-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, qCiJRt29u9efIXFUtlOkdnus2EcgO3EgyVGsdVzVUeyLwiWXM4xmrgdFef0kMMWA e8yeiE6NMXIVDyZfZE83Bg== 0000950123-95-001866.txt : 199506300000950123-95-001866.hdr.sgml : 19950630 ACCESSION NUMBER: 0000950123-95-001866 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950629 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LORAL CORP /NY/ CENTRAL INDEX KEY: 0000060357 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 131718360 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04238 FILM NUMBER: 95551080 BUSINESS ADDRESS: STREET 1: 600 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2126971105 MAIL ADDRESS: STREET 1: 600 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 11-K 1 FORM 11-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 Commission file number 1-4238 LORAL MASTER SAVINGS PLAN LORAL CORPORATION 600 Third Avenue New York, New York 10016 2 REQUIRED INFORMATION The statements of net assets available for benefits as of December 31, 1994 and 1993, and the related statement of changes in net assets available for benefits for the year ended December 31, 1994, together with the Report and Consent of Independent Accountants, are attached and filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Master Plan Committee has duly caused this annual report to be signed by the undersigned thereunto duly authorized. LORAL MASTER SAVINGS PLAN ------------------------- Plan Date: June 28, 1995 BY: STEPHEN L. JACKSON ------------------------- Stephen L. Jackson Plan Administrator -1- 3 REPORT OF INDEPENDENT ACCOUNTS ------------------- To the Master Plan Committee of Loral Corporation and Participants of The Loral Master Savings Plan: We have audited the accompanying statements of the net assets available for benefits of the Loral Master Savings Plan (The "Plan") as of December 31, 1994 and 1993, and the related statement of changes in net assets available for benefits for the year ended December 31, 1994. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1994 and 1993, and the changes in net assets available for benefits for the year ended December 31, 1994 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes at December 31, 1994 and reportable transactions for the year ended December 31, 1994, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund information in the statement of net assets available for benefits and the -2- 4 statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. COOPERS & LYBRAND L.L.P. New York, New York June 28, 1995 -3- 5 LORAL MASTER SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION AT DECEMBER 31, 1994 (In thousands)
Non-Participant Directed Participant Directed ----------- ----------------------------------------------------------------------- Loral Loral IBM Fidelity Fidelity Corporation Corporation Corporation Retirement Growth Common Common Common Fidelity Fidelity Money & Stock Stock Stock Magellan Ginnie Mae Market Income Fund Fund Fund Fund Portfolio Trust Portfolio ----------- ----------- ----------- -------- ---------- ---------- --------- Assets: Investments, at fair value (Notes 1, 2 and 4) $ 24,260 $ 17,274 $ 4,243 $ 97,719 $ 17,398 $ 39,645 $ 50,401 Investments, at contract value (Notes 1,2 and 4) Receivables (Note 3): Employer contributions 469 39 13 21 1 Participant contributions 105 455 112 184 36 Loans receivable from participants (Note 6) 1,116 4,595 1,336 2,724 1,897 -------- -------- -------- -------- -------- -------- -------- Total assets 24,729 18,495 4,243 102,808 18,859 42,574 52,335 -------- -------- -------- -------- -------- -------- -------- Liabilities: Forfeitures available to reduce future employer contributions (Note 2) 187 -------- -------- -------- -------- -------- -------- -------- Net assets available for benefits $ 24,729 $ 18,495 $ 4,243 $102,808 $ 18,859 $ 42,387 $ 52,335 ======== ======== ======== ======== ======== ======== ========
