-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SedI2iioxuVqFYE7gVHTTp3SE1r0dIjpoXHZD6f3PKVmpPkojtod2VOJx47NOf9U JSBtEhukOUFZim2eKXIgBA== 0000950172-97-000339.txt : 19970411 0000950172-97-000339.hdr.sgml : 19970411 ACCESSION NUMBER: 0000950172-97-000339 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970410 SROS: CSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMSAT CORP CENTRAL INDEX KEY: 0000022698 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 520781863 STATE OF INCORPORATION: DC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04929 FILM NUMBER: 97578245 BUSINESS ADDRESS: STREET 1: 6560 ROCK SPRING DR CITY: BETHESDA STATE: MD ZIP: 20817 BUSINESS PHONE: 3012133000 MAIL ADDRESS: STREET 1: 6560 ROCK SPRING DRIVE CITY: BETHESDA STATE: MD ZIP: 20817 FORMER COMPANY: FORMER CONFORMED NAME: COMMUNICATIONS SATELLITE CORP /DE/ DATE OF NAME CHANGE: 19930719 DEFA14A 1 SCHEDULE 14A-SLIDE PRESENTATION SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant {X} Filed by a Party other than the Registrant {_} Check the appropriate box: {_} Preliminary Proxy Statement {_} Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) {_} Definitive Proxy Statement {_} Definitive Additional Materials {X} Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 COMSAT CORPORATION ----------------------------------------- (Name of Registrant as Specified in Its Charter) ----------------------------------------- (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): {X} No fee required. {_} Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ___ (4) Proposed maximum aggregate value of transactions: ________________ (5) Total fee paid. {_} Fee paid previously with preliminary materials. {_} Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: __________________________________________ (2) Form, Schedule or Registration Statement No.: ____________________ (3) Filing Party: ____________________________________________________ (4) Date Filed: ______________________________________________________ [SLIDE PRESENTATION] [COMSAT CORPORATION LOGO] [GLOBE] Many of the statements in this presentation are forward-looking and relate to anticipated future operating results. Forward- looking statements are based on management's current expectations and assumptions, which may be affected by subsequent developments and business conditions, and necessarily involve risks and uncertainties. Therefore, there can be no assurance that actual future results will not differ materially from anticipated results. Please refer to COMSAT disclosure documents filed with the Securities and Exchange Commission, including the corporation's 1996 Form 10-K, for a more complete discussion of some of the important factors that might affect these trends. [COMSAT CORPORATION LOGO] Presentation to the Investment Community Betty C. Alewine President and Chief Executive Officer Spring 1997 [GLOBE] [COMSAT CORPORATION LOGO] Overview o COMSAT pre-restructuring o Restructuring plan o COMSAT post-restructuring o Financial summary [GLOBE] [COMSAT CORPORATION LOGO] Organization Chart Today [Corporate Organization Chart showing "COMSAT Corporation" holding "International", "Entertainment" and "Technologies"; "International" holding "World Systems", "Mobile" and "Int'l Ventures"; "Entertainment" holding "Ascent (80%)" and "OCC (57%)"; and "Technologies" holding "CRSI" and "Labs".] [GLOBE] [COMSAT CORPORATION LOGO] Restructuring Plan [GLOBE] [COMSAT CORPORATION LOGO] Restructuring Plan Underway Initial sale of ICO 12/96 Sale of Philcom 1/97 Dividend policy review 4/97 Divest Ascent Mid-97 Sell CRSI Late 97 Resolve Belcom Late 97 Sell other non-core assets Ongoing [GLOBE] [COMSAT CORPORATION LOGO] Ascent Divestiture o Tax free spin-off pending IRS ruling o Delivers shareholder value in tax-efficient manner o Deconsolidation by mid-year [GLOBE] [COMSAT CORPORATION LOGO] CRSI Sale o Non-core products and manufacturing business o Morgan Stanley retained o Divest by year end 1997 [GLOBE] [COMSAT CORPORATION LOGO] COMSAT Restructuring Results o