-----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, CLZr+4erSx/P1b5lpCe4hEvq/6xjzOBJNyipiH4ti8EgVTxqeRiM6mxLUVENqxc8 g47t058c7QJj/LsW/f/psw== 0000950123-94-001098.txt : 19940707 0000950123-94-001098.hdr.sgml : 19940707 ACCESSION NUMBER: 0000950123-94-001098 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LORAL CORP /NY/ CENTRAL INDEX KEY: 0000060357 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94536455 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 LORAL AEROSPACE SAVINGS PLAN 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, 1993. Commission file number 1-4238 LORAL AEROSPACE SAVINGS PLAN LORAL CORPORATION 600 Third Avenue New York, New York 10016 2 REQUIRED INFORMATION The statement of net assets available for benefits as of December 31, 1993 and 1992 and the related statement of changes in net assets available for benefits for the period January 1, 1993 to December 31, 1993, 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 Savings Committee has duly caused this annual report to be signed by the undersigned thereunto duly authorized. LORAL AEROSPACE SAVINGS PLAN ------------------------------------- (Plan) Date: June 24, 1994 BY: STEPHEN L. JACKSON ------------------------------------- Stephen L. Jackson Member of Savings Committee -1- 3 REPORT OF INDEPENDENT ACCOUNTANTS ------------- To the Savings Committee of Loral Aerospace Corp. and Participants of The Loral Aerospace Savings Plan: We have audited the accompanying statements of net assets available for benefits of the Loral Aerospace Savings Plan ("the Plan") as of December 31, 1993 and 1992, and the related statement of changes in net assets available for benefits for the period January 1, 1993 to December 31, 1993. 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, 1993 and 1992, and the changes in net assets available for benefits for the period January 1, 1993 to December 31, 1993, 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 the Plan for (1) assets held for investment purposes at December 31, 1992, and (2) reportable transactions for the year ended December 31, 1993, 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 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 plan benefits and changes in net assets available for plan benefits for each fund. -2- 4 The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audit 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. /s/ COOPERS & LYBRAND - - --------------------- Sherman Oaks, California June 21, 1994 -3- 5 LORAL AEROSPACE SAVINGS PLAN Statement Of Net Assets Available for Benefits At December 31, 1993 (in thousands)
Fund Information ---------------------------------------------------------------------------- Loral Stock Ford Stock Common Stock Current Interest Income Fund Fund Fund Fund Fund Total ----------- ---------- ------------ ---------------- ------ ----- Assets: Investments, at fair value (Notes 1, 2, and 4) $112,123 $213,758 $101,725 $56,224 $114,245 $598,075 Cash Equivalents (Note 1) 394 5 6,534 552 7,485 Accrued investment income 3 6 156 2 167 Loans receivable from participants (Note 6) 18,318 18,318 Other receivables (2) (25) 7 (845) 696 (169) Interfund receivable (payable) 2,501 (1,709) 436 (2,750) 1,522 --------------------------------------------------------------------------------------- Total assets 115,019 212,035 102,168 77,637 117,017 623,876 Liabilities: Other liabilities (607) (634) (3,052) (4,293) --------------------------------------------------------------------------------------- Net assets available for benefits $114,412 $211,401 $102,168 $74,585 $117,017 $619,583 =======================================================================================
See notes to financial statements. -4- 6 LORAL AEROSPACE SAVINGS PLAN Statement Of Net Assets Available for Benefits At December 31, 1992 (in thousands)
Fund Information --------------------------------------------------------------------------- Loral Stock Ford Stock Common Stock Current Interest Income Fund Fund Fund Fund Fund Total ----------- ---------- ------------ ---------------- ------ ----- Assets: Investments, at fair value (Notes 2 and 4) $51,845 $169,215 $83,055 $54,824 $104,335 $463,274 Cash Equivalents (Note 1) 1 1,661 5,216 23 6,901 Accrued investment income 1 5 171 177 Loans receivable from participants (Note 6) 15,981 15,981 Other receivables 3 8 1 38 682 732 Interfund receivable (payable) 1,663 (460) 1,606 (4,176) 1,367 --------------------------------------------------------------------------------------- Total assets 53,512 168,764 86,328 72,054 106,407 487,065 Liabilities: Other liabilities (164) (398) (5) (1,847) (2,414) --------------------------------------------------------------------------------------- Net assets available for benefits $53,348 $168,366 $86,323 $70,207 $106,407 $484,651 =======================================================================================
See notes to financial statements. -5- 7 LORAL AEROSPACE SAVINGS PLAN Statement Of Changes In Net Assets Available for Benefits For The Period January 1, 1993 to December 31, 1993 (in thousands)
