10-Q

UNITED STATES 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 June 30, 2013

Commission file number 1-14180

Loral Space & Communications Inc.

888 Seventh Avenue

New York, New York 10106

Telephone: (212) 697-1105

Jurisdiction of incorporation: Delaware

IRS identification number: 87-0748324

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
	(Do not check if a smaller reporting company)

Indicate by a check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No ¨

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Act).
Yes ¨ No þ

As of July 31, 2013, 21,414,212 shares of the registrant’s voting common stock and 9,505,673 shares of the registrant’s non-voting common stock were outstanding.

1

LORAL SPACE & COMMUNICATIONS INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended June 30, 2013

	Page No.
PART I — FINANCIAL INFORMATION
Item 1:   Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012	3
Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2013 and June 30, 2012	4
Condensed Consolidated Statements of Equity for the six months ended June 30, 2013 and the year ended December 31, 2012	5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and June 30, 2012	6
Notes to Condensed Consolidated Financial Statements	7
Item 2:   Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3:   Quantitative and Qualitative Disclosures About Market Risk	44
Item 4:   Disclosure Controls and Procedures	45
PART II — OTHER INFORMATION
Item 1:    Legal Proceedings	46
Item 1A: Risk Factors	46
Item 6:    Exhibits	46
Signatures	47

2

PART 1.

FINANCIAL INFORMATION

Item 1. Financial Statements

LORAL SPACE & COMMUNICATIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	June 30,			December 31,
	2013			2012
ASSETS
Current assets:
Cash and cash equivalents	$	30,369		$	87,370
Notes receivable		67,333			34,917
Deferred tax assets		12,511			4,165
Other current assets		1,891			2,655
Total current assets		112,104			129,107
Property and equipment, net		46			42
Long-term receivables		33,667			67,333
Income taxes receivable		13,325			—
Investments in affiliates		59,018			62,517
Long-term deferred tax assets		97,333			117,381
Other assets		2,612			2,612
Total assets	$	318,105		$	378,992
LIABILITIES AND EQUITY
Current liabilities:
Accrued employment costs	$	2,355		$	4,922
Income taxes payable		—			34,505
Other current liabilities		27,522			32,089
Total current liabilities		29,877			71,516
Pension and other postretirement liabilities		24,202			25,174
Long-term liabilities		99,625			95,841
Total liabilities		153,704			192,531
Commitments and contingencies Equity:
Loral shareholders’ equity:
Preferred stock, 0.01 par value; 10,000,000 shares authorized, no shares issued and outstanding		—			—
Common Stock:
Voting common stock, 0.01 par value; 50,000,000 shares authorized, 21,568,706 and 21,416,834 issued		216			214
Non-voting common stock, 0.01 par value; 20,000,000 shares authorized 9,505,673 issued and outstanding		95			95
Paid-in capital		1,024,694			1,027,266
Treasury stock (at cost), 154,494 shares of voting common stock		(9,592	)		(9,592	)
Accumulated deficit		(815,481	)		(794,128	)
Accumulated other comprehensive loss		(35,531	)		(37,394	)
Total equity		164,401			186,461
Total liabilities and equity	$	318,105		$	378,992

See notes to condensed consolidated financial statements.

3

LORAL SPACE & COMMUNICATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
General and administrative expenses	$	(3,361	)	$	(4,264	)	$	(7,107	)	$	(8,875	)
Operating loss		(3,361	)		(4,264	)		(7,107	)		(8,875	)
Interest and investment income		343			398			632			890
Interest expense		(5	)		(29	)		(8	)		(57	)
Other expense		(341	)		(233	)		(371	)		(623	)
Loss from continuing operations before income taxes and equity in net income (loss) of affiliates		(3,364	)		(4,128	)		(6,854	)		(8,665	)
Income tax (provision) benefit		(2,170	)		5,763			(4,985	)		2,541
(Loss) income from continuing operations before equity in net income (loss) of  affiliates		(5,534	)		1,635			(11,839	)		(6,124	)
Equity in net income (loss) of affiliates		132			(11,353	)		(7,149	)		(4,484	)
Loss from continuing operations		(5,402	)		(9,718	)		(18,988	)		(10,608	)
(Loss) income from discontinued operations, net of tax provision		(2,488	)		4,937			(2,365	)		13,445
Net (loss) income		(7,890	)		(4,781	)		(21,353	)		2,837
Net loss attributable to noncontrolling interest		—			3			—			16
Net (loss) income attributable to Loral common shareholders		(7,890	)		(4,778	)		(21,353	)		2,853
Other comprehensive income, net of tax		491			2,414			1,863			5,211
Comprehensive (loss) income attributable to Loral common shareholders	$	(7,399	)	$	(2,364	)	$	(19,490	)	$	8,064
Net (loss) income per share attributable to Loral common shareholders:
Basic
Loss from continuing operations	$	(0.18	)	$	(0.32	)	$	(0.62	)	$	(0.35	)
(Loss) income from discontinued operations, net of tax		(0.08	)		0.16			(0.08	)		0.44
Net (loss) income	$	(0.26	)	$	(0.16	)	$	(0.70	)	$	0.09
Diluted
Loss from continuing operations	$	(0.18	)	$	(0.32	)	$	(0.62	)	$	(0.35	)
(Loss) income from discontinued operations, net of tax		(0.08	)		0.16			(0.08	)		0.44
Net (loss) income	$	(0.26	)	$	(0.16	)	$	(0.70	)	$	0.09
Weighted average common shares outstanding:
Basic		30,793			30,704			30,781			30,653
Diluted		30,793			30,704			30,781			30,653

See notes to condensed consolidated financial statements.

4

LORAL SPACE & COMMUNICATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)

	Common Stock													Treasury Stock					Retained			Accumulated			Shareholders'
	Voting						Non-Voting							Voting					Earnings			Other			Equity
	Shares						Shares				Paid-In								(Accumulated			Comprehensive			Attributable to			Noncontrolling			Total
	Issued			Amount			Issued		Amount		Capital			Shares		Amount			Deficit)			Loss			Loral			Interest			Equity
Balance, January 1, 2012		21,230		$	212			9,506	$	95	$	1,014,724			136	$	(8,400	)	$	94,303		$	(154,475	)	$	946,459		$	1,126		$	947,585
Net income (loss)																				421,322									(231	)
Other comprehensive income																							117,081
Comprehensive income																										538,403						538,172
Elimination of noncontrolling interest resulting from the Sale																													(895	)		(895	)
Common dividends declared ($13.60 per share)																				(417,606	)					(417,606	)					(417,606	)
Special distribution declared ($29.00 per share)																				(892,147	)					(892,147	)					(892,147	)
Exercise of stock options		169			2							1,633														1,635						1,635
Shares surrendered to fund withholding taxes		18										(6,992	)													(6,992	)					(6,992	)
Tax benefit associated with stock based compensation												16,919														16,919						16,919
Stock based compensation												1,151														1,151						1,151
Cash settlement of restricted stock units												(169	)													(169	)					(169	)
Voting common stock repurchased															18		(1,192	)								(1,192	)					(1,192	)
Balance, December 31, 2012		21,417			214			9,506		95		1,027,266			154		(9,592	)		(794,128	)		(37,394	)		186,461			—			186,461
Net loss																				(21,353	)
Other comprehensive income																							1,863
Comprehensive loss																										(19,490	)					(19,490	)
Exercise of restricted stock units		175			2							(2	)													—						—
Equitable adjustment to restricted stock units for dividends and distributions		120			1							(1	)													—						—
Shares surrendered to fund withholding taxes		(143	)		(1	)						(8,896	)													(8,897	)					(8,897	)
Tax benefit associated with stock based compensation												5,910														5,910						5,910
Stock based compensation												417														417						417
Balance, June 30, 2013		21,569		$	216			9,506	$	95	$	1,024,694			154	$	(9,592	)	$	(815,481	)	$	(35,531	)	$	164,401		$	—		$	164,401

See notes to condensed consolidated financial statements.

5

LORAL SPACE & COMMUNICATIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2013			2012
Operating activities:
Net (loss) income	$	(21,353	)	$	2,837
Loss (income) from discontinued operations, net of tax provision		2,365			(13,445	)
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Non-cash operating items (Note 2)		21,871			2,047
Changes in operating assets and liabilities:
Long-term receivables		—			(1,610	)
Other current assets and other assets		1,605			1,218
Accrued expenses and other current liabilities		(6,767	)		(2,645	)
Income taxes receivable and payable		(12,964	)		(109	)
Pension and other postretirement liabilities		(945	)		(623	)
Long-term liabilities		59			(1,354	)
Net cash used in operating activities – continuing operations		(16,129	)		(13,684	)
Net cash used in operating activities – discontinued operations		(39,025	)		(38,353	)
Net cash used in operating activities		(55,154	)		(52,037	)
Investing activities:
Distributions received from affiliate		—			375,809
Proceeds from sale of investment in affiliate		1,150			—
Capital expenditures		(10	)		—
Net cash provided by investing activities – continuing operations		1,140			375,809
Net cash used in investing activities – discontinued operations		—			(84,022	)
Net cash provided by  investing activities		1,140			291,787
Financing activities:
Cash dividend paid		—			(417,606	)
Voting common stock repurchased		—			(472	)
Proceeds from the exercise of stock options		—			1,635
Cash settlement of restricted stock units		—			(169	)
Funding of withholding taxes for stock based compensation		(8,897	)		(5,796	)
Excess tax benefit associated with stock based compensation		5,910			22
Net cash used in financing activities – continuing operations		(2,987	)		(422,386	)
Net cash provided by financing activities – discontinued operations		—			40,000
Net cash used in financing activities		(2,987	)		(382,386	)
Decrease in cash and cash equivalents		(57,001	)		(142,636	)
Cash and cash equivalents — beginning of period		87,370			197,114
Cash and cash equivalents — continuing and discontinued operations — end of period		30,369			54,478
Cash and cash equivalents — discontinued operations — end of period		—			(17,013	)
Cash and cash equivalents — end of period	$	30,369		$	37,465

See notes to condensed consolidated financial statements.

6

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Principal Business

Loral Space & Communications Inc., together with its subsidiaries (“Loral”, the “Company”, “we”, “our” and “us”) is a leading satellite communications company engaged, through our ownership interests in affiliates, in satellite-based communications services. Prior to completion of the sale of our wholly-owned subsidiary, Space Systems/Loral, LLC (formerly known as Space Systems/Loral, Inc. (“SS/L”)), we were also engaged in the satellite manufacturing business.

Sale of SS/L

On November 2, 2012, Loral completed the sale (the “Sale”) of its wholly-owned subsidiary, SS/L, to MDA Communications Holdings, Inc. (“MDA Holdings”), a subsidiary of MacDonald, Dettwiler and Associates Ltd. (“MDA”). Pursuant to the purchase agreement (the “Purchase Agreement”), dated as of June 26, 2012, as amended on October 30, 2012 and March 28, 2013, by and among Loral, SS/L, MDA and MDA Holdings, Loral received total cash payments of $967.9 million plus, for the sale of certain real estate used in connection with SS/L’s business, a three-year promissory note in the principal amount of $101 million (the “Land Note”). Transaction costs related to the Sale were $35.2 million.

Subsequent to the closing of the Sale and pursuant to the Purchase Agreement, Loral, in December 2012, paid MDA $6.5 million as a result of the resolution of a contingency (see Note 16). Also, in April 2013, pursuant to the Purchase Agreement, we completed the final allocation of qualified pension plan assets between Loral and SS/L (see Note 14).

The transaction was taxable, and, for tax purposes, treated as a sale of assets.

Under the terms of the Purchase Agreement, Loral is obligated to indemnify SS/L for certain litigation costs and litigation damages, subject to certain capped cost-sharing by SS/L, and has retained control of the defense of the lawsuit against SS/L and Loral by ViaSat, Inc. as well as SS/L’s counterclaims against ViaSat, Inc. in that lawsuit. Under the terms of the Purchase Agreement, following a change of control of Loral, the liability of Loral for certain litigation costs and litigation damages is subject to a dollar cap. In addition, Loral is obligated to indemnify SS/L from liabilities with respect to certain pre-closing taxes.

The Land Note originally issued at closing provided for interest at the rate of 1% per annum with amortization in three equal annual installments on each March 31, commencing March 31, 2013. The Land Note was amended as described below and is backed by a letter of guarantee from Royal Bank of Canada.

On November 7, 2012, in connection with the receipt of the proceeds from the Sale, our Board of Directors declared a special distribution of $29.00 per share for an aggregate distribution of $892.1 million. The special distribution was paid on December 4, 2012 to holders of record of Loral voting and non-voting common stock as of November 19, 2012. In accordance with Loral’s stock incentive plan, an equitable adjustment was made to outstanding stock-based awards to reflect the special distribution.

On March 28, 2013, Loral and MDA amended the Purchase Agreement to modify SS/L’s capped cost sharing obligations related to Loral’s indemnification of certain litigation costs and litigation damages and also amended the Land Note to defer to March 31, 2014 the due date of the principal payment from MDA to Loral of $33.7 million due originally on March 31, 2013 with an increase in the interest rate applicable to this tranche of the Land Note from 1.0% to 1.5% effective as of April 1, 2013.

Reclassification to Discontinued Operations

For 2012, the operations of SS/L, previously reported as the satellite manufacturing operating segment, have been reclassified as discontinued operations in our statements of operations and cash flows.

Description of Business

Subsequent to the Sale, Loral has one operating segment consisting of satellite-based communications services. Loral participates in satellite services operations through its ownership interest in Telesat Holdings Inc. (“Telesat Holdco”) which owns Telesat Canada (“Telesat”), a global satellite services provider. Telesat owns and leases a satellite fleet that operates in geosynchronous earth orbit approximately 22,000 miles above the equator. In this orbit, satellites remain in a fixed position relative to points on the earth’s surface and provide reliable, high-bandwidth services anywhere in their coverage areas, serving as the backbone for many forms of telecommunications.

7

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Loral holds a 62.8% economic interest and a 32.7% voting interest in Telesat Holdco (see Note 7). We use the equity method of accounting for our ownership interest in Telesat Holdco.

Loral, a Delaware corporation, was formed on June 24, 2005, to succeed to the business conducted by its predecessor registrant, Loral Space & Communications Ltd. (“Old Loral”), which emerged from chapter 11 of the federal bankruptcy laws on November 21, 2005 (the “Effective Date”) pursuant to the terms of the fourth amended joint plan of reorganization, as modified (the “Plan of Reorganization”).

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) and, in our opinion, include all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of results of operations, financial position and cash flows as of the balance sheet dates presented and for the periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules. We believe that the disclosures made are adequate to keep the information presented from being misleading. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results to be expected for the full year.

The December 31, 2012 balance sheet has been derived from the audited consolidated financial statements at that date. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our latest Annual Report on Form 10-K filed with the SEC.

Ownership interests in Telesat and XTAR, LLC (“XTAR”) are accounted for using the equity method of accounting. Income and losses of affiliates are recorded based on our beneficial interest. Intercompany profit arising from transactions with affiliates is eliminated to the extent of our beneficial interest. Equity in losses of affiliates is not recognized after the carrying value of an investment, including advances and loans, has been reduced to zero, unless guarantees or other funding obligations exist. The Company monitors its equity method investments for factors indicating other-than-temporary impairment. An impairment loss would be recognized when there has been a loss in value of the affiliate that is other-than-temporary.

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amount of income (loss) reported for the period. Actual results could differ from estimates.

Significant estimates include the fair value of stock based compensation, the realization of deferred tax assets, uncertain tax positions, our pension liabilities and the fair value of indemnification liabilities.

Concentration of Credit Risk

Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and receivables. Our cash and cash equivalents are maintained with high-credit-quality financial institutions. Our receivables are from large multinational corporations for which the creditworthiness is generally substantial. In addition, the Land Note is guaranteed by Royal Bank of Canada. As a result, management believes that its potential credit risks are minimal.

Fair Value Measurements

U.S. GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. U.S. GAAP also establishes a fair value hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are described below:

8

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Level 1: Inputs represent a fair value that is derived from unadjusted quoted prices for identical assets or liabilities traded in active markets at the measurement date.

Level 2: Inputs represent a fair value that is derived from quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities, and pricing inputs, other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis at June 30, 2013 and December 31, 2012 (in thousands):

	June 30, 2013						December 31, 2012
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash equivalents
Money market funds	$	23,709	$	—	$	—	$	86,820	$	—	$	—
Note receivable
Land Note	$	—	$	—	$	101,000	$	—	$	—	$	101,000
Liabilities
Indemnifications
Sale of SS/L	$	—	$	—	$	16,813	$	—	$	—	$	16,528
Globalstar do Brasil S.A.	$	—	$	—	$	2,496	$	—	$	—	$	1,510

The carrying amount of cash equivalents approximates fair value because of the short maturity of those instruments. The carrying amount of the Land Note approximates fair value because the stated interest rate is consistent with current market rates. The fair value of indemnifications related to the sale of SS/L was estimated using Monte Carlo simulation based on the potential probability weighted cash flows that would be a guarantor’s responsibility in an arm’s length transaction. The fair value of indemnifications related to Globalstar do Brasil S.A. was estimated using expected value analysis. The Company does not have any non-financial assets or non-financial liabilities that are recognized or disclosed at fair value on a recurring basis as of June 30, 2013.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

We review the carrying values of our equity method investments when events and circumstances warrant and consider all available evidence in evaluating when declines in fair value are other than temporary. The fair values of our investments are determined based on valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow projections. An impairment charge is recorded when the carrying amount of the investment exceeds its current fair value and is determined to be other than temporary.

Recent Accounting Pronouncements

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This new standard requires the netting of unrecognized tax benefits (UTBs) against available deferred tax assets for losses and other carryforward benefits that would be available to offset the liability for uncertain tax positions rather than presenting the UTB on a gross basis. The guidance, effective for the Company on January 1, 2014, will have no impact on our consolidated financial statements as the Company has already adopted this methodology.

9

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830) - Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. ASU No. 2013-05 clarifies that the cumulative translation adjustment should be released into net income only when a reporting entity ceases to have a controlling financial interest in a subsidiary or a business within a foreign entity. Further, for an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. The guidance, effective for the Company on January 1, 2014, is not expected to have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405) – Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.  ASU No. 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements. The guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, as the sum of: (a) The amount the reporting entity agreed to pay on the basis of its arrangement with its co-obligors, and (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance, effective for the Company on January 1, 2014, is not expected to have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (ASC Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.  ASU No. 2013-02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The guidance, effective for the Company on January 1, 2013, requires changes in presentation which have been included in our condensed consolidated financial statements.

Additional Cash Flow Information

The following represents non-cash activities and supplemental information to the condensed consolidated statements of cash flows (in thousands):

	Six Months Ended June 30,
	2013		2012
Non-cash operating items:
Equity in net loss of affiliates	$	7,149	$	4,484
Deferred taxes		11,285		(1,910	)
Depreciation and amortization		6		36
Stock based compensation		417		536
Amortization of prior service credit and actuarial loss		3,014		338
Unrealized gain on nonqualified pension plan assets		—		(87	)
Gain on foreign currency transactions and contracts		—		(1,350	)
Net non-cash operating items-continuing operations	$	21,871	$	2,047
Non-cash operating items – discontinued operations	$	—	$	26,438
Non-cash investing activities:
Capital expenditures incurred not yet paid-discontinued operations	$	—	$	7,881
Non-cash financing activities:
Repurchase of voting common stock not yet paid - continuing operations	$	—	$	1,192
Supplemental information:
Interest paid – continuing operations	$	8	$	57
Interest paid – discontinued operations	$	—	$	914
Tax payments – continuing operations	$	86	$	85
Tax payments – discontinued operations	$	35,118	$	—

10

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Discontinued Operations

As a result of the Sale (see Note 1), we have reclassified SS/L’s operations as discontinued operations in our consolidated financial statements for the three and six months ended June 30, 2012.

Loss from discontinued operations for the three and six months ended June 30, 2013 primarily comprises changes in the fair value of our indemnification liabilities related to the Sale, net of a $1.5 million income tax benefit. The following is a summary of SS/L’s financial information included in income from discontinued operations for the three and six months ended June 30, 2012 (in thousands):

	Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Revenues	$	294,377		$	581,090
Operating income		8,765			11,123
Income before income taxes		13,170			25,038
Income tax provision		(8,233	)		(11,593	)
Income from discontinued operations, net of tax	$	4,937		$	13,445

4. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax, are as follows (in thousands):

										Proportionate
										Share of			Accumulated
				Unrealized						Telesat Other			Other
				Gains (losses)			Postretirement			Comprehensive			Comprehensive
	Derivatives			on Investments			Benefits			Loss			Loss
Balance at January 1, 2012	$	(1,306	)	$	580		$	(132,695	)	$	(21,054	)	$	(154,475	)
Other comprehensive (loss) income before reclassification		(415	)		(120	)		1,668			1,313			2,446
Amounts reclassified from accumulated other comprehensive income (loss)		1,721			(460	)		113,374			—			114,635
Net current-period other comprehensive income (loss)		1,306			(580	)		115,042			1,313			117,081
Balance at December 31, 2012		—			—			(17,653	)		(19,741	)		(37,394	)
Other comprehensive income before reclassification		—			—			—			—			—
Amounts reclassified from accumulated other comprehensive loss		—			—			1,863	(a)		—			1,863
Net current-period other comprehensive income		—			—			1,863			—			1,863
Balance at June 30, 2013	$	—		$	—		$	(15,790	)	$	(19,741	)	$	(35,531	)

(a) Reclassification from postretirement benefits accumulated other comprehensive loss comprises $3.0 million included in general and administrative expenses and $1.2 million tax benefit thereon included in income tax provision in our condensed consolidated statement of operations.

11

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of other comprehensive income and related tax effects are as follows (in thousands):

	Three Months Ended June 30,
	2013									2012
	Before-Tax			Tax (Expense)			Net-of-Tax			Before-Tax			Tax (Expense)			Net-of-Tax
	Amount			Benefit			Amount			Amount			Benefit			Amount
Reclassification of prior service credits and net actuarial loss	$	1,513		$	(578	)	$	935		$	2,012		$	(809	)	$	1,203
Proportionate share of Telesat Holdco other comprehensive loss		(718	)		274			(444	)		(869	)		347			(522	)
Derivatives:
Unrealized gain on foreign currency hedges		—			—			—			1,392			(560	)		832
Less: reclassification adjustment for loss included in net income from discontinued operations		—			—			—			1,879			(754	)		1,125
Net unrealized gain on derivatives		—			—			—			3,271			(1,314	)		1,957
Unrealized loss on available-for-sale securities		—			—			—			(374	)		150			(224	)
Other comprehensive income	$	795		$	(304	)	$	491		$	4,040		$	(1,626	)	$	2,414

	Six Months Ended June 30,
	2013							2012
	Before-Tax		Tax (Expense)			Net-of-Tax		Before-Tax			Tax (Expense)			Net-of-Tax
	Amount		Benefit			Amount		Amount			Benefit			Amount
Reclassification of prior service credits and net actuarial loss	$	3,014	$	(1,151	)	$	1,863	$	4,024		$	(1,617	)	$	2,407
Proportionate share of Telesat Holdco other comprehensive income		—		—			—		39			(18	)		21
Derivatives:
Unrealized loss on foreign currency hedges		—		—			—		(285	)		115			(170	)
Less: reclassification adjustment for loss included in net income from discontinued operations		—		—			—		5,156			(2,073	)		3,083
Net unrealized gain on derivatives		—		—			—		4,871			(1,958	)		2,913
Unrealized loss on available-for-sale securities		—		—			—		(217	)		87			(130	)
Other comprehensive income	$	3,014	$	(1,151	)	$	1,863	$	8,717		$	(3,506	)	$	5,211

12

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Receivables

Receivable balances related to the Land Note (see Note 1) and the Telesat consulting services fee (see Note 17) as of June 30, 2013 and December 31, 2012 are presented below (in thousands):

	June 30, 2013			December 31, 2012
Land Note receivable	$	101,000		$	101,000
Telesat notes receivable for consulting services		—			1,250
		101,000			102,250
Less: current portion		(67,333	)		(34,917	)
Long-term receivables	$	33,667		$	67,333

As a result of the amendment to the Purchase Agreement on March 28, 2013, principal payments under the Land Note are scheduled to be received as follows: $67.3 million on March 31, 2014 and $33.7 million on March 31, 2015. Interest on the Land Note ranges between one and one and one half percent per annum and is payable quarterly.

See Note 17 for the terms of the Telesat notes receivable for consulting services.

6. Property and Equipment

Property and equipment consists of (in thousands):

	June 30, 2013			December 31, 2012
Leasehold improvements	$	6		$	1,913
Equipment		516			555
Furniture and fixtures		74			73
		596			2,541
Accumulated depreciation and amortization		(550	)		(2,499	)
	$	46		$	42

7. Investments in Affiliates

Investments in affiliates consist of (in thousands):

	June 30, 2013		December 31, 2012
Telesat Holdings Inc.	$	—	$	—
XTAR, LLC		59,018		62,517
	$	59,018	$	62,517

Our investment in Telesat Holdco was reduced to zero as of June 30, 2013 and December 31, 2012, as discussed below.

Equity in net income (loss) of affiliates consists of (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Telesat Holdings Inc.	$	718		$	(8,855	)	$	—		$	(1,475	)
XTAR, LLC		(1,736	)		(2,498	)		(3,499	)		(3,009	)
Other		1,150			—			(3,650	)		—
	$	132		$	(11,353	)	$	(7,149	)	$	(4,484	)

13

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The condensed consolidated statements of operations for the three and six months ended June 30, 2012 reflect the effects of the following amounts related to SS/L’s transactions with our affiliates (in thousands):

	Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Revenues included in income from discontinued operations	$	22,427		$	46,583
Elimination of Loral’s proportionate share of profits relating to affiliate transactions		(7,184	)		(14,025	)
Profits included in income from discontinued operations relating to affiliate transactions not eliminated		4,041			7,889

Equity in net income of affiliates for the six months ended June 30, 2012 included $4.6 million of profits previously eliminated on satellite sales from SS/L to affiliates that should have been recognized in prior periods as the satellites were depreciated. The Company has not revised previously reported amounts based on its belief that the effect of such adjustments is not material to the financial statements taken as a whole.

Telesat

As of December 31, 2012 and June 30, 2013, we held a 62.8% economic interest in Telesat. Our economic interest decreased from 64% to 62.8% in December 2012 when certain executives of Telesat exercised share appreciation rights related to a total of 5,311,568 stock options granted under Telesat’s share based compensation plan and received 2,249,747 non-voting participating preferred shares.

We use the equity method of accounting for our majority economic interest in Telesat because we own 32.7% of the voting stock and do not exercise control by other means to satisfy the U.S. GAAP requirement for treatment as a consolidated subsidiary. We have also concluded that Telesat is not a variable interest entity for which we are the primary beneficiary. Loral’s equity in net income or loss of Telesat is based on our proportionate share of Telesat’s results in accordance with U.S. GAAP and in U.S. dollars. Our proportionate share of Telesat’s net income or loss is based on our economic interest as our holdings consist of common stock and non-voting participating preferred shares that have all the rights of common stock with respect to dividends, return of capital and surplus distributions, but have no voting rights.

In connection with the closing of a new credit agreement (the “Telesat Credit Agreement”) in March 2012, the Board of Directors of Telesat approved special cash distributions to Telesat’s shareholders of CAD 656.5 million, including a distribution of CAD 420 million to Loral.  The special distributions by Telesat to its shareholders were authorized to be paid in two tranches; the first tranche was paid by Telesat on March 28, 2012, with Loral receiving CAD 375 million ($376 million), and the second tranche was paid by Telesat on July 5, 2012, with Loral receiving CAD 45 million ($44 million).

As of June 30, 2013 and December 31, 2012, the special cash distributions received from Telesat exceeded our recorded cumulative equity in net income of Telesat and our initial investment by $17.7 million and $7.4 million, respectively. In following the equity method of accounting, our investment balance in Telesat was reduced to zero as of June 30, 2013 and December 31, 2012, and we will not record equity in comprehensive income of Telesat until our share of Telesat’s future comprehensive income exceeds $17.7 million.

On April 2, 2013, Telesat re-priced and amended its existing credit agreement, dated March 28, 2012. The amendment converted CAD 34 million from Canadian to U.S. dollars and decreased the interest rates on Telesat’s Canadian and U.S. term loan B facilities by 0.50%. The amendment also decreased the interest rate floors on the debt to 1.00% and 0.75% for the Canadian term loan B facility and U.S. term loan B facility, respectively. The permitted leverage ratio to incur first lien debt is now 4.25:1.00 which represents a change from the prior 4.00:1.00 senior secured leverage ratio in the credit agreement.

On May 1, 2013, Telesat redeemed its 12.5% senior subordinated notes due November 1, 2017 at a price of 106.25% of the principal amount of the senior subordinated notes. Expense of refinancing for the three and six months ended June 30, 2013 primarily represents the premium paid and the write-off of deferred financing costs related to this note redemption.

14

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The ability of Telesat to pay dividends or certain other restricted payments as well as consulting fees in cash to Loral is governed by applicable covenants in Telesat’s debt and shareholder agreements. Under Telesat’s credit agreement and the indenture for Telesat’s 6% senior notes, dividends or certain other restricted payments may be paid only if there is a sufficient capacity under a restricted payment basket, which is based on a formula of cumulative consolidated EBITDA less 1.4 times cumulative consolidated interest expense. Under the 6% senior note indenture and credit agreement, Telesat is generally permitted to pay consulting fees to Loral in cash.  Our general and administrative expenses are net of income related to the Consulting Agreement of $1.25 million for each of the three month periods ended June 30, 2013 and 2012 and $2.5 million for each of the six months period ended June 30, 2013 and 2012. For the six months ended June 30, 2013 and 2012, Loral received payments in cash from Telesat of $3.8 million and $1.6 million, respectively, for consulting fees and interest. The payments received by Loral from Telesat for the six months ended June 30, 2013 included redemption of $1.3 million of notes receivable. These amounts were not allowed to be paid as of December 31, 2012 because Telesat did not meet the leverage ratio required for payment under the indenture for its 12.5% senior subordinated Notes due November 1, 2017.

The contribution of Loral Skynet, a wholly owned subsidiary of Loral prior to its contribution, to Telesat in 2007 was recorded by Loral at the historical book value of our retained interest combined with the gain recognized on the contribution. However, the contribution was recorded by Telesat at fair value. Accordingly, the amortization of Telesat fair value adjustments applicable to the Loral Skynet assets and liabilities is proportionately eliminated in determining our share of the net income or losses of Telesat. Our equity in the net income or loss of Telesat also reflects the elimination of our profit, to the extent of our economic interest, on satellites we constructed for Telesat while we owned SS/L.