Stronger cash flow o More stable balance sheet o Focused on core strengths [GLOBE] [COMSAT CORPORATION LOGO] COMSAT Post-Restructuring [GLOBE] [COMSAT CORPORATION LOGO] Organization Chart Post-Restructuring [Organizational Chart showing "COMSAT Corporation" holding "Satellite Services" and "Network Services"; "Satellite Services" holding "COMSAT World Systems" and "COMSAT Mobile and Personal Communications" and "Network Services" holding "COMSAT International" and "COMSAT Labs."] [GLOBE] [COMSAT CORPORATION LOGO] Focused on Core Strengths o Existing satellites with global coverage - 24 INTELSAT satellites - 7 Inmarsat satellites o State-of-the-art satellite and network technology - "Instant infrastructure" - ATM breakthrough o Established customer base with backlog o Solid reputation and operating experience in emerging markets [GLOBE] [COMSAT CORPORATION LOGO] COMSAT World Systems o U.S. signatory to INTELSAT - Largest owner, user with 19% stake - 24-satellite global network - Existing interconnections to 180 countries o Provide satellite services to U.S. Carriers and broadcasters [GLOBE] [COMSAT CORPORATION LOGO] INTELSAT Global Satellite System [map of the world] [COMSAT CORPORATION LOGO] COMSAT Mobile Communications o U.S. signatory to Inmarsat - Largest owner, user with 23% stake - 7-satellite global system o Provides maritime, aeronautical, land mobile services o COMSAT Personal Communications - Planet 1 [GLOBE] [COMSAT CORPORATION LOGO] Inmarsat Global Coverage [World map showing overlap of hemisphere beams of Inmarsat satellite coverage.] [COMSAT CORPORATION LOGO] Satellite Services Value Drivers o Future of Inmarsat o INTELSAT privatization o COMSAT deregulation [GLOBE] [COMSAT CORPORATION LOGO] Future of Inmarsat o Competition among members is long-term issue o Existing global system requires little additional cap-ex for 5-7 years o Generates substantial cash flow and earnings [GLOBE] [COMSAT CORPORATION LOGO] INTELSAT Privatization o Privatization of broadcast services - Only realistic option o IPO in 1999 timeframe o Non-privatized elements very strong - Opportunity in digital communications o Requires consensus of 140 government parties [GLOBE] [COMSAT CORPORATION LOGO] INTELSAT Privatization Benefits o COMSAT will own interest in privatized affiliate o COMSAT will retain value leased satellite capacity o COMSAT will retain interest in non-privatized entity [GLOBE] [COMSAT CORPORATION LOGO] COMSAT Deregulation o Non-dominant status is critical o Operating and financial flexibility o FCC filing in May o COMSAT optimistic about outcome [GLOBE] [COMSAT CORPORATION LOGO] Network Services [GLOBE] [COMSAT CORPORATION LOGO] Overview o International private-network services o Customers: large corporations, national carriers, governments o Markets underserved by incumbent carriers [GLOBE] [COMSAT CORPORATION LOGO] COMSAT International operations [Map showing twelve countries served by COMSAT International.] [COMSAT CORPORATION LOGO] Competitive Advantages o Reputation/international relationships o Satellite-networking expertise and technology o 14 companies, 15 operating licenses in 12 countries o Business model works [GLOBE] [COMSAT CORPORATION LOGO] Bolsa de Cereales case study o Initiated point-to-point service for high data volumes to regional exchange [Map of Argentina illustrating satellite transmission between Buenes Aires and Bahia Blanca.] [COMSAT CORPORATION LOGO] Bolsa de Cereales case study o Added national multipoint VSAT service [Illustration of multipoint transmission service for Bolsa de Cereales.] [COMSAT CORPORATION LOGO] Bolsa de Cereales case study o Service expanded to include intracompany network [Illustration of intracompany network in Argentina consisting of an array of equipment to facilitate transmission of voice, facsimile and data, as well as linking LANs.] [COMSAT CORPORATION LOGO]
Argentina ($ millions) 92 93 94 95 96 --------------------------------------------------------------------- Revenues 1.9 4.3 12.2 20.0 27.8 EBITDA (.2) 0.7 4.8 7.6 10.5 Margin --- 16% 39% 38% 38% Profit before taxes (.7) (0.2) 2.2 2.6 3.4 Margin --- --- 18% 13% 12% Capital expenditures 6.0 8.4 15.5 18.8 23.2
