<PAGE>   1
                                                                  Exhibit 99

                          INDEPENDENT AUDITORS' REPORT

To the Partners of Globalstar, L.P.:

     We have audited the accompanying consolidated balance sheets of Globalstar,
L.P. (a development stage limited partnership) and its subsidiary as of December
31, 1996 and 1995, and the related consolidated statements of operations,
partners' capital and subscriptions receivable and cash flows for the period
from March 23, 1994 (commencement of operations) to December 31, 1994, the years
ended December 31, 1995 and 1996 and cumulative. We have also audited the
accompanying consolidated statement of operations for the period from January 1,
1994 to March 22, 1994 (the pre-capital subscription period). These consolidated
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated 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, such consolidated financial statements present fairly, in
all material respects, the financial position of Globalstar, L.P. and its
subsidiary at December 31, 1996 and 1995, and the results of their operations
and their cash flows for the periods stated above in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP
San Jose, California
February 24, 1997

                                        2
<PAGE>   2

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

                          CONSOLIDATED BALANCE SHEETS
                  (In thousands, except partnership interests)

<TABLE>
<CAPTION>
                                                                             DECEMBER 31,
                                                                         ---------------------
                                                                           1996         1995
                                                                         --------     --------
<S>                                                                      <C>          <C>
ASSETS
Current assets:
  Cash and cash equivalents............................................  $ 21,180     $ 71,602
  Other current assets.................................................       606          506
                                                                          -------     --------
       Total current assets............................................    21,786       72,108
Property and equipment, net............................................     1,720        1,509
Globalstar System Under Construction:
  Space segment........................................................   730,513      348,434
  Ground segment.......................................................   160,520       51,823
                                                                          -------     --------
                                                                          891,033      400,257
Deferred FCC license costs.............................................     8,690        7,056
Deferred financing costs...............................................    19,577       24,461
Other assets...........................................................       107           --
                                                                          -------     --------
       Total assets....................................................  $942,913     $505,391
                                                                          =======     ========

LIABILITIES and PARTNERS' CAPITAL
Current liabilities:
  Accounts payable.....................................................  $  4,401     $  2,070
  Payable to affiliates................................................    63,937       47,569
  Accrued expenses.....................................................     6,929        4,782
                                                                          -------     --------
       Total current liabilities.......................................    75,267       54,421
Deferred revenues......................................................    23,652       21,913
Vendor financing liability.............................................   130,694       42,219
Borrowings under long-term revolving credit facility...................    96,077           --

Commitments and contingencies (Notes 4,6,7,9,10,11 and 12)
Redeemable preferred partnership interests (4,769,230 outstanding at
  December 31, 1996, $310,000 redemption value)........................   302,037           --
Ordinary partners' capital:
  Ordinary partnership interests (47,000,000 outstanding)..............   292,585      364,237
  Warrants.............................................................    22,601       22,601
                                                                          -------     --------
       Total ordinary partners' capital................................   315,186      386,838
                                                                          -------     --------
       Total liabilities and partners' capital.........................  $942,913     $505,391
                                                                          =======     ========
</TABLE>

                See notes to consolidated financial statements.

                                        3
<PAGE>   3

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)

<TABLE>
<CAPTION>
                                              YEAR ENDED DECEMBER 31, 1994
                                         ---------------------------------------
                                             PRE-CAPITAL                                               CUMULATIVE
                                         SUBSCRIPTION PERIOD       MARCH 23         YEARS ENDED      MARCH 23, 1994
                                         --------------------  (COMMENCEMENT OF     DECEMBER 31,    (COMMENCEMENT OF
                                             JANUARY 1 TO       OPERATIONS) TO    ----------------   OPERATIONS) TO
                                            MARCH 22, 1994     DECEMBER 31, 1994   1995     1996    DECEMBER 31, 1996
                                         --------------------  -----------------  -------  -------  -----------------
<S>                                      <C>                   <C>                <C>      <C>      <C>
Operating expenses:
  Development costs.....................        $4,057              $21,279       $62,854  $42,152      $ 126,285
  Marketing, general and
    administrative......................         2,815                6,748        17,372   18,873         42,993
                                                ------              -------        ------   ------        -------
Total operating expenses................         6,872               28,027        80,226   61,025        169,278
Interest income.........................            --                1,783        11,989    6,379         20,151
                                                ------              -------        ------   ------        -------
Net loss................................         6,872               26,244        68,237   54,646        149,127
Preferred distributions and related
  increase in redeemable preferred
  partnership interests.................            --                   --            --   17,323         17,323
                                                ------              -------        ------   ------        -------
Net loss applicable to ordinary
  partnership interests.................        $6,872              $26,244       $68,237  $71,969      $ 166,450
                                                ======              =======        ======   ======        =======
</TABLE>

                See notes to consolidated financial statements.

