COMSAT Corporation Reports First Quarter 2000 Financial Results.Business Editors/Hi-Tech Writers BETHESDA Bethesda, city, United States Bethesda, uninc. city (1990 pop. 62,936), Montgomery co., W central Md., an affluent residential and commercial suburb of Washington, D.C. The area was settled in the late 17th cent. , Md.--(BUSINESS WIRE)--April 24, 2000 -- COMSAT Comsat: see Communications Satellite Corporation; communications satellite. (COMSAT General Corporation, Bethesda, MD) Formerly Communications Satellite Corporation, COMSAT was a private company that was created by the U.S. Reports $0.39 Earnings Per Share This Quarter, Up 77% Compared to First Quarter of 1999 -- -- COMSAT Makes 119th Consecutive Quarterly Dividend Payment -- COMSAT Corporation (NYSE NYSE See: New York Stock Exchange :CQ) today reported net income of $21.0 million, or $0.39 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the three months ended March 31, 2000, versus net income of $12.0 million, or $0.22 per fully diluted share, in the first quarter of 1999. Revenues this quarter were $171.4 million, up 19% over the $144.5 million in revenues in the first quarter of last year. Income before taxes was $33.7 million, up from $20.1 million in the same period last year. "The financial results during the first quarter continue to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data COMSAT's strategic focus on providing advanced data services and networking products for its customers," said COMSAT President and Chief Executive Officer Betty Bet´ty n. 1. A short bar used by thieves to wrench doors open. The powerful betty, or the artful picklock. - Arbuthnot. 2. C. Alewine. "However, the most significant event for COMSAT in the first quarter was the enactment of the ORBIT Act (Open-market Reorganization for the Betterment bet·ter·ment n. 1. An improvement over what has been the case: financial betterment. 2. Law An improvement beyond normal upkeep and repair that adds to the value of real property. of International Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. ) that overhauls the Communications Satellite communications satellite artificial satellite that functions as part of a global radio-communications network. Echo 1, the first communications satellite, launched in 1960, was an instrumented inflatable sphere that passively reflected radio signals back to Act of 1962, lifts ownership restrictions on COMSAT and will allow the company's proposed merger with Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. Corporation to proceed." Under terms of the merger agreement between COMSAT and Lockheed Martin, Lockheed Martin purchased 49% of COMSAT at a price of $45.50 per share in September September: see month. of 1999. As a result of the enactment of the ORBIT Act, the COMSAT-Lockheed Martin merger is expected to conclude sometime this summer, following necessary regulatory action by the Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. and satisfaction of other regulatory conditions. In Satellite Services, COMSAT World Systems (CWS CWS Chicago White Sox CWS College World Series CWS Church World Service CWS Child Welfare Services CWS Canadian Wildlife Service CWS Community Water System (EPA) CWS Canada-Wide Standard CWS Compressed Work Schedule ) posted segment income (before interest and taxes) of $50.4 million on $99.1 million in revenues for the quarter, up from segment income of $29.3 million and $78.9 million in revenues in the first quarter of 1999. These results include $9.2 million in income realized from the settlement of a commercial lawsuit lawsuit: see procedure; tort. . Of this amount, $5.7 million was included in revenues. Revenue growth for World Systems continues to be generated primarily from increased Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and other high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data traffic. Revenue growth, higher ownership of INTELSAT, the lawsuit settlement, and the change in the depreciable depreciable Of, relating to, or being a long-term tangible asset that is subject to depreciation. lives of satellites in the second half of 1999 contributed to the increased income for World Systems. COMSAT Mobile Communications COMSAT mobile communications (CMC) is a telecommunications company which provides Mobile packet data service. It was formerly owned by Lockheed Martin Global Telecommunications (a subsidiary of Lockheed Martin) but is believed to have been acquired by Telenor of Norway in (CMC (Common Messaging Calls) A programming interface specified by the XAPIA as the standard messaging API for X.400 and other messaging systems. CMC is intended to provide a common API for applications that want to become mail enabled. 