[GLOBE] [COMSAT CORPORATION LOGO] Investment Criteria o High-growth markets o COMSAT operational control o Low entry cost o Cash-flow neutral within 2-3 years o Targeted IRR 25% plus [GLOBE] [COMSAT CORPORATION LOGO] Why Invest In Network Services? o Growth opportunity in emerging markets o COMSAT has critical competitive advantages o COMSAT will operate within its means [GLOBE] [COMSAT CORPORATION LOGO] Network Services Value Creation o Business in major value-creation stage o Sell-down will not maximize COMSAT shareholder value o Non-core asset divestiture and segment disclosure will highlight Network Services results [GLOBE] [COMSAT CORPORATION LOGO] Financial Overview Allen E. Flower Vice President and Chief Financial Officer [GLOBE] [COMSAT CORPORATION LOGO]
Summary Capitalization 1996 1996 ($ millions) Actual Pro forma* -------------------------------------------------------- Short-term debt 178 114 Long-term debt 636 478 Preferred securities 200 200 Stockholders' equity 843 626 LT debt/total capital 43% 43% * Assumes Ascent divestiture, CRSI sale, debt tender
[GLOBE] [COMSAT CORPORATION LOGO]
Summary Income and Cash Flow Statements 1996 1996 ($ millions) Actual Pro forma* ------------------------------------------------------- Revenues 1,015 557 EBITDA 289 252 Margin 29% 45% Net income 9 36 Capital expenditures 364 267 * Assumes Ascent divestiture, CRSI sale, debt tender
[GLOBE] [COMSAT CORPORATION LOGO]
COMSAT Segment Operating Results $ millions 94 95 96 ---------------------------------------------------------- Revenues World Systems 252 255 273 Mobile Communications 194 180 154 International 19 38 58 Laboratories 1 15 12 19 EBITDA World Systems 182 196 196 Mobile Communications 89 94 76 International (1) (9) 0 Laboratories 2 (1) 5 1 Excludes $8 million GI settlement in 1996
[GLOBE] [COMSAT CORPORATION LOGO]
COMSAT Revenue Mix 1996 1996 2001 Actual Post-Restructuring [Pie Chart showing [Pie Chart showing [Pie Chart showing approximately 75% approximately 75% approximately 50% Satellite Services and Satellite Services, and Satellite Services and Network Services, and approximately 25% approximately 50% approximately 25% Network Services.] Network Services.] Entertainment.]
[GLOBE] [COMSAT CORPORATION LOGO]
COMSAT EBITDA Mix 1996 1996 2001 Actual Post-Restructuring [Pie Chart showing [Pie Chart showing [Pie Chart showing approximately 85% approximately 97% approximately 70% Satellite Services and Satellite Services, and Satellite Services and Network Services, and approximately 3% approximately 30% approximately 15% Network Services] Network Services.] Entertainment.]
[GLOBE] [COMSAT CORPORATION LOGO] Summary [GLOBE] [COMSAT CORPORATION LOGO] Why Invest in COMSAT? o Sound restructuring underway o Global coverage through existing Satellite Services - "Instant infrastructure" - Cash flow generator o Management experienced in global satellite business and complex regulatory issues o Upside from COMSAT deregulation and INTELSAT privatization o Enormous opportunity in emerging telecommunications markets [GLOBE] [COMSAT CORPORATION LOGO] COMSAT Corporation ("COMSAT") and certain persons named below may be deemed to be "participants" within the meaning of Regulation 14A under the Securities Exchange Act of 1934. The participants in this solicitation may include the directors of COMSAT (C. J. Silas, Betty C. Alewine, Lucy Wilson Benson, Edwin I. Colodny, Lawrence S. Eagleburger, Neal B. Freeman, Arthur Hauspurg, Caleb B. Hurtt, Peter S. Knight, Peter W. Likins, Howard M. Love, Charles T. Manatt, Robert G. Schwartz, and Dolores D. Wharton); the following executive officers of COMSAT (Janet L. Dewar, Allen E. Flower, Paul G. Pizzani and Warren Y. Zeger); and the following other employees of COMSAT (Gary S. Sharpe and Charles H. Taylor, Jr.). As of March 1, 1997, Betty C. Alewine and Warren Y. Zeger beneficially owned 321,301 shares and 179,979 shares of COMSAT, respectively (including shares subject to stock options exercisable within 60 days). The remaining participants do not beneficially own, individually or in the aggregate, in excess of 1% of COMSAT's equity securities. [GLOBE] [COMSAT CORPORATION LOGO] APPENDIX Consolidated Income Statements Consolidated Balance Sheets Consolidated Cash Flow Statements Statements of Changes in Consolidated Stockholders' Equity Twelve-Year Financial Summary Operating Results by Business Segment Telecom EBITDA Summary COMSAT International Summary [LARGE WORLD GLOBE]