                                        4
<PAGE>   4

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                           MARCH 23, 1994                                    CUMULATIVE
                                                          (COMMENCEMENT OF         YEARS ENDED             MARCH 23, 1994
                                                           OPERATIONS) TO          DECEMBER 31,           (COMMENCEMENT OF
                                                            DECEMBER 31,      ----------------------       OPERATIONS) TO
                                                                1994            1995         1996         DECEMBER 31, 1996
                                                          ----------------    ---------    ---------  -------------------------
<S>                                                       <C>                 <C>          <C>        <C>
Cash flows from operating activities:
 Net loss................................................     $(26,244)       $ (68,237)   $ (54,646)         $(149,127)
 Deferred revenues.......................................           --           21,913        1,739             23,652
 Stock compensation transactions.........................           --               --          317                317
 Depreciation and amortization...........................          115              398        5,858              6,371
 Changes in operating assets and liabilities:
   Other current assets..................................           --             (506)        (100)              (606)
   Other assets..........................................           --               --         (107)              (107)
   Accounts payable......................................          638              857        1,723              3,218
   Payable to affiliates.................................           (1)           4,865       (3,553)             1,311
   Accrued expenses......................................        2,440            2,342        2,147              6,929
                                                              --------        ---------    ---------          ---------
Net cash used in operating activities....................      (23,052)         (38,368)     (46,622)          (108,042)
                                                              --------        ---------    ---------          ---------
Investing activities:
 Globalstar System under construction....................      (71,996)        (328,261)    (490,776)          (891,033)
 Payable to affiliates for Globalstar System under
   construction..........................................       25,042            8,863       19,921             53,826
 Capitalized interest payable on long-term revolving
   credit
   facility..............................................           --               --           77                 77
 Accounts payable........................................           --               67          608                675
 Vendor financing liability..............................           --           42,219       88,475            130,694
                                                              --------        ---------    ---------          ---------
     Cash used for Globalstar System.....................      (46,954)        (277,112)    (381,695)          (705,761)
 Purchases of property and equipment.....................       (1,119)            (888)        (935)            (2,942)
 Deferred FCC license costs..............................       (2,286)          (2,535)      (1,634)            (6,455)
 Purchases of investments................................           --         (126,923)          --           (126,923)
 Maturity of investments.................................           --          126,923           --            126,923
 Other current assets....................................         (190)             190           --                 --
                                                              --------        ---------    ---------          ---------
Net cash used in investing activities....................      (50,549)        (280,345)    (384,264)          (715,158)
                                                              --------        ---------    ---------          ---------
Financing activities:
 Deferred line of credit fees............................           --           (1,875)        (250)            (2,125)
 Proceeds from capital subscriptions receivable..........      148,661          133,780           --            282,441
 Payment of accrued capital raising costs................       (1,500)            (900)          --             (2,400)
 Sale of partnership interests to GTL....................           --          185,750           --            185,750
 Sale of redeemable preferred partnership interests to
   GTL...................................................           --               --      299,500            299,500
 Distributions on redeemable preferred partnership
   interests.............................................           --               --      (14,833)           (14,833)
 Prepaid interest on redeemable preferred partnership
   interests.............................................           --               --           47                 47
 Borrowings under long-term revolving credit facility....           --               --      106,000            106,000
 Repayment of borrowings under long-term revolving credit
   facility..............................................           --               --      (10,000)           (10,000)
                                                              --------        ---------    ---------          ---------
Net cash provided by financing activities................      147,161          316,755      380,464            844,380
                                                              --------        ---------    ---------          ---------
Net increase (decrease) in cash and cash equivalents.....       73,560           (1,958)     (50,422)            21,180
Cash and cash equivalents, beginning of period...........           --           73,560       71,602                 --
                                                              --------        ---------    ---------          ---------
Cash and cash equivalents, end of period.................     $ 73,560        $  71,602    $  21,180          $  21,180
                                                              ========        =========    =========          =========
Noncash transactions:
 Payable to affiliates...................................     $  9,308                                        $   9,308
                                                              ========                                        =========
 Accrual of capital raising costs........................     $  2,400                                        $   2,400
                                                              ========                                        =========
 Deferred FCC license costs..............................     $  2,235                                        $   2,235
                                                              ========                                        =========
 Warrants issued in exchange for debt guarantee..........                     $  22,601                       $  22,601
                                                                              =========                       =========
 Increase in redemption value of preferred partnership
   interests.............................................                                  $   2,537          $   2,537
                                                                                           =========          =========
</TABLE>

                See notes to consolidated financial statements.

