TCR_Public/961028.MBX




InterNet Bankruptcy Library - News for October 28, 1996






Bankruptcy News For October 28,
1996



  1. Acclaim Entertainment, Inc. to report loss for fourth quarter

  2. Interleaf announces restructuring and second quarter results

  3. Hexcel Reports Third Quarter Results; Net Income of $0.3 million on sales of
    $189.5 million reflects seasonal factors and impact of recent business
    acquisition and consolidation activities

  4. PanAmSat revenues increase by 139% TO $66.9 million for third quarter 1996




Acclaim Entertainment, Inc. to report loss for fourth quarter


GLEN COVE, N.Y.--Oct. 28, 1996--Acclaim Entertainment, Inc.
(NASDAQ:AKLM) today announced that it expects to report a net loss for Fiscal
Year 1996, which ended Aug. 31, 1996, significantly in excess of prior market
expectations and a net loss for the fourth quarter of Fiscal Year 1996 of at least $140
million due in part to the establishment of significant additional reserves. The
Company plans to announce its fourth-quarter and fiscal year-end results by the end
of November 1996.


This loss is attributable, in part, to the additional write-off of receivables, to the
establishment of further reserves in the fourth-quarter for receivables, to severance
charges and the reduction of certain deferred costs, as well as fourth-quarter
operating losses. The Company cautioned that results reported today are preliminary
and that actual results could vary significantly from this estimate.


The Company also stated that, due to the anticipated loss, it would fail to meet
certain fiscal year- end financial covenants in its bank credit facilities and that it had
begun discussions with its lenders seeking waivers and a restructuring of the
facilities.


Acclaim Entertainment, Inc., a leading worldwide publisher of software for
Nintendo, Sega, Sony and personal computer hardware systems, also publishes
comic books under a variety of imprints. In addition, Acclaim develops
coin-operated arcade and ticket- redemption games; operates a motion capture
studio; and, through A.D.I., globally sells and distributes products from a variety of
entertainment software publishers including Ocean, Interplay, Marvel, Pulse
Entertainment and Take 2. Acclaim also has a joint venture with
Tele-Communications, Inc. for electronically distributed interactive entertainment.


This press release contains forward looking statements. There are certain important
factors that could cause results to differ materially from those anticipated by the
statements made above. Such risks and uncertainties include, among other things, the
growth of the installed base of 32-bit and 64-bit gaming and PC systems, the timely
availability and acceptance of AcclaimUs future products for such systems, the
competitive environment in the consumer software and related industries, the
management of inventories and growth, and other risks and uncertainties that may be
detailed from time to time in AcclaimUs reports filed with the Securities and
Exchange Commission.


Acclaim is a registered trademark of Acclaim Entertainment, Inc. All other marks
are trademarks or registered trademarks of their respective companies.


CONTACT: For press information: For financial information: Nancy Tully J. Mark
Hattendorf Acclaim Entertainment, Inc. Acclaim Entertainment 516.656.5000
516.656.5000




Interleaf announces restructuring and second quarter results


WALTHAM, Mass.--Oct. 28, 1996--Interleaf Inc. (NASDAQ: LEAF) announced
today that it has taken further actions to reduce its operating expense levels and
heighten the company's focus on its integrated document management business.


The company continued its move toward a virtual field force by closing six field
offices and has reduced its worldwide employment by approximately 20 percent.
These actions will result in a restructuring charge of approximately $3 million to $4
million to be recorded in the third quarter ending Dec. 31, 1996.


As announced earlier, the company recorded revenues for its second quarter ended
Sept. 30, 1996 of $16.6 million, resulting in a loss of $10.3 million, or $(0.59) per
share. This loss includes a $4.8 million restructuring charge resulting from earlier
expense-reduction steps taken and announced in July, 1996. These results compare
with revenues of $23.3 million and net income of $.9 million, or $0.05 per share, for
the same period a year ago.


For the six months ended Sept. 30, 1996, the company reported revenues of $35.6
million and a loss of $14.1 million or $(0.82) per share, including the $4.8 million
second quarter restructuring charge. In the same period one year earlier the company
reported revenues of $46.4 million and a profit of $1.4 million or $0.08 per share.


As previously announced, the company received a $10 million equity investment on
Oct. 15, 1996. Ed Koepfler, Interleaf's president and CEO, commented, "The $10
million equity infusion received earlier this month and the restructuring actions we
have taken in the last two quarters were important steps in moving Interleaf from an
authoring-centric company to a successful and competitive document application
company."


Certain information provided herein by the company or statements made by its
officers or employees may contain forward-looking information. The company's
actual future results may differ materially from projections or suggestions made in
such forward-looking information as a result of various potential risks and
uncertainties including, but not limited to, market acceptance of its products,
technological changes in the information technology industry, competition, and
general economic trends. These and other risks are more fully discussed in the
company's SEC filings.