Participant Directed ---------------------------------------------- Fidelity Fidelity Fidelity Fixed Overseas Intermediate Asset Income Fund Bond Fund Manager Fund Total -------- ------------ -------- --------- -------- Assets: Investments, at fair value (Notes 1, 2 and 4) $ 11,129 $ 783 $ 9,460 $272,312 Investments, at contract value (Notes 1,2 and 4) $ 73,730 73,730 Receivables (Note 3): Employer contributions 2 1 2 548 Participant contributions 35 6 38 971 Loans receivable from participants (Note 6) 440 57 507 3,080 15,752 -------- -------- -------- -------- -------- Total assets 11,606 847 10,007 76,810 363,313 -------- -------- -------- -------- -------- Liabilities: Forfeitures available to reduce future employer contributions (Note 2) 187 -------- -------- -------- -------- -------- Net assets available for benefits $ 11,606 $ 847 $ 10,007 $ 76,810 $363,126 ======== ======== ======== ======== ========
See Notes to Financial Statements. -4- 6 LORAL MASTER SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION AT DECEMBER 31, 1993 (In thousands)
Non-Participant Directed Participant Directed ----------- ------------------------------------------------------------- Loral Loral Corporation Corporation Fidelity Common Common Fidelity Fidelity Retirement Stock Stock Magellan Ginnie Mae Money Market Fund Fund Fund Portfolio Trust Total ----------- ----------- -------- ---------- ------------ -------- Assets: Investments, at fair value (Notes 1, 2 and 4) $20,814 $15,226 $68,615 $22,227 $28,905 $155,787 Receivables (Note 3): Employer contributions 1,144 46 18 25 1,233 Participant contributions 95 504 176 205 980 Loans receivable from participants (Note 6) 901 3,310 927 2,125 7,263 ------- ------- ------- ------- ------- -------- Total assets 21,958 16,222 72,475 23,348 31,260 165,263 ------- ------- ------- ------- ------- -------- Liabilities: Forfeitures available to reduce future employer contributions (Note 2) 3 1 154 158 ------- ------- ------- ------- ------- -------- Net assets available for benefits $21,958 $16,222 $72,472 $23,347 $31,106 $165,105 ======= ======= ======= ======= ======= ========
See Notes to Financial Statements. -5- 7 LORAL MASTER SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1994 (In thousands)
Non-Participant Directed Participant Directed ----------- ------------------------------------------------------------------- Loral Loral IBM Fidelity Corporation Corporation Corporation Retirement Common Common Common Fidelity Fidelity Money Stock Stock Stock Magellan Ginnie Mae Market Fund Fund Fund Fund Portfolio Trust ----------- ----------- ----------- -------- ---------- ---------- Additions: Contributions (Note 3): Employer $ 4,811 $ 405 $ 527 $ 166 $ 266 Participant 1,336 10,329 1,819 3,603 Investment income (Notes 2 and 6): Interest income 79 277 64 136 Dividend income 337 249 2,650 1,141 1,353 Net appreciation (depreciation) in fair value of investments (Note 2) (157) 209 $ 563 (2,889) (1,495) ------- ------- ------ -------- ------- ------- 4,991 2,278 563 10,894 1,695 5,358 Benefit payments (Note 5) (1,340) (1,156) (177) (5,014) (1,726) (3,140) Administrative expenses (Note 8) (3) (4) (35) (22) (77) Transfers among funds, net (877) 1,155 (605) (2,346) (6,128) (1,781) Transfer from Prior Plan (Note 1) 4,462 26,837 1,693 10,921 Net assets available for benefits beginning of year 21,958 16,222 72,472 23,347 31,106 ------- ------- ------ -------- ------- ------- Net assets available for benefits end of year $24,729 $18,495 $4,243 $102,808 $18,859 $42,387 ======= ======= ====== ======== ======= =======
Participant Directed ------------------------------------------------------------ Fidelity Growth & Fidelity Fidelity Fidelity Fixed Income Overseas Intermediate Asset Income Portfolio Fund Bond Fund Manager Fund Total --------- -------- ------------ -------- ------- -------- Additions: Contributions (Note 3): Employer $ 19 $ 31 $ 4 $ 27 $ 6,256 Participant 4,349 1,572 93 1,399 $ 5,167 29,667 Investment income (Notes 2 and 6): Interest income 70 22 1 22 2,548 3,219 Dividend income 3,183 186 52 280 9,431 Net appreciation (depreciation) in fair value of investments (Note 2) (1,399) (355) (69) (627) (6,219) ------- ------- ----- ------ ------- ------- 6,222 1,456 81 1,101 7,715 42,354 Benefit payments (Note 5) (1,117) (300) (103) (385) (1,888) (16,346) Administrative expenses (Note 8) (5) (4) (15) (165) Transfers among funds, net 2,708 4,317 869 4,632 (1,944) Transfer from Prior Plan (Note 1) 44,527 6,133 4,663 72,942 172,178 Net assets available for benefits beginning of year 165,105 ------- ------- ----- ------ ------- ------- Net assets available for benefits end of year $52,335 $11,606 $ 847 $10,007 $76,810 $363,126 ======= ======= ===== ======= ======= ========