COMSAT CORPORATION AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS For the Years Ended December 31, 1996, 1995 and 1994 IN THOUSANDS, EXCEPT PER SHARE AMOUNTS 1996 1995 1994 ------------------------------------------------------------------------------------- REVENUES $1,015,261 $ 862,912 $ 835,665 ---------- ---------- ---------- Operating expenses: Cost of services 666,345 506,660 471,043 Depreciation and amortization 236,276 202,024 167,784 Research and development 24,618 18,693 16,369 General and administrative 23,941 19,856 22,851 Merger and integration costs - - 7,367 Provision for restructuring - 20,044 - ---------- ---------- ---------- Total operating expenses 951,180 767,277 685,414 ---------- ---------- ---------- OPERATING INCOME 64,081 95,635 150,251 Gain on sale of minority interest - 19,286 - Other income (expense), net (11,139) (7,557) 2,689 Interest cost (61,559) (59,487) (48,940) Interest capitalized 15,760 20,355 23,662 ---------- ---------- ---------- Income before taxes and minority interest 7,143 68,232 127,662 Income tax expense (16,144) (34,911) (49,939) Minority interest in net losses (income) of consolidated subsidiaries 17,623 4,496 (81) ---------- ---------- ---------- NET INCOME $ 8,622 $ 37,817 $ 77,642 ========== ========== ========== EARNINGS PER SHARE $ 0.18 $ 0.79 $ 1.64 ========== ========== ========== The accompanying notes are an integral part of these financial statements.
COMSAT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 1996 and 1995 In thousands 1996 1995 ------------------------------------------------------------------------------------------ ASSETS ------ CURRENT ASSETS: Cash and cash equivalents $ 12,721 $ 124,156 Receivables 314,766 234,465 Inventories 39,635 26,851 Deferred income taxes 12,756 12,445 Other 29,961 27,908 ---------- ---------- Total current assets 409,839 425,825 ---------- ---------- Property and equipment 1,656,763 1,528,053 Investments 133,592 88,378 Goodwill 155,250 67,569 Franchise rights 102,189 107,962 Other assets 208,170 96,479 ---------- ---------- TOTAL ASSETS $2,665,803 $2,314,266 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Short-term borrowings and current maturities of long-term debt $ 159,719 $ 11,688 Commercial paper 17,993 - Accounts payable and accrued liabilities 168,039 126,980 Deferred income 81,942 38,060 Due to related parties 34,602 22,825 Accrued income taxes 17,411 - Accrued interest 5,377 5,155 ---------- ---------- Total current liabilities 485,083 204,708 ---------- ---------- Long-term debt 635,474 664,601 Deferred income taxes 123,972 119,018 Deferred investment tax credits 12,350 15,190 Accrued postretirement benefit costs 50,423 49,497 Other long-term liabilities 147,818 129,911 Commitments and contingencies (notes 10, 11 & 18) - - Minority interest 167,472 91,908 Preferred securities issued by subsidiary 200,000 200,000 STOCKHOLDERS' EQUITY: Common stock, without par value, 100,000 shares authorized, 49,090 shares issued in 1996 and 48,612 in 1995 340,691 324,074 Preferred stock, 5,000 shares authorized, no shares issued or outstanding - - Retained earnings 502,839 533,238 Treasury stock, at cost, 269 shares in 1996 and 857 in 1995 (3,006) (9,020) Unearned compensation (3,869) (5,484) Other 6,556 (3,375) ---------- ---------- Total stockholders' equity 843,211 839,433 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,665,803 $2,314,266 ========== ========== The accompanying notes are an integral part of these financial statements.