1. ) posted segment income of $6.9 million and revenues of $29.8 million this quarter, compared to segment income of $4.8 million and revenues of $29.7 million in the same period last year. CMC's first quarter results include a $2.4 million gain from the sale of a portion of its directly owned stock in ICO ICO Icon (File Name Extension) ICO In Case Of ICO Information Commissioner's Office (UK) ICO Instituto de Crédito Oficial (Spain: Official Credit Institute) Global Communications (Holdings) Limited. The Corporation wrote-off its investment in ICO after ICO filed for bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most in 1999. In the first quarter, CMC signed a $24 million extension of a contract to supply satellite capacity and communications for the Wide Area Augmentation System The Wide Area Augmentation System (WAAS) is an elevated-accuracy navigation system developed for civil aviation by the Federal Aviation Administration (FAA), a division of the United States Department of Transportation (DOT). (WAAS (Wide Area Augmentation System) A system of earth stations and satellites that improves the tracking accuracy of the GPS navigation system to approximately 10 feet. ) operated by the Federal Aviation Administration Federal Aviation Administration (FAA), component of the U.S. Department of Transportation that sets standards for the air-worthiness of all civilian aircraft, inspects and licenses them, and regulates civilian and military air traffic through its air traffic control . Also in this quarter, CMC received a General Services Administration The General Services Administration (GSA) was established by section 101 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C.A. § 751). The GSA sets policy for and manages government property and records. (GSA (1) (Global mobile Suppliers Association, Sawbridgeworth, U.K., www.gsacom.com) A membership organization of suppliers of GSM products and services. Its goal is to promote GSM as the worldwide mobile communications standard. See GSM Association and GSM. ) Federal Technology Service contract for a wide variety of INTELSAT and Inmarsat Inmarsat: see Communications Satellite Corporation; communications satellite. (Inmarsat plc, London, www.inmarsat.com) A satellite communications company that provides voice and data services to the maritime, transportation and aeronautics markets as well satellite services that can be used by all government agencies and authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: government contractors A government contractor is a private company that produces goods or services under contract for the government. Often the terms of the contract specify cost plus – i.e., the contractor gets paid for its costs, plus a specified profit margin. . COMSAT International (CI) had revenues of $28.3 million this quarter, up from $27.7 million in the first quarter of 1999. CI posted a segment loss of $6.7 million this quarter, compared to segment income of $8.8 million in the same period last year. The first quarter of 1999 included a $13.1 million gain from the sale of Viatel stock. Exclusive of the Viatel gain, CI's loss was $2.4 million higher than in 1999, due primarily to greater losses in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . Revenues at COMSAT Laboratories were $11.9 million, up 20% from $9.9 million in the same period last year due primarily to growth in its technical consulting business. In February February: see month. , the Society of Satellite Professionals International (SSPI SSPI Security Support Provider Interface (Microsoft) SSPI Society of Satellite Professionals International SSPI Steady-State Plasma Insulin SSPI Security Service Provider Interface (Microsoft) ) chose the COMSAT Labs' Linkway family of networking products as the most important new satellite product of 1999. The Corporation's income before taxes for the first quarter includes $1.3 million in expenses related to the proposed merger with Lockheed Martin Corporation as compared to $1.8 million during the same period of 1999. Additionally, the COMSAT Board of Directors authorized a quarterly dividend of $0.05 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , which is COMSAT's 119th consecutive dividend payment. The quarterly dividend will be payable on June June: see month. 12, 2000, to shareholders of record on May 12, 2000. Some of the statements in this news release are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and relate to anticipated future operating results. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are based on COMSAT management's current expectations and assumptions, which may be affected by the timing and outcome of pending or prospective regulatory actions, by the proposed merger of the corporation with Lockheed Martin Corporation, by developments concerning the privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned of INTELSAT, Inmarsat and New Skies, by international business conditions (e.g., foreign currency devaluation Currency devaluation A deliberate downward adjustment in the official exchange rates established, or pegged, by a government against a specified standard, such as another currency or gold. and economic instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability in foreign markets), by business conditions affecting the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. market, by international reaction to the ORBIT Act, and by other 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. Readers should refer to COMSAT'S disclosure documents filed with the Securities and Exchange Commission, including the corporation's recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for specific details on some of the factors that may affect operating results. COMSAT expressly disclaims any obligation to update forward looking statements. COMSAT Corporation (NYSE: CQ) is a global provider of satellite services and digital networking services, products, and technology.