Fund Information ---------------------------------------------------------------------------- Loral Stock Ford Stock Common Stock Current Interest Income Fund Fund Fund Fund Fund Total ----------- ---------- ------------ ---------------- ------ ----- Additions: Contributions (Note 3): Employer's $12,636 $ 12,636 Participants' 10,139 $12,381 $ 3,975 $ 8,307 34,802 Investment income (Notes 2, 4, 6): Dividend income 1,378 $ 5,824 7,202 Interest income 2,789 8,217 11,006 Net appreciation in fair value of investments 39,140 77,861 9,297 126,298 --------------------------------------------------------------------------------------- 63,293 83,685 21,678 6,764 16,524 191,944 Withdrawals (5,859) (23,167) (8,593) (8,196) (11,197) (57,012) Transfer among funds, net 3,630 (17,483) 2,760 5,810 5,283 --------------------------------------------------------------------------------------- Net increase 61,064 43,035 15,845 4,378 10,610 134,932 Net assets available for benefits at January 1, 1993 53,348 168,366 86,323 70,207 106,407 484,651 --------------------------------------------------------------------------------------- Net assets available for benefits at December 31, 1993 $114,412 $211,401 $102,168 $74,585 $117,017 $619,583 ======================================================================================
See notes to financial statements -6- 8 LORAL AEROSPACE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. Plan Description The Loral Aerospace Savings Plan (the "Plan") was established by Loral Aerospace Corporation ("LAC" or the "Corporation") effective January 1, 1991. LAC, a wholly-owned subsidiary of Loral Aerospace Holdings, Inc. ("LAH"), is the Plan sponsor. LAC and Space Systems/Loral ("SS/L"), a majority-owned subsidiary of LAH, and any of their affiliated companies are the "Participating Employers." LAH is a wholly-owned subsidiary of Loral Corporation ("Loral"). The Plan is a defined contribution plan designed to provide eligible employees with systematic savings and tax-advantaged long-term savings for retirement. Participants are able to direct their investment to a combination of four funds: the Loral Stock Fund; the Common Stock Fund; the Income Fund; and the Current Interest Fund. A fifth fund, the Ford Stock Fund, is a carry-over fund resulting from the transfer of assets from a prior plan; contributions and reinvestment of dividends into that fund are not permitted. The Employer Contribution in the form of Loral Corporation Common Stock ("Loral Stock") is invested in the Loral Stock Fund and is purchased in accordance with the Plan document. Pending investment in the various funds, the Trustee may temporarily invest part of the contributions in temporary cash investments earning interest at money market rates. Generally, each employee of a Participating Employer is eligible to participate in the Plan on the first day of the month following the date of employment. A complete description of the Plan including eligibility requirements and vesting provisions are contained in the Plan document. 2. Summary of Significant Accounting Policies Valuation of Investments Investments in the Loral Stock Fund and the Ford Stock Fund are valued at the last reported sales price on the last business day of the year. Investments in the Common Stock Fund are valued at the net asset value per share as reported by the fund manager. Investments in the Income Fund are valued at contract value (representing contributions made under the contract plus accumulated interest at the contract rate) earning interest at the contract rate. The Current Interest Fund is valued at cost which approximates fair value; the interest rate is variable. 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. -7- 9 LORAL AEROSPACE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (continued) 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. Withdrawals Payable Withdrawal claims pertaining to 1993 and 1992 which were paid in 1994 and 1993, were approximately $3,789,000 and $1,819,000 respectively. These payments are reported as a liability on Form 5500. Forfeitures Generally, participants vest 100% in the Employer Contribution after completion of five years of service and, thereafter, vest immediately in all future Employer Contributions. Non-vested Employer Contributions are forfeited upon termination or withdrawal. These amounts are used for certain Plan administrative expenses or to reduce future Employer Contributions. Forfeitures for the year ended December 31, 1993 were $641,230. Reclassifications Certain reclassifications have been made to conform prior years amounts to the current year presentation. 3. Contributions The Plan has both a Tax-Efficient Savings ("TES") and a Regular Savings feature. Under the Plan, and subject to limits imposed by the Internal Revenue Code ("IRC"), participants may elect a reduction in eligible salary up to 15% with a corresponding TES contribution in the same amount made to the Plan by the Corporation on their behalf. Such contributions are excluded from the participant's taxable income. Subject to limits imposed by the IRC, participants may also contribute up to 10% of their base salaries to the Regular Savings feature of the Plan on an after-tax basis. Participants vest immediately in their TES and Regular Savings contributions. Participants' contributions are matched at a rate of $.60 for each dollar of TES and/or Regular Savings contributions, up to 6% of participants' base salaries, unless a Participating Employer determines to make a lesser contribution or no contribution. As of December 31, 1993, there were approximately 12,000 participants in the Plan, some of whom have elected to invest in more than one fund. -8- 10 LORAL AEROSPACE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (continued) Although the Participating Employers have not expressed an intent to do so, the Participating Employers can discontinue their contributions at any time. The Corporation can 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. 4. Investments Plan investments at December 31, 1993 were as follows:
Face Amount Fair or Shares/Units Value Cost --------------- ----- ---- (in thousands) (in thousands) Loral Stock Fund: Loral Corporation Common Stock 2,980,859 $112,123* $ 63,484 Common Stock Fund: Comerica Mediumcap Index Fund 107,661 13,737 11,054 Comerica 500 Index Fund 483,097 87,988* 66,504 Income Fund: Insurance Contracts: John Hancock Mutual Life Insurance Company 6.07%, maturing December 31, 1993 31,488,000 31,488* 31,488 Protective Life Insurance Company 8.80%, maturing December 31, 1994 38,073,000 38,073* 38,073 Prudential Asset Management Group 7.02%, maturing December 31, 1995 44,684,000 44,684* 44,684 Current Interest Fund: Comerica Short-Term Investment Fund 56,224,000 56,224* 56,224 Ford Stock Fund: Ford Motor Company Common Stock 3,314,081 213,758* 74,120 --------- -------- Total $598,075 $385,631 ========= ========
*Represents greater than 5% of net assets available for benefits. -9- 11 LORAL AEROSPACE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (continued) 5. Withdrawals 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 of pre-tax assets made before the participant reaches age 59 1/2. Tax-efficient Savings Assets ("TES") Assets in a participant's TES 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. After age 59 1/2, TES assets may be withdrawn in total or in part at any time. Regular Savings Assets Assets in a participant's Regular Savings account may be withdrawn in total or in part at any time in accordance with the Plan provisions. Employer Contributions If vested, withdrawal of assets in participants' Employer Contribution accounts is available at the end of the two-year period following the year in which the Employer Contributions were made. 6. Loans The Plan permits active participants to borrow from assets in their TES accounts that are not invested in the Income Fund. The minimum loan amount is $1,000. The maximum loan permitted is the lesser of: (1) $50,000 minus the highest outstanding loan balance during the last twelve months, or (2) 50% of the vested account balance, or (3) the assets in the TES Account which are eligible for a loan. The amounts in (2) and (3) are reduced by any loan balance outstanding. Participants may receive one loan per year and can have up to four loans outstanding at any time. The interest rate for the loan is the prime rate as defined in the Plan document. This interest rate will remain the same for the term of the loan. The term of a loan can be up to five years except for loans to purchase a primary residence, which can have a term of 10 years. Loan repayment is made through payroll deductions. Repayment of the entire balance is permitted at any time. All loan repayments are made to the Current Interest Fund. -10- 12 LORAL AEROSPACE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (continued) 7. Tax Status The Corporation will seek a determination from the Internal Revenue Service that the Plan is a qualified plan under section 401(a) of the IRC and is, therefore, exempt from Federal income taxes under section 501(a). The sponsor believes the Plan is a qualified plan under the above noted sections. Based upon present applicable laws and regulations, participants will not be subject to Federal income tax on the TES contributions or Employer Contributions made on their behalf or on the earnings credited to their account until such time as they are withdrawn. 8. Administrative Expenses Effective January 1, 1992, most administrative expenses are paid by the participants. The Plan permits the Participating Employers to use forfeitures from participants' accounts to pay the asset-based fees for the Guarantee Income Fund Contracts which were in place prior to January 1, 1992, the Ford Stock Fund, and the Loral Stock Fund and, to the extent not used to pay such expenses, to reduce the Employer Contributions. -11- 13 LORAL AEROSPACE SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1993
FACE AMOUNT OR FAIR DESCRIPTION SHARES/UNITS VALUE COST - - ----------- ------------ ----- ---- (in thousands) (in thousands) Loral Stock Fund: Loral Corporation Common Stock 2,980,859 $112,123 $ 63,484 Common Stock Fund: Comerica Medium Cap Index Fund 107,661 13,737 11,054 Comerica 500 Index Fund 483,097 87,988 66,504 Income Fund: Insurance Contracts: John Hancock Mutual Life Insurance Company 6.07%, maturing December 31, 1993 31,488,000 31,488 31,488 Protective Life Insurance Company 8.80%, maturing December 31, 1994 38,073,000 38,073 38,073 Prudential Asset Management Group 7.02%, maturing December 31, 1995 44,684,000 44,684 44,684 Current Interest Fund: Comerica Short-Term Inv. Fund 56,224,000 56,224 56,224 Ford Stock Fund: Ford Motor Company Common Stock 3,314,081 213,758 74,120 Participant Loans Bearing Interest at Rates Ranging From 5% to 11% 18,318,000 18,318 ----------- ---------- TOTAL $616,393 $385,631 =========== ==========
-12- 14 LORAL AEROSPACE SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1993 (in thousands)
Gain Purchase Selling Cost of (Loss) Price Price Asset on Sale -------- ------- ------- ------- Description - - ----------- John Hancock Mutual Life Ins. Co. 43,096 43,096 GIC 6.07% - 12/31/93 Comerica Bank Short-Term Fund 187,959 187,959 Comerica Bank Short-Term Fund 201,070
-13- 15 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statement of Loral Aerospace Corporation on Form S-8 (File No. 33- 37829) of our report dated June 21, 1994 on our audits of the financial statements of Loral Aerospace Savings Plan as of December 31, 1993 and 1992 and for the period January 1, 1993 to December 31, 1993, which report is included in this Annual Report on Form 11-K. /s/ COOPERS & LYBRAND - - --------------------- Sherman Oaks, California June 24, 1994 -14- -----END PRIVACY-ENHANCED MESSAGE-----