The following table presents summary financial data for Telesat in accordance with U.S. GAAP, as of June 30, 2013 and December 31, 2012 and for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Statement of Operations Data:
Revenues	$	210,038		$	199,852		$	427,506		$	395,875
Operating expenses		(44,174	)		(52,207	)		(94,332	)		(135,947	)
Depreciation, amortization and stock-based compensation		(62,845	)		(61,009	)		(120,663	)		(121,497	)
Loss on disposition of long lived asset		(2,010	)		(18	)		(1,542	)		(76	)
Operating income		101,009			86,618			210,969			138,355
Interest expense		(51,077	)		(61,592	)		(110,772	)		(113,282	)
Expense of refinancing		3			(57,541	)		(19,961	)		(79,403	)
Foreign exchange (losses) gains		(98,389	)		(56,178	)		(168,729	)		6,312
Gains (losses) on financial instruments		59,755			25,770			96,608			(655	)
Other income		10,450			241			10,833			965
Income tax provision		(19,151	)		(6,748	)		(26,993	)		(4,319	)
Net income (loss)		2,600			(69,430	)		(8,045	)		(52,027	)

	June 30, 2013		December 31, 2012
Balance Sheet Data:
Current assets	$	226,905	$	289,614
Total assets		4,907,436		5,342,313
Current liabilities		265,053		237,739
Long-term debt, including current portion		3,243,696		3,519,872
Total liabilities		4,379,990		4,770,966
Shareholders’ equity		527,446		571,347

XTAR

We own 56% of XTAR, a joint venture between us and Hisdesat Servicios Estrategicos, S.A. (“Hisdesat”) of Spain. We account for our ownership interest in XTAR under the equity method of accounting because we do not control certain of its significant operating decisions.

15

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

XTAR owns and operates an X-band satellite, XTAR-EUR, located at 29° E.L., which is designed to provide X-band communications services exclusively to United States, Spanish and allied government users throughout the satellite’s coverage area, including Europe, the Middle East and Asia. XTAR also leases 7.2 72MHz X-band transponders on the Spainsat satellite located at 30° W.L., owned by Hisdesat. These transponders, designated as XTAR-LANT, provide capacity to XTAR for additional X-band services and greater coverage and flexibility.

We regularly evaluate our investment in XTAR to determine whether there has been a decline in fair value that is other-than-temporary. We have performed an impairment test for our investment in XTAR as of June 30, 2013, using XTAR’s most recent forecast, and concluded that our investment in XTAR was not impaired. Any declines in XTAR’s projected revenues may result in a future impairment charge.

XTAR’s lease obligation to Hisdesat for the XTAR-LANT transponders requires payments by XTAR of $25 million in 2013, with increases thereafter to a maximum of $28 million per year through the end of the useful life of the satellite which is estimated to be in 2022. Under this lease agreement, Hisdesat may also be entitled under certain circumstances to a share of the revenues generated on the XTAR-LANT transponders. In March 2009, XTAR entered into an agreement with Hisdesat pursuant to which the past due balance on XTAR-LANT transponders of $32.3 million as of December 31, 2008, together with a deferral of $6.7 million in payments due in 2009, will be payable to Hisdesat over 12 years through annual payments of $5 million (the “Catch Up Payments”). XTAR has a right to prepay, at any time, all unpaid Catch Up Payments discounted at 9%. Cumulative amounts paid to Hisdesat for Catch-Up Payments through June 30, 2013 were $21.7 million. XTAR has also agreed that XTAR’s excess cash balance (as defined) will be applied towards making limited payments on future lease obligations, as well as payments of other amounts owed to Hisdesat, Telesat and Loral for services provided by them to XTAR (see Note 17). The ability of XTAR to pay dividends and management fees in cash to Loral is governed by XTAR’s operating agreement.

The following table presents summary financial data for XTAR as of June 30, 2013 and December 31, 2012 and for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Statement of Operations Data:
Revenues	$	8,325		$	6,821		$	16,450		$	14,672
Operating expenses		(8,493	)		(8,279	)		(16,862	)		(16,603	)
Depreciation and amortization		(2,310	)		(2,345	)		(4,620	)		(4,750	)
Operating loss		(2,478	)		(3,803	)		(5,032	)		(6,681	)
Net loss		(3,210	)		(4,572	)		(6,469	)		(8,243	)

	June 30, 2013		December 31, 2012
Balance Sheet Data:
Current assets	$	5,697	$	7,838
Total assets		68,044		74,721
Current liabilities		19,916		18,894
Total liabilities		55,744		55,953
Members’ equity		12,300		18,768

In prior periods, XTAR’s liability to Hisdesat of $27.4 million for Catch Up Payments as of December 31, 2012 was included in current liabilities. In the XTAR summary financial data above, the liability for Catch Up payments was reflected as a long-term liability because the amount is payable over 12 years. This change had no effect on the Loral condensed consolidated financial statements.

Other

In connection with the sale in 2008 by Loral and certain of its subsidiaries and DASA Globalstar LLC to Globalstar Inc. of their respective interests in Globalstar do Brasil S.A. (“GdB”), the Globalstar Brazilian service provider, Loral agreed to indemnify Globalstar Inc. and GdB for certain GdB pre-closing liabilities, primarily related to Brazilian taxes. As a result of an April 2013 adverse court decision in Brazil relating to a potential tax liability, an adverse outcome for which was previously believed to be remote, Loral recorded a loss contingency of $4.8 million in the first quarter of 2013 for such liability and made a payment of $3.7 million against that liability in the second quarter of 2013.

16

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the second quarter of 2013 the Company received cash proceeds of $1.1 million related to the sale of its ownership interests in an affiliate with no carrying value. The gain on sale is included in equity in net income (loss) of affiliates.

As of June 30, 2013 and December 31, 2012, the Company held various indirect ownership interests in two foreign companies that currently serve as exclusive service providers for Globalstar service in Mexico and Russia. The Company accounts for these ownership interests using the equity method of accounting. Loral has written-off its investments in these companies, and, because we have no future funding requirements relating to these investments, there is no requirement for us to provide for our allocated share of these companies’ net losses.

8. Other Current Liabilities

Other current liabilities consists of (in thousands):

	June 30, 2013		December 31, 2012
Pension and other post retirement liabilities	$	18,185	$	18,157
Indemnification liabilities (see Note 16)		5,283		5,835
Deferred tax liability		1,266		3,663
Other		2,788		4,434
	$	27,522	$	32,089

9. Income Taxes

The following summarizes our income tax provision on loss from continuing operations (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Total current income tax benefit (provision)	$	7,138		$	(1,242	)	$	6,300		$	631
Total deferred income tax (provision) benefit		(9,308	)		7,005			(11,285	)		1,910
Income tax (provision) benefit	$	(2,170	)	$	5,763		$	(4,985	)	$	2,541

Loral is projecting a tax loss for 2013 which will be available as a carryback benefit against the taxes previously paid for 2012. As of June 30, 2013, taxes receivable of $13.3 million have been recorded on the condensed consolidated balance sheet for this benefit. Subsequent to the Sale, to the extent that Loral’s profitability from operations is not sufficient to realize the benefit from our remaining net deferred tax assets, the Company would generate sufficient taxable income from the appreciated value of its Telesat investment, which currently has a nominal tax basis, in order to prevent its federal net operating losses from expiring and realize the benefit of all remaining deferred tax assets.

The following summarizes amounts for uncertain tax positions (“UTPs”) included in our income tax provision on loss from continuing operations (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Current (provision) benefit for UTPs	$	(224	)	$	(1,243	)	$	(671	)	$	630
Deferred benefit for UTPs		102			482			241			12
(Provision) benefit for UTPs	$	(122	)	$	(761	)	$	(430	)	$	642

17

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of June 30, 2013, we had unrecognized tax benefits relating to UTPs of $76.1 million. Pursuant to the Purchase Agreement for the Sale, we are obligated to indemnify SS/L from liabilities with respect to certain taxes related to periods prior to the closing of the transaction. The Company recognizes potential accrued interest and penalties related to UTPs in income tax expense on a quarterly basis. As of June 30, 2013, we have accrued approximately $3.4 million and $9.4 million for the payment of potential tax-related interest and penalties, respectively.

With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years prior to 2007. Earlier years related to certain foreign jurisdictions remain subject to examination. Various state and foreign income tax returns are currently under examination. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carryforward. While we intend to contest any future tax assessments for uncertain tax positions, no assurance can be provided that we would ultimately prevail. During the next 12 months, the statute of limitations for assessment of additional tax will expire with regard to UTPs related to our federal income tax return filed for 2009 and certain state income tax returns filed for 2007, 2008 and 2009 potentially resulting in a $0.8 million reduction to our unrecognized tax benefits.

The following summarizes the changes to our liabilities for UTPs included in long-term liabilities in the condensed consolidated balance sheets (in thousands):

	Six Months Ended June 30,
	2013			2012
Liabilities for UTPs:
Opening balance — January 1	$	80,732		$	139,916
Current provision (benefit) for:
Unrecognized tax benefits		625			(115	)
Potential additional interest		1,016			3,094
Potential penalty adjustment		37			6
Statute expirations		(1,007	)		(1,072	)
Ending balance — June 30	$	81,403		$	141,829

As of June 30, 2013, if our positions are sustained by the taxing authorities, approximately $38.4 million of the benefits will reduce the Company’s income tax provision from continuing operations. Other than as described above, there were no significant changes to our uncertain tax positions during the six months ended June 30, 2013 and 2012, and we do not anticipate any other significant changes to our unrecognized tax benefits during the next twelve months.

10. Long Term Liabilities

Long term liabilities consists of (in thousands):

	June 30, 2013		December 31, 2012
Indemnification liabilities (see Note 16)	$	14,026	$	12,204
Liabilities for uncertain tax positions		81,403		80,732
Other		4,196		2,905
	$	99,625	$	95,841

11. Equity

In June 2013, the Company issued 91,204 shares of its voting common stock, net of 83,796 shares to satisfy withholding taxes, to Michael B. Targoff, Vice Chairman of the Company and former Chief Executive Officer and President. This stock issuance resulted from the settlement of 175,000 restricted stock units (“RSUs”) granted to Mr. Targoff in 2009, 2010 and 2011. The grant date fair value of these RSUs was previously recorded as stock-based compensation as the RSUs vested, and the stock issuance had no effect on our condensed consolidated financial statements.

18

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Special Dividend and Special Distribution

On March 28, 2012, our Board of Directors declared a special dividend of $13.60 per share for an aggregate dividend of $417.6 million. The dividend was paid on April 20, 2012 to holders of record of Loral voting and non-voting common stock as of April 10, 2012. In accordance with Loral’s stock incentive plan, an equitable adjustment was made to outstanding stock-based awards to reflect the special dividend. As a result, options outstanding increased by 19,058 and RSUs increased by 6,875. This equitable adjustment had no effect on our condensed consolidated financial statements. Mr. Targoff, who elected to receive the dividend on his RSUs at the $13.60 per share value, received 19,368 shares of Loral voting common stock, net of 18,774 shares to satisfy withholding taxes, in lieu of cash payments totaling $2.4 million on his RSU settlement date in June 2013.

On November 7, 2012, in connection with the receipt of the proceeds from the Sale, our Board of Directors declared a special distribution of $29.00 per share for an aggregate distribution of $892.1 million. The special distribution was paid on December 4, 2012 to holders of record of Loral voting and non-voting common stock as of November 19, 2012. In accordance with Loral’s stock incentive plan, an equitable adjustment was made to outstanding stock-based awards to reflect the special distribution. This equitable adjustment had no effect on our condensed consolidated financial statements. Mr. Targoff, who elected to receive the special distribution related to his RSUs at the $29.00 per share value, received 41,300 shares of Loral voting common stock, net of 40,033 shares to satisfy withholding taxes, in lieu of cash payments totaling $5.1 million on his RSU settlement date in June 2013.

Treasury Stock

In November 2011, our Board of Directors authorized the purchase of up to 800,000 shares of our voting common stock. These purchases may be made from time to time in the open market or private transactions, as conditions may warrant. We intend to hold repurchased shares of our voting common stock in treasury. We account for the treasury shares using the cost method.

The following is a summary of common stock purchases under this repurchase program (total cost in thousands):

	Shares Repurchased		Total Cost		Average  Cost
Year ended December 31,
2012		18,000	$	1,192	$	66.22
2011		136,494		8,400		61.54
Total program		154,494	$	9,592	$	62.04

12. Stock-Based Compensation

As of June 30, 2013, there were 1,319,533 shares of Loral common stock available for future grant under the Company’s Amended and Restated 2005 Stock Incentive Plan. This number of common shares available would be reduced if Loral restricted stock units or SS/L phantom stock appreciation rights are settled in Loral common stock.

The fair value of the SS/L phantom stock appreciation rights (“SS/L Phantom SARs”) related to Loral employees is included as a liability in our consolidated balance sheets. The payout liability reflects the increase in SS/L’s notional stock price over the base price multiplied by the number of SS/L Phantom SARs vested on the applicable vesting date, subject to adjustment. The notional stock price of SS/L was frozen as of December 31, 2011, in connection with the Sale. As of June 30, 2013 and December 31, 2012, the amount of the liability in our consolidated balance sheet related to the SS/L Phantom SARs was $0.5 million and $1.0 million, respectively. During the six months ended June 30, 2013 and 2012, cash payments of $0.5 million and $2.0 million, respectively, for continuing operations were made related to SS/L Phantom SARs.

Total stock-based compensation included in loss from continuing operations was $0.2 million and $0.4 million for the three months ended June 30, 2013 and 2012, respectively, and $0.5 million and $1.0 million for the six months ended June 30, 2013 and 2012, respectively.

19

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

13. Earnings Per Share

Telesat has awarded employee stock options, which, if exercised, would result in dilution of Loral’s ownership interest in Telesat to approximately 62.3%. Telesat stock options are excluded from the calculation of diluted loss per share for the three and six months ended June 30, 2013 and 2012, as the effect would be antidilutive.

For the three and six months ended June 30, 2013 and 2012, all stock options outstanding, unvested restricted stock and unvested restricted stock units are excluded from the calculation of diluted loss per share as the effect would have been antidilutive.

The following summarizes stock options outstanding, unvested restricted stock and unvested restricted stock units excluded from the calculation of diluted loss per share (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Stock options		—		57		—		97
Unvested restricted stock units		—		2		—		2
Unvested restricted stock		84		232		172		223

14. Pensions and Other Employee Benefit Plans

The following table provides the components of net periodic cost included in loss from continuing operations for our qualified and supplemental retirement plans (the “Pension Benefits”) and health care and life insurance benefits for retired employees and dependents (the “Other Benefits”) for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Pension Benefits  Three Months Ended June 30,						Other Benefits  Three Months Ended June 30,
	2013			2012			2013			2012
Service cost	$	9		$	200		$	2		$	2
Interest cost		458			622			10			11
Expected return on plan assets		(402	)		(364	)		—			—
Amortization of net actuarial loss		1,515			173			4			2
Amortization of prior service credits		—			—			(6	)		(6	)
Net periodic cost	$	1,580		$	631		$	10		$	9

	Pension Benefits  Six Months Ended June 30,						Other Benefits  Six Months Ended June 30,
	2013			2012			2013			2012
Service cost	$	156		$	400		$	4		$	4
Interest cost		921			1,244			20			22
Expected return on plan assets		(829	)		(728	)		—			—
Amortization of net actuarial loss		3,018			346			8			4
Amortization of prior service credits		—			—			(12	)		(12	)
Net periodic cost	$	3,266		$	1,262		$	20		$	18

20

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Sale of SS/L

As required by the Purchase Agreement, prior to the closing of the Sale on November 2, 2012, new stand-alone SS/L pension plans were established. Pension obligations related to SS/L current and former employees and plan assets determined through an initial allocation methodology were transferred from the Loral pension plans to the newly formed plans. With the closing of the Sale, the newly formed SS/L plans were transferred to SS/L. Subsequent to the closing of the Sale, our actuary performed a review to determine the amount of qualified plan assets that proportionately relate to the benefit liabilities of the SS/L pension participants in accordance with the asset priorities of Section 4044 of ERISA. This review resulted in a true-up of the initial asset transfer between plans. As a result, Loral contributed $10.7 million to its qualified pension plan, which transferred $11.9 million to SS/L’s plan. In return, MDA paid Loral $11.9 million, pursuant to the Purchase Agreement. The net effect of this true-up, which took place in April 2013, was a $1.2 million increase to Loral’s cash balance and a $1.2 million decrease to the assets of Loral’s qualified pension plan.

Termination of Supplemental Executive Retirement Plan (“SERP”)

In connection with the corporate office restructuring as a result of the Sale, on December 13, 2012, Loral’s Board of Directors approved termination of the SERP. The Company expects to make lump sum payments to the participants in the SERP between December 16, 2013 and December 31, 2013 in accordance with the requirements of Section 409A of the Internal Revenue Code and the regulations promulgated thereunder. Other current liabilities as of June 30, 2013 and December 31, 2012 included approximately $18.2 million and $18.1 million, respectively, for future SERP payments based on benefits earned, including recurring monthly payments to December 2013 and lump sum payouts in December 2013. The lump sum payouts have been calculated based on plan provisions.

15. Financial Instruments, Derivative Instruments and Hedging

Financial Instruments

The carrying amount of cash equivalents approximates fair value because of the short maturity of those instruments. The carrying amount of the Land Note approximates fair value because the stated interest rate is consistent with current market rates.

Foreign Currency

We are subject to the risks associated with fluctuations in foreign currency exchange rates. To limit this foreign exchange rate exposure, we attempt to denominate all contracts in U.S. dollars. Where appropriate, derivatives are used to minimize the risk of foreign exchange rate fluctuations to operating results and cash flows. We do not use derivative instruments for trading or speculative purposes.

Derivatives and Hedging Transactions

There were no derivative instruments as of June 30, 2013 and December 31, 2012.

Foreign Exchange Contracts

In March 2012, Telesat declared a special cash distribution denominated in Canadian dollars to be paid in two tranches (see Note 7). Loral entered into a foreign exchange forward contract to hedge foreign exchange risk associated with the payment of the second tranche in July 2012. This foreign exchange forward contract was not designated as a hedging instrument. Other expense for the three and six months ended June 30, 2012 was net of an unrealized gain of $1.4 million related to this foreign exchange forward contract.

21

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

16. Commitments and Contingencies

Financial Matters

In the fourth quarter of 2012, we sold our former subsidiary, SS/L, to MDA pursuant to the Purchase Agreement. Under the terms of the Purchase Agreement, we are obligated to indemnify MDA from (1) liabilities with respect to certain pre-closing taxes; (2) certain litigation costs and litigation damages relating to the ViaSat lawsuit, subject to certain sharing formulas and caps; and (3) certain breaches of representations, warranties and covenants, subject to certain limitations on survival of claims, deductibles and caps. In March 2013, we and MDA agreed, among other things, to modify SS/L’s capped cost-sharing obligations. To date, other than with respect to sharing of litigation costs (see Legal Proceedings, below), MDA has submitted one claim for indemnification which relates to pre-closing taxes. The amount of this claim has not yet been determined. We intend to vigorously contest the underlying tax assessment, but there can be no assurance that we will be successful. Although no assurance can be provided, we do not believe that this matter will have a material adverse effect on our financial position or results of operations. Our condensed consolidated balance sheets include liabilities of $16.8 million and $16.5 million as of June 30, 2013 and December 31, 2012, respectively, representing the estimated fair value of all potential indemnification liabilities relating to the Sale.

In connection with the Sale, Loral has restructured its corporate functions and has reduced the number of employees at its headquarters. In 2012, Loral charged approximately $11.8 million to general and administrative expenses, mainly for severance and related costs, and paid approximately $8.0 million. During the three and six months ended June 30, 2013, Loral paid restructuring costs of approximately $2.7 million and $2.9 million, respectively, and at June 30, 2013, the liability recorded in the condensed consolidated balance sheet for the restructuring was $0.9 million which includes all expected future payments under the restructuring plan relating to the Sale.

In connection with the sale in 2008 by Loral and certain of its subsidiaries and DASA Globalstar LLC to Globalstar Inc. of their respective interests in Globalstar do Brasil S.A. (“GdB”), the Globalstar Brazilian service provider, Loral agreed to indemnify Globalstar Inc. and GdB for certain GdB pre-closing liabilities, primarily related to Brazilian taxes. As a result of an April 2013 adverse court decision in Brazil relating to a potential tax liability, an adverse outcome for which was previously believed to be remote, Loral recorded a loss contingency of $4.8 million in the first quarter of 2013 for such liability and made a payment of $3.7 million against that liability in the second quarter of 2013.

See Note 17 — Related Party Transactions — Transactions with Affiliates — Telesat for commitments and contingencies relating to our agreement to indemnify Telesat for certain liabilities and our arrangements with ViaSat, Inc. and Telesat.

Satellite Matters

During the launch of an SS/L-built satellite on June 1, 2012, the satellite’s south solar array was damaged, resulting in a reduction of power available to the satellite’s transponders. SS/L had total orbital receivables related to this satellite of $18 million, which represents the maximum possible loss from this anomaly, excluding the cost of the failure investigation. During the third quarter of 2012, SS/L recorded a charge of $6.5 million to reduce orbital receivables based on the estimated loss of power on the satellite. The write down of SS/L’s orbital receivables as a result of the anomaly also resulted in a $6.5 million payment by Loral to MDA pursuant to the Purchase Agreement relating to the Sale. Any additional reduction in orbital receivables for this satellite prior to November 2, 2013 would result in additional payment by Loral to MDA pursuant to the Purchase Agreement.

Legal Proceedings

ViaSat

ViaSat, Inc. and ViaSat Communications, Inc. (formerly known as WildBlue Communications, Inc.) (collectively, “ViaSat”) have sued SS/L and Loral in the United States District Court for the Southern District of California. ViaSat’s amended complaint alleges, among other things, that SS/L and Loral directly and indirectly infringed, that SS/L and Loral induced infringement, and that SS/L contributed to the infringement of, certain ViaSat patents in connection with the manufacture of satellites by SS/L for customers other than ViaSat. The amended complaint also alleges that each of SS/L and Loral breached non-disclosure obligations in certain contracts with ViaSat. ViaSat’s amended complaint seeks, among other things, damages (including treble damages with respect to the patent infringement claims) in amounts to be determined at trial and to enjoin SS/L and Loral from further infringement of the ViaSat patents and breach of contract.

SS/L and Loral have answered ViaSat’s complaint and asserted defenses to ViaSat’s claims and counterclaims seeking a declaratory judgment that neither SS/L nor Loral has infringed and that they are not infringing the ViaSat patents, that ViaSat’s patents are invalid and that at least certain of ViaSat’s patents are unenforceable due to inequitable conduct. SS/L has also asserted counterclaims against ViaSat for patent infringement, alleging, among other things, that ViaSat infringed certain SS/L patents in connection with its manufacture and sale of certain satellite communication products and services. SS/L’s counterclaims seek, among other things, damages (including treble damages with respect to at least one of the patent infringement claims) in amounts to be determined at trial and to enjoin ViaSat from further infringement of the SS/L patents.

22

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In May 2013, the court denied without prejudice ViaSat’s renewed motion for summary judgment seeking an order declaring that the claims in two of SS/L’s patents are invalid. Also, in May 2013, the court granted in part and denied in part the motion filed by SS/L and Loral seeking an order declaring that three of the claims in one of ViaSat’s patents are invalid as indefinite or, in the alternative, summary judgment of non-infringement of such claims, holding that one of such claims in the patent was invalid.

In August 2013, SS/L and Loral filed a motion for summary judgment seeking an order that certain claims in one of ViaSat’s patents are invalid for being indefinite.

We believe that each of SS/L and Loral has, and we intend vigorously to pursue, meritorious defenses and counterclaims to ViaSat’s claims. There can be no assurance, however, that SS/L’s and Loral’s defenses and counterclaims will be successful with respect to all or some of ViaSat’s claims or that SS/L will prevail with respect to its assertion that ViaSat has infringed SS/L patents. We believe that SS/L’s and Loral’s conduct was consistent with, and in due regard for, any applicable and valid intellectual property rights of ViaSat. Although no assurance can be provided, we do not believe that this matter will have a material adverse effect on our financial position or results of operations.

Under the terms of the Purchase Agreement, as amended, Loral is obligated to indemnify SS/L for certain litigation costs and litigation damages, subject to certain capped cost-sharing by SS/L, and has retained control of the defense of the lawsuit by ViaSat against SS/L and Loral as well as SS/L’s counterclaims against ViaSat in the lawsuit. Under the terms of the Purchase Agreement, following a change of control of Loral, the liability of Loral for certain litigation costs and litigation damages is subject to a dollar cap.

Other Litigation

Other than the litigation with ViaSat discussed above, we are not currently subject to any other legal proceedings. In the future, however, we may become subject to other legal proceedings and claims, either asserted or unasserted, that may arise in the ordinary course of business.

17. Related Party Transactions

Transactions with Affiliates

Telesat

As described in Note 7, we own 62.8% of Telesat and account for our ownership interest under the equity method of accounting.

In connection with the acquisition of our ownership interest in Telesat (which we refer to as the Telesat transaction), Loral and certain of its subsidiaries, our Canadian partner, Public Sector Pension Investment Board (“PSP”) and one of its subsidiaries, Telesat Holdco and certain of its subsidiaries, including Telesat, and MHR entered into a Shareholders Agreement (the “Shareholders Agreement”). The Shareholders Agreement provides for, among other things, the manner in which the affairs of Telesat Holdco and its subsidiaries will be conducted and the relationships among the parties thereto and future shareholders of Telesat Holdco. The Shareholders Agreement also contains an agreement by Loral not to engage in a competing satellite communications business and agreements by the parties to the Shareholders Agreement not to solicit employees of Telesat Holdco or any of its subsidiaries. Additionally, the Shareholders Agreement details the matters requiring the approval of the shareholders of Telesat Holdco (including veto rights for Loral over certain extraordinary actions) and provides for preemptive rights for certain shareholders upon the issuance of certain capital shares of Telesat Holdco. The Shareholders Agreement also restricts the ability of holders of certain shares of Telesat Holdco to transfer such shares unless certain conditions are met or approval of the transfer is granted by the directors of Telesat Holdco, provides for a right of first offer to certain Telesat Holdco shareholders if a holder of equity shares of Telesat Holdco wishes to sell any such shares to a third party and provides for, in certain circumstances, tag-along rights in favor of shareholders that are not affiliated with Loral if Loral sells equity shares and drag-along rights in favor of Loral in case Loral or its affiliate enters into an agreement to sell all of its Telesat Holdco equity securities. In addition, the Shareholders Agreement provides for either PSP or Loral to initiate the process of conducting an initial public offering of the equity shares of Telesat Holdco. There can be no assurance as to whether, when or on what terms an initial public offering of Telesat Holdco equity may occur.

Under the Shareholders Agreement, in the event that, except in certain limited circumstances, either (i) ownership or control, directly or indirectly, by Dr. Rachesky, President of MHR, of Loral’s voting stock falls below certain levels other than in connection with an acquisition by a Strategic Competitor (as defined in the Shareholders Agreement) or (ii) there is a change in the composition of a majority of the members of the Loral Board of Directors over a consecutive two-year period, Loral will lose its veto rights relating to certain extraordinary actions by Telesat Holdco and its subsidiaries. In addition, after either of these events, PSP will have certain rights to enable it to exit from its investment in Telesat Holdco, including a right to cause Telesat Holdco to conduct an initial public offering in which PSP’s shares would be the first shares offered or, if no such offering has occurred within one year due to a lack of cooperation from Loral or Telesat Holdco, to cause the sale of Telesat Holdco and to drag along the other shareholders in such sale, subject to Loral’s right to call PSP’s shares at fair market value.

23

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Shareholders Agreement provides for a board of directors of each of Telesat Holdco and certain of its subsidiaries, including Telesat, consisting of 10 directors, three nominated by Loral, three nominated by PSP and four independent directors to be selected by a nominating committee comprised of one PSP nominee, one nominee of Loral and one of the independent directors then in office. Each party to the Shareholders Agreement is obligated to vote all of its Telesat Holdco shares for the election of the directors nominated by the nominating committee. Pursuant to action by the board of directors taken on October 31, 2007, Dr. Rachesky, who is non-executive Chairman of the Board of Directors of Loral, was appointed non-executive Chairman of the Board of Directors of Telesat Holdco and certain of its subsidiaries, including Telesat. In addition, Michael B. Targoff, Loral’s Vice Chairman, serves on the board of directors of Telesat Holdco and certain of its subsidiaries, including Telesat.

Information related to satellite construction contracts between SS/L and Telesat for the period when we owned SS/L is as follows (in thousands):

	Three Months Ended		Six Months Ended
	June 30, 2012		June 30, 2012
Revenues (included in income from discontinued operations) from Telesat satellite construction contracts	$	22,501	$	46,712
Milestone payments received from Telesat		15,726		34,305

On October 31, 2007, Loral and Telesat entered into a consulting services agreement (the “Consulting Agreement”). Pursuant to the terms of the Consulting Agreement, Loral provides to Telesat certain non-exclusive consulting services in relation to the business of Loral Skynet which was transferred to Telesat as part of the Telesat transaction as well as with respect to certain aspects of the satellite communications business of Telesat. The Consulting Agreement has a term of seven years with an automatic renewal for an additional seven year term if certain conditions are met. In exchange for Loral’s services under the Consulting Agreement, Telesat pays Loral an annual fee of $5.0 million, payable quarterly in arrears on the last day of March, June, September and December of each year during the term of the Consulting Agreement. If the terms of Telesat’s bank or bridge facilities or certain other debt obligations prevent Telesat from paying such fees in cash, Telesat may issue junior subordinated promissory notes to Loral in the amount of such payment, with interest on such promissory notes payable at the rate of 7% per annum, compounded quarterly, from the date of issue of such promissory note to the date of payment thereof. Our general and administrative expenses are net of income related to the Consulting Agreement of $1.25 million for each of the three month periods ended June 30, 2013 and 2012 and $2.5 million for each of the six month periods ended June 30, 2013 and 2012. For the six months ended June 30, 2013 and 2012, Loral received payments in cash from Telesat of $3.8 million and $1.6 million, respectively for consulting fees and interest. We had notes receivable from Telesat of nil and $1.3 million as of June 30, 2013 and December 31, 2012, respectively, related to the Consulting Agreement.

In connection with the Telesat transaction, Loral has retained the benefit of tax recoveries related to the transferred assets and has indemnified Telesat for certain liabilities including Loral Skynet’s tax liabilities arising prior to January 1, 2007. As of June 30, 2013 and December 31, 2012, we had recognized a net receivable from Telesat of $0.5 million, representing our estimate of the probable outcome of these tax matters, which is included as other assets of $2.6 million and long-term liabilities of $2.1 million in the consolidated balance sheets as of June 30, 2013 and December 31, 2012. There can be no assurance, however, that these tax matters will be ultimately settled for the net amount recorded.