                                    Interleaf Inc.
                             Consolidated Balance Sheets
        

                                          Sept. 30, 1996  March 31, 1996
        In thousands, except for share and
        per share amounts                       (unaudited)
        

                                       Assets
        

        Current Assets
        Cash and cash equivalents                 $    4,942    $   12,725
        Accounts receivable, net                      15,890        19,771
        Prepaid expenses and other current assets      2,013         2,112
        Total current assets                          22,845        34,608
        Property and equipment, net                    7,521         7,800
        Intangible assets                              7,864         6,164
        Other assets                                     628           344
        Total assets                              $   38,858    $   48,916
        

                         Liabilities and Shareholders' Equity
        

        Current Liabilities                       
        Short-term borrowings                     $      374    $       --
        Accounts payable                               2,982         2,908
        Accrued expenses                              13,804        13,252
        Unearned revenue                              11,444        15,986
        Other current liabilities                      4,830         1,348
        Total current liabilities                     33,434        33,494
        Other liabilities                                225             3
        Total liabilities                             33,659        33,497
        

        Shareholders' Equity
        Preferred stock, par value $.10 per share,
        authorized 5,000,000 shares:
           Series A Junior Participating, none issued
           and outstanding
           Senior Series B Convertible, issued and
           outstanding, 861,911 at Sept. 30, 1996 and
           923,304 at March 31, 1996                      86            92
        Common stock, par value $.01 per share, authorized
           30,000,000 shares, issued and outstanding
           17,459,219 at Sept. 30, 1996 and 16,697,988
           at March 31, 1996                             175           167
        Additional paid-in capital                    76,224        72,348
        Retained earnings (deficit)                  (71,085)      (56,958)
        Cumulative translation adjustment               (201)         (230)
        Total shareholders' equity                     5,199        15,419
        Total liabilities & shareholders' equity   $  38,858    $   48,916
        

                                    Interleaf Inc.
                        Consolidated statements of operations
        

                                         3 Months Ended   6 Months Ended
                                            Sept. 30,        Sept. 30,
                                         1996      1995   1996      1995
        

        In thousands, except for per share
         amounts                              (unaudited)      (unaudited)
        

        Revenues:                   
        

        Products                            $4,614    $9,273  $11,660
        $18,710
        Maintenance                          7,410     8,399   14,882
        16,191
        Services                             4,561     5,639    9,097
        11,537
        

        Total Revenues                      16,585    23,311   35,639
        46,438
        

        Costs of revenues:
        

        Products                             1,527     1,564    3,153
        3,224
        Maintenance                          1,291     1,314    2,599
        2,683
        Services                             4,362     4,767    8,562
        9,576
        

        Total costs of revenues              7,180     7,645   14,314
        15,483
        

        Gross margin                         9,405    15,666   21,325
        30,955
        

        Operating expenses
        

        Selling, general and administrative 10,481    10,871   21,903
        21,853
        Research and development             4,306     3,931    8,576
        7,857
        Restructuring expense                4,800         -    4,800
        -
        

        Total operating expenses            19,587    14,802   35,279
        29,710
        

        Income (loss) from operations      (10,182)      864  (13,954)
        1,245
        Other income (expense)                (145)       58     (173)
        149
        Income (loss) before income taxes  (10,327)      922  (14,127)
        1,394
        Provision for income taxes
        -         -        -        -
        

        Net income (loss)                 $(10,327)     $922 $(14,127)
        $1,394
        

        Net income (loss) per share         $(0.59)     $.05   $(0.82)
        $.08
        

        Shares used in computing net
         income (loss) per share            17,457    18,618   17,229
        18,134
        

        


CONTACT: Interleaf Inc. G. Gordon M. Large, 617/768-1012 or

Dana Finnegan, 617/768-1038




Hexcel Reports Third Quarter Results; Net Income of $0.3 million on sales of
$189.5 million reflects seasonal factors and impact of recent business acquisition
and consolidation activities


STAMFORD, Conn.--Oct. 28, 1996--Hexcel Corp. (NYSE/PSE: HXL) today
reported results for the third quarter ended Sept. 29, 1996.


The results for the third quarter of 1996 include the results of the composites
businesses acquired from Ciba-Geigy Limited and Ciba-Geigy Corp. (collectively,
"Ciba") on Feb. 29, 1996, and from Hercules Inc. ("Hercules") on June 27, 1996.