                                        5
<PAGE>   5

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

             CONSOLIDATED STATEMENTS OF ORDINARY PARTNERS' CAPITAL
                          AND SUBSCRIPTIONS RECEIVABLE
                                 (In thousands)

                           ORDINARY PARTNERS' CAPITAL

<TABLE>
<CAPTION>
                                                              ORDINARY
                                                             PARTNERSHIP
                                                              INTERESTS      WARRANTS      TOTAL
                                                             -----------     --------     --------
<S>                                                          <C>             <C>          <C>
Capital subscription, March 23, 1994
  General partner (18,000 interests).....................     $  50,000                   $ 50,000
  Limited partners (18,000 interests)....................       225,000                    225,000
Cost of raising capital..................................        (2,400)                    (2,400)
Net losses -- pre-capital subscription period:
  Year ended December 31, 1993...........................       (11,510)                   (11,510)
  January 1, 1994 to March 22, 1994......................        (6,872)                    (6,872)
Net loss applicable to ordinary partnership interests --
  March 23, 1994 (commencement of operations) to December
  31, 1994...............................................       (26,244)                   (26,244)
Capital subscription, December 31, 1994
  (1,000 limited partnership interests)..................        18,750                     18,750
                                                             -----------                  --------
Capital balances, December 31, 1994......................       246,724                    246,724
Sale of 10,000 general partnership interests to GTL,
  February 22, 1995......................................       185,750                    185,750
Warrant agreement in connection with debt
  guarantee..............................................            --      $22,601        22,601
Net loss applicable to ordinary partnership
  interests -- Year ended December 31, 1995..............       (68,237)                   (68,237)
                                                             -----------     --------     --------
Capital balances -- December 31, 1995....................       364,237       22,601       386,838
Stock compensation transactions by managing general
  partner for the benefit of Globalstar..................           317                        317
Net loss applicable to ordinary partnership
  interests -- Year ended December 31, 1996..............       (71,969)                   (71,969)
                                                             -----------     --------     --------
Capital balances -- December 31, 1996....................     $ 292,585      $22,601      $315,186
                                                              =========      =======      ========
</TABLE>

                            SUBSCRIPTIONS RECEIVABLE

<TABLE>
<S>                                                          <C>             <C>          <C>
Capital subscriptions:
  March 23, 1994.........................................     $ 275,000                   $275,000
  December 31, 1994......................................        18,750                     18,750
                                                             -----------                  --------
  Total subscriptions....................................       293,750                    293,750
                                                             -----------                  --------
  Cash received..........................................      (148,661)                  (148,661)
  Credit for pre-capital subscription costs..............       (11,309)                   (11,309)
                                                             -----------                  --------
                                                               (159,970)                  (159,970)
                                                             -----------                  --------
Subscriptions receivable, December 31, 1994..............       133,780                    133,780
  Cash received..........................................      (133,780)                  (133,780)
                                                             -----------                  --------
Subscriptions receivable, December 31, 1995 and 1996.....     $      --                   $     --
                                                              =========                   ========
</TABLE>

                See notes to consolidated financial statements.

                                        6
<PAGE>   6

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BUSINESS

     Globalstar, L.P. ("Globalstar"), a Delaware limited partnership with a
December 31 fiscal year end, was formed in November 1993. It had no activities
until March 23, 1994, when it received capital subscriptions for $275 million
and commenced operations. The accompanying financial statements reflect the
operations of the Partnership from that date. In addition, the statements of
operations for the period January 1, 1994 to March 22, 1994 (the "Pre-Capital
Subscription Period") reflect certain costs incurred by Loral Corporation ("Old
Loral") and QUALCOMM Incorporated ("Qualcomm") and reimbursed by Globalstar
through a capital subscription credit or agreement for reimbursement, as
described in Note 9.