COMSAT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In millions)
March 31, December 31,
2000 1999
----------- -----------
Current assets:
Cash $ 44.7 $ 78.6
Receivables 167.4 150.0
Other current assets 49.4 62.0
----------- -----------
Total current assets 261.5 290.6
Property and equipment, net 936.8 912.5
Investments 359.9 327.7
Other assets 125.7 120.9
----------- -----------
Total assets $ 1,683.9 $ 1,651.7
=========== ===========
Current liabilities:
Current maturities of long-term
debt $ 0.8 $ 0.8
Other current liabilities 152.0 148.9
----------- -----------
Total current liabilities 152.8 149.7
Long-term debt 414.7 409.0
Other noncurrent liabilities 294.7 295.3
Preferred securities issued by
subsidiary 200.0 200.0
Stockholders' equity 621.7 597.7
----------- -----------
Total liabilities & stockholders'
equity $ 1,683.9 $ 1,651.7
=========== ===========
COMSAT CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
(In millions, except per share amounts)
For the Quarter Ended
March 31,
------------------------
2000 1999
----------- -----------
Revenues $ 171.4 $ 144.5
----------- -----------
Operating expenses:
Cost of services 91.0 80.5
Depreciation and amortization 38.8 42.5
Research and development 2.3 1.7
General and administrative 6.0 5.2
Merger costs 1.3 1.8
----------- -----------
Total operating expenses 139.4 131.7
----------- -----------
Operating income 32.0 12.8
Other income (expense), net 10.3 17.1
Interest costs, net of amounts
capitalized (8.6) (9.8)
----------- -----------
Income before taxes 33.7 20.1
Income tax expense (12.7) (8.1)
----------- -----------
Net income $ 21.0 $ 12.0
=========== ===========
Earnings per common share:
Basic $ 0.40 $ 0.23
Assuming dilution $ 0.39 $ 0.22
Average shares-basic 53.1 52.5
Average shares-assuming dilution 53.2 53.7
COMSAT CORPORATION
OPERATING RESULTS BY BUSINESS SEGMENT (UNAUDITED)
(In millions)
2000 1999
------ -----------------------------------------
QTR 1 QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------ -----------------------------------------
Revenues
Satellite
Services
World
Systems $ 99.1 $ 78.9 $ 86.3 $ 87.1 $ 90.6 $342.9
Mobile
Communi-
cations 29.8 29.7 30.9 30.8 31.6 123.0
------ -----------------------------------------
Total 128.9 108.6 117.2 117.9 122.2 465.9
International 28.3 27.7 27.7 25.8 27.4 108.6
Laboratories 11.9 9.9 13.3 14.3 16.6 54.1
Eliminations
and other 2.3 (1.7) (2.3) (2.3) (4.0) (10.3)
------ -----------------------------------------
Total $171.4 $144.5 $155.9 $155.7 $162.2 $618.3
====== =========================================
2000 1999
------ -----------------------------------------
QTR 1 QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------ -----------------------------------------
Segment
income
(loss) (1)
Satellite
Services
World
Systems $ 50.4 $ 29.3 $ 32.0 $ 36.9 $ 38.9 $137.1
Mobile
Communi-
cations
(2) 6.9 4.8 4.1 (31.2) (29.9) (52.2)
------ -----------------------------------------
Total 57.3 34.1 36.1 5.7 9.0 84.9
International
(3) (6.7) 8.8 9.5 (6.4) (11.8) 0.1
Laboratories (1.0) (1.5) (0.2) (0.4) 1.3 (0.8)
------ -----------------------------------------
Total
segment
income
(loss) 49.6 41.4 45.4 (1.1) (1.5) 84.2
General
and
admini-
strative
expenses (6.0) (5.2) (6.7) (6.7) (6.1) (24.7)
Merger costs (1.3) (1.8) (2.1) (5.3) (1.1) (10.3)
Interest
costs, net
of amounts
capitalized (8.6) (9.8) (9.6) (9.1) (8.7) (37.2)
Other income
(expense),
net - (4.5) (4.6) (3.6) (1.3) (14.0)
------ -----------------------------------------
Total (15.9) (21.3) (23.0) (24.7) (17.2) (86.2)
------ -----------------------------------------
Total $ 33.7 $ 20.1 $ 22.4 $(25.8) $(18.7) $ (2.0)
====== =========================================
Notes:
(1) The corporation evaluates the performance of its operating
segments based on income (loss) before taxes and interest costs.
(2) Mobile Communication's third and fourth quarter of 1999
includes a $36.0 million and $34.6 million non-cash write-off of its
direct investment and indirect investment, respectively, in ICO Global
Communications (Holdings) Limited.
(3) International's first and second quarters of 1999 includes a
$13.1 million and $12.6 million gain, respectively, from the sale of
stock in Viatel, Inc.