Third Quarter Results


Net sales for the third quarter of 1996 were $189.5 million, compared with net sales
for the third quarter of 1995 of $81.4 million. Gross margin for the 1996 quarter was
$35.8 million, or 18.9% of sales, compared with gross margin for the 1995 quarter
of $15.9 million, or 19.5% of sales. Excluding the business operations acquired
from Ciba and Hercules, sales for the third quarter of 1996 were approximately $92
million (a 13% increase over the third quarter of 1995) and gross margin was
approximately $22 million, or 23.9% of sales.


Third quarter net income was $0.3 million in 1996, or $0.01 per share, compared
with $1.4 million in 1995, or $0.08 per share. There were 37.4 million weighted
average shares and equivalent shares outstanding during the third quarter of 1996,
versus 18.1 million during the comparable period of 1995.


During the third quarter of 1996, sales of composite materials and parts to aerospace
customers continued to improve, reflecting the initial impact of recently announced
build rate increases for certain commercial aircraft. However, the financial
difficulties of two European aerospace customers resulted in the postponement or
cancellation of some orders, and the Company experienced some softening in sales
to certain recreation customers.


Third quarter results also reflect the seasonality of the Company's European
operations, which account for approximately half of the Company's worldwide
revenues. Sales levels are generally lowest during the third quarter of the year, as a
result of the traditional holiday period at many of the Company's European
customers.


Results for the third quarter of 1996 include an additional $1.4 million of business
acquisition and consolidation expenses attributable to Hexcel's program to
assimilate acquired operations. Components of the Company's previously announced
business consolidation program, such as the consolidation of U.S. special process
manufacturing and the integration of sales and marketing functions, are progressing
according to plan.


However, some actions have been temporarily slowed by the second quarter
acquisition of the composites business from Hercules, even though this acquisition
will facilitate certain aspects of the consolidation and is not expected to have a
significant impact on the total cost of the program.


As previously announced, the consolidation of the Company's business operations is
expected to result in $49 million of expenses over a three-year period, but is also
expected to generate savings that will pay for the program by the time it is completed
in 1999 and produce continuing and long-term benefits thereafter.


John J. Lee, the chairman and chief executive officer of Hexcel, said, "The
company's transition from a producer of composite materials to a leading integrated
supplier of carbon fibers, fabrics, and composite materials, parts and structures is a
major challenge. The program to integrate and restructure acquired operations will
take two to three years to implement, due to the manufacturing and product
qualification requirements of the aerospace industry.


"However, Hexcel is capable of generating significant benefits from such a program,
as evidenced by the restructuring program initiated in 1992 and 1993. That
restructuring contributed to the improved gross margin performance of the operations
owned by the company prior to 1996.


"Our goal is to build on that success, improving the performance of the acquired
businesses and capitalizing on the opportunities created by Hexcel's integrated
manufacturing and marketing capabilities. I am confident that we will make progress
toward achieving Hexcel's full potential in the months ahead."


Year-to-Date Results


For the year-to-date period ended Sept. 29, 1996, net sales were $482.7 million,
compared with $257.5 million for the comparable period of 1995. Gross margin for
the first nine months of 1996 was $97.8 million, or 20.3% of sales, versus gross
margin for the same period of 1995 of $48.7 million, or 18.9% of sales.


Excluding the business operations acquired from Ciba and Hercules, sales for the
year-to-date period ended Sept. 29, 1996 were approximately $289 million (a 12%
increase over the first nine months of 1995) and gross margin was approximately
$69 million, or 23.9% of sales.


The 1996 year-to-date net loss was $21.5 million, or $0.66 per share, including
$35.8 million of business acquisition and consolidation expenses and $3.4 million of
interest expense attributable to the write-off of capitalized debt financing costs.


Net income for the comparable period of 1995 was $0.7 million, or $0.05 per share.
There were 32.3 million weighted average shares and equivalent shares outstanding
during the first nine months of 1996, versus 15.0 million during the first nine months
of 1995.


Hexcel Corp. is an international developer and manufacturer of carbon fibers,
fabrics, and lightweight, high-performance composite materials, parts and structures
for use in the commercial aerospace, space and defense, recreation and general
industrial markets.


        Hexcel Corp. and Subsidiaries
        Condensed Consolidated Statements of Operations
        (in thousands, except per share data)
        

                                             Unaudited
                             The Quarter Ended   The Year-to-Date Ended
                            Sept. 29,    Oct. 1,  Sept. 29,    Oct. 1,
                              1996        1995     1996         1995
        

        Net sales                $189,542   $81,366   $482,730    $257,544
        

        Cost of sales            (153,729)  (65,478)  (384,946)   (208,806)
        

        Gross margin               35,813    15,888     97,784      48,738
        

        Selling, general and
         administrative expenses  (25,642)  (11,358)   (67,003)    (35,630)
        Business acquisition and
         consolidation expenses    (1,382)       --    (35,802)         --
        Other income, net             142       600      3,127         600
        