Loral, along with Telesat Holdco, Telesat, PSP and 4440480 Canada Inc., an indirect wholly-owned subsidiary of Loral (the “Special Purchaser”), entered into grant agreements (the “Grant Agreements”) with certain executives of Telesat (each, a “Participant” and collectively, the “Participants”). Each of the Participants was, at the time, an executive of Telesat.

The Grant Agreements confirm grants of Telesat Holdco stock options (including tandem SAR rights) to the Participants and provide for certain rights, obligations and restrictions related to such stock options, which include, among other things: (w) the right of each Participant to require the Special Purchaser to purchase a portion of the shares in Telesat Holdco owned by him in the event of exercise after termination of employment to cover taxes that are greater than the minimum withholding amount; (x) the possible obligation of the Special Purchaser to purchase the shares in the place of Telesat Holdco should Telesat Holdco be prohibited by applicable law or under the terms of any credit agreement applicable to Telesat Holdco from purchasing such shares, or otherwise default on such purchase obligation, pursuant to the terms of the Grant Agreements; (y) the obligation of the Special Purchaser to purchase shares upon exercise by Telesat Holdco of its call right under Telesat Holdco’s Management Stock Incentive Plan in the event of a Participant’s termination of employment; and (z) the right of each Participant to require Telesat Holdco to cause the Special Purchaser or Loral to purchase a portion of the shares in Telesat Holdco owned by him, or that are issuable to him under Telesat Holdco’s Management Stock Incentive Plan at the relevant time, in the event that more than 90% of Loral’s common stock is acquired by an unaffiliated third party that does not also purchase all of PSP’s and its affiliates’ interest in Telesat Holdco.

24

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Grant Agreements further provide that, in the event the Special Purchaser is required to purchase shares, such shares, together with the obligation to pay for such shares, shall be transferred to a subsidiary of the Special Purchaser, which subsidiary shall be wound up into Telesat Holdco, with Telesat Holdco agreeing to the acquisition of such subsidiary by Telesat Holdco from the Special Purchaser for nominal consideration and with the purchase price for the shares being paid by Telesat Holdco within ten (10) business days after completion of the winding-up of such subsidiary into Telesat Holdco.

Loral received special cash distributions from Telesat of $376 million on March 28, 2012 and $44 million on July 5, 2012. The distributions were the result of a Telesat refinancing and recapitalization transaction (see Note 7).

ViaSat/Telesat

In connection with an agreement entered into between SS/L and ViaSat, Inc. (“ViaSat”) for the construction by SS/L for ViaSat of a high capacity broadband satellite called ViaSat-1, on January 11, 2008, we entered into certain agreements, described below, pursuant to which, we invested in the Canadian coverage portion of the ViaSat-1 satellite. Until his resignation in February 2012, Michael B. Targoff served, and another Loral director currently serves, as a member of the ViaSat Board of Directors.

A Beam Sharing Agreement between us and ViaSat provided for, among other things, (i) the purchase by us of a portion of the ViaSat-1 satellite payload providing coverage into Canada (the “Loral Payload”) and (ii) payment by us of 15% of the actual costs of launch and associated services, launch insurance and telemetry, tracking and control services for the ViaSat-1 satellite. SS/L commenced construction of the ViaSat-1 satellite in January 2008. SS/L recorded sales to ViaSat under this contract of $0.2 million, for the three months ended June 30, 2012 and $0.5 million for the six months ended June 30, 2012. SS/L’s sales to ViaSat have been included in income from discontinued operations in our statements of operations for the three and six months ended June 30, 2012.

On April 11, 2011, Loral assigned to Telesat and Telesat assumed from Loral all of Loral’s rights and obligations with respect to the Loral Payload and all related agreements. In connection with the assignment, Loral is entitled to receive one-half of any net revenue earned by Telesat in connection with the leasing of certain supplemental capacity on the payload to its customers during the first four years after the commencement of service using the supplemental capacity. For the three and six months ended June 30, 2013, we earned approximately $0.3 million and $0.8 million, respectively, under this arrangement. We had a receivable from Telesat of $0.3 million and $1.0 million as of June 30, 2013 and December 31, 2012, respectively, related to this arrangement. In connection with the sale, Loral also assigned to Telesat and Telesat assumed Loral’s 15-year contract with Xplornet Communications, Inc. (“Xplornet”) (formerly known as Barrett Xplore Inc.) for delivery of high throughput satellite Ka-band capacity and gateway services for broadband services in Canada.

Costs of satellite manufacturing for sales to related parties included in income from discontinued operations were $10.2 million and $24.3 million for the three and six months ended June 30, 2012.

In connection with an agreement reached in 1999 and an overall settlement reached in February 2005 with ChinaSat relating to the delayed delivery of ChinaSat 8, SS/L has provided ChinaSat with usage rights to two Ku-band transponders on Telesat’s Telstar 10 for the life of such transponders (subject to certain restoration rights) and to one Ku-band transponder on Telesat’s Telstar 18 for the life of the Telstar 10 satellite plus two years, or the life of such transponder (subject to certain restoration rights), whichever is shorter. Pursuant to an amendment to the agreement executed in June 2009, in lieu of rights to one of the Ku-band transponders on Telstar 10, ChinaSat has rights to an equivalent amount of Ku-band capacity on Telstar 18 (the “Alternative Capacity”). The Alternative Capacity may be utilized by ChinaSat until April 30, 2019 subject to certain conditions. Under the agreement, SS/L makes monthly payments to Telesat for the transponders allocated to ChinaSat. Effective with the termination of Telesat’s leasehold interest in Telstar 10 in July 2009, SS/L makes monthly payments with respect to capacity used by ChinaSat on Telstar 10 directly to APT, the owner of the satellite. Interest expense on this liability included in income from discontinued operations was $0.1 million and $0.3 million for the three and six months ended June 30, 2012. For the six months ended June 30, 2012, SS/L made payments of $1.4 million to Telesat pursuant to the agreement. The liability for the future use of these transponders was retained by SS/L in connection with the Sale.

25

LORAL SPACE & COMMUNICATIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

XTAR

As described in Note 7, we own 56% of XTAR, a joint venture between Loral and Hisdesat and account for our investment in XTAR under the equity method of accounting. SS/L constructed XTAR’s satellite, which was successfully launched in February 2005. XTAR and Loral have entered into a management agreement whereby Loral provides general and specific services of a technical, financial and administrative nature to XTAR. For the services provided by Loral, XTAR is charged a quarterly management fee equal to 3.7% of XTAR’s quarterly gross revenues. Amounts due to Loral primarily due to the management agreement as of June 30, 2013 and December 31, 2012 were $6.1 million and $5.5 million, respectively. Beginning in 2008, Loral and XTAR agreed to defer amounts owed to Loral under this agreement, and XTAR has agreed that its excess cash balance (as defined), will be applied at least quarterly towards repayment of receivables owed to Loral, as well as to Hisdesat and Telesat. No cash was received under this agreement for the three and six months ended June 30, 2013 and 2012.

MHR Fund Management LLC

Mark H. Rachesky, managing principal of MHR, and Hal Goldstein, a former managing principal of MHR, are members of Loral’s board of directors. Sai S. Devabhaktuni, former managing principal of MHR, was a member of the Loral Board until his resignation in January 2012.

Various funds affiliated with MHR and Dr. Rachesky held, as of June 30, 2013 and December 31, 2012, approximately 38.0% and 38.3%, respectively, of the outstanding voting common stock and as of June 30, 2013 and December 31, 2012 had a combined ownership of outstanding voting and non-voting common stock of Loral of 57.1% and 57.4%, respectively.

Consulting Agreement

On December 14, 2012, Loral entered into a consulting agreement with Michael B. Targoff, Vice Chairman of the Company and former Chief Executive Officer and President. Pursuant to this agreement, Mr. Targoff is engaged as a part-time consultant to the Board to assist the Board with respect to the oversight of strategic matters relating to Telesat and Xtar and the ViaSat lawsuit. Under the agreement, Mr. Targoff receives consulting fees of $120,000 per month before deduction of certain expenses of $17,000 per month for which he reimburses the Company. For the three and six months ended June 30, 2013, Mr. Targoff earned $360,000 (before his expense reimbursement to Loral of $51,000) and $720,000 (before his expense reimbursement to Loral of $102,000), respectively.

26

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements (the “financial statements”) included in Item 1 and our latest Annual Report on Form 10-K filed with the Securities and Exchange Commission.

INDEX

Topic	Location
Overview	Page 29
Consolidated Operating Results	Page 31
Liquidity and Capital Resources:
Loral	Page 37
Telesat	Page 40
Contractual Obligations	Page 42
Statement of Cash Flows	Page 42
Affiliate Matters	Page 43
Commitments and Contingencies	Page 43
Other Matters	Page 44

Loral Space & Communications Inc., a Delaware corporation, together with its subsidiaries (“Loral”, the “Company”, “we”, “our”, and “us”) is a leading satellite communications company engaged, through our ownership interests in affiliates, in satellite-based communications services. Prior to completion of the sale of our wholly-owned subsidiary, Space Systems/Loral, LLC (formerly known as Space Systems/Loral, Inc. (“SS/L”)), we were also engaged in the satellite manufacturing business.

27

Disclosure Regarding Forward-Looking Statements

Except for the historical information contained in the following discussion and analysis, the matters discussed below are not historical facts, but are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition, we or our representatives have made and may continue to make forward-looking statements, orally or in writing, in other contexts. These forward-looking statements can be identified by the use of words such as “believes,” “expects,” “plans,” “may,” “will,” “would,” “could,” “should,” “anticipates,” “estimates,” “project,” “intend,” or “outlook” or other variations of these words. These statements, including without limitation, those relating to Telesat, are not guarantees of future performance and involve risks and uncertainties that are difficult to predict or quantify. Actual events or results may differ materially as a result of a wide variety of factors and conditions, many of which are beyond our control. For a detailed discussion of these and other factors and conditions, please refer to the Commitments and Contingencies section below and to our other periodic reports filed with the Securities and Exchange Commission (“SEC”). We operate in an industry sector in which the value of securities may be volatile and may be influenced by economic and other factors beyond our control. We undertake no obligation to update any forward-looking statements.

28

Overview

Business

Sale of SS/L

On November 2, 2012, Loral completed the sale (the “Sale”) of its wholly-owned subsidiary, SS/L, to MDA Communications Holdings, Inc. (“MDA Holdings”), a subsidiary of MacDonald, Dettwiler and Associates Ltd. (“MDA”). Pursuant to the purchase agreement (the “Purchase Agreement”), dated as of June 26, 2012, as amended on October 30, 2012 and March 28, 2013, by and among Loral, SS/L, MDA and MDA Holdings, Loral received total cash payments of $967.9 million plus, for the sale of certain real estate used in connection with SS/L’s business, a three-year promissory note in the principal amount of $101 million (the “Land Note”). Transaction costs related to the Sale were $35.2 million.

Subsequent to the closing of the Sale and pursuant to the Purchase Agreement, Loral, in December 2012, paid MDA $6.5 million as a result of the resolution of a contingency (see Note 16 to the financial statements). Also, in April 2013, pursuant to the Purchase Agreement, we completed the final allocation of qualified pension plan assets between Loral and SS/L (see Note 14 to the financial statements).

The transaction was taxable, and, for tax purposes, treated as a sale of assets.

Under the terms of the Purchase Agreement, Loral is obligated to indemnify SS/L for certain litigation costs and litigation damages, subject to certain capped cost-sharing by SS/L, and has retained control of the defense of the lawsuit against SS/L and Loral by ViaSat, Inc. as well as SS/L’s counterclaims against ViaSat, Inc. in that lawsuit. Under the terms of the Purchase Agreement, following a change of control of Loral, the liability of Loral for certain litigation costs and litigation damages is subject to a dollar cap. In addition, Loral is obligated to indemnify SS/L from liabilities with respect to certain pre-closing taxes.

The Land Note originally issued at closing provided for interest at the rate of 1% per annum with amortization in three equal annual installments on each March 31, commencing March 31, 2013. The Land Note was amended as described below and is backed by a letter of guarantee from Royal Bank of Canada.

On November 7, 2012, in connection with the receipt of the proceeds from the Sale, our Board of Directors declared a special distribution of $29.00 per share for an aggregate distribution of $892.1 million. The special distribution was paid on December 4, 2012 to holders of record of Loral voting and non-voting common stock as of November 19, 2012. In accordance with Loral’s stock incentive plan, an equitable adjustment was made to outstanding stock-based awards to reflect the special distribution.

On March 28, 2013, Loral and MDA amended the Purchase Agreement to modify SS/L’s capped cost sharing obligations related to Loral’s indemnification of the certain litigation costs and litigation damages and also amended the Land Note to defer to March 31, 2014 the due date of the principal payment from MDA to Loral of $33.7 million due originally on March 31, 2013 with an increase in the interest rate applicable to this tranche of the Land Note from 1.0% to 1.5% effective as of April 1, 2013.

Description of Business

Subsequent to the Sale, Loral has one operating segment consisting of satellite-based communications services. Loral participates in satellite services operations through its ownership interest in Telesat Holdings Inc. (“Telesat Holdco”) which owns Telesat Canada (“Telesat”), a leading global satellite operator, with offices and facilities around the world. Telesat provides its satellite and communication services from a fleet of satellites that occupy Canadian and other orbital locations.

Loral holds a 62.8% economic interest and a 32.7% voting interest in Telesat, the world’s fourth largest satellite operator with approximately $4.7 billion of backlog as of June 30, 2013.

Telesat provides satellite services to customers from its fleet of 14 satellites. In addition, Telesat owns the Canadian payload on the ViaSat-1 satellite.

The satellite services business is capital intensive and the build-out of a satellite fleet requires substantial time and investment. Once the investment in a satellite is made, the incremental costs to maintain and operate the satellite are relatively low over the life of the satellite, with the exception of in-orbit insurance. Telesat has been able to generate a large contracted revenue backlog by entering into long-term contracts with some of its customers for all or substantially all of a satellite’s life. Historically, this has resulted in revenue from the satellite services business being fairly predictable.

29

Telesat’s commitment to providing strong customer service and its focus on innovation and technical expertise has allowed it to successfully build its business to date. Building on its existing contractual revenue backlog, Telesat’s focus is on taking disciplined steps to grow its core business and sell newly launched and existing in-orbit satellite services, and, in a disciplined manner, use the cash flow generated by existing business, contracted expansion satellites and cost savings to strengthen the business.

Telesat believes its satellite fleet offers a strong combination of existing revenue backlog, and a strong foundation upon which it will seek to continue to grow its revenue and cash flows. The growth is expected to come from the sale of available capacity on its existing in-orbit satellites, including its Anik G1 satellite, which began commercial service on May 8, 2013.

Telesat has contracted with Astrium SAS to procure a powerful, multi-mission satellite that will replace and expand on Telstar 12 at 15 degrees West. This new state-of-the-art satellite, which Telesat expects to launch in late 2015, will utilize high throughput capabilities and offer superior performance which Telesat believes will meet the growing needs of broadcast, corporate, government and enterprise users, including demand for aero and maritime services. The satellite will offer a high level of flexibility with coverage of Europe, the Americas, the Middle East, Africa, the Caribbean, North Sea, Mediterranean and South Atlantic regions.

Telesat believes that it is well-positioned to serve its customers and the markets in which it participates. Telesat actively pursues opportunities to develop new satellites, particularly in conjunction with current or prospective customers who will commit to long term service agreements prior to the time the satellite construction contract is signed. Although Telesat regularly pursues opportunities to develop new satellites, it does not procure additional or replacement satellites until it believes there is a demonstrated need and a sound business plan for such satellite capacity.

Telesat anticipates that the relatively fixed cost nature of the business, combined with contracted revenue growth and other growth opportunities, will produce growth in operating income and cash flow.

For the remainder of 2013, Telesat will remain focused on: increasing utilization of its existing satellites, identifying and pursuing opportunities to expand its satellite fleet and maintaining cost and operating discipline.

Telesat’s operating results are subject to fluctuations as a result of exchange rate variations. Approximately 47% of Telesat’s revenues received in Canada for the three and six months ended June 30, 2013, and a substantial portion of its expenses, indebtedness and capital expenditures are denominated in U.S. dollars. The most significant impact of variations in the exchange rate is on the U.S. dollar denominated debt financing. As of June 30, 2013, Telesat’s U.S. dollar denominated debt totaled $2.6 billion. As of June 30, 2013, a five percent increase (decrease) in the Canadian dollar against the U.S. dollar would have increased (decreased) Telesat’s net income by approximately $146 million. This analysis assumes all other variables, in particular interest rates, remain constant.

General

Since the Sale, Loral’s principal asset continues to be its majority ownership interest in Telesat. With the goal of maximizing shareholder value, we have previously explored and expect to continue to explore potential strategic transactions involving the possible disposition of Loral’s interest in Telesat. The exact structure of any such transaction has not yet been determined and may include a disposition of Loral itself. Any disposition will need to comply with the rights and obligations of the parties to the Telesat Shareholders Agreement. There can be no assurance as to whether, when or on what terms a strategic transaction involving Telesat or Loral may occur, or that any particular economic, tax, structural or other objectives or benefits with respect to any transaction involving Telesat or Loral’s interest therein will be achieved.

Loral may, from time to time, explore and evaluate other possible strategic transactions and alliances which may include joint ventures and strategic relationships as well as business combinations or the acquisition or disposition of assets. In order to pursue certain of these opportunities, additional funds are likely to be required. There can be no assurance that we will enter into additional strategic transactions or alliances, nor do we know if we will be able to obtain the necessary financing for transactions that require additional funds on favorable terms, if at all.

30

In connection with the Sale, Loral has restructured its corporate functions and has reduced the number of employees at its headquarters. During 2012, Loral charged approximately $11.8 million to general and administrative expenses, mainly for severance and related costs, and paid approximately $8.0 million. During the three and six months ended June 30, 2013 Loral paid approximately $2.7 million and $2.9 million, respectively, in restructuring costs and at June 30, 2013, the liability recorded in the condensed consolidated balance sheet for the restructuring was $0.9 million which includes all expected future payments under the restructuring plan relating to the Sale.

In connection with the corporate office restructuring as a result of the Sale, on December 13, 2012, Loral’s Board of Directors approved termination of Loral’s supplemental retirement plan (the “SERP”). The Company expects to make lump sum payments to the participants in the SERP between December 16, 2013 and December 31, 2013 in accordance with the requirements of Section 409A of the Internal Revenue Code and the regulations promulgated thereunder. Our unfunded benefit obligations include approximately $18.2 million for future SERP payments based on benefits earned as of June 30, 2013.

In connection with the acquisition of our ownership interest in Telesat in 2007, Loral has agreed that, subject to certain exceptions described in Telesat’s shareholders agreement, for so long as Loral has an interest in Telesat, it will not compete in the business of leasing, selling or otherwise furnishing fixed satellite service, broadcast satellite service or audio and video broadcast direct to home service using transponder capacity in the C-band, Ku-band and Ka-band (including in each case extended band) frequencies and the business of providing end-to-end data solutions on networks comprised of earth terminals, space segment, and, where appropriate, networking hubs.

Consolidated Operating Results

See Critical Accounting Matters in our latest Annual Report on Form 10-K filed with the SEC and Note 2 to the financial statements.

Changes in Critical Accounting Policies — There have been no changes in our critical accounting policies during the six months ended June 30, 2013.

Consolidated Operating Results

Three Months Ended June 30, 2013 Compared With Three Months Ended June 30, 2012

The following compares our consolidated results for the three months ended June 30, 2013 and 2012 as presented in our financial statements (in millions):

General and Administrative Expenses

	Three Months Ended June 30,
	2013		2012
General and administrative expenses	$	3.4	$	4.3

General and administrative expenses decreased by $0.9 million for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012, primarily due to a $1.6 million reduction in compensation resulting from the restructuring of our corporate functions and $0.3 million of income earned from supplemental capacity on the ViaSat-1 satellite, partially offset by a $1.0 million increase in pension expense due to accelerated amortization as a result of the termination of our supplemental retirement plan.

Interest and Investment Income

	Three Months Ended June 30,
	2013		2012
Interest and investment income	$	0.3	$	0.4

Interest and investment income, which consists primarily of interest on our cash balance and notes receivable, decreased by $0.1 million for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012 primarily due to the reduction in the balance of notes receivable from Telesat in 2013, partially offset by the increase due to the interest on the Land Note in 2013.

31

Other Expense

Other expense of $0.3 million for the three months ended June 30, 2013 is primarily comprised of expenses related to the evaluation of strategic initiatives. Other expense of $0.2 million for the three months ended June 30, 2012 was primarily comprised of expenses of $1.4 million related to the sale of SS/L, substantially offset by a $1.3 million gain related to a foreign exchange forward contract to hedge the foreign exchange risk associated with the payment of the second tranche of the special cash distribution from Telesat that was received in July 2012.

Income Tax Provision

For the three months ended June 30, our income tax provision is summarized as follows: (i) for 2013, we recorded a current tax benefit of $7.1 million (which included a provision of $0.2 million to increase our liability for uncertain tax positions (“UTPs”)) and a deferred tax provision of $9.3 million (which included a benefit of $0.1 million for UTPs), resulting in a total provision of $2.2 million on a pre-tax loss of $3.4 million and (ii) for 2012, we recorded a current tax provision of $1.2 million to increase our liability for UTPs and a deferred tax benefit of $7.0 million (which included a benefit of $0.5 million for UTPs), resulting in a total benefit of $5.8 million on a pre-tax loss of $4.1 million.

The income tax provision includes our tax expense on equity in net income (loss) of affiliates, although equity in net income (loss) of affiliates is shown below the line for income tax provision on the condensed consolidated statements of operations.Our income tax provision for each period is computed by applying an expected effective annual tax rate (negative 86% for 2013 and positive 39% for 2012) against the pre-tax loss for the six months ended June 30, 2013 and 2012 (before adjusting for certain tax items that are discrete to each period) less the provision recorded for the three months ended March 31, 2013 and 2012.

For the three months ended June 30, 2012, we increased our deferred tax provision by $1.5 million to establish an additional valuation allowance against our net deferred tax assets after having determined, based on all available evidence, that at that time it was more likely than not that we would not realize the benefit from that portion of our deferred tax assets in the future.

Subsequent to the Sale, to the extent that Loral’s profitability from operations is not sufficient to realize the benefit from our remaining net deferred tax assets, we would generate sufficient taxable income from the appreciated value of our Telesat investment, which currently has a nominal tax basis, in order to prevent the federal net operating losses from expiring and realize the benefit of all the remaining deferred tax assets.

Loral is projecting a tax loss for 2013 which will be available as a carryback benefit against the taxes previously paid for 2012. As of June 30, 2013, taxes receivable of $13.3 million have been recorded on the condensed consolidated balance sheet for this benefit.

Equity in Net Income (Loss) of Affiliates

Equity in net income (loss) of affiliates consists of (in millions):

	Three Months Ended June 30,
	2013			2012
Telesat	$	0.7		$	(8.9	)
XTAR, LLC		(1.7	)		(2.5	)
Other		1.1			—
	$	0.1		$	(11.4	)

As of June 30, 2013 and December 31, 2012, we held a 62.8% economic interest in Telesat. Our economic interest decreased from 64% to 62.8% in December 2012 when certain executives of Telesat exercised share appreciation rights related to a total of 5,311,568 stock options granted under Telesat’s share based compensation plan and received 2,249,747 non-voting participating preferred shares.

Loral’s equity in net income of Telesat is based on our proportionate share of Telesat’s results in accordance with U.S. GAAP and in U.S. dollars. The amortization of Telesat fair value adjustments applicable to the Loral Skynet assets and liabilities acquired by Telesat in 2007 is proportionately eliminated in determining our share of the net income or losses of Telesat. Our equity in net income (loss) of Telesat also reflects the elimination of our profit, to the extent of our beneficial interest, on satellites we constructed for Telesat while we owned SS/L.

32

Summary financial information for Telesat in accordance with U.S. GAAP and in Canadian dollars (“CAD”) and U.S. dollars (“$”) for the three months ended June 30, 2013 and 2012 follows (in millions):

	Three Months Ended June 30,						Three Months Ended June 30,
	2013			2012			2013			2012
	(In Canadian dollars)						(In U.S. dollars)
Statement of Operations Data:
Revenues		214.3			201.9			210.0			199.9
Operating expenses		(45.1	)		(52.9	)		(44.2	)		(52.2	)
Depreciation, amortization and stock-based compensation		(64.1	)		(61.6	)		(62.8	)		(61.0	)
Loss on disposition of long lived asset		(2.1	)		—			(2.0	)		—
Operating income		103.0			87.4			101.0			86.7
Interest expense		(52.1	)		(62.1	)		(51.1	)		(61.6	)
Expense of refinancing		(0.1	)		(58.0	)		—			(57.6	)
Foreign exchange losses		(100.2	)		(56.3	)		(98.4	)		(56.2	)
Gains on financial instruments		60.8			25.7			59.8			25.7
Other income		10.6			0.3			10.5			0.3
Income tax provision		(19.4	)		(6.7	)		(19.2	)		(6.7	)
Net income (loss)		2.6			(69.7	)		2.6			(69.4	)
Average exchange rate for translating Canadian dollars to U.S. dollars (1 U.S. dollar equals)		1.0203			1.0104

Telesat’s revenue increased by $10 million for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012 due primarily to revenue on the Nimiq 6 and Anik G1 satellites which entered commercial service in June 2012 and May 2013, respectively. These increases were partially offset by decreases in revenue with respect to the Nimiq 1 satellite, which was returned by Telesat’s customer in the fourth quarter of 2012, and the Nimiq 2 satellite, which has continued to suffer solar array circuit failures thereby decreasing the number of available transponders and revenue associated with the satellite. Telesat’s revenue excluding foreign exchange impact would have increased $11 million for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012.

Telesat’s operating expense for the three months ended June 30, 2012 included a $7 million expense related to special payments to executives and certain employees of Telesat in connection with the cash distribution made to Telesat’s shareholders. Expense of refinancing for the three months ended June 30, 2012 results from the refinancing of Telesat’s 6% senior notes in May 2012. Deferred financing costs and redemption premiums on the previous senior notes were charged to expense as a result of the refinancing.

Telesat’s operating income increased by $15 million for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012 primarily due to expense related to the special payments to executives and certain employees of Telesat in connection with the cash distribution to shareholders in 2012, lower in-orbit insurance in 2013 and the revenue increase described above, partially offset by an increase in stock based compensation expense and higher revenue related expense in 2013. Foreign exchange rate changes had no significant net impact on the change in operating income for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012.

Telesat’s operating results are subject to fluctuations as a result of exchange rate variations to the extent that transactions are made in currencies other than Canadian dollars. Telesat’s main currency exposures as of June 30, 2013 lie in its U.S. dollar denominated cash and cash equivalents, accounts receivable, accounts payable and debt financing. The most significant impact of variations in the exchange rate is on the U.S. dollar denominated debt financing. As of June 30, 2013, Telesat’s U.S. dollar denominated debt totaled $2.6 billion. As of June 30, 2013, a five percent change in the value of the Canadian dollar against the U.S. dollar would have increased or decreased Telesat’s net income for the three months ended June 30, 2013 by approximately $146 million. This analysis assumes all other variables, in particular interest rates, remain constant.

33

The equity losses in XTAR, LLC (“XTAR”), our 56% owned joint venture, represent our share of XTAR losses incurred in connection with its operations.

We regularly evaluate our investment in XTAR to determine whether there has been a decline in fair value that is other than temporary. We have performed an impairment test for our investment in XTAR as of June 30, 2013, using the most recent forecast, and concluded that our investment in XTAR was not impaired. Any declines in XTAR’s projected revenues may result in a future impairment charge.

During the three months ended June 30, 2013, we recorded a gain of $1.1 million related to the sale of our ownership interests in an affiliate with no carrying value.

Six Months Ended June 30, 2013 Compared With Six Months Ended June 30, 2012

The following compares our consolidated results for the six months ended June 30, 2013 and 2012 as presented in our financial statements (in millions):

General and Administrative Expenses

	Six Months Ended June 30,
	2013		2012
General and administrative expenses	$	7.1	$	8.9

General and administrative expenses decreased by $1.8 million for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012, primarily due to a $3.0 million reduction in compensation resulting from the restructuring of our corporate functions and $0.8 million of income earned from supplemental capacity on the ViaSat-1 satellite, partially offset by a $2.0 million increase in pension expense due to accelerated amortization as a result of the termination of our supplemental retirement plan.

Interest and Investment Income

	Six Months Ended June 30,
	2013		2012
Interest and investment income	$	0.6	$	0.9

Interest and investment income, which consists primarily of interest on our cash balance and notes receivable, decreased by $0.3 million for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012 primarily due to the reduction in the balance of notes receivable from Telesat in 2013, partially offset by the increase due to the interest on the Land Note in 2013.

Other Expense

Other expense of $0.4 million for the six months ended June 30, 2013 is primarily comprised of expenses related to the evaluation of strategic initiatives. Other expense of $0.6 million for the six months ended June 30, 2012 was comprised of $1.9 million of expenses related to the sale of SS/L, partially offset by a $1.3 million gain related to a foreign exchange forward contract to hedge the foreign exchange risk associated with the payment of the second tranche of the special cash distribution from Telesat that was received in July 2012.

34

Income Tax Provision

For the six months ended June 30, our income tax provision is summarized as follows: (i) for 2013, we recorded a current tax benefit of $6.3 million (which included a provision of $0.7 million to increase our liability for UTPs) and a deferred tax provision of $11.3 million (which included a benefit of $0.2 million for UTPs), resulting in a total provision of $5.0 million on a pre-tax loss of $6.9 million and (ii) for 2012, we recorded a current tax benefit of $0.6 million to decrease our liability for UTPs and a deferred tax benefit of $1.9 million, resulting in a total benefit of $2.5 million on a pre-tax loss of $8.7 million.

Our income tax provision for each period is computed by applying an expected effective annual tax rate against the pre-tax loss for the six months ended June 30, 2013 and 2012 (before adjusting for certain tax items that are discrete to each period). The income tax provision includes our tax expense on equity in net income (loss) of affiliates, although equity in net income (loss) of affiliates is shown below the line for income tax provision on the condensed consolidated statements of operations. For 2013, the impact of taxes provided on our projected equity in net income of Telesat for the full year relative to the projected pre-tax loss from continuing operations caused our expected effective annual tax rate (projected provision for the full year as a percentage of our projected pre-tax loss for the full year) to be negative 86% thereby increasing our deferred tax provision by approximately $9.1 million. For 2012, our expected effective annual tax rate was positive 39%, which was applied against the pre-tax loss of $8.7 million (the effect of our projected equity in net income (loss) of Telesat was minimal).