COMSAT CORPORATION
OPERATING RESULTS BY BUSINESS SEGMENT (UNAUDITED)
(In millions)
2000 1999
------ -----------------------------------------
QTR 1 QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------ -----------------------------------------
Depreciation
and
Amortization
Satellite
Services
World
Systems $ 22.4 $ 26.2 $ 27.5 $ 22.8 $ 21.8 $ 98.3
Mobile
Communi-
cations 4.2 5.1 5.0 4.8 4.8 19.7
------ -----------------------------------------
Total 26.6 31.3 32.5 27.6 26.6 118.0
International 10.6 9.8 10.0 9.9 10.9 40.6
Laboratories 0.3 0.3 0.3 0.3 0.4 1.3
Other 1.3 1.1 1.1 1.3 1.4 4.9
------ -----------------------------------------
Total $ 38.8 $ 42.5 $ 43.9 $ 39.1 $ 39.3 $164.8
====== =========================================
2000 1999
------ -----------------------------------------
QTR 1 QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------ -----------------------------------------
EBITDA
Satellite
Services
World
Systems $ 71.5 $ 54.8 $ 58.6 $ 59.1 $ 60.2 $232.7
Mobile
Communi-
cations 5.1 4.1 5.9 4.9 4.2 19.1
------ -----------------------------------------
Total 76.6 58.9 64.5 64.0 64.4 251.8
International 2.4 4.6 6.2 3.0 (2.8) 11.0
Laboratories (0.7) (1.2) 0.2 (0.1) 1.7 0.6
Other (7.5) (7.0) (9.0) (12.0) (8.5) (36.5)
------ -----------------------------------------
Total $ 70.8 $ 55.3 $ 61.9 $ 54.9 $ 54.8 $226.9
====== =========================================
Note:
EBITDA (earnings before interest, taxes, depreciation and
amortization) is calculated by adding depreciation, amortization and
operating income (loss). Other includes G&A expenses, merger costs and
Other from the Segment income (loss) section.
COMSAT Corporation Financial Highlights First Quarter 2000 SUMMARY Revenue in the first quarter was $171.4 million, up 19% from the first quarter of 1999. Net income for the first quarter was $21.0 million ($0.39 per fully diluted share) versus net income of $12.0 million ($0.22 per share) for the comparative period of 1999. During the first quarter of 2000, the corporation recognized income of $9.2 million from the settlement of a commercial lawsuit. Gains from the sale of investments were $5.4 million in the three months ended March 31, 2000 and $13.1 million in the same period in 1999. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
BUSINESS SEGMENT INFORMATION The corporation reports operating results and financial data in four segments: COMSAT World Systems (CWS), COMSAT Mobile Communications (CMC), COMSAT International (CI) and COMSAT Laboratories (Labs). The corporation evaluates the performance of its operating segments based on segment income (loss) before taxes and interest costs. COMSAT SATELLITE SERVICES WorldSystems revenue was up 26% in the first quarter to $99.1 million, compared to the same period in 1999. Segment income for the quarter was $50.4 million, versus 1999 segment income of $29.3 million. These results include $9.2 million in income realized from the settlement of a commercial lawsuit. Of this amount, $5.7 million was included in revenues. The growing demand for Internet services and other high-speed data traffic and COMSAT's increased ownership in INTELSAT contributed to the remainder of the revenue increase. Revenue growth, higher ownership of INTELSAT, the lawsuit settlement and the change in the depreciable lives of satellites in the second half of 1999 contributed to the increase in segment income. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $71.5 million, up 30% in the quarter compared with the respective period in 1999. EBITDA margin was 72% for the first quarter. Excluding the commercial lawsuit settlement, EBITDA margin was 67% versus 69% for the first quarter in 1999. This EBITDA margin is lower than in 1999, reflecting CWS's changing revenue mix, from higher margin voice service to higher growth, but lower margin data services. Mobile Communications revenue for the first quarter 2000 was $29.8 million, essentially unchanged from the same period a year earlier. Increased revenue from the US Navy's IT-21 lease contract was offset by lower analog telephone traffic. CMC segment income for the quarter was $6.9 million compared to segment income of $4.8 million for the same period in 1999. Most of the improvement was due to lower operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and depreciation and amortization. CMC's first quarter results also included a $2.4 million gain from the sale of a portion of its stock in ICO Global Communications (Holdings) Limited. The corporation wrote off its investment in ICO after ICO filed for bankruptcy in the third quarter of 1999. As a result of the privatization of Inmarsat in April 1999, CMC's share of Inmarsat's operating results now include income taxes that were not reported in CMC's results in the first quarter of 1999. In addition, CMC's 1999 results included its share of a gain realized by Inmarsat in March 1999. CMC's EBITDA was up 24% in the quarter to $5.1 million. EBITDA margin was 17% for the first quarter versus 14% for the first quarter in 1999. COMSAT INTERNATIONAL COMSAT International (CI) revenue increased 2% in the first quarter 2000 to $28.3 million compared with the same period in 1999. Revenue increases in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. and Turkey were partially offset by revenue declines in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. and Colombia Colombia (kəlŭm`bēə, Span. kōlōm`byä), officially Republic of Colombia, republic (2005 est. pop. 42,954,000), 439,735 sq mi (1,138,914 sq km), NW South America. Bogotá is the capital and largest city. in the quarter. CI segment loss for the first quarter of 2000 was $6.7 million compared to segment income of $8.8 million in the first quarter of 1999. CI results in the first quarter of 1999 include a $13.1 million gain on sale of stock in Viatel, Inc. Absent the gain on sale of Viatel stock, CI's loss in the first quarter of 1999 would have been $4.3 million. The increase in CI's segment loss was primarily due to higher operating costs operating costs npl → gastos mpl operacionales in Brazil. Segment EBITDA totaled $2.4 million in the first quarter 2000 compared to EBITDA of $4.6 million in the first quarter of 1999. EBITDA margin for the quarter was 8% in 2000 and 17% in 1999, respectively.