        Operating income (loss)     8,931     5,130     (1,894)     13,708
        Interest expense           (7,173)   (2,260)   (15,655)     (6,702)
        Bankruptcy reorganization
         expenses                      --      (410)        --      (3,361)
        

        Income (loss) from 
         continuing operations
         before income taxes        1,758     2,460    (17,549)      3,645
        Provision for income taxes (1,412)     (899)    (3,924)     (2,503)
        

          Income (loss) from
           continuing operations      346     1,561    (21,473)      1,142
        

        Discontinued operations:
         Losses during
         phase-out period              --      (171)        --        (468)
        

          Net income (loss)      $    346    $1,390   $(21,473)      $ 674 
        

        Net income (loss) per share 
        and equivalent share:
        Primary and fully diluted:                                      
          Continuing operations    $ 0.01     $0.09     $(0.66)     $ 0.08
          Discontinued operations    0.00     (0.01)      0.00       (0.03)
          

           Net income (loss)   $ 0.01     $0.08     $(0.66)     $ 0.05
        

        Weighted average shares 
         and equivalent shares     37,430    18,094     32,305      14,958
        

               

CONTACT: Hexcel Corp. William P. Meehan, 510/847-9500




PanAmSat revenues increase by 139% TO $66.9 million for third quarter 1996


GREENWICH, Conn.--Oct. 28, 1996--


Total Revenues Were $177.6 Million for First Nine Months of 1996


PanAmSat Corporation (NASDAQ: SPOT) announced today that total revenues
were $66.9 million for the three months ended September 30, 1996, an increase of
139 percent over total revenues of $28.0 million for the same period in 1995. Total
revenues for the first nine months of 1996 were $177.6 million, an increase of
$105.8 million or 147 percent as compared to the same nine-month period in 1995.


Earnings Before Net Interest Expense, Income Taxes, Depreciation and Amortization
(EBITDA) for the third quarter of 1996 was $42.2 million, an increase of 136
percent as compared to $17.9 million for the same three-month period in 1995.
EBITDA during the third quarter of 1996 included non-recurring expenses of $2.5
million related to the September 1996 Agreement and Plan of Reorganization with
Hughes Electronics Corporation and $4.8 million related to a corporate
compensation plan. EBITDA was $122.2 million for the nine months ended
September 30, 1996, an increase of $86.5 million or 242 percent over the same
period in 1995. EBITDA for the first nine months of 1995 included a charge for a
non-recurring reorganization expense of $8.3 million.


EBITDA was 69 percent of total revenues for the first nine months of 1996, as
compared to 50 percent of total revenues for the same period in 1995.


PanAmSat experienced significant revenue increases during the third quarter of 1996
for both broadcast and business communications services. Broadcast services
revenue increased by 170 percent to $56.1 million, primarily due to revenues for
video services on the PAS-3 and PAS-4 satellites. Business communications
services revenue grew by 55 percent to $10.4 million as a result of the
commencement of several new data network and carrier service contracts.


On September 20, 1996, PanAmSat and Hughes Electronics Corporation announced
an agreement to merge their respective satellite service operations into a new
publicly held company. The merger transaction will require governmental
approvals, which are expected to be completed within six to 12 months of the
announcement date.


In a separate but related transaction, Televisa will purchase PanAmsat's options to
obtain equity interests in Spanish-speaking direct-to-home ventures in Latin America
and the Iberian Peninsula.


As of September 30, 1996, PanAmSat had signed contracts of approximately $2.2
billion to provide satellite services on the PAS-1, PAS-2, PAS-3 and PAS-4
satellites. In addition, the Company signed a binding letter of agreement in February
1996 with certain partners of the Latin America direct-to-home (DTH) television
partnership of Grupo Televisa, News Corp., Globo and Tele-Communications
International for services on 48 transponders on the PAS-5 and PAS-6 satellites at a
minimum value of $1.2 billion. For most of the transponders, this value reflects
service fees that are equal to the company's best estimate of the cost to design,
construct, launch, insure and operate the satellites and for the balance of the
transponders, the value reflects service fees that are based on a fixed price.


PanAmSat is the world's first private-sector company to provide global satellite
services. It offers satellite-based video and data communications services to more
than 300 customers worldwide. The company currently operates a four-satellite
global system: PAS-1 and PAS-3 over the Atlantic Ocean Region; PAS-2 over the
Pacific Ocean Region; and PAS-4 over the Indian Ocean Region. PanAmSat plans to
launch four additional satellites by early 1998, which will enable the company to
operate multiple satellites in each ocean region worldwide. The next launch will
deploy the PAS-6 Atlantic Ocean Region satellite in December 1996.