COMSAT CORPORATION AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENTS For the Years Ended December 31, 1996, 1995 and 1994 In thousands 1996 1995 1994 ------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 8,622 $ 37,817 $ 77,642 Adjustments for noncash expenses: Depreciation and amortization 236,276 202,024 167,784 Provision for restructuring - 20,044 - Gain on sale of minority interest - (19,286) - Changes in operating assets and liabilities: Receivables and other current assets (63,155) (11,959) (17,169) Current liabilities 30,557 (12,431) (14,847) Noncurrent liabilities 15,498 24,748 25,808 Other 3,482 22,161 3,690 ---------- ---------- ---------- Net cash provided by operating activities 231,280 263,118 242,908 ---------- ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (364,427) (308,161) (274,562) Expenditures for film production costs (21,050) (12,549) (181) Investments in unconsolidated businesses (64,707) (32,810) (53,397) Purchase of subsidiaries (9,264) (78,240) (35,676) Purchase of minority shares of subsidiaries (1,461) (92) (4,016) Proceeds from sale of investments 29,684 - - Insurance proceeds from satellite launch failure 54,443 - - Decrease (increase) in INTELSAT ownership (1,238) 17,919 13,520 Decrease (increase) in Inmarsat ownership 5,746 (6,978) 3,573 Other 15,579 (2,930) (3,471) ---------- ---------- ---------- Net cash used in investing activities (356,695) (423,841) (354,210) ---------- ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 126,645 154,119 112,296 Net short-term borrowings (repayments) 158,323 (121,356) 74,123 Borrowings (repayments) against company-owned life insurance policies (51,443) 2,542 32,437 Common stock issued 16,445 10,834 5,291 Proceeds from issuance of preferred securities of subsidiary - 200,000 - Proceeds from issuance of subsidiary's common stock - 78,985 1,486 Repayment of long-term debt (196,543) (9,970) (77,023) Cash dividends paid (37,698) (36,874) (33,547) Other (1,749) (12,059) (1,333) ---------- ---------- ---------- Net cash provided by financing activities 13,980 266,221 113,730 ---------- ---------- ---------- Net increase (decrease) in cash and cash equivalents (111,435) 105,498 2,428 Cash and cash equivalents, beginning of year 124,156 18,658 16,230 ---------- ---------- ---------- Cash and cash equivalents, end of year $ 12,721 $ 124,156 $ 18,658 ========== ========== ========== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid, net of amount capitalized $ 40,623 $ 36,710 $ 24,880 Income taxes paid $ 1,255 $ 20,607 $ 30,639 Noncash financing of Inmarsat satellites $ 5,602 $ 7,551 $ 7,197 The accompanying notes are an integral part of these financial statements.
COMSAT CORPORATION AND SUBSIDIARIES STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY For the Years Ended December 31, 1996, 1995 and 1994 Shares Shares Common Retained Treasury Unearned In thousands Issued Outstanding Stock Earnings Stock Compensation Other ------------------------------------------------------------------------------------------------------------------------ BALANCE AT DECEMBER 31, 1993 48,404 46,373 $311,506 $488,090 $(21,473) $(10,891) (3,792) Net income 77,642 Cash dividends (33,547) Common stock issued: Stock options and restricted stock units, including tax benefits 105 948 808 Employee stock purchase, 401(k) and Investors' Plus plans 333 333 6,432 Amortization of unearned compensation and incentive plan expense 1,420 2,868 Retirement of treasury stock (683) (8,163) 8,163 Translation adjustment 5,343 Other 44 774 744 -------------------------------------------------------------------------------- BALANCE AT DECEMBER 31, 1994 48,054 46,811 312,143 532,229 (12,502) (7,249) 2,295 Net income 37,817 Cash dividends (36,874) Common stock issued: Stock options and restricted stock units, including tax benefits 334 1,705 3,373 Employee stock purchase, 401(k) and Investors' Plus plans 558 558 10,276 Restricted stock awarded 91 871 911 (1,782) Amortization of unearned compensation and incentive plan expense 619 2,131 Forfeiture and cancellation of restricted stock awards (39) (1,540) (802) 798 Minimum pension liability adjustment (2,006) Translation adjustment (3,664) Other 66 618 -------------------------------------------------------------------------------- BALANCE AT DECEMBER 31, 1995 48,612 47,755 324,074 533,238 (9,020) (5,484) (3,375) Net income 8,622 Cash dividends (37,698) Common stock issued: Stock options and restricted stock units, including tax benefits 4 484 4,768 5,149 Employee stock purchase, 401(k) and Investors' Plus plans 474 474 8,888 Restricted stock awarded 183 597 1,980 (2,577) Amortization of unearned compensation and incentive plan expense 437 2,685 Forfeiture and cancellation of restricted stock awards (75) (51) (1,115) 360 Minimum pension liability adjustment 383 Translation adjustment 924 Unrealized gain on available for sale securities, net of taxes 8,624 Other 1,978 (1,323) 1,147 -------------------------------------------------------------------------------- BALANCE AT DECEMBER 31, 1996 49,090 48,821 $340,691 $502,839 $ (3,006) $ (3,869) $6,556 ================================================================================ The accompanying notes are an integral part of these financial statements.