The income tax provision for the six months ended June 30, 2013 included a discrete tax benefit of $1.4 million related to other equity in net income (loss) of affiliates of $3.7 million (see Note 7 to the financial statements). For the six months ended June 30, 2012, we increased our deferred tax provision by $1.5 million to establish an additional valuation allowance against our net deferred tax assets after having determined, based on all available evidence, that at that time it was more likely than not that we would not realize the benefit from that portion of our deferred tax assets in the future.

Subsequent to the Sale, to the extent that Loral’s profitability from operations is not sufficient to realize the benefit from our remaining net deferred tax assets, we would generate sufficient taxable income from the appreciated value of our Telesat investment, which currently has a nominal tax basis, in order to prevent the federal net operating losses from expiring and realize the benefit of all the remaining deferred tax assets.

Loral is projecting a tax loss for 2013 which will be available as a carryback benefit against the taxes previously paid for 2012. As of June 30, 2013, taxes receivable of $13.3 million have been recorded on the condensed consolidated balance sheet for this benefit.

Equity in Net Income (Loss) of Affiliates

	Six Months Ended June 30,
	2013			2012
Telesat	$	—		$	(1.5	)
XTAR, LLC		(3.5	)		(3.0	)
Other		(3.7	)		—
	$	(7.2	)	$	(4.5	)

As of June 30, 2013 and December 31, 2012, we held a 62.8% economic interest in Telesat. Our economic interest decreased from 64% to 62.8% in December 2012 when certain executives of Telesat exercised share appreciation rights related to a total of 5,311,568 stock options granted under Telesat’s share based compensation plan and received 2,249,747 non-voting participating preferred shares.

In March 2012, Telesat completed a refinancing and recapitalization transaction which resulted in special cash distributions to Loral of CAD 375 million ($376 million) in the first quarter of 2012 and CAD 45 million ($44 million) in July 2012 (see Note 7 to the financial statements). As of June 30, 2013 and December 31, 2012, the special cash distributions received from Telesat exceeded our recorded cumulative equity in net income of Telesat and our initial investment by approximately $18 million and $7 million, respectively. In following the equity method of accounting, our investment balance in Telesat was reduced to zero as of June 30, 2013 and December 31, 2012, and we will not record equity in comprehensive income of Telesat until our share of Telesat’s future comprehensive income exceeds $18 million.

35

The following is a reconciliation of the changes in our investment in Telesat for the six months ended June 30, 2013 (in millions):

	Six Months Ended June 30, 2013
Ending balance, December 31, 2012	$	—
Equity in net loss of Telesat		(8.5	)
Proportionate share of Telesat other comprehensive loss		(0.3	)
Eliminations of affiliate transactions and related amortization		(1.5	)
Additional unrecognized loss for the six months ended June 30, 2013		10.3
Ending balance, June 30, 2013	$	—

Summary financial information for Telesat in accordance with U.S. GAAP and in Canadian dollars (“CAD”) and U.S. dollars (“$”) for the six months ended June 30, 2013 and 2012 follows (in millions):

	Six Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In Canadian dollars)						(In U.S. dollars)
Statement of Operations Data:
Revenues		433.2			398.2			427.5			395.9
Operating expenses		(95.6	)		(136.7	)		(94.3	)		(135.9	)
Depreciation, amortization and stock-based compensation		(122.3	)		(122.2	)		(120.7	)		(121.5	)
Loss on disposition of long lived asset		(1.6	)		(0.1	)		(1.5	)		(0.1	)
Operating income		213.7			139.2			211.0			138.4
Interest expense		(112.2	)		(113.9	)		(110.7	)		(113.3	)
Expense of refinancing		(20.2	)		(79.9	)		(20.0	)		(79.4	)
Foreign exchange (losses) gains		(171.0	)		6.3			(168.7	)		6.3
Gains (losses) on financial instruments		97.9			(0.7	)		96.6			(0.7	)
Other income		11.0			1.0			10.8			1.0
Income tax provision		(27.3	)		(4.3	)		(27.0	)		(4.3	)
Net loss		(8.1	)		(52.3	)		(8.0	)		(52.0	)
Average exchange rate for translating Canadian dollars to U.S. dollars (1 U.S. dollar equals)		1.0135			1.0058

	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
	(In Canadian dollars)				(In U.S. dollars)
Balance Sheet Data:
Current assets		238.7		287.3		226.9		289.6
Total assets		5,161.9		5,300.1		4,907.4		5,342.3
Current liabilities		278.8		235.8		265.1		237.7
Long-term debt, including current portion		3,411.9		3,492.1		3,243.7		3,519.9
Total liabilities		4,607.2		4,733.3		4,380.0		4,771.0
Shareholders’ equity		554.7		566.8		527.4		571.3
Period end exchange rate for translating Canadian dollars to U.S. dollars (1 U.S. dollar equals)		1.0519		0.9921

36

Telesat’s revenue increased by $32 million for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012 due primarily to revenue on the Nimiq 6 and Anik G1 satellites which entered commercial service in June 2012 and May 2013, respectively, and increased enterprise services revenues from higher equipment sales and growth in international activities. These increases were partially offset by decreases in revenue with respect to the Nimiq 1 satellite, which was returned by Telesat’s customer in the fourth quarter of 2012, and the Nimiq 2 satellite, which has continued to suffer solar array circuit failures thereby decreasing the number of available transponders and revenue associated with the satellite. Telesat’s revenue excluding foreign exchange impact would have increased $33 million for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012.

Telesat’s operating expense for the six months ended June 30, 2012 included a $44 million expense related to special payments to executives and certain employees of Telesat in connection with the cash distribution made to Telesat’s shareholders. Expense of refinancing for the six months ended June 30, 2012 results from Telesat entering into a new credit agreement in March 2012 and the refinancing of Telesat’s 6% senior notes in May 2012. Deferred financing costs on the previous credit facilities and deferred financing costs and redemption premiums on the previous senior notes were charged to expense as a result of these refinancings.

Telesat’s operating income increased by $73 million for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012 primarily due to the expense related to the special payments to executives and certain employees of Telesat in connection with the cash distribution to shareholders in 2012, non-recurring cost associated with a payment made to independent directors in 2012, lower in-orbit insurance in 2013 and the revenue increase described above, partially offset by an increase in stock-based compensation and higher costs related to equipment sales in 2013. Foreign exchange rate changes had no significant net impact on the change in operating income for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012.

Expense of refinancing for the six months ended June 30, 2013 primarily represents the premium paid and the write-off of deferred financing costs related to the redemption of Telesat’s 12.5% senior subordinated notes.

The equity losses in XTAR, our 56% owned joint venture, represent our share of XTAR losses incurred in connection with its operations.

We regularly evaluate our investment in XTAR to determine whether there has been a decline in fair value that is other than temporary. We have performed an impairment test for our investment in XTAR as of June 30, 2013, using the most recent forecast, and concluded that our investment in XTAR was not impaired. Any declines in XTAR’s projected revenues may result in a future impairment charge.

For the six months ended June 30, 2013, we recorded a loss contingency of $4.8 million for an indemnification of pre-closing liabilities related to our sale of Globalstar do Brasil S.A. in 2008. We also recorded a gain of $1.1 million related to the sale of our ownership interests in an affiliate with no carrying value.

Backlog

Telesat’s backlog as of June 30, 2013 and December 31, 2012 was $4.7 billion and $5.2 billion, respectively.

The decrease in Telesat’s backlog as of June 30, 2013 compared with December 31, 2012 was the result of exchange rate changes and the realization of a portion of previous backlog as revenues, partially offset by additional bookings.

Liquidity and Capital Resources

Loral

As of June 30, 2013, Loral’s principal asset is a 62.8% economic interest in Telesat. In addition, we have a 56% economic interest in XTAR and a note receivable of $101 million related to the Sale. The operations of Telesat and XTAR are not consolidated but are presented using the equity method of accounting.

Loral has no debt. Telesat has third party debt with financial institutions. XTAR has no external debt other than to its LLC member, Hisdesat, for restructured lease payments on the Spainsat satellite. XTAR makes payments of $5 million per year to pay down the outstanding restructured lease balance. The Company has not provided a guarantee for the debt of Telesat or XTAR.

37

Cash is maintained at Loral, Telesat and XTAR to support the operating needs of each respective entity. The ability of Telesat to pay dividends or certain other restricted payments as well as consulting fees in cash to Loral is governed by applicable covenants relating to its debt and its shareholder agreement. The ability of XTAR to pay dividends and management fees in cash to Loral is governed by its operating agreement.

Cash and Available Credit

At June 30, 2013, Loral had $30 million of cash and cash equivalents, the Land Note of $101 million and no debt. The Company’s cash and cash equivalents decreased by $57 million from December 31, 2012. The cash decrease during the first six months of 2013 consisted primarily of a payment of $35 million for income taxes on the gain related to the Sale, $9 million of withholding taxes paid related to stock-based compensation, a $4 million indemnification payment to Globalstar do Brasil, $3 million of severance payments and $3 million of corporate expenses. A discussion of cash changes by activity is set forth in the sections, “Net Cash Used In Operating Activities,” “Net Cash Provided By Investing Activities,” and “Net Cash Used In Financing Activities.”

The Company did not have a credit facility as of June 30, 2013.

Cash Management

We have a cash management investment program that seeks a competitive return while maintaining a conservative risk profile. Our cash management investment policy establishes what we believe to be conservative guidelines relating to the investment of surplus cash. The policy allows us to invest in commercial paper, money market funds and other similar short term investments but does not permit us to engage in speculative or leveraged transactions, nor does it permit us to hold or issue financial instruments for trading purposes. The cash management investment policy was designed to preserve capital and safeguard principal, to meet all of our liquidity requirements and to provide a competitive rate of return for similar risk categories of investment. The policy addresses dealer qualifications, lists approved securities, establishes minimum acceptable credit ratings, sets concentration limits, defines a maturity structure, requires all firms to safe keep securities on our behalf, requires certain mandatory reporting activity and discusses review of the portfolio. We operate the cash management investment program under the guidelines of our investment policy and continuously monitor the investments to avoid risks.

We currently invest cash in several liquid Prime AAA money market funds. The dispersion across funds reduces the exposure of a default at one fund.

Liquidity

On March 28, 2013, Loral entered into Amendment No. 2 to the Purchase Agreement in connection with the sale of SS/L. Under the terms of the Purchase Agreement, Loral is obligated to indemnify SS/L for certain litigation costs and litigation damages relating to the lawsuit with ViaSat, Inc., subject to certain capped cost-sharing by SS/L. Pursuant to Amendment No. 2, the parties agreed to modify SS/L’s capped cost-sharing obligations and also to defer to March 31, 2014 the due date of the principal payment from MDA to Loral of $33.7 million due originally on March 31, 2013 under the $101 million Land Note. With this amendment, we still expect that our cash and cash equivalents will be sufficient to fund projected expenditures for the next 12 months though we may decide to borrow on a short-term basis to allow more efficient cash management. These borrowings, if any, would most likely occur in late 2013. If necessary, we plan to obtain a short-term credit facility that may be used until we receive the initial Land Note payment of $67.3 million on March 31, 2014. The substantial fair value of our assets, which include our 62.8% economic interest in Telesat, should permit us to access the financial markets for this facility. Given the continuously changing financial environment, however, there can be no assurance that Loral would be able to obtain such financing on acceptable terms.

We expect that our major cash outlays for the next 12 months will be payments under our supplemental retirement plan of $18 million including the final lump sum distribution resulting from termination of the plan. Other cash outlays will include employee benefit programs, ViaSat litigation costs and general corporate expenses. We expect the Sale will enable us to reduce the annual run rate of corporate expenses, after a transition period, to approximately $6 million, excluding costs related to the SS/L transaction and net of consulting fees from Telesat of $5 million per year. We are also considering an additional contribution to our qualified pension plan to reduce the unfunded obligation. Offsetting these expenditures will be the income sharing arrangement for certain Canadian transponders on the ViaSat-1 satellite, reimbursement of ViaSat litigation costs from SS/L under the terms of the Purchase Agreement, as amended and receipt of $67.3 million from MDA in March 2014 under the Land Note.

38

Risks to Cash Flow

In the fourth quarter of 2012, we sold our former subsidiary, SS/L, to MDA pursuant to the Purchase Agreement. Under the terms of the Purchase Agreement, we are obligated to indemnify MDA from (1) liabilities with respect to certain pre-closing taxes; (2) certain litigation costs and litigation damages relating to the ViaSat lawsuit, subject to certain sharing formulas and caps; and (3) certain breaches of representations, warranties and covenants, subject to certain limitations on survival of claims, deductibles and caps. In March 2013, we and MDA agreed, among other things, to modify SS/L’s capped cost-sharing obligations. To date, other than with respect to sharing of litigation costs (see below), MDA has submitted one claim for indemnification, which relates to pre-closing taxes. The amount of this claim has not yet been determined. We intend to vigorously contest the underlying tax assessment, but there can be no assurance that we will be successful. Although no assurance can be provided, we do not believe that this matter will have a material adverse effect on our financial position or results of operations. Our condensed consolidated balance sheets include liabilities of $16.8 million and $16.5 million as of June 30, 2013 and December 31, 2012, respectively, representing the estimated fair value of all potential indemnification liabilities relating to the Sale.

ViaSat, Inc. and ViaSat Communications, Inc. (formerly known as WildBlue Communications, Inc.) (collectively, “ViaSat”) have sued SS/L and Loral in the United States District Court for the Southern District of California. ViaSat’s amended complaint alleges, among other things, that SS/L and Loral directly and indirectly infringed, that SS/L and Loral induced infringement, and that SS/L contributed to the infringement of, certain ViaSat patents in connection with the manufacture of satellites by SS/L for customers other than ViaSat. The amended complaint also alleges that each of SS/L and Loral breached non-disclosure obligations in certain contracts with ViaSat. ViaSat’s amended complaint seeks, among other things, damages (including treble damages with respect to the patent infringement claims) in amounts to be determined at trial and to enjoin SS/L and Loral from further infringement of the ViaSat patents and breach of contract.

SS/L and Loral have answered ViaSat’s complaint and asserted defenses to ViaSat’s claims and counterclaims seeking a declaratory judgment that neither SS/L nor Loral has infringed and that they are not infringing the ViaSat patents, that ViaSat’s patents are invalid and that at least certain of ViaSat’s patents are unenforceable due to inequitable conduct. SS/L has also asserted counterclaims against ViaSat for patent infringement, alleging, among other things, that ViaSat infringed certain SS/L patents in connection with its manufacture and sale of certain satellite communication products and services. SS/L’s counterclaims seek, among other things, damages (including treble damages with respect to at least one of the patent infringement claims) in amounts to be determined at trial and to enjoin ViaSat from further infringement of the SS/L patents.

In May 2013, the court denied without prejudice ViaSat’s renewed motion for summary judgment seeking an order declaring that the claims in two of SS/L’s patents are invalid. Also, in May 2013, the court granted in part and denied in part the motion filed by SS/L and Loral seeking an order declaring that three of the claims in one of ViaSat’s patents are invalid as indefinite or, in the alternative, summary judgment of non-infringement of such claims, holding that one of such claims in the patent was invalid.

In August 2013, SS/L and Loral filed a motion for summary judgment seeking an order that certain claims in one of ViaSat’s patents are invalid for being indefinite.

We believe that each of SS/L and Loral has, and we intend vigorously to pursue, meritorious defenses and counterclaims to ViaSat’s claims. There can be no assurance, however, that SS/L’s and Loral’s defenses and counterclaims will be successful with respect to all or some of ViaSat’s claims or that SS/L will prevail with respect to its assertion that ViaSat has infringed SS/L patents. We believe that SS/L’s and Loral’s conduct was consistent with, and in due regard for, any applicable and valid intellectual property rights of ViaSat. Although no assurance can be provided, we do not believe that this matter will have a material adverse effect on our financial position or results of operations.

Under the terms of the Purchase Agreement, as amended, Loral is obligated to indemnify SS/L for certain litigation costs and litigation damages, subject to certain capped cost-sharing by SS/L, and has retained control of the defense of the lawsuit by ViaSat against SS/L and Loral as well as SS/L’s counterclaims against ViaSat in the lawsuit. Under the terms of the Purchase Agreement, following a change of control of Loral, the liability of Loral for certain litigation costs and litigation damages is subject to a dollar cap.

39

Telesat

Cash and Available Credit

As of June 30, 2013, Telesat had CAD 131 million of cash and short-term investments as well as approximately CAD 140 million of borrowing availability under its revolving facility. Telesat believes that cash and short-term investments as of June 30, 2013, cash flow from operating activities and drawings on the available lines of credit under the Telesat credit facility will be adequate to meet its expected cash requirements for at least the next 12 months for activities in the normal course of business, including interest and required principal payments on debt.

Cash Flows from Operating Activities

Cash generated from operating activities for the six months ended June 30, 2013, was CAD 253 million, a CAD 101 million increase over the same period in the prior year. The increase was primarily due to special payments made in the prior year to executives and certain employees of Telesat in connection with the cash distribution made to Telesat’s shareholders, improved working capital, an increase in revenue earned from Telesat’s Nimiq 6 and Anik G1 satellites, higher equipment sales, growth in Telesat’s international enterprise activities and lower interest expense. These increases were partially offset by lower customer prepayments on future satellite services.

Cash Flows used in Investing Activities

Cash used in investing activities for the six months ended June 30, 2013 was CAD 38 million. This consisted primarily of cash outflows related to capital expenditures of CAD 34 million for the launch of Anik G1 in April 2013, and CAD 5 million for other equipment.

Cash Flows used in Financing Activities

Cash used in financing activities for the six months ended June 30, 2013, was CAD 266 million. This was primarily the result of the redemption of Telesat’s 12.5% senior subordinated notes and the associated premiums paid for early redemption. Other financing activities included mandatory repayments made on its term loan A and term loan B credit facilities, debt issue costs relating to the re-pricing and amendment of its credit agreement on April 2, 2013, and satellite performance incentive payments.

Liquidity

A large portion of Telesat’s annual cash receipts are reasonably predictable because they are primarily derived from an existing backlog of long-term customer contracts and high contract renewal rates. Telesat believes its cash flow from operating activities, in addition to cash on hand and available credit facilities, will be sufficient to provide for its capital requirements and to fund its interest and debt payment obligations for the next 12 months.

The construction of any satellite replacement or expansion program will require significant capital expenditures. Telesat may choose to invest in new satellites to further grow its business. Cash required for current and future satellite construction programs will be funded from some or all of the following: cash and short-term investments, cash flow from operating activities, cash flow from customer prepayments or through borrowings on available lines of credit under Telesat’s revolving facility. In addition, Telesat may sell certain satellite assets, and in accordance with the terms and conditions of the Telesat senior secured credit facilities, reinvest the proceeds in replacement satellites or pay down indebtedness under the Telesat senior secured credit facilities. Subject to market conditions and subject to compliance with the terms and conditions of the Telesat credit facilities and the financial leverage covenant tests therein, Telesat may also have the ability to obtain additional secured or unsecured financing to fund current or future satellite construction. Telesat’s ability to access these sources of funding, however, is not guaranteed and, therefore, Telesat may not be able to fully fund additional replacement and new satellite construction programs.

40

Debt

Telesat’s debt as of June 30, 2013 and December 31, 2012 was as follows:

	Maturity	Currency	June 30, 2013			December 31, 2012
			(In CAD millions)
Senior Credit Facilities:
Revolving credit facility	March 28,2017	CAD or USD equivalent		—			—
Term Loan A	March 28,2017	CAD		487			500
Term Loan B - U.S. facility	March 28,2019	USD		1,832			1,703
Term Loan B - Canadian facility	March 28,2019	CAD		140			174
6.0% Senior notes	May 15, 2017	USD		947			893
12.5% Senior subordinated notes	November 1, 2017	USD		—			215
				3,406			3,485
Less:deferred financing costs, interest rate floors and prepayment options				(75	)		(78	)
				3,331			3,407
Current portion				(45	)		(32	)
Long term portion				3,286			3,375

The obligations under the credit agreement and the guarantees of those obligations are secured, subject to certain exceptions, by first priority liens and security interest in the assets of Telesat and the guarantors. The credit agreement contains covenants that restrict the ability of Telesat and certain of its subsidiaries to take specified actions, including, among other things and subject to certain significant exceptions: creating liens, incurring indebtedness, making investments, engaging in mergers, selling property, paying dividends, entering into sales-leaseback transactions, creating subsidiaries, repaying subordinated debt or amending organizational documents. The credit agreement requires Telesat to comply with a maximum senior secured leverage ratio. The credit agreement also contains customary affirmative covenants and events of default.

Each of the Telesat senior secured credit facilities is subject to mandatory principal repayment requirements. The maturity date for each of the Telesat senior secured credit facilities described above will be accelerated if Telesat’s existing 6.0% senior notes due in 2017 or certain refinancing thereof are not repurchased, redeemed, refinanced or deferred before the date that is 91 days prior to the maturity date of such notes.

The senior notes include covenants or terms that restrict Telesat’s ability to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) modify or cancel the Company’s satellite insurance, (vi) effect mergers with another entity, and (vii) redeem the senior notes prior to May 15, 2014, in each case subject to exceptions provided in the senior notes indenture.

On April 2, 2013, Telesat amended its senior secured credit facilities which converted CAD 34 million from Canadian to U.S. dollars and decreased the interest rate on the Canadian term loan B facility and the U.S. term loan B facility by 0.50%. The amendment also decreased the interest rate floors on the debt to 0.75% and 1.00% for the U.S. term loan B facility and Canadian term loan B facility, respectively. The permitted leverage ratio to incur the first lien debt is now 4.25:1.00 which represents a change from the prior 4.00:1.00 senior secured leverage ratio test in the credit agreement.

On May 1, 2013, Telesat redeemed all outstanding 12.5% senior subordinated notes at a price equal to 106.25% of the principal amount from cash on-hand.

As of June 30, 2013, Telesat was in compliance with the financial covenants of its senior secured credit facilities and the indenture governing its 6.0% senior notes.

41

Debt Service Cost

An estimate of the interest expense on the facilities is based upon assumptions of LIBOR and Bankers Acceptance rates and the applicable margin for the Telesat senior secured credit facilities and the senior notes. Telesat’s estimated interest expense for the year ended December 31, 2013 is approximately CAD 205 million.

Derivatives

Telesat has used interest rate and currency derivatives to hedge its exposure to changes in interest rates and foreign exchange rates.

In order to hedge its currency risk, Telesat has cross-currency basis swaps to synthetically convert $1.0 billion of the U.S. term loan facility debt into CAD 1.2 billion of debt. Any non-cash loss will remain unrealized until this contract is settled. The contract matures on October 31, 2014.

At June 30, 2013, Telesat had a series of five interest rate swaps to fix interest on CAD 1.5 billion of Canadian dollar denominated debt at a weighted average fixed rate of 2.63% (excluding applicable margins) and one interest rate swap to pay a fixed rate of 1.46% (excluding applicable margins) on CAD 300 million of U.S. dollar denominated debt. These contracts mature between October 31, 2014 and September 30, 2016.

Telesat also has embedded derivatives. These embedded derivatives are related to a prepayment option included in its senior notes as well as interest rate floors included in its Canadian and U.S. term loan B facilities. The prepayment option on the senior notes will expire on its maturity date of May 15, 2017. The interest rate floors on the Canadian and U.S. term loan B facilities will expire on their respective maturity dates.

Contractual Obligations

There have not been any significant changes to Loral’s contractual obligations as previously disclosed in our latest Annual Report on Form 10-K filed with the SEC.

Statement of Cash Flows

Net Cash Used in Operating Activities

Net cash used in operations was $55 million for the six months ended June 30, 2013.

Net cash used in operating activities by continuing operations was $16 million for the six months ended June 30, 2013, consisting primarily of an increase in income taxes receivable of $13 million, a $7 million decrease in accrued expenses and other current liabilities of which $4 million relates to payment of a Globalstar do Brasil indemnification liability and a $1 million decrease in pension and other postretirement liabilities, partially offset by $3 million from the loss from continuing operations adjusted for non-cash operating items and a $2 million decrease in other current assets and other assets.

Net cash used in operating activities by discontinued operations was $39 million for the three months ended June 30, 2013, consisting primarily of income tax payments of $35 million relating to the gain on the Sale and payment of $3 million of indemnification liabilities related to the Sale.

Net cash used by operations was $52 million for the six months ended June 30, 2012.

Loss from continuing operations adjusted for non-cash items used $9 million. Changes in operating assets and liabilities of continuing operations used $5 million.

Net cash used in operating activities by discontinued operations was $38 million for the six months ended June 30, 2012.

42

Net Cash Provided by Investing Activities

Net cash provided by investing activities from continuing operations for the six months ended June 30, 2012 was $1 million relating to the proceeds from the sale of our ownership interests in an affiliate.

Net cash provided by investing activities for the six months ended June 30, 2012 was $292 million.

Net cash provided by investing activities from continuing operations for the six months ended June 30, 2012 was $376 million relating to a special cash distribution by Telesat.

Net cash used in investing activities by discontinued operations was $84 million for the three months ended June 30, 2012.

Net Cash Used in Financing Activities

Net cash used in financing activities for the six months ended June 30, 2013 was $3 million which includes funding of $9 million of withholding taxes relating to stock-based compensation, partially offset by $6 million of excess tax benefits associated with stock-based compensation.

Net cash used in financing activities for the six months ended June 30, 2012 was $382 million primarily due to payment of a special dividend of $418 million to common shareholders and funding of withholding taxes of $6 million on employee cashless stock option exercises. Discontinued operations provided $40 million of cash from borrowings under the SS/L revolving credit facility.

Affiliate Matters

Loral has made certain investments in joint ventures in the satellite services business that are accounted for under the equity method of accounting. See Note 7 to the financial statements for further information on affiliate matters.

Commitments and Contingencies

Our business and operations are subject to a number of significant risks, the most significant of which are summarized in Part II, Item 1A — Risk Factors and also in Note 16 to the financial statements.

43

Other Matters

Recent Accounting Pronouncements

There are no accounting pronouncements that have been issued but not yet adopted that we believe will have a significant impact on our financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Loral

Foreign Currency

We are subject to the risks associated with fluctuations in foreign currency exchange rates. To limit this foreign exchange rate exposure, the Company seeks to denominate its contracts in U.S. dollars. If we are unable to enter into a contract in U.S. dollars, we review our foreign exchange exposure and, where appropriate, derivatives are used to minimize the risk of foreign exchange rate fluctuations to operating results and cash flows. We do not use derivative instruments for trading or speculative purposes.

Interest

During the second quarter of 2013, cash was invested in money market securities; we did not hold any other marketable securities.

Derivatives

Although Loral has no derivative instruments at June 30, 2013, we have used derivative instruments in the past. If derivative instruments are used in the future, the Company would be exposed to the risk that counterparties to derivative contracts would fail to meet their contractual obligations. To mitigate the counterparty credit risk, the Company has a policy of entering into contracts only with carefully selected major financial institutions based upon their credit ratings and other factors.

Telesat

Foreign Exchange Risk

Telesat’s operating results are subject to fluctuations as a result of exchange rate variations to the extent that transactions are made in currencies other than Canadian dollars. The most significant impact of variations in the exchange rate is on the U.S. dollar denominated debt financing. Telesat is also exposed to foreign currency risk on anticipated transactions, such as the costs of satellite construction, launch and acquisition.

Telesat’s main currency exposures as of June 30, 2013 lie in its U.S. dollar denominated cash and cash equivalents, accounts receivable, accounts payable and debt financing.

Approximately 47% of Telesat’s revenue and a substantial portion of its expenses, indebtedness and capital expenditures are denominated in U.S. dollars for the six months ended June 30, 2013. As a result, the volatility of U.S. currency may expose Telesat to foreign exchange risks.

As of June 30, 2013, a five percent increase (decrease) in the Canadian dollar against the U.S. dollar would have increased (decreased) Telesat’s net income by approximately $146 million. This analysis assumes that all other variables, in particular, interest rates, remain constant.

Interest Rate Risk

Telesat is exposed to interest rate risk on its cash and cash equivalents and its long-term debt, which is primarily variable-rate financing. Changes in the interest rates could impact the amount of interest that Telesat is required to pay.

44

Derivative Financial Instruments

Telesat uses derivative instruments to manage its exposure to foreign currency and interest rate risk. Telesat’s policy is that it does not use derivative instruments for speculative purposes.

Telesat uses, as required, the following instruments:

• forward currency contracts to hedge foreign currency risk on anticipated transactions, mainly related to the construction of satellites and interest payments;

• cross-currency basis swaps to hedge the foreign currency risk on a portion of its U.S. dollar denominated debt; and

• interest rate swaps to hedge the interest rate risk related to debt financing which is primarily variable rate financing.

Telesat’s derivative financial instruments also include embedded derivatives that are related to a prepayment option included in its senior notes, as well as interest rate floors included in its Canadian and U.S. term loan B facilities.

Item 4. Disclosure Controls and Procedures

(a) Disclosure Controls and Procedures. Our president and our chief financial officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2013, have concluded that our disclosure controls and procedures were effective and designed to ensure that information relating to Loral and its consolidated subsidiaries required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission rules and forms.

(b) Internal control over financial reporting. There were no changes in our internal control over financial reporting (as defined in the Securities and Exchange Act of 1934 Rules 13a-15(f) and 15-d-15(f)) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

45

PART II.

OTHER INFORMATION

Item 1. Legal Proceedings

We discuss certain legal proceedings pending against the Company in the notes to the financial statements and refer the reader to that discussion for important information concerning those legal proceedings, including the basis for such actions and relief sought. See Note 16 to the financial statements of this Quarterly Report on Form 10-Q for this discussion.

Item 1A. Risk Factors

Our business and operations are subject to a significant number of risks. The most significant of these risks are summarized in, and the reader’s attention is directed to, the section of our Annual Report on Form 10-K for the year ended December 31, 2012 in “Item 1A. Risk Factors.” There are no material changes to those risk factors except as set forth in Note 16 (Commitments and Contingencies) of the financial statements contained in this report, and the reader is specifically directed to that section.