                           PanAmSat Corporation
                For the Nine Months Ended September 30, 1996
                                      

                       PART I - FINANCIAL INFORMATION
        

        Financial Statements
        

        Balance Sheets, September 30, 1996 (unaudited) and December 31,
        1995.
        

        Statements of Operations for the Nine Months Ended September 30,
        1996
        and 1995 (unaudited).
        

        Statements of Operations for the Three Months ended September 30,
        1996 and 1995 (unaudited).
        

        Statements of Cash Flows for the Nine Months Ended September 30,
        1996
        and 1995 (unaudited).
        

        Notes to Financial Statements.
        

                               BALANCE SHEETS
        

                                        September 30,    December 31,
                                            1996            1995
        ASSETS                               (Unaudited)                  
        CURRENT ASSETS:                                                
          Cash and cash equivalents      $    3,336,719  $   13,562,113
        Accounts receivable, less                         
         allowance for doubtful accounts                  
         of $100,000                          9,423,406       4,881,255
        Prepaid expenses and other                        
         current assets                      13,717,889       5,594,999
        TOTAL CURRENT ASSETS                 26,478,014      24,038,367
                                                     

        SATELLITES AND OTHER PROPERTY                    
         AND EQUIPMENT, AT COST             859,319,906     609,927,311
        Less:  Accumulated Depreciation                  
         And Amortization                  (122,912,134)   (79,177,520)
                                        736,407,772     530,749,791
                                                     

        MARKETABLE SECURITIES               372,405,626     495,078,866
                                                     

        SATELLITE SYSTEMS UNDER                           
         DEVELOPMENT                        423,247,476     377,383,581
                                                     

        DEBT ISSUANCE COSTS (Net of                      
          Amortization)                       9,944,437      11,414,920
                                                     

        OTHER ASSETS                            806,054         154,287
        TOTAL ASSETS                     $1,569,289,379  $1,438,819,812
        -0-
                            PanAmSat Corporation
                               BALANCE SHEETS
        

                                          September 30,       December 31,
                                              1996               1995
                                           (Unaudited)          
        LIABILITIES AND EQUITY                                      
        CURRENT LIABILITIES:
         Current portion of long-term debt    $ 4,065,094      $
        3,287,250
         Accounts payable                         780,873
        834,405
         Accrued interest                       2,843,750
        7,109,375
         Accrued liabilities and taxes          9,983,058
        7,686,452
         Deferred revenue                       7,439,157
        6,009,836
        TOTAL CURRENT LIABILITIES              25,111,932
        24,927,318
                                                                

        LONG-TERM DEBT                        616,583,843
        575,283,661
                                                                

        DEFERRED INCOME TAXES                  51,105,310
        31,573,000
                                                                

        DEFERRED REVENUE                       68,320,236
        41,656,778
                                                                

        OTHER LIABILITIES                         732,934
        867,934
          TOTAL LIABILITIES                   761,854,255
        674,308,691
                                                                

        COMMITMENTS AND CONTINGENCIES                               
                                                                

        PREFERRED STOCK, 12-3/4% Mandatorily                        
        Exchangeable Senior Redeemable Preferred                    
         Stock, $0.01 par value, 20,000,000 shares
          authorized, 321,050 shares issued and
          outstanding, 8,565 shares for accrued                     
          dividends                           318,193,850
        287,648,667
                                                                

        STOCKHOLDERS' EQUITY:                                       
          Class A Common Stock, $0.01 par value,                    
           100,000,000 shares authorized,                           
           40,459,432 shares issued and                               
        outstanding                           404,594            404,594
          Class B Common Stock, $0.01 par value,                    
           100,000,000 shares authorized,                           
           40,459,431 shares issued and                         
           outstanding                            404,594            404,597
          Common Stock, $0.01 par value,                            
           400,000,000 shares authorized,                                  
           19,082,737 shares issued and              
           outstanding                            190,828            190,812
          Additional paid-in-capital          477,324,937        477,297,753
          Retained earnings (deficit)          10,916,321
        (1,435,299)
        Total Stockholders' Equity            489,241,274        476,862,454
        

          TOTAL LIABILITIES AND EQUITY     $1,569,289,379     $1,438,819,812
        -0-
        

                           PanAmSat Corporation
                          STATEMENTS OF OPERATIONS
            For the Nine Months Ended September 30, 1996 and 1995
                                 (Unaudited)
        

                                         September 30,  September 30,
                                             1996           1995
        

        REVENUES:                                           
          Unaffiliated parties               $170,920,581   $ 68,964,209
          Related parties                       6,713,364      2,859,283
                                                       