COMSAT International
Operating Companies Information (unaudited)
(in millions)
1Q'00 1Q'99
Revenue
Americas $25.7 $25.7
Asia/Europe 2.6 2.0
--- ---
Total Revenue $28.3 $27.7
===== =====
EBITDA
Americas $5.6 $8.2
Asia/Europe (0.4) (0.5)
----- -----
EBITDA before CI Corporate 5.2 7.7
CI Corporate (2.8) (3.1)
----- -----
Total EBITDA $2.4 $4.6
==== ====
Notes:
1. Americas includes Argentina (100%), Brazil (100%), Colombia
(100%), Guatemala (100%), and Venezuela (100%). Asia/Europe includes
BelCom (100%), China (64%), Turkey IBS (85%), and Turkey VSAT (64%).
Numbers in parenthesis indicate COMSAT ownership.
2. CI share of India revenue not consolidated for accounting
purposes is: $1.7 million for 1Q00 and $1.2 million for 1Q99.
3. EBITDA (earnings before interest, taxes, depreciation and
amortization) is calculated by adding depreciation and amortization
and operating income (loss).
COMSAT LABORATORIES COMSAT Laboratories revenue was up 20% in the quarter to $11.9 million. Systems and technology contracts drove growth in the first quarter. Segment loss for the quarter was $1.0 million, versus a segment loss of $1.5 million in the same period in 1999. Laboratories external revenue backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at March 31, 2000 increased 15% from the first quarter of 1999 levels to $58.4 million. ELIMINATIONS AND OTHER Electromechanical The use of electricity to run moving parts. Disk drives, printers and motors are examples. Electromechanical systems must be designed for the eventual deterioration of moving components that wear over time. The first TVs were electromechanical systems (see video/TV history). Systems, Inc. (EMS) was included in discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. prior to 2000. Beginning in 2000, EMS is being reported in continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the as part of eliminations and other. COMSAT CONSOLIDATED General & Administrative expenses totaled $6.0 million in the first quarter of 2000, up from $5.2 million in the first quarter of 1999. Merger Costs in the first three months of 2000 were $1.3 million, compared to $1.8 million in the same period of 1999. These costs are related to the proposed merger with Lockheed Martin Corporation. Research & Development expenses in the first quarter totaled $2.3 million, versus $1.7 million in the first quarter of 1999. OtherIncome (Expense), net for the quarter was income of $10.3 million, compared with income of $17.1 million in same quarter in 1999. The first three months of 2000 included gains of $5.4 million on the sale of investments. The first quarter of 1999 included a $13.1 million gain on the sale of investments. Interest Costs, Net of Amounts Capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. in the first quarter of 2000 was $8.6 million versus $9.8 million in the same period in 1999. The change was due to an increase in the amount of interest the corporation capitalized related to the construction of INTELSAT satellites. Income Tax Expense for the quarter was $12.7 million versus an expense of $8.1 million in the same quarter of 1999. The effective tax rate for the first quarter of 2000 was 38% compared to 40% for the first quarter of 1999. Weighted Average Shares Outstanding were 53.2 million for the first quarter of 2000, compared to 53.7 million for the first quarter of 1999. CASH AND LIQUIDITY Cash and Cash Equivalents totaled $44.7 million at the end of the first quarter of 2000, compared with $78.6 million at the end of 1999. Cash was used during the first quarter of 2000 to increase COMSAT's ownership in INTELSAT. Long-term Debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. increased to $414.7 million as of March 31, 2000 from $409.0 million as of December 31, 1999 due to a higher ownership of INTELSAT. |
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