The risks described in our Annual Report on Form 10-K, as updated by this report, are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 6. Exhibits

The following exhibits are filed as part of this report:

Exhibit 31.1 — Certification of President pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 — Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1 — Certification of President pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2 — Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002

Exhibit 99.1 — Amendment, dated April 2, 2013, to the Credit Agreement, dated March 28, 2012, among Telesat Canada and Telesat LLC, as borrowers, JP Morgan Chase Bank, N.A., as administrative agent, and the other financial institutions party thereto (incorporated by reference to Exhibit 4.1 in the Form 6-K filed by Telesat Holdings Inc. on April 2, 2013)

Exhibit 101 — Interactive Data Files

(101.INS) XBRL Instance Document

(101.SCH) XBRL Taxonomy Extension Schema Document

(101.CAL) XBRL Taxonomy Extension Calculation Linkbase Document

(101.DEF) XBRL Taxonomy Extension Definition Linkbase Document

(101.LAB) XBRL Taxonomy Extension Label Linkbase Document

(101.PRE) XBRL Taxonomy Extension Presentation Linkbase Document

46

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.

Registrant

Loral Space & Communications Inc.

/s/ John Capogrossi

John Capogrossi

Vice President, Chief Financial Officer, Treasurer and Controller

(Principal Financial Officer)

and Registrant’s Authorized Officer

Date: August 8, 2013

47

EXHIBIT INDEX

Exhibit 31.1 — Certification of President pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 — Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1 — Certification of President pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2 — Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002

Exhibit 99.1 — Amendment, dated April 2, 2013, to the Credit Agreement, dated March 28, 2012, among Telesat Canada and Telesat LLC, as borrowers, JP Morgan Chase Bank, N.A., as administrative agent, and the other financial institutions party thereto (incorporated by reference to Exhibit 4.1 in the Form 6-K filed by Telesat Holdings Inc. on April 2, 2013)

Exhibit 101 — Interactive Data Files

(101.INS) XBRL Instance Document

(101.SCH) XBRL Taxonomy Extension Schema Document

(101.CAL) XBRL Taxonomy Extension Calculation Linkbase Document

(101.DEF) XBRL Taxonomy Extension Definition Linkbase Document

(101.LAB) XBRL Taxonomy Extension Label Linkbase Document

(101.PRE) XBRL Taxonomy Extension Presentation Linkbase Document

48

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Avi Katz, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Loral Space & Communications Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Avi Katz

Avi Katz

President, General Counsel & Secretary

August 8, 2013

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Capogrossi, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Loral Space & Communications Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ John Capogrossi

John Capogrossi

Vice President, Chief Financial Officer, Treasurer and Controller

August 8, 2013

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Loral Space & Communications Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Avi Katz, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Avi Katz

Avi Katz

President, General Counsel & Secretary

August 8, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Loral Space & Communications Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Capogrossi, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John Capogrossi

John Capogrossi

Vice President, Chief Financial Officer, Treasurer and Controller

August 8, 2013

XML

Long Term Liabilities

6 Months Ended

Jun. 30, 2013

Long Term Liabilities [Abstract]

Long Term Liabilities

10. Long Term Liabilities

Long term liabilities consists of (in thousands):

	June 30, 2013		December 31, 2012
Indemnification liabilities (see Note 16)	$	14,026	$	12,204
Liabilities for uncertain tax positions		81,403		80,732
Other		4,196		2,905
	$	99,625	$	95,841

XML

Investments in Affiliates (Equity Method Investment, Summarized Financial Data) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
XTAR, LLC [Member]
Statement of Operations Data:
Revenues	$ 8,325	$ 6,821	$ 16,450	$ 14,672
Operating expenses	(8,493)	(8,279)	(16,862)	(16,603)
Depreciation, amortization and stock-based compensation	(2,310)	(2,345)	(4,620)	(4,750)
Operating income (loss)	(2,478)	(3,803)	(5,032)	(6,681)
Net income (loss)	(3,210)	(4,572)	(6,469)	(8,243)
Current assets	5,697		5,697		7,838
Total assets	68,044		68,044		74,721
Current liabilities	19,916		19,916		18,894
Total liabilities	55,744		55,744		55,953
Shareholder' equity/Members' equity	12,300		12,300		18,768
Telesat Holdings Inc [Member]
Statement of Operations Data:
Revenues	210,038	199,852	427,506	395,875
Operating expenses	(44,174)	(52,207)	(94,332)	(135,947)
Depreciation, amortization and stock-based compensation	(62,845)	(61,009)	(120,663)	(121,497)
Gain (loss) on disposition of long lived asset	(2,010)	(18)	(1,542)	(76)
Operating income (loss)	101,009	86,618	210,969	138,355
Interest expense	(51,077)	(61,592)	(110,772)	(113,282)
Expense of refinancing	3	(57,541)	(19,961)	(79,403)
Foreign exchange gains (losses)	(98,389)	(56,178)	(168,729)	6,312
Gains (losses) on financial instruments	59,755	25,770	96,608	(655)
Other income (expense)	10,450	241	10,833	965
Income tax expense	(19,151)	(6,748)	(26,993)	(4,319)
Net income (loss)	2,600	(69,430)	(8,045)	(52,027)
Current assets	226,905		226,905		289,614
Total assets	4,907,436		4,907,436		5,342,313
Current liabilities	265,053		265,053		237,739
Long-term debt, including current portion	3,243,696		3,243,696		3,519,872
Total liabilities	4,379,990		4,379,990		4,770,966
Shareholder' equity/Members' equity	$ 527,446		$ 527,446		$ 571,347

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Condensed Consolidated Statements of Operations and Comprehensive Income [Abstract]
General and administrative expenses	$ (3,361)	$ (4,264)	$ (7,107)	$ (8,875)
Operating income (loss)	(3,361)	(4,264)	(7,107)	(8,875)
Interest and investment income	343	398	632	890
Interest expense	(5)	(29)	(8)	(57)
Other income (expense)	(341)	(233)	(371)	(623)
Income (loss) from continuing operations before income taxes and equity in net income (loss) of affiliates	(3,364)	(4,128)	(6,854)	(8,665)
Income tax (provision) benefit	(2,170)	5,763	(4,985)	2,541
Income (loss) from continuing operations before equity in net income (loss) of affiliates	(5,534)	1,635	(11,839)	(6,124)
Equity in net income (loss) of affiliates	132	(11,353)	(7,149)	(4,484)
Income (loss) from continuing operations	(5,402)	(9,718)	(18,988)	(10,608)
Income (loss) from discontinued operations, net of tax provision	(2,488)	4,937	(2,365)	13,445
Net income (loss)	(7,890)	(4,781)	(21,353)	2,837
Net (income) loss attributable to noncontrolling interest		3		16
Net income (loss) attributable to Loral common shareholders	(7,890)	(4,778)	(21,353)	2,853
Other comprehensive income (loss), net of tax	491	2,414	1,863	5,211
Comprehensive income (loss) attributable to Loral common shareholders	$ (7,399)	$ (2,364)	$ (19,490)	$ 8,064
Basic
Income (loss) from continuing operations	$ (0.18)	$ (0.32)	$ (0.62)	$ (0.35)
Income (loss) from discontinued operations, net of tax	$ (0.08)	$ 0.16	$ (0.08)	$ 0.44
Net income (loss)	$ (0.26)	$ (0.16)	$ (0.70)	$ 0.09
Diluted
Income (loss) from continuing operations	$ (0.18)	$ (0.32)	$ (0.62)	$ (0.35)
Income (loss) from discontinued operations, net of tax	$ (0.08)	$ 0.16	$ (0.08)	$ 0.44
Net income (loss)	$ (0.26)	$ (0.16)	$ (0.70)	$ 0.09
Weighted average common shares outstanding:
Basic	30,793	30,704	30,781	30,653
Diluted	30,793	30,704	30,781	30,653

XML

Discontinued Operations

6 Months Ended

Jun. 30, 2013

Discontinued Operations [Abstract]

Discontinued Operations

3. Discontinued Operations

As a result of the Sale (see Note 1), we have reclassified SS/L’s operations as discontinued operations in our consolidated financial statements for the three and six months ended June 30, 2012.

Loss from discontinued operations for the three and six months ended June 30, 2013 primarily comprises changes in the fair value of our indemnification liabilities related to the Sale, net of a $1.5 million income tax benefit. The following is a summary of SS/L’s financial information included in income from discontinued operations for the three and six months ended June 30, 2012 (in thousands):

	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
Revenues	$	294,377	$	581,090
Operating income		8,765		11,123
Income before income taxes		13,170		25,038
Income tax provision		(8,233)		(11,593)
Income from discontinued operations, net of tax	$	4,937	$	13,445

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

17. Related Party Transactions

Transactions with Affiliates

Telesat

As described in Note 7, we own 62.8% of Telesat and account for our ownership interest under the equity method of accounting.

In connection with the acquisition of our ownership interest in Telesat (which we refer to as the Telesat transaction), Loral and certain of its subsidiaries, our Canadian partner, Public Sector Pension Investment Board (“PSP”) and one of its subsidiaries, Telesat Holdco and certain of its subsidiaries, including Telesat, and MHR entered into a Shareholders Agreement (the “Shareholders Agreement”). The Shareholders Agreement provides for, among other things, the manner in which the affairs of Telesat Holdco and its subsidiaries will be conducted and the relationships among the parties thereto and future shareholders of Telesat Holdco. The Shareholders Agreement also contains an agreement by Loral not to engage in a competing satellite communications business and agreements by the parties to the Shareholders Agreement not to solicit employees of Telesat Holdco or any of its subsidiaries. Additionally, the Shareholders Agreement details the matters requiring the approval of the shareholders of Telesat Holdco (including veto rights for Loral over certain extraordinary actions) and provides for preemptive rights for certain shareholders upon the issuance of certain capital shares of Telesat Holdco. The Shareholders Agreement also restricts the ability of holders of certain shares of Telesat Holdco to transfer such shares unless certain conditions are met or approval of the transfer is granted by the directors of Telesat Holdco, provides for a right of first offer to certain Telesat Holdco shareholders if a holder of equity shares of Telesat Holdco wishes to sell any such shares to a third party and provides for, in certain circumstances, tag-along rights in favor of shareholders that are not affiliated with Loral if Loral sells equity shares and drag-along rights in favor of Loral in case Loral or its affiliate enters into an agreement to sell all of its Telesat Holdco equity securities.  In addition, the Shareholders Agreement provides for either PSP or Loral to initiate the process of conducting an initial public offering of the equity shares of Telesat Holdco. There can be no assurance as to whether, when or on what terms an initial public offering of Telesat Holdco equity may occur.

Under the Shareholders Agreement, in the event that, except in certain limited circumstances, either (i) ownership or control, directly or indirectly, by Dr. Rachesky, President of MHR, of Loral’s voting stock falls below certain levels other than in connection with an acquisition by a Strategic Competitor (as defined in the Shareholders Agreement) or (ii) there is a change in the composition of a majority of the members of the Loral Board of Directors over a consecutive two-year period, Loral will lose its veto rights relating to certain extraordinary actions by Telesat Holdco and its subsidiaries. In addition, after either of these events, PSP will have certain rights to enable it to exit from its investment in Telesat Holdco, including a right to cause Telesat Holdco to conduct an initial public offering in which PSP’s shares would be the  first shares offered or, if no such offering has occurred within one year due to a lack of cooperation from Loral or Telesat Holdco, to cause the sale of Telesat Holdco and to drag along the other shareholders in such sale, subject to Loral’s right to call PSP’s shares at fair market value.

The Shareholders Agreement provides for a board of directors of each of Telesat Holdco and certain of its subsidiaries, including Telesat, consisting of 10 directors, three nominated by Loral, three nominated by PSP and four independent directors to be selected by a nominating committee comprised of one PSP nominee, one nominee of Loral and one of the independent directors then in office. Each party to the Shareholders Agreement is obligated to vote all of its Telesat Holdco shares for the election of the directors nominated by the nominating committee. Pursuant to action by the board of directors taken on October 31, 2007, Dr. Rachesky, who is non-executive Chairman of the Board of Directors of Loral, was appointed non-executive Chairman of the Board of Directors of Telesat Holdco and certain of its subsidiaries, including Telesat. In addition, Michael B. Targoff, Loral’s Vice Chairman, serves on the board of directors of Telesat Holdco and certain of its subsidiaries, including Telesat.

Information related to satellite construction contracts between SS/L and Telesat for the period when we owned SS/L is as follows (in thousands):

	Three Months Ended		Six Months Ended
	June 30, 2012		June 30, 2012
Revenues (included in income from discontinued operations) from Telesat satellite construction contracts	$	22,501	$	46,712
Milestone payments received from Telesat		15,726		34,305

On October 31, 2007, Loral and Telesat entered into a consulting services agreement (the “Consulting Agreement”). Pursuant to the terms of the Consulting Agreement, Loral provides to Telesat certain non-exclusive consulting services in relation to the business of Loral Skynet which was transferred to Telesat as part of the Telesat transaction as well as with respect to certain aspects of the satellite communications business of Telesat. The Consulting Agreement has a term of seven years with an automatic renewal for an additional seven year term if certain conditions are met. In exchange for Loral’s services under the Consulting Agreement, Telesat pays Loral an annual fee of $5.0 million, payable quarterly in arrears on the last day of March, June, September and December of each year during the term of the Consulting Agreement. If the terms of Telesat’s bank or bridge facilities or certain other debt obligations prevent Telesat from paying such fees in cash, Telesat may issue junior subordinated promissory notes to Loral in the amount of such payment, with interest on such promissory notes payable at the rate of 7% per annum, compounded quarterly, from the date of issue of such promissory note to the date of payment thereof. Our general and administrative expenses are net of income related to the Consulting Agreement of $1.25 million for each of the three month periods ended June 30, 2013 and 2012 and $2.5 million for each of the six month periods ended June 30, 2013 and 2012. For the six months ended June 30, 2013 and 2012, Loral received payments in cash from Telesat of $3.8 million and $1.6 million, respectively for consulting fees and interest. We had notes receivable from Telesat of nil and $1.3 million as of June 30, 2013 and December 31, 2012, respectively, related to the Consulting Agreement.

In connection with the Telesat transaction, Loral has retained the benefit of tax recoveries related to the transferred assets and has indemnified Telesat for certain liabilities including Loral Skynet’s tax liabilities arising prior to January 1, 2007. As of June 30, 2013 and December 31, 2012, we had recognized a net receivable from Telesat of $0.5 million, representing our estimate of the probable outcome of these tax matters, which is included as other assets of $2.6 million and long-term liabilities of $2.1 million in the consolidated balance sheets as of June 30, 2013 and December 31, 2012. There can be no assurance, however, that these tax matters will be ultimately settled for the net amount recorded.

Loral, along with Telesat Holdco, Telesat, PSP and 4440480 Canada Inc., an indirect wholly-owned subsidiary of Loral (the “Special Purchaser”), entered into grant agreements (the “Grant Agreements”) with certain executives of Telesat (each, a “Participant” and collectively, the “Participants”). Each of the Participants was, at the time, an executive of Telesat.

The Grant Agreements confirm grants of Telesat Holdco stock options (including tandem SAR rights) to the Participants and provide for certain rights, obligations and restrictions related to such stock options, which include, among other things: (w) the right of each Participant to require the Special Purchaser to purchase a portion of the shares in Telesat Holdco owned by him in the event of exercise after termination of employment to cover taxes that are greater than the minimum withholding amount; (x) the possible obligation of the Special Purchaser to purchase the shares in the place of Telesat Holdco should Telesat Holdco be prohibited by applicable law or under the terms of any credit agreement applicable to Telesat Holdco from purchasing such shares, or otherwise default on such purchase obligation, pursuant to the terms of the Grant Agreements; (y) the obligation of the Special Purchaser to purchase shares upon exercise by Telesat Holdco of its call right under Telesat Holdco’s Management Stock Incentive Plan in the event of a Participant’s termination of employment; and (z) the right of each Participant to require Telesat Holdco to cause the Special Purchaser or Loral to purchase a portion of the shares in Telesat Holdco owned by him, or that are issuable to him under Telesat Holdco’s Management Stock Incentive Plan at the relevant time, in the event that more than 90% of Loral’s common stock is acquired by an unaffiliated third party that does not also purchase all of PSP’s and its affiliates’ interest in Telesat Holdco.

The Grant Agreements further provide that, in the event the Special Purchaser is required to purchase shares, such shares, together with the obligation to pay for such shares, shall be transferred to a subsidiary of the Special Purchaser, which subsidiary shall be wound up into Telesat Holdco, with Telesat Holdco agreeing to the acquisition of such subsidiary by Telesat Holdco from the Special Purchaser for nominal consideration and with the purchase price for the shares being paid by Telesat Holdco within ten (10) business days after completion of the winding-up of such subsidiary into Telesat Holdco.

Loral received special cash distributions from Telesat of $376 million on March 28, 2012 and $44 million on July 5, 2012. The distributions were the result of a Telesat refinancing and recapitalization transaction (see Note 7).

ViaSat/Telesat

In connection with an agreement entered into between SS/L and ViaSat, Inc. (“ViaSat”) for the construction by SS/L for ViaSat of a high capacity broadband satellite called ViaSat-1, on January 11, 2008, we entered into certain agreements, described below, pursuant to which, we invested in the Canadian coverage portion of the ViaSat-1 satellite. Until his resignation in February 2012, Michael B. Targoff served, and another Loral director currently serves, as a member of the ViaSat Board of Directors.

A Beam Sharing Agreement between us and ViaSat provided for, among other things, (i) the purchase by us of a portion of the ViaSat-1 satellite payload providing coverage into Canada (the “Loral Payload”) and (ii) payment by us of 15% of the actual costs of launch and associated services, launch insurance and telemetry, tracking and control services for the ViaSat-1 satellite. SS/L commenced construction of the ViaSat-1 satellite in January 2008. SS/L recorded sales to ViaSat under this contract of $0.2 million, for the three months ended June 30, 2012 and $0.5 million for the six months ended June 30, 2012. SS/L’s sales to ViaSat have been included in income from discontinued operations in our statements of operations for the three and six months ended June 30, 2012.

On April 11, 2011, Loral assigned to Telesat and Telesat assumed from Loral all of Loral’s rights and obligations with respect to the Loral Payload and all related agreements. In connection with the assignment, Loral is entitled to receive one-half of any net revenue  earned by Telesat in connection with the leasing of certain supplemental capacity on the payload to its customers during the first four years after the commencement of service using the supplemental capacity. For the three and six months ended June 30, 2013, we earned approximately $0.3 million and $0.8 million, respectively, under this arrangement. We had a receivable from Telesat of $0.3 million and $1.0 million as of June 30, 2013 and December 31, 2012, respectively, related to this arrangement. In connection with the sale, Loral also assigned to Telesat and Telesat assumed Loral’s 15-year contract with Xplornet Communications, Inc. (“Xplornet”) (formerly known as Barrett Xplore Inc.) for delivery of high throughput satellite Ka-band capacity and gateway services for broadband services in Canada. 

Costs of satellite manufacturing for sales to related parties included in income from discontinued operations were $10.2 million and $24.3 million for the three and six months ended June 30, 2012.

In connection with an agreement reached in 1999 and an overall settlement reached in February 2005 with ChinaSat relating to the delayed delivery of ChinaSat 8, SS/L has provided ChinaSat with usage rights to two Ku-band transponders on Telesat’s Telstar 10 for the life of such transponders (subject to certain restoration rights) and to one Ku-band transponder on Telesat’s Telstar 18 for the life of the Telstar 10 satellite plus two years, or the life of such transponder (subject to certain restoration rights), whichever is shorter. Pursuant to an amendment to the agreement executed in June 2009, in lieu of rights to one of the Ku-band transponders on Telstar 10, ChinaSat has rights to an equivalent amount of Ku-band capacity on Telstar 18 (the “Alternative Capacity”). The Alternative Capacity may be utilized by ChinaSat until April 30, 2019 subject to certain conditions. Under the agreement, SS/L makes monthly payments to Telesat for the transponders allocated to ChinaSat. Effective with the termination of Telesat’s leasehold interest in Telstar 10 in July 2009, SS/L makes monthly payments with respect to capacity used by ChinaSat on Telstar 10 directly to APT, the owner of the satellite. Interest expense on this liability included in income from discontinued operations was $0.1 million and $0.3 million for the three and six months ended June 30, 2012. For the six months ended June 30, 2012, SS/L made payments of $1.4 million to Telesat pursuant to the agreement. The liability for the future use of these transponders was retained by SS/L in connection with the Sale.

XTAR

As described in Note 7, we own 56% of XTAR, a joint venture between Loral and Hisdesat and account for our investment in XTAR under the equity method of accounting. SS/L constructed XTAR’s satellite, which was successfully launched in February 2005. XTAR and Loral have entered into a management agreement whereby Loral provides general and specific services of a technical, financial and administrative nature to XTAR. For the services provided by Loral, XTAR is charged a quarterly management fee equal to 3.7% of XTAR’s quarterly gross revenues. Amounts due to Loral primarily due to the management agreement as of June 30, 2013 and December 31, 2012 were $6.1 million and $5.5 million, respectively. Beginning in 2008, Loral and XTAR agreed to defer amounts owed to Loral under this agreement, and XTAR has agreed that its excess cash balance (as defined), will be applied at least quarterly towards repayment of receivables owed to Loral, as well as to Hisdesat and Telesat. No cash was received under this agreement for the three and six months ended June 30, 2013 and 2012.

MHR Fund Management LLC

Mark H. Rachesky, managing principal of MHR, and Hal Goldstein, a former managing principal of MHR, are members of Loral’s board of directors. Sai S. Devabhaktuni, former managing principal of MHR, was a member of the Loral Board until his resignation in January 2012.

Various funds affiliated with MHR and Dr. Rachesky held, as of June 30, 2013 and December 31, 2012, approximately 38.0% and 38.3%, respectively, of the outstanding voting common stock and as of June 30, 2013 and December 31, 2012 had a combined ownership of outstanding voting and non-voting common stock of Loral of 57.1% and 57.4%, respectively.

Consulting Agreement

On December 14, 2012, Loral entered into a consulting agreement with Michael B. Targoff, Vice Chairman of the Company and former Chief Executive Officer and President. Pursuant to this agreement, Mr. Targoff is engaged as a part-time consultant to the Board to assist the Board with respect to the oversight of strategic matters relating to Telesat and Xtar and the ViaSat lawsuit. Under the agreement, Mr. Targoff receives consulting fees of $120,000 per month before deduction of certain expenses of $17,000 per month for which he reimburses the Company. For the three and six months ended June 30, 2013, Mr. Targoff earned $360,000 (before his expense reimbursement to Loral of $51,000) and $720,000 (before his expense reimbursement to Loral of $102,000), respectively.

XML

Financial Instruments, Derivative Instruments and Hedging (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Financial Instruments, Derivative Instruments and Hedging [Abstract]
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	$ 1.4	$ 1.4

XML

Income Taxes (Summary of Income Tax Benefit (Provision)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income tax (provision) benefit	$ (2,170)	$ 5,763	$ (4,985)	$ 2,541
Continuing Operations [Member]
Total current income tax (provision) benefit	7,138	(1,242)	6,300	631
Total deferred income tax (provision) benefit	(9,308)	7,005	(11,285)	1,910
Income tax (provision) benefit	$ (2,170)	$ 5,763	$ (4,985)	$ 2,541

XML

Equity

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Equity

11. Equity

In June 2013, the Company issued 91,204 shares of its voting common stock, net of 83,796 shares to satisfy withholding taxes, to Michael B. Targoff, Vice Chairman of the Company and former Chief Executive Officer and President.  This stock issuance resulted from the settlement of 175,000 restricted stock units (“RSUs”) granted to Mr. Targoff in 2009, 2010 and 2011. The grant date fair value of these RSUs was previously recorded as stock-based compensation as the RSUs vested, and the stock issuance had noeffect on our condensed consolidated financial statements.

Special Dividend and Special Distribution

On March 28, 2012, our Board of Directors declared a special dividend of $13.60 per share for an aggregate dividend of $417.6 million. The dividend was paid on April 20, 2012 to holders of record of Loral voting and non-voting common stock as of April 10, 2012.In accordance with Loral’s stock incentive plan, an equitable adjustment was made to outstanding stock-based awards to reflect the special dividend. As a result, options outstanding increased by 19,058 and RSUs increased by 6,875. This equitable adjustment had no effect on our condensed consolidated financial statements. Mr. Targoff, who elected to receive the dividend on his RSUs at the $13.60 per share value, received 19,368shares of Loral voting common stock, net of 18,774 shares to satisfy withholding taxes, in lieu of cash payments totaling $2.4 million on his RSU settlement date in June 2013.

On November 7, 2012, in connection with the receipt of the proceeds from the Sale, our Board of Directors declared a special distribution of $29.00 per share for an aggregate distribution of $892.1 million. The special distribution was paid on December 4, 2012to holders of record of Loral voting and non-voting common stock as of November 19, 2012. In accordance with Loral’s stock incentive plan, an equitable adjustment was made to outstanding stock-based awards to reflect the special distribution. This equitable adjustment had no effect on our condensed consolidated financial statements. Mr. Targoff, who elected to receive the special distribution related to his RSUs at the $29.00 per share value, received 41,300 shares of Loral voting common stock, net of 40,033 shares to satisfy withholding taxes, in lieu of cash payments totaling $5.1 million on his RSU settlement date in June 2013.

 Treasury Stock

In November 2011, our Board of Directors authorized the purchase of up to 800,000 shares of our voting common stock. These purchases may be made from time to time in the open market or private transactions, as conditions may warrant. We intend to hold repurchased shares of our voting common stock in treasury. We account for the treasury shares using the cost method.

The following is a summary of common stock purchases under this repurchase program (total cost in thousands):

	Shares Repurchased	Total Cost		Average Cost
Year ended December 31,
2012	18,000	$	1,192	$	66.22
2011	136,494		8,400		61.54
Total program	154,494	$	9,592	$	62.04

XML

Property, Plant and Equipment (Property, Plant and Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Property and Equipment [Abstract]
Leasehold improvements	$ 6	$ 1,913
Equipment	516	555
Furniture and fixtures	74	73
Property, Plant and Equipment, Gross	596	2,541
Accumulated depreciation and amortization	(550)	(2,499)
Property, plant and equipment, net, as reported	$ 46	$ 42

XML

Income Taxes (Summary of Uncertain Tax Positions Included in Income Tax Provision) (Details) (Continuing Operations [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Continuing Operations [Member]
Current (provision) benefit for UTPs	$ (224)	$ (1,243)	$ (671)	$ 630
Deferred (provision) benefit for UTPs	102	482	241	12
(Provision) benefit for UTPs on income (loss) from continuing operations	$ (122)	$ (761)	$ (430)	$ 642

XML

Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

Information related to satellite construction contracts between SS/L and Telesat for the period when we owned SS/L is as follows (in thousands):

	Three Months Ended		Six Months Ended
	June 30, 2012		June 30, 2012
Revenues (included in income from discontinued operations) from Telesat satellite construction contracts	$	22,501	$	46,712
Milestone payments received from Telesat		15,726		34,305

XML

Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2013

Discontinued Operations [Abstract]

Summary of SS/L's Operating Results Which Are Included In Income From Discontinued Operations

The following is a summary of SS/L’s financial information included in income from discontinued operations for the three and six months ended June 30, 2012 (in thousands):

	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
Revenues	$	294,377	$	581,090
Operating income		8,765		11,123
Income before income taxes		13,170		25,038
Income tax provision		(8,233)		(11,593)
Income from discontinued operations, net of tax	$	4,937	$	13,445

XML

Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2013

Basis of Presentation [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis at June 30, 2013 and December 31, 2012 (in thousands):

	June 30, 2013						December 31, 2012
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash equivalents
Money market funds	$	23,709	$	—	$	—	$	86,820	$	—	$	—
Note receivable
Land Note	$	—	$	—	$	101,000	$	—	$	—	$	101,000
Liabilities
Indemnifications
Sale of SS/L	$	—	$	—	$	16,813	$	—	$	—	$	16,528
Globalstar do Brasil S.A.	$	—	$	—	$	2,496	$	—	$	—	$	1,510

Additional Cash Flow Information

The following represents non-cash activities and supplemental information to the condensed consolidated statements of cash flows (in thousands):

	Six Months Ended June 30,
	2013		2012
Non-cash operating items:
Equity in net loss of affiliates	$	7,149	$	4,484
Deferred taxes		11,285		(1,910)
Depreciation and amortization		6		36
Stock based compensation		417		536
Amortization of prior service credit and actuarial loss		3,014		338
Unrealized gain on nonqualified pension plan assets		—		(87)
Gain on foreign currency transactions and contracts		—		(1,350)
Net non-cash operating items-continuing operations	$	21,871	$	2,047
Non-cash operating items – discontinued operations	$	—	$	26,438
Non-cash investing activities:
Capital expenditures incurred not yet paid-discontinued operations	$	—	$	7,881
Non-cash financing activities:
Repurchase of voting common stock not yet paid - continuing operations	$	—	$	1,192
Supplemental information:
Interest paid – continuing operations	$	8	$	57
Interest paid – discontinued operations	$	—	$	914
Tax payments – continuing operations	$	86	$	85
Tax payments – discontinued operations	$	35,118	$	—

XML

Receivables (Narrative) (Details) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Land Note [Member]	Jun. 30, 2013 Land Note [Member] Maturity Date, March 31, 2014 [Member]	Jun. 30, 2013 Land Note [Member] Maturity Date, March 31, 2015 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 67,333	$ 34,917		$ 67,300	$ 33,700
Interest rate on Land Note, start			1.00%
Interest rate on Land Note, end			1.50%

XML

Long Term Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Long Term Liabilities [Abstract]

Schedule of Long Term Liabilities

Long term liabilities consists of (in thousands):

	June 30, 2013		December 31, 2012
Indemnification liabilities (see Note 16)	$	14,026	$	12,204
Liabilities for uncertain tax positions		81,403		80,732
Other		4,196		2,905
	$	99,625	$	95,841

XML

Basis of Presentation (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Level 2 [Member]
Assets and Liabilities
Note receivable, Land Note
Level 3 [Member]
Assets and Liabilities
Note receivable, Land Note	101,000	101,000
Money Market Funds [Member] | Level 1 [Member]
Assets and Liabilities
Cash equivalents	23,709	86,820
Money Market Funds [Member] | Level 2 [Member]
Assets and Liabilities
Cash equivalents
Sale Of SS/L [Member] | Level 2 [Member]
Assets and Liabilities
Indemnifications liabilities
Sale Of SS/L [Member] | Level 3 [Member]
Assets and Liabilities
Indemnifications liabilities	16,813	16,528
Globalstar do Brasil S.A. [Member] | Level 2 [Member]
Assets and Liabilities
Indemnifications liabilities
Globalstar do Brasil S.A. [Member] | Level 3 [Member]
Assets and Liabilities
Indemnifications liabilities	$ 2,496	$ 1,510