TWELVE-YEAR FINANCIAL SUMMARY (1) Unaudited Compounded Growth Rates ----------------------- In thousands except per share, 10-Year 5-Year ratio, and employee information 1986-96 1991-96 1996 1995 1994 1993 1992 1991 ------- ------- ---------- ---------- ---------- ---------- ---------- ---------- SUMMARY OF OPERATIONS Revenues 11.1% 9.3% $1,015,261 $ 862,912 $ 835,665 $ 758,015 $ 690,245 $ 651,211 Operating expenses 951,180 767,277 685,414 606,435 585,263 508,499 Operating income (loss) (2.1%) (14.8%) 64,081 95,635 150,251 151,580 104,982 142,712 Income (loss) from continuing operations before cumulative effect of changes in accounting principles (15.7%) (36.1%) 8,622 37,817 77,642 82,469 53,292 81,014 Cumulative effect of changes in accounting principles - - - 1,925 - (26,607) Net income (loss) (18.1%) (30.8%) 8,622 37,817 77,642 84,394 53,292 54,407 CASH FLOW DATA Cash provided (used) by operating and investing activities (113,854) (160,723) (111,302) 23,431 (7,596) (7,396) Net increase (decrease) in cash and cash equivalents (111,435) 105,498 2,428 4,453 (2,915) 8,157 Dividends paid 5.6% 7.8% 37,698 36,874 33,547 30,410 27,837 25,867 BALANCE SHEET DATA Total assets 7.6% 12.6% 2,665,803 2,314,266 1,975,992 1,773,513 1,654,985 1,469,516 Long-term debt 6.5% 10.2% 635,474 664,601 515,542 410,550 496,804 391,308 Stockholders' equity 3.0% 5.1% 843,211 839,433 826,916 763,440 702,292 657,783 STOCK INFORMATION Market capitalization (2) 1,202,217 889,437 871,855 1,379,597 1,094,478 769,454 Stock price-high 33 1/8 24 5/8 30 35 1/4 24 1/2 18 7/8 Stock price-low 16 3/4 17 5/8 17 1/2 23 3/4 17 1/8 11 1/2 Stock price-close 24 5/8 18 5/8 18 5/8 29 3/4 23 7/8 17 1/4 Book value per share 17.27 17.58 17.66 16.46 15.32 14.75 Primary earnings per share 0.18 0.79 1.64 1.79 1.16 1.22 Dividends paid per share 0.78 0.78 0.76 0.74 0.70 0.67 Shares outstanding 48,821 47,755 46,811 46,373 45,842 44,606 Average shares outstanding for primary earnings per share 49,090 47,998 47,356 47,095 45,875 44,556 STATISTICAL INFORMATION Long-term debt to total capital 43.0% 44.2% 38.4% 35.0% 41.4% 37.3% Return on net assets (3) 1.7% 3.2% 5.4% 6.3% 4.8% 5.1% Return on average assets 0.3% 1.8% 4.1% 4.9% 3.4% 3.9% Return on average equity 1.0% 4.5% 9.8% 11.5% 7.8% 8.5% Return on revenues 0.8% 4.4% 9.3% 11.1% 7.7% 8.4% Current ratio 0.8 2.1 0.9 0.9 1.3 1.0 Employees at year end 3,766 2,991 2,894 2,770 2,707 2,427 Revenues per employee (4) $301 $293 $295 $277 $269 $282 Notes: (1) As discussed in Note 6 to the financial statements, the corporation consummated its merger with Radiation Systems, Inc. (RSI) in June 1994. The merger has been treated as a pooling of interests for accounting purposes. Accordingly, financial information for all periods prior to the merger has been restated to include RSI. Information for 1984 through 1987 has been restated for operations discontinued in subsequent years. Information for 1992 through 1995 has been restated for certain costs historically reflected as reduction of revenues and now classified as costs of services. (2) Market capitalization is the product of year-end stock price multiplied by the number of shares outstanding at each year end. (3) Return on net assets is calculated as net income excluding interest (net of tax) divided by average total assets less average current liabilities (excluding current notes payable and current maturities of long-term obligations). (4) Revenues per employee is based on the average number of employees for each year.