                                          177,633,945     71,823,492
        OPERATING EXPENSES:                                 
         Direct expenses-service agreements     6,831,774      3,723,267
         Sales and marketing                   10,318,748      6,588,476
          Engineering and technical services   12,334,312      6,952,638
        General and administrative             18,641,535     10,521,560
        Depreciation and amortization          45,224,473     22,000,388
        Compensatory programs                   4,799,933      8,341,040
          Reorganization costs                  2,528,177          -
                                          100,678,952     58,127,369
                                                        

        INCOME FROM OPERATIONS                 76,954,993     13,696,123
                                                        

        INTEREST INCOME                       (17,615,682)   (12,745,350)
                                                       

        INTEREST EXPENSE                      20,588,872      12,636,131
          INCOME BEFORE INCOME TAXES          73,981,803      13,805,342
                                                        

        INCOME TAXES                          31,085,000       9,041,000
        NET INCOME                            42,896,803       4,764,342
                                                        

        PREFERRED STOCK DIVIDEND              30,545,183      16,453,920
                                                        

        NET INCOME (LOSS) TO COMMON SHARES  $ 12,351,620    $(11,689,578)
                                                        

        PRO FORMA NET LOSS TO COMMON SHARES:                  
          HISTORICAL NET INCOME                              $ 4,764,342
          PRO FORMA INCOME TAX BENEFIT                      
                                                          (1,207,000)
        PRO FORMA NET INCOME                                
                                                           5,971,342
                                                          

        PREFERRED STOCK DIVIDEND                            
                                                          16,453,920
                                                        

        PRO FORMA NET LOSS TO COMMON SHARES                 $(10,482,578)
                                                       

                                                        
        ACTUAL AND PRO FORMA EARNINGS (LOSS)                  
        PER COMMON SHARE                      $    .12             (0.12)
                                                          

        ACTUAL AND PRO FORMA WEIGHTED AVERAGE                 
        COMMON SHARES OUTSTANDING          100,324,978        85,877,428
        -0-
        

                            PanAmSat Corporation
                          STATEMENTS OF OPERATIONS
           For the Three Months Ended September 30, 1996 and 1995
                               (Unaudited)
        

                                        September 30,    September 30,
                                            1996            1995
        REVENUES:                                            
          Unaffiliated parties              $ 64,410,187     $ 27,066,931
          Related parties                      2,516,592          949,625
                                          66,926,779       28,016,556
        OPERATING EXPENSES:                                  
          Direct expenses-service agreements   3,107,203        1,172,449
        Sales and marketing                    3,085,276        2,393,765
          Engineering and technical services   4,562,193        2,709,388
        General and administrative             6,594,795        3,651,488
        Depreciation and amortization         16,132,786        8,051,364
        Compensatory programs                  4,799,933          187,440
          Reorganization costs                 2,528,177             -
                                          40,810,363       18,165,894
        

                                                         
        INCOME FROM OPERATIONS                26,116,416        9,850,662
                                                         

        INTEREST INCOME                       (5,346,337)      (5,042,954)
        INTEREST EXPENSE                       5,704,954        3,245,643
          INCOME BEFORE INCOME TAXES          25,757,799       11,647,973
                                                         

        INCOME TAXES                          11,699,000        4,910,000
                                                         

         NET INCOME                           14,058,799        6,737,973
                                                         

         PREFERRED STOCK DIVIDEND             10,525,683        9,334,050
                                                         

         NET INCOME (LOSS) TO COMMON SHARES  $ 3,533,116     $ (2,596,077)
                                                           

                                                           
         EARNINGS (LOSS) PER COMMON SHARE     $      .04     $      (0.03)
                                                           

         WEIGHTED AVERAGE COMMON SHARES                       
          OUTSTANDING                        100,414,456       86,142,774
        -0-
        

                              PanAmSat Corporation
                            STATEMENTS OF CASH FLOWS
              For the Nine Months Ended September 30, 1996 and 1995
                                   (Unaudited)
        

                                                 September 30,  September 30,
                                                     1996           1995
        CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
        

          Net income                                 $ 42,896,803   $
        4,764,342
          Adjustments to reconcile net income to                       
          net cash provided by operating activities:                   
        Depreciation and amortization                  45,224,473
        22,000,388
        Deferred income taxes                          19,532,310
        4,976,000
        Accretion of interest on senior subordinated                   
         discount notes                                29,835,300
        26,719,491
        (Accretion) collection of interest
         on marketable securities                      (2,623,629)
        484,390
        Interest expense capitalized                  (27,269,311)
        (29,172,552)
        Compensation expense related to corporate                      
         reorganization
        -          3,849,300
        Changes in assets and liabilities:                             
        Increase in accounts receivable                (4,542,151)
        (1,680,285)
        Increase in prepaid expenses and
         other current assets                          (8,122,890)
        (2,339,658)
        Decrease in tax distribution receivable
        -          6,470,285
        Decrease in accounts payable                      (53,532)
        (848,727)
        Decrease in accrued interest                   (4,265,625)
        (4,265,625)
        Increase in accrued liabilities and taxes       2,296,606
        4,194,764
        Increase in deferred revenue                   28,092,779
        33,278,933
         Decrease in other liabilities                   (135,000)
        (50,000)
          NET CASH PROVIDED BY OPERATING
           ACTIVITIES                                 120,866,133
        68,381,046
                                                                   