XML

Investments in Affiliates (Narrative) (Details)	6 Months Ended			0 Months Ended				3 Months Ended		6 Months Ended		12 Months Ended		3 Months Ended	6 Months Ended				6 Months Ended		0 Months Ended		0 Months Ended			6 Months Ended		12 Months Ended	0 Months Ended			3 Months Ended
	Jun. 30, 2013 USD ($)	Jun. 30, 2012 USD ($)	Dec. 31, 2012 USD ($)	Jul. 05, 2012 Telesat Holdings Inc [Member] USD ($)	Jul. 05, 2012 Telesat Holdings Inc [Member] CAD	Mar. 28, 2012 Telesat Holdings Inc [Member] USD ($)	Mar. 28, 2012 Telesat Holdings Inc [Member] CAD	Jun. 30, 2013 Telesat Holdings Inc [Member] USD ($)	Jun. 30, 2012 Telesat Holdings Inc [Member] USD ($)	Jun. 30, 2013 Telesat Holdings Inc [Member] USD ($)	Jun. 30, 2012 Telesat Holdings Inc [Member] USD ($)	Dec. 31, 2012 Telesat Holdings Inc [Member] USD ($)	Dec. 31, 2012 Telesat Holdings Inc [Member] CAD	Mar. 31, 2009 XTAR, LLC [Member]	Jun. 30, 2013 XTAR, LLC [Member] USD ($)	Dec. 31, 2012 XTAR, LLC [Member] USD ($)	Dec. 31, 2009 XTAR, LLC [Member] USD ($)	Dec. 31, 2008 XTAR, LLC [Member] USD ($)	Jun. 30, 2013 12.5% Senior Subordinated Notes Due November 2017 [Member] Telesat Holdings Inc [Member]	Jun. 30, 2013 6% Senior Notes [Member] Telesat Holdings Inc [Member] item	Mar. 28, 2013 Credit Agreement Dated March 28, 2012 [Member] Telesat Holdings Inc [Member] CAD	Dec. 31, 2012 Nonvoting Common Stock [Member] Telesat Holdings Inc [Member]	Jul. 05, 2012 Telesat [Member] USD ($)	Mar. 28, 2012 Telesat [Member] USD ($)	Jun. 30, 2013 Telesat [Member]	Jun. 30, 2013 Transaction, Consulting Agreement [Member] Telesat [Member] USD ($)	Jun. 30, 2012 Transaction, Consulting Agreement [Member] Telesat [Member] USD ($)	Dec. 31, 2012 Transaction, Consulting Agreement [Member] Telesat [Member] USD ($)	Mar. 28, 2013 Term Loan B [Member] Telesat Holdings Inc [Member]	Mar. 28, 2013 Term Loan B - Canadian Facility [Member] Credit Agreement Dated March 28, 2012 [Member] Telesat Holdings Inc [Member]	Mar. 28, 2013 Term Loan B - U.S. Facility [Member] Credit Agreement Dated March 28, 2012 [Member] Telesat Holdings Inc [Member]	Jun. 30, 2013 Globalstar do Brasil S.A. [Member] USD ($)	Mar. 31, 2013 Indemnification Agreement [Member] Globalstar do Brasil S.A. [Member] USD ($)
Investments in and Advances to Affiliates [Line Items]
Profits recognized on affiliate sales eliminated in earlier periods		$ 4,600,000
Investments in affiliates	59,018,000		62,517,000												59,018,000	62,517,000
Economic interest in affiliates										62.80%		62.80%	62.80%
Original economic interest in Telesat												64.00%	64.00%
Share appreciation rights exercised by Telesat employees												5,311,568
Distributions declared to shareholders, option holders and certain employees													656,500,000
Non-voting participating preferred stock issued to Telesat Employees																						2,249,747
Voting interests, affiliates										32.70%
Excess Distribution over carrying value of investment in Telesat								17,700,000		17,700,000		7,400,000
Loral's share of Telesat's future net income (loss), minimum								17,700,000		17,700,000
Indenture maturity date																			Nov. 01, 2017
Redemeption date of debt instrument																			May 01, 2013
Distribution declared to Loral													420,000,000
Redemption rate relative to principal amount																			106.25%
Debt instrument amendment date																					Apr. 02, 2013
Debt amount converted into U.S. dollars																					34,000,000
Interest rate reduction after amendment																													0.50%
Interest rate floor after amendment																														1.00%	0.75%
Leverage ratio after amendment																					4.25
Leverage ratio before amendment																					4.00
Distributions received from affiliate		375,809,000		44,000,000	45,000,000	376,000,000	375,000,000																44,000,000	376,000,000
Income related to consulting agreement								1,250,000	1,250,000	2,500,000	2,500,000
Interest on notes																				6.00%
Interest expense Multiplier to determine EBITDA available for dividend distribution																				1.40
Transaction Payments received during the period																										3,800,000	1,600,000
Transaction payment in promissory notes																												1,300,000
Percentage of ownership interest															56.00%										62.80%
Lease obligation															25,000,000
Maximum annual lease obligation															28,000,000
Lease agreement, Past due																		32,300,000
Lease agreement, deferred amount																	6,700,000
Deferred lease payments															5,000,000
Repayment term past due and deferred lease obligation, years														12 years
Discount rate for prepayment of restructured past due and deferred lease obligation															9.00%
Cumulative payments of restructured past due and deferred lease obligation															21,700,000
Lease obligation, non current																27,400,000
Indemnification liabilities																																	4,800,000
Loss contingency recorded																																3,700,000
Proceeds from sale of investment in affiliate	$ 1,150,000

XML

Investments In Affiliates (Tables)

6 Months Ended

Jun. 30, 2013

Investments in and Advances to Affiliates [Line Items]

Investments in Affiliates

Investments in affiliates consist of (in thousands):

	June 30, 2013		December 31, 2012
Telesat Holdings Inc.	$	—	$	—
XTAR, LLC		59,018		62,517
	$	59,018	$	62,517

Equity in Net (Loss) Income of Affiliates

Equity in net income (loss) of affiliates consists of (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Telesat Holdings Inc.	$	718	$	(8,855)	$	—	$	(1,475)
XTAR, LLC		(1,736)		(2,498)		(3,499)		(3,009)
Other		1,150		—		(3,650)		—
	$	132	$	(11,353)	$	(7,149)	$	(4,484)

Effect of Affiliate Transactions on Operating Statement

The condensed consolidated statements of operations for the three and six months ended June 30, 2012 reflect the effects of the following amounts related to SS/L’s transactions with our affiliates (in thousands):

	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
Revenues included in income from discontinued operations	$	22,427	$	46,583
Elimination of Loral’s proportionate share of profits relating to affiliate transactions		(7,184)		(14,025)
Profits included in income from discontinued operations relating to affiliate transactions not eliminated		4,041		7,889

Telesat Holdings Inc [Member]

Investments in and Advances to Affiliates [Line Items]

Summary Financial Data, Equity Method Investment

The following table presents summary financial data for Telesat in accordance with U.S. GAAP, as of June 30, 2013 and December 31, 2012 and for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Statement of Operations Data:
Revenues	$	210,038	$	199,852	$	427,506	$	395,875
Operating expenses		(44,174)		(52,207)		(94,332)		(135,947)
Depreciation, amortization and stock-based compensation		(62,845)		(61,009)		(120,663)		(121,497)
Loss on disposition of long lived asset		(2,010)		(18)		(1,542)		(76)
Operating income		101,009		86,618		210,969		138,355
Interest expense		(51,077)		(61,592)		(110,772)		(113,282)
Expense of refinancing		3		(57,541)		(19,961)		(79,403)
Foreign exchange (losses) gains		(98,389)		(56,178)		(168,729)		6,312
Gains (losses) on financial instruments		59,755		25,770		96,608		(655)
Other income		10,450		241		10,833		965
Income tax provision		(19,151)		(6,748)		(26,993)		(4,319)
Net income (loss)		2,600		(69,430)		(8,045)		(52,027)

	June 30, 2013		December 31, 2012
Balance Sheet Data:
Current assets	$	226,905	$	289,614
Total assets		4,907,436		5,342,313
Current liabilities		265,053		237,739
Long-term debt, including current portion		3,243,696		3,519,872
Total liabilities		4,379,990		4,770,966
Shareholders’ equity		527,446		571,347

XTAR, LLC [Member]

Investments in and Advances to Affiliates [Line Items]

Summary Financial Data, Equity Method Investment

The following table presents summary financial data for XTAR as of June 30, 2013 and December 31, 2012 and for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Statement of Operations Data:
Revenues	$	8,325	$	6,821	$	16,450	$	14,672
Operating expenses		(8,493)		(8,279)		(16,862)		(16,603)
Depreciation and amortization		(2,310)		(2,345)		(4,620)		(4,750)
Operating loss		(2,478)		(3,803)		(5,032)		(6,681)
Net loss		(3,210)		(4,572)		(6,469)		(8,243)

	June 30, 2013		December 31, 2012
Balance Sheet Data:
Current assets	$	5,697	$	7,838
Total assets		68,044		74,721
Current liabilities		19,916		18,894
Total liabilities		55,744		55,953
Members’ equity		12,300		18,768

XML

Earnings Per Share (Summary of Stock Options Outstanding, Unvested Restricted Stock and Unvested Restricted Stock Units Excluded From The Calculation Of Diluted Loss Per Share) (Details) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the calculation of diluted loss per share		57		97
Unvested Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the calculation of diluted loss per share		2		2
Unvested Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the calculation of diluted loss per share	84	232	172	223

XML

Earnings Per Share (Narrative) (Details)	6 Months Ended
	Jun. 30, 2013
Earnings Per Share [Abstract]
Percentage of ownership interest as a result of dilution upon the exercise of stock options	62.30%

XML

Discontinued Operations (Summary of SS/L's Operating Results Included in Income From Discontinued Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Discontinued Operations [Abstract]
Revenues		$ 294,377		$ 581,090
Operating income		8,765		11,123
Income before income taxes		13,170		25,038
Income tax (provision) benefit	1,500	(8,233)	1,500	(11,593)
Income (loss) from discontinued operations, net of tax	$ (2,488)	$ 4,937	$ (2,365)	$ 13,445

XML

Related Party Transactions (Narrative) (Details) (USD $)	3 Months Ended	6 Months Ended	0 Months Ended			3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended				6 Months Ended	12 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended	3 Months Ended	6 Months Ended			3 Months Ended	6 Months Ended		6 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jul. 05, 2012 Telesat [Member]	Mar. 28, 2012 Telesat [Member]	Apr. 11, 2011 Telesat [Member]	Jun. 30, 2012 Telesat [Member]	Jun. 30, 2013 Telesat [Member]	Jun. 30, 2012 Telesat [Member]	Jun. 30, 2012 Telesat [Member] Discontinued Operations [Member]	Jun. 30, 2012 Telesat [Member] Discontinued Operations [Member]	Jun. 30, 2012 ViaSat [Member]	Jun. 30, 2013 ViaSat [Member]	Jun. 30, 2012 ViaSat [Member]	Jun. 30, 2013 Viasat And Telesat [Member]	Jun. 30, 2013 XTAR [Member]	Jun. 30, 2013 MHR Funds [Member]	Dec. 31, 2012 MHR Funds [Member]	Jun. 30, 2013 Transaction, Consulting Agreement [Member] Telesat [Member]	Jun. 30, 2012 Transaction, Consulting Agreement [Member] Telesat [Member]	Jun. 30, 2013 Transaction, Consulting Agreement [Member] Telesat [Member]	Jun. 30, 2012 Transaction, Consulting Agreement [Member] Telesat [Member]	Dec. 31, 2012 Transaction, Consulting Agreement [Member] Telesat [Member]	Jun. 30, 2013 Transaction, Consulting Agreement [Member] Director [Member]	Jun. 30, 2013 Transaction, Consulting Agreement [Member] Director [Member]	Jun. 30, 2013 Transaction, Tax Indemnification [Member] Telesat [Member]	Dec. 31, 2012 Transaction, Tax Indemnification [Member] Telesat [Member]	Jun. 30, 2013 Transaction, Supplemental Capacity Revenue Share [Member] Viasat And Telesat [Member]	Jun. 30, 2013 Transaction, Supplemental Capacity Revenue Share [Member] Viasat And Telesat [Member]	Dec. 31, 2012 Transaction, Supplemental Capacity Revenue Share [Member] Viasat And Telesat [Member]	Jun. 30, 2013 Transaction, Management Agreement [Member] XTAR [Member]	Dec. 31, 2012 Transaction, Management Agreement [Member] XTAR [Member]	Jun. 30, 2013 Annual Fee [Member] Transaction, Consulting Agreement [Member] Telesat [Member]	Jun. 30, 2013 Monthly Fee [Member] Transaction, Consulting Agreement [Member] Director [Member]
Related Party Transaction [Line Items]
Percentage of ownership interest							62.80%								56.00%
Related party transaction, date																				Oct. 31, 2007				Dec. 14, 2012				Apr. 11, 2011
Transaction term																				7 years								4 years
Consulting agreement, renewal term																				7 years
Transaction fee																																$ 5,000,000	$ 120,000
Expenses deductible from transaction fee																																	17,000
Related party annual transaction rate																				7.00%
Transaction income during the period																		1,250,000	1,250,000	2,500,000	2,500,000		51,000	102,000			300,000	800,000
Transaction Payments received during the period																				3,800,000	1,600,000
Transaction, notes receivable																		0		0		1,300,000
Transaction payment in promissory notes																						1,300,000
Amounts due under the transaction																											300,000	300,000	1,000,000
Tax indemnification, net																									500,000	500,000
Amounts due under the transaction																									2,600,000	2,600,000				6,100,000	5,500,000
Tax indemnification, recorded liability																									2,100,000	2,100,000
Common stock, percentage acquired by an unaffiliated third party							90.00%
Duration for shares to be paid, days							10 days
Distributions received from affiliate		375,809,000	44,000,000	376,000,000
Payment of launch and associated services actual costs by parent, percentage												15.00%
Revenue from related parties	22,427,000	46,583,000				22,501,000		46,712,000			200,000		500,000
Percentage of entity's entitlement to net revenue of related party					50.00%
Duration of contract assigned to Telesat														15 years
Expenses on transactions with related party									10,200,000	24,300,000													360,000	720,000
Interest expense on ChinaSat liability						100,000		300,000
Payments to related party pursuant to the ChinaSat agreement								$ 1,400,000
Management fee charged as a percentage of revenue																														3.70%
Percentage of outstanding voting common stock																38.00%	38.30%
Percentage of combined ownership of voting and non-voting common stock																57.10%	57.40%

XML

Basis of Presentation (Policy)

6 Months Ended

Jun. 30, 2013

Basis of Presentation [Abstract]

Use of Estimates in Preparation of Financial Statements

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amount of income (loss) reported for the period. Actual results could differ from estimates.

Significant estimates include the fair value of stock based compensation, the realization of deferred tax assets, uncertain tax positions, our pension liabilities and the fair value of indemnification liabilities.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and receivables. Our cash and cash equivalents are maintained with high-credit-quality financial institutions. Our receivables are from large multinational corporations for which the creditworthiness is generally substantial. In addition, the Land Note is guaranteed by Royal Bank of Canada. As a result, management believes that its potential credit risks are minimal.

Fair Value Measurements

Fair Value Measurements

U.S. GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. U.S. GAAP also establishes a fair value hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are described below:

Level 1: Inputs represent a fair value that is derived from unadjusted quoted prices for identical assets or liabilities traded in active markets at the measurement date.

Level 2: Inputs represent a fair value that is derived from quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities, and pricing inputs, other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis at June 30, 2013 and December 31, 2012 (in thousands):

	June 30, 2013						December 31, 2012
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash equivalents
Money market funds	$	23,709	$	—	$	—	$	86,820	$	—	$	—
Note receivable
Land Note	$	—	$	—	$	101,000	$	—	$	—	$	101,000
Liabilities
Indemnifications
Sale of SS/L	$	—	$	—	$	16,813	$	—	$	—	$	16,528
Globalstar do Brasil S.A.	$	—	$	—	$	2,496	$	—	$	—	$	1,510

The carrying amount of cash equivalents approximates fair value because of the short maturity of those instruments. The carrying amount of the Land Note approximates fair value because the stated interest rate is consistent with current market rates. The fair value of indemnifications related to the sale of SS/L was estimated using Monte Carlo simulation based on the potential probability weighted cash flows that would be a guarantor’s responsibility in an arm’s length transaction. The fair value of indemnifications related to Globalstar do Brasil S.A. was estimated using expected value analysis. The Company does not have any non-financial assets or non-financial liabilities that are recognized or disclosed at fair value on a recurring basis as of June 30, 2013.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

We review the carrying values of our equity method investments when events and circumstances warrant and consider all available evidence in evaluating when declines in fair value are other than temporary. The fair values of our investments are determined based on valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow projections. An impairment charge is recorded when the carrying amount of the investment exceeds its current fair value and is determined to be other than temporary.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740):  Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This new standard requires the netting of unrecognized tax benefits (UTBs) against available deferred tax assets for losses and other carryforward benefits that would be available to offset the liability for uncertain tax positions rather than presenting the UTB on a gross basis. The guidance, effective for the Company on January 1, 2014, will have no impact on our consolidated financial statements as the Company has already adopted this methodology.

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830) -  Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. ASU No. 2013-05 clarifies that the cumulative translation adjustment should be released into net income only when a reporting entity ceases to have a controlling financial interest in a subsidiary or a business within a foreign entity. Further, for an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. The guidance, effective for the Company on January 1, 2014, is not expected to have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405) – Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.  ASU No. 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements. The guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, as the sum of: (a) The amount the reporting entity agreed to pay on the basis of its arrangement with its co-obligors, and (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance, effective for the Company on January 1, 2014, is not expected to have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (ASC Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.  ASU No. 2013-02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The guidance, effective for the Company on January 1, 2013, requires changes in presentation which have been included in our condensed consolidated financial statements.

XML

Condensed Consolidated Statements of Equity (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2012
Condensed Consolidated Statements of Equity [Abstract]
Common dividends declared per share	$ 13.60
Special distribution declared per share	$ 29.00

XML

Organization and Principal Business

6 Months Ended

Jun. 30, 2013

Organization and Principal Business [Abstract]

Organization and Principal Business

1. Organization and Principal Business

Loral Space & Communications Inc., together with its subsidiaries (“Loral”, the “Company”, “we”, “our” and “us”) is a leading satellite communications company engaged, through our ownership interests in affiliates, in satellite-based communications services. Prior to completion of the sale of our wholly-owned subsidiary, Space Systems/Loral, LLC (formerly known as Space Systems/Loral, Inc. (“SS/L”)), we were also engaged in the satellite manufacturing business. 

Sale of SS/L

On November 2, 2012, Loral completed the sale (the “Sale”) of its wholly-owned subsidiary, SS/L, to MDA Communications Holdings, Inc. (“MDA Holdings”), a subsidiary of MacDonald, Dettwiler and Associates Ltd. (“MDA”). Pursuant to the purchase agreement (the “Purchase Agreement”), dated as of June 26, 2012, as amended on October 30, 2012 and March 28, 2013, by and among Loral, SS/L, MDA and MDA Holdings, Loral received total cash payments of $967.9 million plus, for the sale of certain real estate used in connection with SS/L’s business, a three-year promissory note in the principal amount of $101 million (the “Land Note”). Transaction costs related to the Sale were $35.2 million.

Subsequent to the closing of the Sale and pursuant to the Purchase Agreement, Loral, in December 2012, paid MDA $6.5 million as a result of the resolution of a contingency (see Note 16). Also, in April 2013, pursuant to the Purchase Agreement, we completed the final allocation of qualified pension plan assets between Loral and SS/L (see Note 14).

The transaction was taxable, and, for tax purposes, treated as a sale of assets.

Under the terms of the Purchase Agreement, Loral is obligated to indemnify SS/L for certain litigation costs and litigation damages, subject to certain capped cost-sharing by SS/L, and has retained control of the defense of the lawsuit against SS/L and Loral by ViaSat, Inc. as well as SS/L’s counterclaims against ViaSat, Inc. in that lawsuit. Under the terms of the Purchase Agreement, following a change of control of Loral, the liability of Loral for certain litigation costs and litigation damages is subject to a dollar cap. In addition, Loral is obligated to indemnify SS/L from liabilities with respect to certain pre-closing taxes.

The Land Note originally issued at closing provided for interest at the rate of 1% per annum with amortization in three equal annual installments on each March 31, commencing March 31, 2013.  The Land Note was amended as described below and is backed by a letter of guarantee from Royal Bank of Canada.

On November 7, 2012, in connection with the receipt of the proceeds from the Sale, our Board of Directors declared a special distribution of $29.00 per share for an aggregate distribution of $892.1 million. The special distribution was paid on December 4, 2012 to holders of record of Loral voting and non-voting common stock as of November 19, 2012. In accordance with Loral’s stock incentive plan, an equitable adjustment was made to outstanding stock-based awards to reflect the special distribution.

On March 28, 2013, Loral and MDA amended the Purchase Agreement to modify SS/L’s capped cost sharing obligations related to Loral’s indemnification of certain litigation costs and litigation damages and also amended the Land Note to defer to March 31, 2014 the due date of the principal payment from MDA to Loral of $33.7 million due originally on March 31, 2013 with an increase in the interest rate applicable to this tranche of the Land Note from 1.0% to 1.5% effective as of April 1, 2013.

Reclassification to Discontinued Operations

For 2012, the operations of SS/L, previously reported as the satellite manufacturing operating segment, have been reclassified as discontinued operations in our statements of operations and cash flows.

Description of Business

Subsequent to the Sale, Loral has one operating segment consisting of satellite-based communications services. Loral participates in satellite services operations through its ownership interest in Telesat Holdings Inc. (“Telesat Holdco”) which owns Telesat Canada (“Telesat”), a global satellite services provider. Telesat owns and leases a satellite fleet that operates in geosynchronous earth orbit approximately 22,000 miles above the equator. In this orbit, satellites remain in a fixed position relative to points on the earth’s surface and provide reliable, high-bandwidth services anywhere in their coverage areas, serving as the backbone for many forms of telecommunications.

Loral holds a 62.8% economic interest and a 32.7% voting interest in Telesat Holdco (see Note 7). We use the equity method of accounting for our ownership interest in Telesat Holdco.

Loral, a Delaware corporation, was formed on June 24, 2005, to succeed to the business conducted by its predecessor registrant, Loral Space & Communications Ltd. (“Old Loral”), which emerged from chapter 11 of the federal bankruptcy laws on November 21, 2005 (the “Effective Date”) pursuant to the terms of the fourth amended joint plan of reorganization, as modified (the “Plan of Reorganization”).

XML

Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

4. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax, are as follows (in thousands):

								Proportionate
								Share of		Accumulated
			Unrealized					Telesat Other		Other
			Gains (losses)		Postretirement			Comprehensive		Comprehensive
	Derivatives		on Investments		Benefits			Loss		Loss
Balance at January 1, 2012	$	(1,306)	$	580	$	(132,695)		$	(21,054)	$	(154,475)
Other comprehensive (loss) income before reclassification		(415)		(120)		1,668			1,313		2,446
Amounts reclassified from accumulated other comprehensive income (loss)		1,721		(460)		113,374			—		114,635
Net current-period other comprehensive income (loss)		1,306		(580)		115,042			1,313		117,081
Balance at December 31, 2012		—		—		(17,653)			(19,741)		(37,394)
Other comprehensive income before reclassification		—		—		—			—		—
Amounts reclassified from accumulated other comprehensive loss		—		—		1,863	(a)		—		1,863
Net current-period other comprehensive income		—		—		1,863			—		1,863
Balance at June 30, 2013	$	—	$	—	$	(15,790)		$	(19,741)	$	(35,531)
(a) Reclassification from postretirement benefits accumulated other comprehensive loss comprises $3.0 million included in general and administrative expenses and $1.2 million tax benefit thereon included in income tax provision in our condensed consolidated statement of operations.

The components of other comprehensive income and related tax effects are as follows (in thousands):

	Three Months Ended June 30,
	2013						2012
	Before-Tax		Tax (Expense)		Net-of-Tax		Before-Tax		Tax (Expense)		Net-of-Tax
	Amount		Benefit		Amount		Amount		Benefit		Amount
Reclassification of prior service credits and net actuarial loss	$	1,513	$	(578)	$	935	$	2,012	$	(809)	$	1,203
Proportionate share of Telesat Holdco other comprehensive loss		(718)		274		(444)		(869)		347		(522)
Derivatives:
Unrealized gain on foreign currency hedges		—		—		—		1,392		(560)		832
Less: reclassification adjustment for loss included in net income from discontinued operations		—		—		—		1,879		(754)		1,125
Net unrealized gain on derivatives		—		—		—		3,271		(1,314)		1,957
Unrealized loss on available-for-sale securities		—		—		—		(374)		150		(224)
Other comprehensive income	$	795	$	(304)	$	491	$	4,040	$	(1,626)	$	2,414

	Six Months Ended June 30,
	2013						2012
	Before-Tax		Tax (Expense)		Net-of-Tax		Before-Tax		Tax (Expense)		Net-of-Tax
	Amount		Benefit		Amount		Amount		Benefit		Amount
Reclassification of prior service credits and net actuarial loss	$	3,014	$	(1,151)	$	1,863	$	4,024	$	(1,617)	$	2,407
Proportionate share of Telesat Holdco other comprehensive income		—		—		—		39		(18)		21
Derivatives:
Unrealized loss on foreign currency hedges		—		—		—		(285)		115		(170)
Less: reclassification adjustment for loss included in net income from discontinued operations		—		—		—		5,156		(2,073)		3,083
Net unrealized gain on derivatives		—		—		—		4,871		(1,958)		2,913
Unrealized loss on available-for-sale securities		—		—		—		(217)		87		(130)
Other comprehensive income	$	3,014	$	(1,151)	$	1,863	$	8,717	$	(3,506)	$	5,211

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2013

Basis of Presentation [Abstract]

Basis of Presentation

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) and, in our opinion, include all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of results of operations, financial position and cash flows as of the balance sheet dates presented and for the periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules. We believe that the disclosures made are adequate to keep the information presented from being misleading. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results to be expected for the full year.

The December 31, 2012 balance sheet has been derived from the audited consolidated financial statements at that date. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our latest Annual Report on Form 10-K filed with the SEC.

Ownership interests in Telesat and XTAR, LLC (“XTAR”) are accounted for using the equity method of accounting. Income and losses of affiliates are recorded based on our beneficial interest. Intercompany profit arising from transactions with affiliates is eliminated to the extent of our beneficial interest. Equity in losses of affiliates is not recognized after the carrying value of an investment, including advances and loans, has been reduced to zero, unless guarantees or other funding obligations exist. The Company monitors its equity method investments for factors indicating other-than-temporary impairment. An impairment loss would be recognized when there has been a loss in value of the affiliate that is other-than-temporary.

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amount of income (loss) reported for the period. Actual results could differ from estimates.

Significant estimates include the fair value of stock based compensation, the realization of deferred tax assets, uncertain tax positions, our pension liabilities and the fair value of indemnification liabilities.

Concentration of Credit Risk

Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and receivables. Our cash and cash equivalents are maintained with high-credit-quality financial institutions. Our receivables are from large multinational corporations for which the creditworthiness is generally substantial. In addition, the Land Note is guaranteed by Royal Bank of Canada. As a result, management believes that its potential credit risks are minimal.

Fair Value Measurements

U.S. GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. U.S. GAAP also establishes a fair value hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are described below:

Level 1: Inputs represent a fair value that is derived from unadjusted quoted prices for identical assets or liabilities traded in active markets at the measurement date.

Level 2: Inputs represent a fair value that is derived from quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities, and pricing inputs, other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis at June 30, 2013 and December 31, 2012 (in thousands):

	June 30, 2013						December 31, 2012
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash equivalents
Money market funds	$	23,709	$	—	$	—	$	86,820	$	—	$	—
Note receivable
Land Note	$	—	$	—	$	101,000	$	—	$	—	$	101,000
Liabilities
Indemnifications
Sale of SS/L	$	—	$	—	$	16,813	$	—	$	—	$	16,528
Globalstar do Brasil S.A.	$	—	$	—	$	2,496	$	—	$	—	$	1,510

The carrying amount of cash equivalents approximates fair value because of the short maturity of those instruments. The carrying amount of the Land Note approximates fair value because the stated interest rate is consistent with current market rates. The fair value of indemnifications related to the sale of SS/L was estimated using Monte Carlo simulation based on the potential probability weighted cash flows that would be a guarantor’s responsibility in an arm’s length transaction. The fair value of indemnifications related to Globalstar do Brasil S.A. was estimated using expected value analysis. The Company does not have any non-financial assets or non-financial liabilities that are recognized or disclosed at fair value on a recurring basis as of June 30, 2013.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

We review the carrying values of our equity method investments when events and circumstances warrant and consider all available evidence in evaluating when declines in fair value are other than temporary. The fair values of our investments are determined based on valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow projections. An impairment charge is recorded when the carrying amount of the investment exceeds its current fair value and is determined to be other than temporary.

Recent Accounting Pronouncements

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740):  Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This new standard requires the netting of unrecognized tax benefits (UTBs) against available deferred tax assets for losses and other carryforward benefits that would be available to offset the liability for uncertain tax positions rather than presenting the UTB on a gross basis. The guidance, effective for the Company on January 1, 2014, will have no impact on our consolidated financial statements as the Company has already adopted this methodology.

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830) -  Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. ASU No. 2013-05 clarifies that the cumulative translation adjustment should be released into net income only when a reporting entity ceases to have a controlling financial interest in a subsidiary or a business within a foreign entity. Further, for an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. The guidance, effective for the Company on January 1, 2014, is not expected to have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405) – Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.  ASU No. 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements. The guidance requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, as the sum of: (a) The amount the reporting entity agreed to pay on the basis of its arrangement with its co-obligors, and (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance, effective for the Company on January 1, 2014, is not expected to have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (ASC Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.  ASU No. 2013-02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The guidance, effective for the Company on January 1, 2013, requires changes in presentation which have been included in our condensed consolidated financial statements.