1990 1989 1988 1987 1986 1985 ---- ---- ---- ---- ---- ---- $ 563,462 $ 474,917 $ 407,338 $ 365,272 $ 354,204 $ 343,329 583,980 383,074 323,083 318,105 274,762 250,298 (518) 91,843 84,256 47,167 79,442 93,031 (9,045) 66,234 65,986 20,741 47,600 64,157 (9,045) 66,234 65,986 (44,358) 63,176 (38,473) - - - - - - 20,652 (59,545) (89,331) 94,863 (17,585) (38,495) (2,508) (54,064) (70,731) 11,021 19,869 38,654 25,219 25,024 23,722 22,292 21,873 21,725 1,300,683 1,337,817 1,233,247 1,172,776 1,281,744 1,212,393 383,695 373,686 376,602 329,436 337,814 357,486 619,150 649,647 603,033 559,211 628,909 569,884 528,444 781,674 585,212 596,764 609,960 739,589 19 1/4 20 3/8 15 3/8 17 3/8 20 1/4 19 1/4 10 1/4 13 12 5/8 11 3/4 14 1/8 12 3/4 12 17 7/8 13 1/2 14 14 1/8 17 3/4 14.06 14.86 13.91 13.12 14.56 13.68 (0.21) 1.52 1.54 (1.03) 1.48 (0.92) 0.66 0.66 0.63 0.60 0.60 0.60 44,037 43,730 43,349 42,626 43,183 41,667 43,818 43,620 42,805 43,125 42,755 41,622 38.3% 36.5% 38.4% 37.1% 34.9% 38.5% (0.6%) 5.5% 6.3% (3.3%) 6.3% (3.2%) (0.7%) 5.2% 5.5% (3.6%) 5.1% (3.2%) (1.4%) 10.6% 11.4% (7.5%) 10.5% (6.4%) (1.6%) 13.9% 16.2% (12.1%) 17.8% (11.2%) 1.5 1.6 2.2 1.9 2.6 2.3 2,196 1,956 1,841 1,886 2,789 3,110 $271 $250 $219 $156 $120 $105
COMSAT CORPORATION OPERATING RESULTS BY BUSINESS SEGMENT (UNAUDITED) (In millions) 1995 1996 ------------------------------------------ ------------------------------------------- QTR 1 QTR2 QTR3 QTR4 TOTAL QTR 1 QTR 2 QTR 3 QTR 4 TOTAL ------------------------------------------ ------------------------------------------- REVENUES -------- International Communications World Systems $ 62.7 $ 63.0 $ 62.9 $ 66.1 $254.7 $ 65.6 $ 67.5 $ 67.0 $ 72.8 $ 272.9 Mobile Communications 47.1 46.1 47.5 39.7 180.4 42.6 39.3 38.4 34.9 155.2 International 7.9 8.2 9.7 11.9 37.7 11.9 12.4 15.6 18.2 58.1 ------------------------------------------ ------------------------------------------- Total International Communications 117.7 117.3 120.1 117.7 472.8 120.1 119.2 121.0 125.9 486.2 Technology Services 46.8 48.1 50.9 60.1 205.9 61.6 70.4 83.0 85.6 300.6 Entertainment 49.5 52.6 40.0 60.2 202.3 72.4 56.0 38.1 91.6 258.1 Eliminations and other (4.0) (3.9) (4.7) (5.5) (18.1) (5.5) (6.4) (8.1) (9.6) (29.6) ------------------------------------------ -------------------------------------------- TOTAL REVENUES $210.0 $214.1 $206.3 $232.5 $862.9 $248.6 $239.2 $234.0 $293.5 $1,015.3 ========================================== ============================================ 1995 1996 ------------------------------------------ ------------------------------------------- QTR 1 QTR2 QTR3 QTR4 TOTAL QTR 1 QTR 2 QTR 3 QTR 4 TOTAL ------------------------------------------ ------------------------------------------- OPERATING INCOME (LOSS) ---------------------- International Communications World Systems $ 27.6 $ 26.7 $ 26.8 $ 