See Notes to Financial Statements. -6- 8 LORAL MASTER SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. Plan Description The Loral Master Savings Plan (the "Plan") includes the following individual qualified defined contribution 401(k) plans of certain divisions and subsidiaries of Loral Corporation (the "Company"): the Loral Corporation Deferred Income Savings Plan, the Loral Electro-Optical Systems, Inc. 401(k) Matching Contribution Plan, the Conic Corporation Deferred Income Retirement Plan, the Loral/Rolm Mil-Spec Corp. Retirement Income Savings Plan, the Frequency Sources, Inc. 401(k) Retirement Savings Plan, the Narda-Western Operations 401(k) Deferred Income Retirement Plan and the Narda Microwave Supplemental Retirement Savings Plan (the "Individual Plans"). Effective July 1, 1994, the Company established another Individual Plan, the Loral Federal Systems Deferred Income Retirement Plan (the "LFS Plan"), pursuant to the purchase of substantially all the assets and liabilities of IBM Federal Systems Company. At that date, certain participants of the IBM Corporation Tax Deferred Savings Plan (the "Prior Plan") became participants of the Plan and the Prior Plan transferred cash and assets equal to the participants' balances in the Prior Plan. The Plan is a defined contribution 401(k) plan designed to provide eligible employees with tax advantaged long-term savings for retirement. Participants are able to direct their investment to a combination of eight investment options: Loral Corporation Common Stock and seven mutual funds managed by Fidelity Management and Research Company. In addition, participants in the LFS Plan can direct their investment to the Fixed Income Fund. The Fixed Income Fund comprises guaranteed investment contracts with various financial institutions and the Fidelity Short-term Interest Fund. Fidelity Management Trust Company is the investment manager for the Fixed Income Fund and as such, places investment contracts with various financial institutions. The Plan's investment in the Fixed Income Fund represents an unsecured obligation of the financial institution that issued the investment contract. There are certain limitations, as defined in the LFS Plan document, with respect to transfers to or from the Fixed Income Fund. Pending the purchase of the investment contracts, participants' contributions are invested in the Fidelity Short-term Interest Fund. The IBM Corporation Common Stock Fund is a carry-over fund from the Prior Plan and contributions and reinvestment of dividends into the fund are not permitted. Effective December 31, 1995 the IBM Common Stock Fund will be discontinued and any remaining balance in the fund will be transferred to the Fidelity Retirement Money Market Trust. -7- 9 LORAL MASTER SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (Continued) Complete descriptions of the Plan and the Individual Plans, including eligibility requirements and vesting provisions, are contained in the Plan and the Individual Plan documents. 2. Summary of Significant Accounting Policies Valuation of Investments Investments in Loral Corporation Common Stock and IBM Corporation Common Stock are valued at the last reported quoted market price on the last business day of the year. Investments in the Fidelity mutual funds are valued at quoted market prices which represent the net asset value per share as reported by Fidelity Management and Research Company. Investments in the Fixed Income Fund are stated at contract value as reported by the issuer. Contract value represents the principal amount placed with the issuer, plus interest at the contract rate, less withdrawals and expenses. Loans receivable from participants are valued at cost which approximates fair value. The Plan presents in the statement of changes in net assets available for benefits the net appreciation or depreciation in the fair value of its investments which consists of realized gains or losses and the unrealized appreciation or depreciation on those investments. Investment Transactions and Investment Income Investment transactions are accounted for on a trade date basis. Dividend income is recorded on the ex-dividend date. Interest income is accrued as earned. Benefits Payable Benefits pertaining to 1994 and 1993, which