Additional Cash Flow Information

The following represents non-cash activities and supplemental information to the condensed consolidated statements of cash flows (in thousands):

	Six Months Ended June 30,
	2013		2012
Non-cash operating items:
Equity in net loss of affiliates	$	7,149	$	4,484
Deferred taxes		11,285		(1,910)
Depreciation and amortization		6		36
Stock based compensation		417		536
Amortization of prior service credit and actuarial loss		3,014		338
Unrealized gain on nonqualified pension plan assets		—		(87)
Gain on foreign currency transactions and contracts		—		(1,350)
Net non-cash operating items-continuing operations	$	21,871	$	2,047
Non-cash operating items – discontinued operations	$	—	$	26,438
Non-cash investing activities:
Capital expenditures incurred not yet paid-discontinued operations	$	—	$	7,881
Non-cash financing activities:
Repurchase of voting common stock not yet paid - continuing operations	$	—	$	1,192
Supplemental information:
Interest paid – continuing operations	$	8	$	57
Interest paid – discontinued operations	$	—	$	914
Tax payments – continuing operations	$	86	$	85
Tax payments – discontinued operations	$	35,118	$	—

XML

Basis Of Presentation (Additional Cash Flow Information) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Non-cash operating items:
Equity in net (income) loss of affiliates	$ (132)	$ 11,353	$ 7,149	$ 4,484
Deferred taxes			11,285	(1,910)
Depreciation and amortization			6	36
Stock based compensation			417	536
Amortization of prior service credit and actuarial (gain) loss			3,014	338
Unrealized (gain) income on nonqualified pension plan assets				(87)
(Gain) loss on foreign currency transactions and contracts				(1,350)
Net non-cash operating items			21,871	2,047
Non-cash financing activities:
Repurchase of voting common stock not yet paid - continuing operations				1,192
Continuing Operations [Member]
Supplemental information:
Interest paid			8	57
Tax payments (refunds)			86	85
Discontinued Operations [Member]
Non-cash operating items:
Net non-cash operating items				26,438
Non-cash investing activities:
Capital expenditures incurred not yet paid - discontinued operations				7,881
Supplemental information:
Interest paid				914
Tax payments (refunds)			$ 35,118

XML

Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Components of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax, are as follows (in thousands):

								Proportionate
								Share of		Accumulated
			Unrealized					Telesat Other		Other
			Gains (losses)		Postretirement			Comprehensive		Comprehensive
	Derivatives		on Investments		Benefits			Loss		Loss
Balance at January 1, 2012	$	(1,306)	$	580	$	(132,695)		$	(21,054)	$	(154,475)
Other comprehensive (loss) income before reclassification		(415)		(120)		1,668			1,313		2,446
Amounts reclassified from accumulated other comprehensive income (loss)		1,721		(460)		113,374			—		114,635
Net current-period other comprehensive income (loss)		1,306		(580)		115,042			1,313		117,081
Balance at December 31, 2012		—		—		(17,653)			(19,741)		(37,394)
Other comprehensive income before reclassification		—		—		—			—		—
Amounts reclassified from accumulated other comprehensive loss		—		—		1,863	(a)		—		1,863
Net current-period other comprehensive income		—		—		1,863			—		1,863
Balance at June 30, 2013	$	—	$	—	$	(15,790)		$	(19,741)	$	(35,531)
(a) Reclassification from postretirement benefits accumulated other comprehensive loss comprises $3.0 million included in general and administrative expenses and $1.2 million tax benefit thereon included in income tax provision in our condensed consolidated statement of operations.

Schedule of Other Comprehensive Income (Loss) and Related Income Tax Effects

The components of other comprehensive income and related tax effects are as follows (in thousands):

	Three Months Ended June 30,
	2013						2012
	Before-Tax		Tax (Expense)		Net-of-Tax		Before-Tax		Tax (Expense)		Net-of-Tax
	Amount		Benefit		Amount		Amount		Benefit		Amount
Reclassification of prior service credits and net actuarial loss	$	1,513	$	(578)	$	935	$	2,012	$	(809)	$	1,203
Proportionate share of Telesat Holdco other comprehensive loss		(718)		274		(444)		(869)		347		(522)
Derivatives:
Unrealized gain on foreign currency hedges		—		—		—		1,392		(560)		832
Less: reclassification adjustment for loss included in net income from discontinued operations		—		—		—		1,879		(754)		1,125
Net unrealized gain on derivatives		—		—		—		3,271		(1,314)		1,957
Unrealized loss on available-for-sale securities		—		—		—		(374)		150		(224)
Other comprehensive income	$	795	$	(304)	$	491	$	4,040	$	(1,626)	$	2,414

	Six Months Ended June 30,
	2013						2012
	Before-Tax		Tax (Expense)		Net-of-Tax		Before-Tax		Tax (Expense)		Net-of-Tax
	Amount		Benefit		Amount		Amount		Benefit		Amount
Reclassification of prior service credits and net actuarial loss	$	3,014	$	(1,151)	$	1,863	$	4,024	$	(1,617)	$	2,407
Proportionate share of Telesat Holdco other comprehensive income		—		—		—		39		(18)		21
Derivatives:
Unrealized loss on foreign currency hedges		—		—		—		(285)		115		(170)
Less: reclassification adjustment for loss included in net income from discontinued operations		—		—		—		5,156		(2,073)		3,083
Net unrealized gain on derivatives		—		—		—		4,871		(1,958)		2,913
Unrealized loss on available-for-sale securities		—		—		—		(217)		87		(130)
Other comprehensive income	$	3,014	$	(1,151)	$	1,863	$	8,717	$	(3,506)	$	5,211

XML

Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Other Current Liabilities [Abstract]

Schedule of Other Current Liabilities

Other current liabilities consists of (in thousands):

	June 30, 2013		December 31, 2012
Pension and other post retirement liabilities	$	18,185	$	18,157
Indemnification liabilities (see Note 16)		5,283		5,835
Deferred tax liability		1,266		3,663
Other		2,788		4,434
	$	27,522	$	32,089

XML

Pensions and Other Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2013

Pensions and Other Employee Benefit Plans [Abstract]

Components of Net Periodic Cost

The following table provides the components of net periodic cost included in loss from continuing operations for our qualified and supplemental retirement plans (the “Pension Benefits”) and health care and life insurance benefits for retired employees and dependents (the “Other Benefits”) for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Pension Benefits Three Months Ended June 30,				Other Benefits Three Months Ended June 30,
	2013		2012		2013		2012
Service cost	$	9	$	200	$	2	$	2
Interest cost		458		622		10		11
Expected return on plan assets		(402)		(364)		—		—
Amortization of net actuarial loss		1,515		173		4		2
Amortization of prior service credits		—		—		(6)		(6)
Net periodic cost	$	1,580	$	631	$	10	$	9

	Pension Benefits Six Months Ended June 30,				Other Benefits Six Months Ended June 30,
	2013		2012		2013		2012
Service cost	$	156	$	400	$	4	$	4
Interest cost		921		1,244		20		22
Expected return on plan assets		(829)		(728)		—		—
Amortization of net actuarial loss		3,018		346		8		4
Amortization of prior service credits		—		—		(12)		(12)
Net periodic cost	$	3,266	$	1,262	$	20	$	18

XML

Related Party Transactions (Schedule of Related Party Transactions) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Related Party Transaction [Line Items]
Revenues (included in income from discontinued operations) from Telesat satellite construction contracts	$ 22,427	$ 46,583
Telesat [Member]
Related Party Transaction [Line Items]
Revenues (included in income from discontinued operations) from Telesat satellite construction contracts	22,501	46,712
Milestone payments received from Telesat	$ 15,726	$ 34,305

XML

Income Taxes (Narrative) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Income Taxes [Abstract]
Income Taxes Receivable, Noncurrent	$ 13,325,000
Unrecognized tax benefits relating to UTPs	76,100,000
Unrecognized tax benefits, interest on income taxes accrued	3,400,000
Unrecognized tax benefits, income tax penalties accrued	9,400,000
Statute of limitations to expire during next twelve months	2007, 2008 and 2009
Potential change in unrecognized tax benefits during next twelve months	800,000
Unrecognized tax benefits that would reduce the income tax provision	$ 38,400,000

XML

Investments in Affiliates (Investments In Affiliates) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Schedule of Equity Method Investments [Line Items]
Investments in affiliates	$ 59,018	$ 62,517
XTAR, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Investments in affiliates	$ 59,018	$ 62,517

XML

Accumulated Other Comprehensive Income (Loss) (Components of Other Comprehensive Income and Related Tax Effects) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Abstract]
Reclassification of prior service credits and net actuarial (gain) loss, Before-Tax Amount	$ 1,513	$ 2,012	$ 3,014	$ 4,024
Proportionate share of Telesat Holdco other comprehensive income (loss), Before-Tax Amount	(718)	(869)		39
Unrealized gain (loss) on foreign currency hedges, Before-Tax Amount		1,392		(285)
Less: reclassification adjustment for (income) loss included in net income (loss) from discontinued operations, Before-Tax Amount		1,879		5,156
Net unrealized gain (loss) on derivatives, Before-Tax Amount		3,271		4,871
Unrealized gain (loss) on available-for-sale securities, Before-Tax Amount		(374)		(217)
Other comprehensive income (loss), Before-Tax Amount	795	4,040	3,014	8,717
Reclassification of prior service credits and net actuarial (gain) loss, Tax (Expense) Benefit	(578)	(809)	(1,151)	(1,617)
Proportionate share of Telesat Holdco other comprehensive income (loss), Tax (Expense) Benefit	274	347		(18)
Unrealized gain (loss) on foreign currency hedges, Tax (Expense) Benefit		(560)		115
Less: reclassification adjustment for (gain) loss included in net income from discontinued operations, Tax (Expense) Benefit		(754)		(2,073)
Net unrealized gain (loss) on derivatives , Tax (Expense) Benefit		(1,314)		(1,958)
Unrealized gain (loss) on available-for-sale securities , Tax (Expense) Benefit		150		87
Other comprehensive income (loss), Tax (Expense) Benefit	(304)	(1,626)	(1,151)	(3,506)
Amortization of prior service credits and net actuarial gain (loss), Net-of Tax Amount	935	1,203	1,863	2,407
Proportionate share of Telesat Holdco other comprehensive income (loss)	(444)	(522)		21
Unrealized gaiin (loss) on foreign currency hedges, Net-of Tax Amount		832		(170)
Less: reclassification adjustment for (gain) loss included in net income (loss) from discontinued operations, Net-of Tax Amount		1,125		3,083
Net unrealized gain (loss) on derivatives, Net-of Tax Amount		1,957		2,913
Unrealized gain (loss) on available-for-sale securities, Net-of Tax Amount		(224)		(130)
Other comprehensive income (loss), Net-of Tax Amount	$ 491	$ 2,414	$ 1,863	$ 5,211	$ 117,081

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Treasury stock, shares	154,494	154,494
Voting Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	21,568,706	21,416,834
Nonvoting Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	9,505,673	9,505,673
Common stock, shares outstanding	9,505,673	9,505,673

XML

Investments in Affiliates

6 Months Ended

Jun. 30, 2013

Investments in Affiliates [Abstract]

Investments in Affiliates

7. Investments in Affiliates

Investments in affiliates consist of (in thousands):

	June 30, 2013		December 31, 2012
Telesat Holdings Inc.	$	—	$	—
XTAR, LLC		59,018		62,517
	$	59,018	$	62,517

Our investment in Telesat Holdco was reduced to zero as of June 30, 2013 and December 31, 2012, as discussed below.

Equity in net income (loss) of affiliates consists of (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Telesat Holdings Inc.	$	718	$	(8,855)	$	—	$	(1,475)
XTAR, LLC		(1,736)		(2,498)		(3,499)		(3,009)
Other		1,150		—		(3,650)		—
	$	132	$	(11,353)	$	(7,149)	$	(4,484)

The condensed consolidated statements of operations for the three and six months ended June 30, 2012 reflect the effects of the following amounts related to SS/L’s transactions with our affiliates (in thousands):

	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
Revenues included in income from discontinued operations	$	22,427	$	46,583
Elimination of Loral’s proportionate share of profits relating to affiliate transactions		(7,184)		(14,025)
Profits included in income from discontinued operations relating to affiliate transactions not eliminated		4,041		7,889

Equity in net income of affiliates for the six months ended June 30, 2012 included $4.6 million of profits previously eliminated on satellite sales from SS/L to affiliates that should have been recognized in prior periods as the satellites were depreciated. The Company has not revised previously reported amounts based on its belief that the effect of such adjustments is not material to the financial statements taken as a whole.

Telesat

As of December 31, 2012 and June 30, 2013, we held a 62.8% economic interest in Telesat.  Our economic interest decreased from 64% to 62.8% in December 2012 when certain executives of Telesat exercised share appreciation rights related to a total of 5,311,568 stock options granted under Telesat’s share based compensation plan and received 2,249,747 non-voting participating preferred shares. 

We use the equity method of accounting for our majority economic interest in Telesat because we own 32.7% of the voting stock and do not exercise control by other means to satisfy the U.S. GAAP requirement for treatment as a consolidated subsidiary. We have also concluded that Telesat is not a variable interest entity for which we are the primary beneficiary. Loral’s equity in net income or loss of Telesat is based on our proportionate share of Telesat’s results in accordance with U.S. GAAP and in U.S. dollars. Our proportionate share of Telesat’s net income or loss is based on our economic interest as our holdings consist of common stock and non-voting participating preferred shares that have all the rights of common stock with respect to dividends, return of capital and surplus distributions, but have no voting rights.

In connection with the closing of a new credit agreement(the “Telesat Credit Agreement”) in March 2012, the Board of Directors of Telesat approved special cash distributions to Telesat’s shareholders of CAD 656.5 million, including a distribution of CAD 420 million to Loral.  The special distributions by Telesat to its shareholders  were authorized to be paid in two tranches; the first tranche was paid by Telesat on March 28, 2012, with Loral receiving CAD 375 million ($376 million), and the second tranche was paid by Telesat on July 5, 2012, with Loral receiving CAD 45 million ($44 million).

As of June 30, 2013 and December 31, 2012, the special cash distributions received from Telesat exceeded our recorded cumulative equity in net income of Telesat and our initial investment by $17.7 million and $7.4 million, respectively. In following the equity method of accounting, our investment balance in Telesat was reduced to zero as of June 30, 2013 and December 31, 2012, and we will not record equity in comprehensive income of Telesat until our share of Telesat’s future comprehensive income exceeds $17.7 million.  

On April 2, 2013, Telesat re-priced and amended its existing credit agreement, dated March 28, 2012. The amendment converted CAD34 million from Canadian to U.S. dollars and decreased the interest rates on Telesat’s Canadian and U.S. term loan B facilities by 0.50%. The amendment also decreased the interest rate floors on the debt to 1.00% and 0.75%  for the Canadian term loan B facility and U.S. term loan B facility, respectively. The permitted leverage ratio to incur first lien debt is now 4.25:1.00 which represents a change from the prior 4.00:1.00 senior secured leverage ratio in the credit agreement.

On May 1, 2013, Telesat redeemed its 12.5% senior subordinated notes due November 1, 2017 at a price of 106.25%  of the principal amount of the senior subordinated notes. Expense of refinancing for the three and six months ended June 30, 2013 primarily represents the premium paid and the write-off of deferred financing costs related to this note redemption.

The ability of Telesat to pay dividends or certain other restricted payments as well as consulting fees in cash to Loral is governed by applicable covenants in Telesat’s debt and shareholder agreements.  Under Telesat’s credit agreement and the indenture for Telesat’s 6% senior notes, dividends or certain other restricted payments may be paid only if there is a sufficient capacity under a restricted payment basket, which is based on a formula of cumulative consolidated EBITDA less 1.4 times cumulative consolidated interest expense. Under the 6% senior note indenture and credit agreement, Telesat is generally permitted to pay consulting fees to Loral in cash.  Our general and administrative expenses are net of income related to the Consulting Agreement of $1.25 million for each of the three month periods ended June 30, 2013 and 2012 and $2.5 million for each of the six months period ended June 30, 2013 and 2012. For the six months ended June 30, 2013 and 2012, Loral received payments in cash from Telesat of $3.8 million and $1.6 million, respectively, for consulting fees and interest. The payments received by Loral from Telesat for the six months ended June 30, 2013 included redemption of $1.3 million of notes receivable. These amounts were not allowed to be paid as of December 31, 2012 because Telesat did not meet the leverage ratio required for payment under the indenture for its 12.5% senior subordinated Notes due November 1, 2017. 

The contribution of Loral Skynet, a wholly owned subsidiary of Loral prior to its contribution, to Telesat in 2007 was recorded by Loral at the historical book value of our retained interest combined with the gain recognized on the contribution. However, the contribution was recorded by Telesat at fair value. Accordingly, the amortization of Telesat fair value adjustments applicable to the Loral Skynet assets and liabilities is proportionately eliminated in determining our share of the net income or losses of Telesat. Our equity in the net income or loss of Telesat also reflects the elimination of our profit, to the extent of our economic interest, on satellites we constructed for Telesat while we owned SS/L.

The following table presents summary financial data for Telesat in accordance with U.S. GAAP, as of June 30, 2013 and December 31, 2012 and for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Statement of Operations Data:
Revenues	$	210,038	$	199,852	$	427,506	$	395,875
Operating expenses		(44,174)		(52,207)		(94,332)		(135,947)
Depreciation, amortization and stock-based compensation		(62,845)		(61,009)		(120,663)		(121,497)
Loss on disposition of long lived asset		(2,010)		(18)		(1,542)		(76)
Operating income		101,009		86,618		210,969		138,355
Interest expense		(51,077)		(61,592)		(110,772)		(113,282)
Expense of refinancing		3		(57,541)		(19,961)		(79,403)
Foreign exchange (losses) gains		(98,389)		(56,178)		(168,729)		6,312
Gains (losses) on financial instruments		59,755		25,770		96,608		(655)
Other income		10,450		241		10,833		965
Income tax provision		(19,151)		(6,748)		(26,993)		(4,319)
Net income (loss)		2,600		(69,430)		(8,045)		(52,027)

	June 30, 2013		December 31, 2012
Balance Sheet Data:
Current assets	$	226,905	$	289,614
Total assets		4,907,436		5,342,313
Current liabilities		265,053		237,739
Long-term debt, including current portion		3,243,696		3,519,872
Total liabilities		4,379,990		4,770,966
Shareholders’ equity		527,446		571,347

XTAR

We own 56% of XTAR, a joint venture between us and Hisdesat Servicios Estrategicos, S.A. (“Hisdesat”) of Spain. We account for our ownership interest in XTAR under the equity method of accounting because we do not control certain of its significant operating decisions.

XTAR owns and operates an X-band satellite, XTAR-EUR, located at 29° E.L., which is designed to provide X-band communications services exclusively to United States, Spanish and allied government users throughout the satellite’s coverage area, including Europe, the Middle East and Asia. XTAR also leases 7.2 72MHz X-band transponders on the Spainsat satellite located at 30° W.L., owned by Hisdesat. These transponders, designated as XTAR-LANT, provide capacity to XTAR for additional X-band services and greater coverage and flexibility.

We regularly evaluate our investment in XTAR to determine whether there has been a decline in fair value that is other-than-temporary. We have performed an impairment test for our investment in XTAR as of June 30, 2013, using XTAR’s most recent forecast, and concluded that our investment in XTAR was not impaired. Any declines in XTAR’s projected revenues may result in a future impairment charge.

XTAR’s lease obligation to Hisdesat for the XTAR-LANT transponders requires payments by XTAR of $25 million in 2013, with increases thereafter to a maximum of $28 million per year through the end of the useful life of the satellite which is estimated to be in 2022. Under this lease agreement, Hisdesat may also be entitled under certain circumstances to a share of the revenues generated on the XTAR-LANT transponders. In March 2009, XTAR entered into an agreement with Hisdesat pursuant to which the past due balance on XTAR-LANT transponders of $32.3 million as of December 31, 2008, together with a deferral of $6.7 million in payments due in 2009, will be payable to Hisdesat over 12 years through annual payments of $5 million (the “Catch Up Payments”). XTAR has a right to prepay, at any time, all unpaid Catch Up Payments discounted at 9%. Cumulative amounts paid to Hisdesat for Catch-Up Payments through June 30, 2013 were $21.7 million. XTAR has also agreed that XTAR’s excess cash balance (as defined) will be applied towards making limited payments on future lease obligations, as well as payments of other amounts owed to Hisdesat, Telesat and Loral for services provided by them to XTAR (see Note 17). The ability of XTAR to pay dividends and management fees in cash to Loral is governed by XTAR’s operating agreement.

The following table presents summary financial data for XTAR as of June 30, 2013 and December 31, 2012 and for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Statement of Operations Data:
Revenues	$	8,325	$	6,821	$	16,450	$	14,672
Operating expenses		(8,493)		(8,279)		(16,862)		(16,603)
Depreciation and amortization		(2,310)		(2,345)		(4,620)		(4,750)
Operating loss		(2,478)		(3,803)		(5,032)		(6,681)
Net loss		(3,210)		(4,572)		(6,469)		(8,243)

	June 30, 2013		December 31, 2012
Balance Sheet Data:
Current assets	$	5,697	$	7,838
Total assets		68,044		74,721
Current liabilities		19,916		18,894
Total liabilities		55,744		55,953
Members’ equity		12,300		18,768

In prior periods, XTAR’s liability to Hisdesat of $27.4 million for Catch Up Payments as of December 31, 2012 was included in current liabilities.  In the XTAR summary financial data above, the liability for Catch Up payments was reflected as a long-term liability because the amount is payable over 12 years. This change had no effect on the Loral condensed consolidated financial statements.

Other

In connection with the sale in 2008 by Loral and certain of its subsidiaries and DASA Globalstar LLC to Globalstar Inc. of their respective interests in Globalstar do Brasil S.A. (“GdB”), the Globalstar Brazilian service provider, Loral agreed to indemnify Globalstar Inc. and GdB for certain GdB pre-closing liabilities, primarily related to Brazilian taxes. As a result of an April 2013 adverse court decision in Brazil relating to a potential tax liability, an adverse outcome for which was previously believed to be remote, Loral recorded a loss contingency of $4.8 million in the first quarter of 2013 for such liability and made a payment of $3.7 million against that liability in the second quarter of 2013.

During the second quarter of 2013 the Company received cash proceeds of $1.1 million related to the sale of its ownership interests in an affiliate with no carrying value.  The gain on sale is included in equity in net income (loss) of affiliates.

As of June 30, 2013 and December 31, 2012, the Company held various indirect ownership interests in two foreign companies that currently serve as exclusive service providers for Globalstar service in Mexico and Russia. The Company accounts for these ownership interests using the equity method of accounting. Loral has written-off its investments in these companies, and, because we have no future funding requirements relating to these investments, there is no requirement for us to provide for our allocated share of these companies’ net losses.

XML

Condensed Consolidated Statements of Equity (USD $) In Thousands, except Share data	Voting Common Stock [Member] Common Stock [Member]	Nonvoting Common Stock [Member] Common Stock [Member]	Paid-In Capital [Member]	Treasury Stock Voting [Member]	Retained Earnings (Accumulated Deficit) [Member]	Accumulated Other Comprehensive Loss [Member]	Shareholders' Equity Attributable To Loral [Member]	Noncontrolling Interest [Member]	Total
Total equity at Dec. 31, 2011									$ 947,585
Balance at Dec. 31, 2011	212	95	1,014,724	(8,400)	94,303	(154,475)	946,459	1,126
Balance, shares at Dec. 31, 2011	21,230,000	9,506,000
Treasury stock, shares at Dec. 31, 2011				136,000
Net income (loss)					421,322			(231)
Other comprehensive income (loss)						117,081			117,081
Comprehensive income (loss)							538,403		538,172
Elimination of noncontrolling interest resulting from the Sale								(895)	(895)
Common dividends declared ($13.60 per share)					(417,606)		(417,606)		(417,606)
Special distribution declared ($29.00 per share)					(892,147)		(892,147)		(892,147)
Exercise of stock options	2		1,633				1,635		1,635
Exercise of stock options, shares	169,000
Shares surrendered to fund withholding taxes			(6,992)				(6,992)		(6,992)
Shares surrendered to fund withholding taxes, shares	18,000
Tax benefit associated with stock based compensation			16,919				16,919		16,919
Stock based compensation			1,151				1,151		1,151
Cash settlement of restricted stock units			(169)				(169)		(169)
Voting common stock repurchased				(1,192)			(1,192)		(1,192)
Voting common stock repurchased, shares				18,000					18,000
Total equity at Dec. 31, 2012									186,461
Balance at Dec. 31, 2012	214	95	1,027,266	(9,592)	(794,128)	(37,394)	186,461
Balance, shares at Dec. 31, 2012	21,417,000	9,506,000
Treasury stock, shares at Dec. 31, 2012				154,000					154,494
Net income (loss)					(21,353)				(21,353)
Other comprehensive income (loss)						1,863			1,863
Comprehensive income (loss)							(19,490)		(19,490)
Exercise of restricted stock units	2		(2)
Exercise of restricted stock units, shares	175,000
Equitable adjustment to restricted stock units for dividends and distributions	1		(1)
Equitable adjustment to restricted stock units for dividends and distributions, shares	120,000
Shares surrendered to fund withholding taxes	(1)		(8,896)				(8,897)		(8,897)
Shares surrendered to fund withholding taxes, shares	(143,000)
Tax benefit associated with stock based compensation			5,910				5,910		5,910
Stock based compensation			417				417		417
Total equity at Jun. 30, 2013									164,401
Balance at Jun. 30, 2013	$ 216	$ 95	$ 1,024,694	$ (9,592)	$ (815,481)	$ (35,531)	$ 164,401
Balance, shares at Jun. 30, 2013	21,569,000	9,506,000
Treasury stock, shares at Jun. 30, 2013				154,000					154,494

XML

Income Taxes (Summary of Changes to Company's Liabilities for UTPs) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Income Taxes [Abstract]
Opening balance - January 1	$ 80,732	$ 139,916
Unrecognized tax (provision) benefit	625	(115)
Potential additional interest	1,016	3,094
Potential penalty adjustment	37	6
Statute expirations	(1,007)	(1,072)
Ending balance - June 30	$ 81,403	$ 141,829

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 30,369	$ 87,370
Notes receivable	67,333	34,917
Deferred tax assets	12,511	4,165
Other current assets	1,891	2,655
Total current assets	112,104	129,107
Property and equipment, net	46	42
Long-term receivables	33,667	67,333
Income taxes receivable	13,325
Investments in affiliates	59,018	62,517
Long-term deferred tax assets	97,333	117,381
Other assets	2,612	2,612
Total assets	318,105	378,992
Current liabilities:
Accrued employment costs	2,355	4,922
Income taxes payable		34,505
Other current liabilities	27,522	32,089
Total current liabilities	29,877	71,516
Pension and other postretirement liabilities	24,202	25,174
Long-term liabilities	99,625	95,841
Total liabilities	153,704	192,531
Commitments and contingencies
Loral shareholders' equity:
Preferred stock, 0.01 par value; 10,000,000 shares authorized, no shares issued and outstanding
Common Stock:
Paid-in capital	1,024,694	1,027,266
Treasury stock (at cost), 154,494 shares of voting common stock	(9,592)	(9,592)
Accumulated deficit	(815,481)	(794,128)
Accumulated other comprehensive loss	(35,531)	(37,394)
Total equity	164,401	186,461
Total liabilities and equity	318,105	378,992
Voting Common Stock [Member]
Common Stock:
Common stock, 0.01 par value	216	214
Nonvoting Common Stock [Member]
Common Stock:
Common stock, 0.01 par value	$ 95	$ 95

XML

Investments in Affiliates (Equity in Net Income (Losses) of Affiliates) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Schedule of Equity Method Investments [Line Items]
Equity in net income (loss) of affiliates	$ 132	$ (11,353)	$ (7,149)	$ (4,484)
Telesat Holdings Inc [Member]
Schedule of Equity Method Investments [Line Items]
Equity in net income (loss) of affiliates	718	(8,855)		(1,475)
XTAR, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity in net income (loss) of affiliates	(1,736)	(2,498)	(3,499)	(3,009)
Other Affiliates [Member]
Schedule of Equity Method Investments [Line Items]
Equity in net income (loss) of affiliates	$ 1,150		$ (3,650)

XML

Receivables (Tables)

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Receivable Balances Related to Land Note Receivable and the Telesat Consulting Services Fee

Receivable balances related to the Land Note (see Note 1) and the Telesat consulting services fee (see Note 17) as of June 30, 2013 and December 31, 2012 are presented below (in thousands):

	June 30, 2013		December 31, 2012
Land Note receivable	$	101,000	$	101,000
Telesat notes receivable for consulting services		—		1,250
		101,000		102,250
Less: current portion		(67,333)		(34,917)
Long-term receivables	$	33,667	$	67,333

XML

Commitments And Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies [Abstract]

Commitments And Contingencies

16. Commitments and Contingencies

Financial Matters

In the fourth quarter of 2012, we sold our former subsidiary, SS/L, to MDA pursuant to the Purchase Agreement. Under the terms of the Purchase Agreement, we are obligated to indemnify MDA from (1) liabilities with respect to certain pre-closing taxes; (2) certain litigation costs and litigation damages relating to the ViaSat lawsuit, subject to certain sharing formulas and caps; and (3) certain breaches of representations, warranties and covenants, subject to certain limitations on survival of claims, deductibles and caps. In March 2013, we and MDA agreed, among other things, to modify SS/L’s capped cost-sharing obligations. To date, other than with respect to sharing of litigation costs (see Legal Proceedings, below), MDA has submitted one claim for indemnification which relates to pre-closing taxes. The amount of this claim has not yet been determined. We intend to vigorously contest the underlying tax assessment, but there can be no assurance that we will be successful. Although no assurance can be provided, we do not believe that this matter will have a material adverse effect on our financial position or results of operations. Our condensed consolidated balance sheets include liabilities of $16.8 million and $16.5 million as of June 30, 2013 and December 31, 2012, respectively, representing the estimated fair value of all potential indemnification liabilities relating to the Sale. 

In connection with the Sale, Loral has restructured its corporate functions and has reduced the number of employees at its headquarters. In 2012, Loral charged approximately $11.8 million to general and administrative expenses, mainly for severance and related costs, and paid approximately $8.0 million. During the three and six months ended June 30, 2013, Loral paid restructuring costs of approximately $2.7 million and $2.9 million, respectively, and at June 30, 2013, the liability recorded in the condensed consolidated balance sheet for the restructuring was $0.9 million which includes all expected future payments under the restructuring plan relating to the Sale.

In connection with the sale in 2008 by Loral and certain of its subsidiaries and DASA Globalstar LLC to Globalstar Inc. of their respective interests in Globalstar do Brasil S.A. (“GdB”), the Globalstar Brazilian service provider, Loral agreed to indemnify Globalstar Inc. and GdB for certain GdB pre-closing liabilities, primarily related to Brazilian taxes. As a result of an April 2013 adverse court decision in Brazil relating to a potential tax liability, an adverse outcome for which was previously believed to be remote, Loral recorded a loss contingency of $4.8 million in the first quarter of 2013 for such liability and made a payment of $3.7 million against that liability in the second quarter of 2013.

See Note 17 — Related Party Transactions — Transactions with Affiliates —  Telesat for commitments and contingencies relating to our agreement to indemnify Telesat for certain liabilities and our arrangements with ViaSat, Inc. and Telesat.