        CASH FLOWS FROM INVESTING ACTIVITIES:                          
         Expenditures for property and equipment      (17,395,302)
        (14,675,782)
         Expenditures for satellite systems under                       
          development                                (235,670,725)
        (244,787,985)
         Purchase of marketable securities and cash
        -         (561,302,274)
        Proceeds from insurance claim receivable
        -          191,084,380
        Proceeds from maturity of marketable
         securities                                   125,296,869
        50,000,000
        Increase in other assets                         (671,143)
        (83,216)
          NET CASH USED IN INVESTING ACTIVITIES      (128,440,301)
        (579,764,877)
                                                                   

        CASH FLOWS FROM FINANCING ACTIVITIES:
        

         Proceeds from Preferred Stock offering, net
        -         263,421,082
         Proceeds from issuance of Common Stock, net
        -         228,873,873
         Repayments of long-term debt                  (2,678,426)
        (1,365,133)     
         Proceeds from exercise of employee
          stock options                                    27,200         -
        NET CASH PROVIDED BY (USED IN)
         FINANCING ACTIVITIES                          (2,651,226)
        490,929,822
                                                                   

        NET DECREASE IN CASH AND CASH 
         EQUIVALENTS                                  (10,225,394)
        (20,454,009)
                                                                   

        CASH AND EQUIVALENTS, beginning of period      13,562,113
        22,854,209
        CASH AND EQUIVALENTS, end of period         $   3,336,719   $
        2,400,200
                                                                   

        SUPPLEMENTAL DISCLOSURES OF CASH FLOW                          
        INFORMATION:
        Cash received for interest                  $  14,992,053   $
        13,655,521
        Cash paid for interest                      $  22,288,506   $
        18,215,709
        Cash paid for income taxes                  $  11,566,000   $     -
        -0-
        

                             PanAmSat Corporation
                                           

                         NOTES TO FINANCIAL STATEMENTS
                                           



(1) Principles of Presentation.

The interim unaudited Financial Statements should be read in conjunction with the
audited Financial Statements and the notes thereto for the year ended December 31,
1995 included in the Company's Annual Report on Form 10-K, as filed with the
Securities and Exchange Commission (Commission File Number 33-63284) (the
"Annual Form 10-K"). The balance sheet as of September 30, 1996, and the related
statements of operations and cash flows for the nine months ended September 30,
1996 and 1995 have been prepared by the Company and are unaudited. In the
opinion of management, all adjustments which are of a normal recurring nature
necessary to present fairly the financial position, results of operations and cash
flows as of and for the three and nine month periods ended September 30, 1996 and
1995 have been made. The accounting policies followed during the interim periods
reported are in conformity with generally accepted accounting principles and are
consistent with those applied for annual periods and described in the Company's
Annual Form 10-K.


The results of operations for the nine month periods ended September 30, 1996 and
1995 are not necessarily indicative of the operating results for the full year.


(2) DTH Business.

During the third quarter of 1994, the Company announced its intention to provide
DTH services in Latin America. In connection therewith, the Company and Grupo
Televisa, S.A. ("Televisa") signed a binding memorandum of understanding in the
first quarter of 1995 (the "Original MOU") to put into operation a digital DTH
satellite television broadcasting business covering Latin America, the Caribbean and
certain areas of the southern United States.


In November 1995, the Company announced that it would serve as a satellite service
provider for the Latin America DTH service ("Latin America DTH") to be offered
by the Globo Organization ("Globo"), Televisa, The News Corporation Limited
("News Corp.") and Tele-Communications International, Inc.("TCI") and that the
Company would


have options to acquire equity interests in the joint ventures serving Latin America,
the Caribbean and the Southern United States, but not Brazil.