27.5 $108.6 $ 25.4 $ 24.0 $ 24.2 $ 30.4 $ 104.0 Mobile Communications 12.6 17.6 13.3 10.0 53.5 13.7 11.2 7.2 (0.8) 31.3 International (3.4) (4.6) (7.0) (5.7) (20.7) (3.8) (4.6) (3.7) (5.2) (17.3) ------------------------------------------ -------------------------------------------- Total International Communications 36.8 39.7 33.1 31.8 141.4 35.3 30.6 27.7 24.4 118.0 Technology Services 2.6 6.5 0.6 4.3 14.0 3.4 5.1 13.5 (3.0) 19.0 Entertainment (3.2) 6.3 (6.4) (12.1) (15.4) (4.2) (6.9) (7.1) (27.7) (45.9) ------------------------------------------ -------------------------------------------- Total segment operating income (loss) 36.2 52.5 27.3 24.0 140.0 34.5 28.8 34.1 (6.3) 91.1 General and administrative expenses (4.9) (5.8) (5.8) (3.4) (19.9) (7.1) (5.5) (5.8) (5.5) (23.9) Provision for restructuring - - (20.1) - (20.1) - - - - - Other (1.5) (1.8) (0.8) (0.3) (4.4) (1.6) (0.6) (2.1) 1.2 (3.1) ------------------------------------------ -------------------------------------------- TOTAL OPERATING INCOME (LOSS) $ 29.8 $ 44.9 $ 0.6 $ 20.3 $ 95.6 $ 25.8 $ 22.7 $ 26.2 ($10.6) $ 64.1 ========================================== ============================================
TELECOM EBITDA SUMMARY ---------------------- ($ millions, unaudited) Fourth Quarter Full Year --------------- ---------------- 1996 1995 1996 1995 --------------- ---------------- World Systems $53.9 $49.7 $195.7 $196.6 Mobile 12.0 20.2 76.5 93.6 International (0.3) (2.8) (2.5) (12.5) Technology (1.0) 6.0 26.6 21.2 Other (3.8) (3.1) (24.8) (22.0) --------------- ---------------- Telecom EBITDA $60.8 $70.0 $271.5 $276.9 =============== ================ Note: 1995 excludes restructuring and reorganization charges.
COMSAT INTERNATIONAL SUMMARY ---------------------------- Twelve Months Ending December 31, 1996 ($ millions, unaudited proportional operating data) Revenues Operating Income (Loss) ----------------------- ----------------------- Companies 1996 1995 1996 1995 ---------------------- ----------------------- ----------------------- Americas (1) $48.0 $26.4 $ 6.3 $ 2.4 Europe (2) 5.7 7.1 (8.1) (6.4) Asia/Pacific (3) 6.9 8.6 0.9 (2.6) ---------------------- --------------------- Existing Company Total 60.6 42.1 (0.9) (6.6) New Companies (4) 5.2 1.3 (4.8) (1.5) ---------------------- --------------------- Total $65.8 $43.4 ($5.7) ($8.1) ====================== ===================== Note: This information was developed by taking COMSAT's ownership percentage of each company multiplied by total company revenues and operating income/loss. 1. Americas: Argentina, Bolivia, Brazil and Guatemala 2. Europe: BelCom (Russia) and Turkey (IBS), excluding Viatel 3. Asia/Pacific: PhilCom 4. Includes companies less than 24 months old: Colombia, Peru, Venezuela, China, India and Turkey (VSAT)
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