were paid in 1995 and 1994, were approximately $4,866,000 and $504,000, respectively. These payments are reported as liabilities on Form 5500. -8- 10 LORAL MASTER SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (Continued) Forfeitures Participants vest in the Employer Contribution in accordance with the provisions of each Individual Plan. Non-vested Employer Contributions are forfeited upon termination or withdrawal. These amounts are used to reduce future Employer Contributions. Forfeitures for the year ended December 31, 1994 were approximately $180,000. Reclassifications Certain reclassifications have been made to conform prior year amounts to the current year presentation. 3. Contributions All active participants may contribute 2% to 6% of their cash compensation, as defined, to the Plan as a "Basic Contribution." In addition, participants who are making Basic Contributions at the maximum rate may elect to contribute an additional amount ranging up to 11% of their cash compensation as a "Voluntary Contribution", subject to Internal Revenue Code ("IRC") limitations. Participants' contributions vest immediately and can only be withdrawn pursuant to the appropriate provisions of the IRC. The Company will contribute amounts ranging from 20% to 100% of the participants' Basic Contribution in accordance with the provisions of the Individual Plans as an Employer Contribution. The amount of the contribution, the type of the contribution, the allocation to the various investment funds and limits on the contributions credited to a participant are governed by the Individual Plan documents. As of December 31, 1994 and 1993, there were approximately 13,300 and 4,100 participants in the Plan, respectively, some of whom have elected to invest in more than one fund. Although the Company has not expressed an intent to do so, the Company can discontinue its contributions and or terminate the Plan at any time, subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). In the event of a discontinuance and or termination of the Plan, participants will become 100 percent vested and the net assets of the Plan will be allocated among the participants and their beneficiaries in accordance with the provisions of ERISA. -9- 11 LORAL MASTER SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (Continued) 4. Investments Plan investments at December 31, 1994 and 1993 were as follows:
1994 1993 ---- ---- (In thousands) -------------- Investments at fair value: Loral Corporation Common Stock $ 41,534* $ 36,040* IBM Corporation Common Stock 4,243* Fidelity Magellan Fund 97,719* 68,615* Fidelity Ginnie Mae Portfolio 17,398* 22,227* Fidelity Retirement Money Market Trust 39,645* 28,905* Fidelity Growth & Income Portfolio 50,401* Fidelity Overseas Fund 11,129* Fidelity Intermediate Bond Fund 783 Fidelity Asset Manager 9,460* -------- -------- $272,312 $155,787 ======== ======== Investments at contract value: Fixed Income Fund $ 73,730* ========
* Represents greater than 5% of net assets available for plan benefits at beginning of the year. -10- 12 LORAL MASTER SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (Continued) 5. Benefit Payments Upon termination, participants receive the vested portion of their account balance as soon as practicable after termination. Terminated participants who have an account balance in excess of $3,500 may elect to leave their account balance in the Plan and withdraw it at any time up to age 65. Generally a 10% penalty will be imposed on certain withdrawals made before the participant reaches age 59 1/2. Assets in a participant's account may be withdrawn only for financial hardship before termination of employment or before reaching age 59 1/2. Financial hardship is determined pursuant to provisions of the IRC. 6. Loans The Plan generally provides for loans to active participants. The maximum loan generally allowed to each participant is the lesser of (1) $50,000 less the highest outstanding loan balance over the prior year or (2) 50% of the vested value of the participant's account in the Plan. The minimum loan amount is $1,000. The Individual Plan Administrative Committees establish the interest rate and the repayment terms, both of which are fixed for the term of the loan. The interest is based on the prime interest rate, as defined, plus one