On February 29, 1996, the Company signed a binding letter agreement with Globo,
Televisa and News Corp. (the "1996 Letter Agreement") to provide service to a
series of joint ventures (the "Latin America JVs") to be formed by them and TCI on
48 transponders ultimately on PAS-5 and PAS-6, with temporary service on PAS-3
pending the commencement of service on PAS-6. On June 26, 1996, a full-scale
agreement was executed for service in Brazil on twelve transponders (the "Brazil
Agreement"). The 1996 Letter Agreement remains in force for the remaining 36
transponders. This capacity would enable the Latin America JVs to broadcast to
Latin America, the Caribbean, and certain areas of the southern United States
approximately 500 digital channels and to permit distribution of program packages
of approximately 120 digital channels to specific market areas. Also under the 1996
Letter Agreement, Globo, Televisa, and News Corp. have agreed to proportionally
guarantee 100 percent of the fees for transponder services to the Latin America JVs.
These guarantee obligations may be assigned to TCI and, with the Company's prior
written consent, to new equity participants in the Latin America JVs. Globo and
News Corp have proportionately guaranteed the obligations under the Brazil
Agreement. The Company will receive minimum service fees equivalent to the
Company's best estimate of the cost per transponder to the Company of designing,
launching, operating and insuring each satellite for the transponders used by the Latin

America JVs. The Company also will receive additional revenue based on
subscriber revenues of the Latin America JVs above a certain threshold, except that
the transponders that will be used by the Latin America JV operating in Brazil will
be charged on a fixed fee basis.


Under a verbal agreement in principle with Televisa, PanAmSat and Televisa
intended to form a joint venture to offer DTH services in the Iberian Peninsula.
Pursuant to a revised memorandum of understanding(the "Revised MOU")between
the Company and Televisa entered into on September 20, 1996 which incorporated
the prior verbal agreement between the parties and which superseded the Original
MOU, the Company was granted an option for ten years to obtain 10 to 15 percent
interests from Televisa in the Latin America JVs that would service Latin America,
the Caribbean, and the southern United States, but not Brazil. In the event the option
is exercised, the purchase price would be equal to the Company's pro rata share of


Televisa's aggregate contributions to the Latin America JVs providing such service,
less all distributions by such Latin America JVs to Televisa, plus interest. The
Company has no interest nor any options to acquire an interest in the Latin America
JVs that will provide DTH service in Brazil. In connection with the Agreement and
Plan of Reorganization (see Note 5), Televisa will purchase the Company's options
under the Revised MOU.


On September 20, 1996, the Company entered into an agreement with Televisa S.A.
de C.V. to provide transponder service on up to five PAS-3 Ku-band transponders,
at least three of which will be used for distribution of television services in Spain,
which may include DTH services. The service fees reflect market rates.


The Company has significant investments in and commitments for PAS-5 and PAS-6
which are intended to be primarily used by the Latin America JVs. Globo, Televisa
and News Corp. plan to enter into one or more definitive agreements to implement
the terms agreed in and contemplated by the 1996 Letter Agreement. No assurance
can be given that the Latin America JVs will be successful.


(3) PAS-3 Placed in Service.

The Company's PAS-3 satellite (a replacement for a satellite lost as a result of a
launch failure in December 1994) was launched on January 12, 1996 and
commenced service on February 19, 1996. As a result, approximately $232 million
of costs included in satellite systems under development was transferred to satellites
in service and the Company incurred $15.0 million of long-term debt in accordance
with the satellite performance incentive terms in its PAS-3 satellite construction
contract during the quarter ended March 31, 1996.


(4) Compensation Plan.

In September, 1996, the Company adopted a plan to pay a cash bonus to its
employees who would otherwise have qualified for the grant of stock options under
the Company's Long-Term Stock Investment Plan. Such compensation totaling $4.8
million was paid in October, 1996.


(5) Agreement and Plan of Reorganization

On September 20, 1996 (the "Announcement Date"), the Company and Hughes
Electronics Corporation ("Hughes") announced they have agreed to merge their
respective satellite service operations into a new publicly held company. Under the
terms of the Agreement and Plan of Reorganization, the Galaxy business of Hughes
will be combined with the Company to form a new public company. In connection
with the transaction, PanAmSat stockholders will receive an aggregate of $1.5
billion in cash and 28.5 percent of the new company. PanAmSat stockholders will
have three options to receive payment with respect to the outstanding shares of
PanAmSat Common Stock: $30 in cash, one share of common stock of the new
company, or one-half share of common stock of the new company and $15 in cash.
Immediately after the merger, Hughes will own 71.5 percent of the merged entities.
The transaction will require governmental approvals, including that of the U.S.
Federal Communications Commission and the Federal Trade Commission, which
are expected to be completed within six to twelve months of the Announcement Date.


In connection with the above transaction, the Company will incur certain
professional and advisory fees substantially all of which are payable upon the
successful completion of the merger which aggregate approximately $20 million.


In a separate but related transaction, Televisa will purchase the Company's options
to obtain equity interests in Spanish-speaking DTH ventures in Latin America and
the Iberian Peninsula.


CONTACT: Kevin Burgoyne, 203/622-6664 burgoynk@grn.panamsat.com
www.panamsat.com