Satellite Matters

During the launch of an SS/L-built satellite on June 1, 2012, the satellite’s south solar array was damaged, resulting in a reduction of power available to the satellite’s transponders. SS/L had total orbital receivables related to this satellite of $18 million, which represents the maximum possible loss from this anomaly, excluding the cost of the failure investigation. During the third quarter of 2012, SS/L recorded a charge of $6.5 million to reduce orbital receivables based on the estimated loss of power on the satellite. The write down of SS/L’s orbital receivables as a result of the anomaly also resulted in a $6.5 million payment by Loral to MDA pursuant to the Purchase Agreement relating to the Sale. Any additional reduction in orbital receivables for this satellite prior to November 2, 2013 would result in additional payment by Loral to MDA pursuant to the Purchase Agreement.

Legal Proceedings

ViaSat

ViaSat, Inc. and ViaSat Communications, Inc. (formerly known as WildBlue Communications, Inc.) (collectively, “ViaSat”) have sued SS/L and Loral in the United States District Court for the Southern District of California. ViaSat’s amended complaint alleges, among other things, that SS/L and Loral directly and indirectly infringed, that SS/L and Loral induced infringement, and that SS/L contributed to the infringement of, certain ViaSat patents in connection with the manufacture of satellites by SS/L for customers other than ViaSat. The amended complaint also alleges that each of SS/L and Loral breached non-disclosure obligations in certain contracts with ViaSat. ViaSat’s amended complaint seeks, among other things, damages (including treble damages with respect to the patent infringement claims) in amounts to be determined at trial and to enjoin SS/L and Loral from further infringement of the ViaSat patents and breach of contract.

SS/L and Loral have answered ViaSat’s complaint and asserted defenses to ViaSat’s claims and counterclaims seeking a declaratory judgment that neither SS/L nor Loral has infringed and that they are not infringing the ViaSat patents, that ViaSat’s patents are invalid and that at least certain of ViaSat’s patents are unenforceable due to inequitable conduct. SS/L has also asserted counterclaims against ViaSat for patent infringement, alleging, among other things, that ViaSat infringed certain SS/L patents in connection with its manufacture and sale of certain satellite communication products and services. SS/L’s counterclaims seek, among other things, damages (including treble damages with respect to at least one of the patent infringement claims) in amounts to be determined at trial and to enjoin ViaSat from further infringement of the SS/L patents.

In May 2013, the court denied without prejudice ViaSat’s renewed motion for summary judgment seeking an order declaring that the claims in two of SS/L’s patents are invalid. Also, in May 2013, the court granted in part and denied in part the motion filed by SS/L and Loral seeking an order declaring that three of the claims in one of ViaSat’s patents are invalid as indefinite or, in the alternative, summary judgment of non-infringement of such claims, holding that one of such claims in the patent was invalid.

In August 2013, SS/L and Loral filed a motion for summary judgment seeking an order that certain claims in one of ViaSat’s patents are invalid for being indefinite.

We believe that each of SS/L and Loral has, and we intend vigorously to pursue, meritorious defenses and counterclaims to ViaSat’s claims. There can be no assurance, however, that SS/L’s and Loral’s defenses and counterclaims will be successful with respect to all or some of ViaSat’s claims or that SS/L will prevail with respect to its assertion that ViaSat has infringed SS/L patents. We believe that SS/L’s and Loral’s conduct was consistent with, and in due regard for, any applicable and valid intellectual property rights of ViaSat. Although no assurance can be provided, we do not believe that this matter will have a material adverse effect on our financial position or results of operations.

Under the terms of the Purchase Agreement, as amended, Loral is obligated to indemnify SS/L for certain litigation costs and litigation damages, subject to certain capped cost-sharing by SS/L, and has retained control of the defense of the lawsuit by ViaSat against SS/L and Loral as well as SS/L’s counterclaims against ViaSat in the lawsuit. Under the terms of the Purchase Agreement, following a change of control of Loral, the liability of Loral for certain litigation costs and litigation damages is subject to a dollar cap.

Other Litigation

Other than the litigation with ViaSat discussed above, we are not currently subject to any other legal proceedings. In the future, however, we may become subject to other legal proceedings and claims, either asserted or unasserted, that may arise in the ordinary course of business.

XML

Accumulated Other Comprehensive Income (Loss) (Components of Accumulated Other Comprehensive Loss) (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Accumulated other comprehensive income (loss), Beginning balance			$ (37,394,000)	$ (154,475,000)	$ (154,475,000)
Other comprehensive income (loss) before reclassification					2,446,000
Amounts reclassified from accumulated other comprehensive income (loss)			1,863,000		114,635,000
Net current-period other comprehensive income (loss)	491,000	2,414,000	1,863,000	5,211,000	117,081,000
Accumulated other comprehensive income (loss), Ending balance	(35,531,000)		(35,531,000)		(37,394,000)
Derivatives [Member]
Accumulated other comprehensive income (loss), Beginning balance				(1,306,000)	(1,306,000)
Other comprehensive income (loss) before reclassification					(415,000)
Amounts reclassified from accumulated other comprehensive income (loss)					1,721,000
Net current-period other comprehensive income (loss)					1,306,000
Unrealized Gains (losses) on Investments [Member]
Accumulated other comprehensive income (loss), Beginning balance				580,000	580,000
Other comprehensive income (loss) before reclassification					(120,000)
Amounts reclassified from accumulated other comprehensive income (loss)					(460,000)
Net current-period other comprehensive income (loss)					(580,000)
Postretirement Benefits [Member]
Accumulated other comprehensive income (loss), Beginning balance			(17,653,000)	(132,695,000)	(132,695,000)
Other comprehensive income (loss) before reclassification					1,668,000
Amounts reclassified from accumulated other comprehensive income (loss)			1,863,000		113,374,000
Net current-period other comprehensive income (loss)			1,863,000		115,042,000
Accumulated other comprehensive income (loss), Ending balance	(15,790,000)		(15,790,000)		(17,653,000)
Proportionate Share of Telesat Other Comprehensive Loss [Member]
Accumulated other comprehensive income (loss), Beginning balance				(21,054,000)	(21,054,000)
Other comprehensive income (loss) before reclassification					1,313,000
Net current-period other comprehensive income (loss)					1,313,000
Accumulated other comprehensive income (loss), Ending balance	(19,741,000)		(19,741,000)		(19,741,000)
Accumulated Other Comprehensive Loss [Member]
Net current-period other comprehensive income (loss)			1,863,000		117,081,000
General Administrative Expenses [Member]
Reclassification from postretirement benefits accumulated other comprehensive income (loss)			3,000,000
Income Tax Provision Benefit [Member]
Reclassification from postretirement benefits accumulated other comprehensive income (loss)			$ (1,200,000)

XML

Other Current Liabilities (Schedule of Other Current Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current Liabilities [Abstract]
Pension and other post retirement liabilities	$ 18,185	$ 18,157
Indemnification liabilities	5,283	5,835
Deferred tax liability	1,266	3,663
Other	2,788	4,434
Other current liabilities, Total	$ 27,522	$ 32,089

XML

Pensions and Other Employee Benefits Plans (Narrative) (Details) (USD $)	1 Months Ended
	Apr. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Contribution to qualified pension plan	$ 10,700,000
Pension plan assets transferred to disposal group	11,900,000
Amount reimbursed by purchaser of disposal group for pension true-up	11,900,000
Cash proceeds from the decrease in the plan assets	1,200,000
Decrease to the assets of the Loral Pension Plan	1,200,000
Pension and other post retirement liabilities		18,185,000	18,157,000
Supplemental Employee Retirement Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension and other post retirement liabilities		$ 18,200,000	$ 18,100,000

XML

Organization and Principal Business (Narrative) (Details) (USD $)	0 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	0 Months Ended	6 Months Ended
	Nov. 07, 2012	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Telesat Holdco [Member]	Nov. 02, 2012 Sale Of SS/L [Member]	Jun. 30, 2013 Sale Of SS/L [Member]
Organization And Principal Business [Line Items]
Cash proceeds from sale of SS/L					$ 967,900,000
Amortization period of Land Note					3 years
Date purchase agreement entered into					Jun. 26, 2012
Date of first modification of purchase agreement					Oct. 30, 2012
Date of second modification of purchase agreement						Mar. 28, 2013
Promissory note for sale of real estate of disposal group		101,000,000	102,250,000		101,000,000
Transaction costs related to sale of SS/L					35,200,000
Original due date of first installment of promissory note						Mar. 31, 2013
Revised due date of first installment of promissory note						Mar. 31, 2014
Principal amount of first installment of promissory note						33,700,000
Original interest rate of first installment of promissory note						1.00%
Revised interest rate of first installment of promissory note						1.50%
Land promissory note interest rate					1.00%
Disposal segment, sale date					Nov. 02, 2012
Payment towards contingency pursuant to purchase agreement					6,500,000
Promissory note amortization period and frequency					three equal annual installments
Promissory note amortization period commencement date					Mar. 31, 2013
Special distribution record date	Nov. 19, 2012
Special distribution declared per share	$ 29.00		$ 29.00
Aggregate special distribution	$ 892,100,000
Special distribution Paid date	Dec. 04, 2012
Voting interest				32.70%
Percentage of ownership interest				62.80%
Date of incorporation		Jun. 24, 2005
Date of emergence from bankruptcy proceedings		Nov. 21, 2005

XML

Equity (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Summary of Common Stock Purchases

The following is a summary of common stock purchases under this repurchase program (total cost in thousands):

	Shares Repurchased	Total Cost		Average Cost
Year ended December 31,
2012	18,000	$	1,192	$	66.22
2011	136,494		8,400		61.54
Total program	154,494	$	9,592	$	62.04

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Summary of Stock Options Outstanding, Unvested Restricted Stock and Unvested Restricted Stock Units Excluded From the Calculation of Diluted Loss Per Share

The following summarizes stock options outstanding, unvested restricted stock and unvested restricted stock units excluded from the calculation of diluted loss per share (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Stock options		—		57		—		97
Unvested restricted stock units		—		2		—		2
Unvested restricted stock		84		232		172		223

XML

Property and Equipment

6 Months Ended

Jun. 30, 2013

Property and Equipment [Abstract]

Property and Equipment

6.Property and Equipment

Property and equipment consists of (in thousands):

	June 30, 2013		December 31, 2012
Leasehold improvements	$	6	$	1,913
Equipment		516		555
Furniture and fixtures		74		73
		596		2,541
Accumulated depreciation and amortization		(550)		(2,499)
	$	46	$	42

XML

Stock-Based Compensation (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for future grant	1,319,533		1,319,533
Continuing Operations [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation liability	$ 0.5		$ 0.5		$ 1.0
Stock compensation, cash payments	0.5	2.0	0.5	2.0
Total stock-based compensation included in income (loss) from continuing operations	$ 0.2	$ 0.4	$ 0.5	$ 1.0

XML

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2013

Property and Equipment [Abstract]

Property, Plant and Equipment

Property and equipment consists of (in thousands):

	June 30, 2013		December 31, 2012
Leasehold improvements	$	6	$	1,913
Equipment		516		555
Furniture and fixtures		74		73
		596		2,541
Accumulated depreciation and amortization		(550)		(2,499)
	$	46	$	42

XML

Discontinued Operations (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Discontinued Operations [Abstract]
Income tax (provision) benefit	$ 1,500	$ (8,233)	$ 1,500	$ (11,593)

XML

Income Taxes

6 Months Ended

Jun. 30, 2013

Income Taxes [Abstract]

Income Taxes

9. Income Taxes

The following summarizes our income tax provision on loss from continuing operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Total current income tax benefit (provision)	$	7,138	$	(1,242)	$	6,300	$	631
Total deferred income tax (provision) benefit		(9,308)		7,005		(11,285)		1,910
Income tax (provision) benefit	$	(2,170)	$	5,763	$	(4,985)	$	2,541

Loral is projecting a tax loss for 2013 which will be available as a carryback benefit against the taxes previously paid for 2012. As of June 30, 2013, taxes receivable of $13.3 million have been recorded on the condensed consolidated balance sheet for this benefit. Subsequent to the Sale, to the extent that Loral’s profitability from operations is not sufficient to realize the benefit from our remaining net deferred tax assets, the Company would generate sufficient taxable income from the appreciated value of its Telesat investment, which currently has a nominal tax basis, in order to prevent its federal net operating losses from expiring and realize the benefit of all remaining deferred tax assets.

The following summarizes amounts for uncertain tax positions (“UTPs”) included in our income tax provision on loss from continuing operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Current (provision) benefit for UTPs	$	(224)	$	(1,243)	$	(671)	$	630
Deferred benefit for UTPs		102		482		241		12
(Provision) benefit for UTPs	$	(122)	$	(761)	$	(430)	$	642

As of June 30, 2013, we had unrecognized tax benefits relating to UTPs of $76.1 million. Pursuant to the Purchase Agreement for the Sale, we are obligated to indemnify SS/L from liabilities with respect to certain taxes related to periods prior to the closing of the transaction. The Company recognizes potential accrued interest and penalties related to UTPs in income tax expense on a quarterly basis. As of June 30, 2013, we have accrued approximately $3.4 million and $9.4 million for the payment of potential tax-related interest and penalties, respectively.

With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years prior to 2007. Earlier years related to certain foreign jurisdictions remain subject to examination. Various state and foreign income tax returns are currently under examination. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carryforward. While we intend to contest any future tax assessments for uncertain tax positions, no assurance can be provided that we would ultimately prevail. During the next 12 months, the statute of limitations for assessment of additional tax will expire with regard to UTPs related to our federal income tax return filed for 2009 and certain state income tax returns filed for 2007, 2008 and 2009 potentially resulting in a $0.8 million reduction to our unrecognized tax benefits.

The following summarizes the changes to our liabilities for UTPs included in long-term liabilities in the condensed consolidated balance sheets (in thousands):

	Six Months Ended June 30,
	2013		2012
Liabilities for UTPs:
Opening balance — January 1	$	80,732	$	139,916
Current provision (benefit) for:
Unrecognized tax benefits		625		(115)
Potential additional interest		1,016		3,094
Potential penalty adjustment		37		6
Statute expirations		(1,007)		(1,072)
Ending balance — June 30	$	81,403	$	141,829

As of June 30, 2013, if our positions are sustained by the taxing authorities, approximately $38.4 million of the benefits will reduce the Company’s income tax provision from continuing operations. Other than as described above, there were no significant changes to our uncertain tax positions during the six months ended June 30, 2013 and 2012, and we do not anticipate any other significant changes to our unrecognized tax benefits during the next twelve months.

XML

Receivables

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Receivables

5. Receivables

Receivable balances related to the Land Note (see Note 1) and the Telesat consulting services fee (see Note 17) as of June 30, 2013 and December 31, 2012 are presented below (in thousands):

	June 30, 2013		December 31, 2012
Land Note receivable	$	101,000	$	101,000
Telesat notes receivable for consulting services		—		1,250
		101,000		102,250
Less: current portion		(67,333)		(34,917)
Long-term receivables	$	33,667	$	67,333

As a result of the amendment to the Purchase Agreement on March 28, 2013, principal payments under the Land Note are scheduled to be received as follows: $67.3 million on March 31, 2014 and $33.7 million on March 31, 2015. Interest on the Land Note ranges between one and one and one half percent per annum and is payable quarterly.

See Note 17 for the terms of the Telesat notes receivable for consulting services.

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities:
Net income (loss)	$ (21,353)	$ 2,837
(Income) loss from discontinued operations, net of tax provision	2,365	(13,445)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Non-cash operating items (Note 2)	21,871	2,047
Changes in operating assets and liabilities:
Long-term receivables		(1,610)
Other current assets and other assets	1,605	1,218
Accrued expenses and other current liabilities	(6,767)	(2,645)
Income taxes receivable and payable	(12,964)	(109)
Pension and other postretirement liabilities	(945)	(623)
Long-term liabilities	59	(1,354)
Net cash provided by (used in) operating activities - continuing operations	(16,129)	(13,684)
Net cash provided by (used in) operating activities - discontinued operations	(39,025)	(38,353)
Net cash provided by (used in) operating activities	(55,154)	(52,037)
Investing activities:
Distributions received from affiliate		375,809
Proceeds from sale of investment in affiliate	1,150
Capital expenditures	(10)
Net cash provided by (used in) investing activities - continuing operations	1,140	375,809
Net cash provided by (used in) investing activities - discontinued operations		(84,022)
Net cash provided by (used in) investing activities	1,140	291,787
Financing activities:
Cash dividend paid		(417,606)
Voting common stock repurchased		(472)
Proceeds from the exercise of stock options		1,635
Cash settlement of restricted stock units		(169)
Funding of withholding taxes for stock based compensation	(8,897)	(5,796)
Excess tax benefit associated with stock based compensation	5,910	22
Net cash provided by (used in) financing activities - continuing operations	(2,987)	(422,386)
Net cash provided by (used in) financing activities - discontinued operations		40,000
Net cash provided by (used in) financing activities	(2,987)	(382,386)
Increase (decrease) in cash and cash equivalents	(57,001)	(142,636)
Cash and cash equivalents - beginning of period	87,370	197,114
Cash and cash equivalents - continuing and discontinued operations - end of period	30,369	54,478
Cash and cash equivalents - discontinued operations - end of period		(17,013)
Cash and cash equivalents - end of period	$ 30,369	$ 37,465

XML

Investments in Affiliates (Effect of Affiliate Transactions on Operating Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Investments in Affiliates [Abstract]
Revenues included in income (loss) from discontinued operations	$ 22,427	$ 46,583
Elimination of Loral's proportionate share of profits relating to affiliate transactions	(7,184)	(14,025)
Profits included in income (loss) from discontinued operations relating to affiliate transactions not eliminated	$ 4,041	$ 7,889

XML

Receivables (Receivable Balances Related to Land Note Receivable and the Telesat Consulting Services Fee) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Financing Receivable Recorded Investment [Line Items]
Notes receivable	$ 101,000	$ 102,250
Less: current portion	(67,333)	(34,917)
Long-term receivables	33,667	67,333
Land Note [Member]
Financing Receivable Recorded Investment [Line Items]
Notes receivable	101,000	101,000
Telesat Notes Receivable For Consulting Services [Member]
Financing Receivable Recorded Investment [Line Items]
Notes receivable		$ 1,250

XML

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2013

Income Taxes [Abstract]

Summary of Income Tax Benefit (Provision)

The following summarizes our income tax provision on loss from continuing operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Total current income tax benefit (provision)	$	7,138	$	(1,242)	$	6,300	$	631
Total deferred income tax (provision) benefit		(9,308)		7,005		(11,285)		1,910
Income tax (provision) benefit	$	(2,170)	$	5,763	$	(4,985)	$	2,541

Summary of Uncertain Tax Positions Included in Income Tax Provision

The following summarizes amounts for uncertain tax positions (“UTPs”) included in our income tax provision on loss from continuing operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Current (provision) benefit for UTPs	$	(224)	$	(1,243)	$	(671)	$	630
Deferred benefit for UTPs		102		482		241		12
(Provision) benefit for UTPs	$	(122)	$	(761)	$	(430)	$	642

Summary Of Changes to Company's Liabilities for UTPs

The following summarizes the changes to our liabilities for UTPs included in long-term liabilities in the condensed consolidated balance sheets (in thousands):

	Six Months Ended June 30,
	2013		2012
Liabilities for UTPs:
Opening balance — January 1	$	80,732	$	139,916
Current provision (benefit) for:
Unrecognized tax benefits		625		(115)
Potential additional interest		1,016		3,094
Potential penalty adjustment		37		6
Statute expirations		(1,007)		(1,072)
Ending balance — June 30	$	81,403	$	141,829

XML

Pensions and Other Employee Benefits Plans (Components of Net Periodic Cost) (Details) (Continuing Operations [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 9	$ 200	$ 156	$ 400
Interest cost	458	622	921	1,244
Expected return on plan assets	(402)	(364)	(829)	(728)
Amortization of net actuarial loss	1,515	173	3,018	346
Net periodic cost included in income (loss) from continuing operations	1,580	631	3,266	1,262
Other Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	2	2	4	4
Interest cost	10	11	20	22
Amortization of net actuarial loss	4	2	8	4
Amortization of prior service credits	(6)	(6)	(12)	(12)
Net periodic cost included in income (loss) from continuing operations	$ 10	$ 9	$ 20	$ 18

XML

Long Term Liabilities (Schedule of Long Term Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Long Term Liabilities [Abstract]
Indemnification liabilities	$ 14,026	$ 12,204
Liabilities for uncertain tax positions	81,403	80,732	141,829	139,916
Other liabilities	4,196	2,905
Long term liabilities, Total	$ 99,625	$ 95,841

XML

Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Stock-Based Compensation [Abstract]

Stock-Based Compensation

12. Stock-Based Compensation

As of June 30, 2013, there were 1,319,533 shares of Loral common stock available for future grant under the Company’s Amended and Restated 2005 Stock Incentive Plan. This number of common shares available would be reduced if Loral restricted stock units or SS/L phantom stock appreciation rights are settled in Loral common stock.

The fair value of the SS/L phantom stock appreciation rights (“SS/L Phantom SARs”) related to Loral employees is included as a liability in our consolidated balance sheets. The payout liability reflects the increase in SS/L’s notional stock price over the base price multiplied by the number of SS/L Phantom SARs vested on the applicable vesting date, subject to adjustment. The notional stock price of SS/L was frozen as of December 31, 2011, in connection with the Sale. As of June 30, 2013 and December 31, 2012, the amount of the liability in our consolidated balance sheet related to the SS/L Phantom SARs was $0.5 million and $1.0 million, respectively. During the six months ended June 30, 2013 and 2012, cash payments of $0.5 million and $2.0 million, respectively, for continuing operations were made related to SS/L Phantom SARs.

Total stock-based compensation included in loss from continuing operations was $0.2 million and $0.4 million for the three months ended June 30, 2013 and 2012, respectively, and $0.5 million and $1.0 million for the six months ended June 30, 2013 and 2012, respectively.

XML

Other Current Liabilities

6 Months Ended

Jun. 30, 2013

Other Current Liabilities [Abstract]

Other Current Liabilities

8. Other Current Liabilities

Other current liabilities consists of (in thousands):

	June 30, 2013		December 31, 2012
Pension and other post retirement liabilities	$	18,185	$	18,157
Indemnification liabilities (see Note 16)		5,283		5,835
Deferred tax liability		1,266		3,663
Other		2,788		4,434
	$	27,522	$	32,089

XML

Commitments and Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended	12 Months Ended	3 Months Ended	6 Months Ended	12 Months Ended	0 Months Ended			3 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012 Satellite Matters [Member]	Jun. 30, 2013 Satellite Matters [Member]	Dec. 31, 2012 Satellite Matters [Member]	Nov. 02, 2012 Sale Of SS/L [Member]	Jun. 30, 2013 Sale Of SS/L [Member] Indemnification Agreement [Member]	Dec. 31, 2012 Sale Of SS/L [Member] Indemnification Agreement [Member]	Jun. 30, 2013 Globalstar do Brasil S.A. [Member]	Mar. 31, 2013 Globalstar do Brasil S.A. [Member] Indemnification Agreement [Member]
Contingencies And Commitments [Line Items]
Loss contingency recorded										$ 3.7
Indemnification liabilities related to sale of SS/L								16.8	16.5
Restructuring costs			11.8
Restructuring costs paid	2.7	2.9	8.0
Restructuring Reserve for future payments	0.9	0.9
Indemnification liabilities											4.8
Maximum loss due to reduced satellite power					18
Occurence date of satellite anamoly					June 1, 2012
Satellite warranty expense				6.5
Payment towards contingency pursuant to purchase agreement						$ 6.5	$ 6.5
Date indemnification liability ends					Nov. 02, 2013

XML

Financial Instruments, Derivative Instruments and Hedging

6 Months Ended

Jun. 30, 2013

Financial Instruments, Derivative Instruments and Hedging [Abstract]

Financial Instruments, Derivative Instruments and Hedging

15.Financial Instruments, Derivative Instruments and Hedging

Financial Instruments

The carrying amount of cash equivalents approximates fair value because of the short maturity of those instruments. The carrying amount of the Land Note approximates fair value because the stated interest rate is consistent with current market rates.

Foreign Currency

We are subject to the risks associated with fluctuations in foreign currency exchange rates. To limit this foreign exchange rate exposure, we attempt to denominate all contracts in U.S. dollars. Where appropriate, derivatives are used to minimize the risk of foreign exchange rate fluctuations to operating results and cash flows. We do not use derivative instruments for trading or speculative purposes.

Derivatives and Hedging Transactions

There were no derivative instruments as of June 30, 2013 and December 31, 2012.

Foreign Exchange Contracts

In March 2012, Telesat declared a special cash distribution denominated in Canadian dollars to be paid in two tranches (see Note 7). Loral entered into a foreign exchange forward contract to hedge foreign exchange risk associated with the payment of the second tranche in July 2012. This foreign exchange forward contract was not designated as a hedging instrument. Other expense for the three and six months ended June 30, 2012 was net of an unrealized gain of $1.4 million related to this foreign exchange forward contract.

XML

Earnings Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

13. Earnings Per Share

Telesat has awarded employee stock options, which, if exercised, would result in dilution of Loral’s ownership interest in Telesat to approximately 62.3%. Telesat stock options are excluded from the calculation of diluted loss per share for the three and six months ended June 30, 2013 and 2012, as the effect would be antidilutive.

For the three and six months ended June 30, 2013 and 2012, all stock options outstanding, unvested restricted stock and unvested restricted stock units are excluded from the calculation of diluted loss per share as the effect would have been antidilutive.

The following summarizes stock options outstanding, unvested restricted stock and unvested restricted stock units excluded from the calculation of diluted loss per share (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Stock options		—		57		—		97
Unvested restricted stock units		—		2		—		2
Unvested restricted stock		84		232		172		223

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 31, 2013 Voting Common Stock [Member]	Jul. 31, 2013 Nonvoting Common Stock [Member]
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	lorl
Entity Registrant Name	LORAL SPACE & COMMUNICATIONS INC.
Entity Central Index Key	0001006269
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		21,414,212	9,505,673

XML

Pensions and Other Employee Benefit Plans

6 Months Ended

Jun. 30, 2013

Pensions and Other Employee Benefit Plans [Abstract]

Pensions and Other Employee Benefit Plans

14. Pensions and Other Employee Benefit Plans

The following table provides the components of net periodic cost included in loss from continuing operations for our qualified and supplemental retirement plans (the “Pension Benefits”) and health care and life insurance benefits for retired employees and dependents (the “Other Benefits”) for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Pension Benefits Three Months Ended June 30,				Other Benefits Three Months Ended June 30,
	2013		2012		2013		2012
Service cost	$	9	$	200	$	2	$	2
Interest cost		458		622		10		11
Expected return on plan assets		(402)		(364)		—		—
Amortization of net actuarial loss		1,515		173		4		2
Amortization of prior service credits		—		—		(6)		(6)
Net periodic cost	$	1,580	$	631	$	10	$	9

	Pension Benefits Six Months Ended June 30,				Other Benefits Six Months Ended June 30,
	2013		2012		2013		2012
Service cost	$	156	$	400	$	4	$	4
Interest cost		921		1,244		20		22
Expected return on plan assets		(829)		(728)		—		—
Amortization of net actuarial loss		3,018		346		8		4
Amortization of prior service credits		—		—		(12)		(12)
Net periodic cost	$	3,266	$	1,262	$	20	$	18

Sale of SS/L

As required by the Purchase Agreement, prior to the closing of the Sale on November 2, 2012, new stand-alone SS/L pension plans were established. Pension obligations related to SS/L current and former employees and plan assets determined through an initial allocation methodology were transferred from the Loral pension plans to the newly formed plans. With the closing of the Sale, the newly formed SS/L plans were transferred to SS/L. Subsequent to the closing of the Sale, our actuary performed a review to determine the amount of qualified plan assets that proportionately relate to the benefit liabilities of the SS/L pension participants in accordance with the asset priorities of Section 4044 of ERISA. This review resulted in a true-up of the initial asset transfer between plans. As a result, Loral contributed $10.7 million to its qualified pension plan, which transferred $11.9 million to SS/L’s plan. In return, MDA paid Loral $11.9 million, pursuant to the Purchase Agreement. The net effect of this true-up, which took place in April 2013, was a $1.2 million increase to Loral’s cash balance and a $1.2 million decrease to the assets of Loral’s qualified pension plan.

Termination of Supplemental Executive Retirement Plan (“SERP”)

In connection with the corporate office restructuring as a result of the Sale, on December 13, 2012, Loral’s Board of Directors approved termination of the SERP. The Company expects to make lump sum payments to the participants in the SERP between December 16, 2013 and December 31, 2013 in accordance with the requirements of Section 409A of the Internal Revenue Code and the regulations promulgated thereunder. Other current liabilities as of June 30, 2013 and December 31, 2012 included approximately $18.2 million and $18.1 million, respectively, for future SERP payments based on benefits earned, including recurring monthly payments to December 2013 and lump sum payouts in December 2013. The lump sum payouts have been calculated based on plan provisions.

XML

Equity (Summary of Common Stock Purchases) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended		24 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Equity [Abstract]
Shares repurchased	18,000	136,494	154,494
Total Cost	$ 1,192	$ 8,400	$ 9,592
Average Cost	$ 66.22	$ 61.54	$ 62.04

XML

Equity (Narrative) (Details) (USD $)	0 Months Ended		12 Months Ended		1 Months Ended		0 Months Ended	1 Months Ended
	Nov. 07, 2012	Mar. 28, 2012	Dec. 31, 2012	Nov. 30, 2011	Jun. 30, 2013 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2013 Restricted Stock Units (RSUs) [Member] Special Distribution [Member]	Mar. 28, 2012 Restricted Stock Units (RSUs) [Member] Special Dividend [Member]	Jun. 30, 2013 Restricted Stock Units (RSUs) [Member] Special Dividend [Member]
Restricted stock, shares issued net of shares for tax withholdings					91,204	41,300		19,368
Shares surrendered to fund withholding taxes, shares					83,796	40,033		18,774
Shares, Vested					175,000
Dividends per share		$ 13.60
Common dividends declared ($13.60 per share)		$ 417,600,000	$ 417,606,000
Dividends payable date		Apr. 20, 2012
Dividend payable record date		Apr. 10, 2012
Equitable adjustment to stock options outstanding							19,058
Equitable adjustment to restricted stock units for dividends and distributions						5,100,000		2,400,000
Special distribution Paid date	Dec. 04, 2012
Special distribution record date	Nov. 19, 2012
Special distribution declared per share	$ 29.00		$ 29.00
Equitable adjustment to restricted stock units outstanding							6,875
Aggregate special distribution	$ 892,100,000
Voting common stock repurchased, authorized shares				800,000