percent. Repayment periods generally range from one to four years, with a nine year maximum for loans used in connection with the purchase of a principal residence, except for one of the Individual Plans where repayment periods range from five to ten years. Loan repayments are made through payroll deductions, with principal and interest being credited to the participants' fund accounts. Repayment of the entire balance is permitted at any time. 7. Tax Status The Plan filed a request with the Internal Revenue Service on March 31, 1995, for determination that the Plan constitutes a qualified plan under Section 401(a) of the IRC and is therefore exempt from Federal income taxes under Section 501(a). The Plan Administrator believes the Plan is a qualified plan under the IRC. Based upon present applicable laws and regulations, participants will not be subject to Federal income tax on the Employer Contributions made on their behalf or on the Plan earnings credited to their account until such time as they are withdrawn. 8. Administrative Expenses As provided for in the Individual Plan documents, certain administrative expenses are paid by the Plan. The remaining expenses are paid by the Company. -11- 13 LORAL MASTER SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1994
FACE AMOUNT OR FAIR/CONTRACT DESCRIPTION SHARES/UNITS VALUE COST - ----------- ------------ ----- ---- (In thousands) (In thousands) Loral Corporation Common Stock 1,096,625 $ 41,534 $ 25,344 IBM Common Stock 57,730 4,243 3,713 Fidelity Magellan Fund 1,462,857 97,719 92,707 Fidelity Ginnie Mae Portfolio 1,741,523 17,398 18,478 Fidelity Retirement Money Market Trust 39,645,349 39,645 39,645 Fidelity Growth & Income Portfolio 2,389,797 50,401 51,778 Fidelity Overseas Fund 407,654 11,129 11,496 Fidelity Intermediate Bond Fund 79,670 783 832 Fidelity Asset Manager 684,008 9,460 10,038 Fixed Income Fund: Fidelity Short-term Interest Fund 1,956,414 1,956 1,956 Guaranteed Investment Contracts: Citibank, 8.99%, due April 5, 1995 10,667,597 10,668 10,668 Continental Assurance, 7.04%, due September 30, 1997 5,114,048 5,114 5,114 Metropolitan Life, 9.03%, due January 3, 1995 6,254,826 6,255 6,255 New York Life, 7.56%, due June 30, 1995 10,591,021 10,591 10,591 New York Life, 5.35%, due June 30, 1995 13,968,318 13,968 13,968 Peoples Security Life, 7.24%, due March 31, 1999 6,203,936 6,204 6,204 Prudential Insurance Company of America 7.03%, due July 5, 1995 10,553,421 10,553 10,553 Prudential Insurance Company of America 6.49%, due March 31, 1995 8,421,353 8,421 8,421 Participant Loans 15,752,391 15,752 -------- -------- TOTAL $361,794 $327,761 ======== ========
-12- 14 LORAL MASTER SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1994 (In thousands)
Gain Purchase Selling Cost of (Loss) Description Price Price Asset on Sale - ----------- -------- ------- ------- ------- Loral Corporation Common Stock $10,142 Fidelity Magellan Fund 48,667 Fidelity Ginnie Mae Portfolio 5,950 Fidelity Retirement Money Market Trust 24,742 Fidelity Growth & Income Portfolio 54,979 Fidelity Overseas Fund 12,954 Fidelity Intermediate Bond Fund 1,235 Fidelity Asset Manager 12,224 Fixed Income Fund 79,723
-13- 15 LORAL MASTER SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1994 (In thousands) (Continued)
Gain Purchase Selling Cost of (Loss) Description Price Price Asset on Sale - ----------- -------- ------- ------- ------- Loral Corporation Common Stock $ 4,700 $ 2,851 $1,849 IBM Common Stock 536 503 33 Fidelity Magellan Fund 16,675 15,836 839 Fidelity Ginnie Mae Portfolio 9,283 9,505 (222) Fidelity Retirement Money Market Trust 14,002 14,002 Fidelity Growth & Income Portfolio 3,179 3,201 (22) Fidelity Overseas Fund 1,469 1,456 13 Fidelity Intermediate Bond Fund 383 403 (20) Fidelity Asset Manager 2,138 2,170 (32) Fixed Income Fund 5,993 5,993
-14- 16 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statement of Loral Corporation on Form S-8 (File No. 33-55661) of our report dated June 28, 1995, on our audits of the financial statements and supplemental schedules of the Loral Master Savings Plan as of December 31, 1994 and 1993, and for the year ended December 31, 1994, which report is included in this Annual Report on Form 11-K. COOPERS & LYBRAND L.L.P. New York, New York June 28, 1995 -15- -----END PRIVACY-ENHANCED MESSAGE-----