     Effective April 23, 1996, a merger between Old Loral and Lockheed Martin
Corporation ("Lockheed Martin") was completed. In conjunction with the merger,
Old Loral's space and communications businesses, including its direct and
indirect interests in Globalstar, Globalstar Telecommunications Limited ("GTL"),
Space Systems/Loral, Inc. ("SS/L") and other affiliated businesses, as well as
certain other assets and liabilities, have been transferred to Loral Space &
Communications Ltd. ("Loral"), a Bermuda company.

     The managing general partner of Globalstar is Loral/QUALCOMM Satellite
Services, L.P. ("LQSS"). The general partner of LQSS is Loral/QUALCOMM
Partnership, L.P. ("LQP"), a Delaware limited partnership comprised of
subsidiaries of Loral and Qualcomm. The managing general partner of LQP is Loral
General Partner, Inc. ("LGP"), a subsidiary of Loral.

     Globalstar was founded to design, construct and operate a worldwide,
low-earth orbit ("LEO") satellite-based digital telecommunications system (the
"Globalstar System"). The Globalstar System's worldwide coverage is designed to
enable its service providers to extend modern telecommunications services to
millions of people who currently lack basic telephone service and to enhance
wireless communications in areas underserved or not served by existing or future
cellular systems, providing a telecommunications solution in parts of the world
where the build-out of terrestrial systems cannot be economically justified. On
January 31, 1995, the U.S. Federal Communications Commission ("FCC") granted the
necessary license to a wholly-owned subsidiary of LQP to construct, launch and
operate the Globalstar System. LQP has agreed to use such license for the
exclusive benefit of Globalstar.

     On November 23, 1994, GTL was incorporated as an exempted company under the
Companies Act 1981 of Bermuda. GTL's sole business is acting as a general
partner of Globalstar. On February 14, 1995, GTL completed an initial public
offering of 10,000,000 shares of common stock resulting in net proceeds of
$185,750,000. Effective February 22, 1995, GTL purchased 10,000,000 partnership
interests from Globalstar with the net proceeds of the initial public offering.
The partners in Globalstar have the right to convert their partnership interests
into shares of GTL common stock on a one-for-one basis following the Full
Coverage Date, as defined, of the Globalstar System and after at least two
consecutive reported fiscal quarters of positive net income, subject to certain
annual limitations.

     At December 31, 1996, Loral had an effective 33.8% interest in the ordinary
partnership interests of Globalstar, including 1,407,144 shares of GTL's common
stock.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Development Stage Company

     Globalstar is devoting substantially all of its present efforts to the
design, licensing, construction, testing, and financing of the Globalstar
System, and establishing its business. Its planned principal operations have not
commenced. Accordingly, Globalstar is a development stage company as defined

                                        7
<PAGE>   7

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
in Statement of Financial Accounting Standards ("SFAS") No. 7 "Accounting and
Reporting by Development Stage Enterprises."

     Globalstar may encounter problems, delays and expenses, many of which may
be beyond Globalstar's control. These may include, but are not limited to,
problems related to technical development of the system, testing, regulatory
compliance, manufacturing and assembly, the competitive and regulatory
environment in which Globalstar will operate, marketing problems and costs and
expenses that may exceed current estimates. There can be no assurance that
substantial delays in any of the foregoing matters would not delay Globalstar's
achievement of profitable operations.

  Use of Estimates in Preparation of Financial Statements

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the amounts of expenses reported for the period. Actual results
could differ from estimates.

  Principles of Consolidation

     The consolidated financial statements include the accounts of Globalstar
and its wholly-owned subsidiary, Globalstar Capital Corporation. All
intercompany accounts and transactions are eliminated.

  Cash and Cash Equivalents

     Cash and cash equivalents consist of cash on hand and highly liquid
investments with original maturities of three months or less.

  Property and Equipment

     Property and equipment are stated at cost. Depreciation is provided using
the straight-line method over the estimated useful lives of the respective
assets, generally three to eight years. Leasehold improvements are amortized
over the shorter of the lease term or the estimated useful lives of the
improvements.

  Globalstar System Under Construction

     Globalstar System Under Construction expenditures include and will include
progress payments and costs for the design, manufacture, test, launch and launch
insurance for 48 low-earth orbit satellites, plus additional spare satellites
(the "Space Segment"), and ground and satellite operations control centers,
gateways and subscriber terminals (handsets) (the "Ground Segment").

     Globalstar intends to depreciate the Space Segment over 7 1/2 years and to
depreciate the Ground Segment over eight years as assets are placed in service.
Service is currently anticipated to commence in 1998.

     Costs incurred related to the development of certain technologies, pursuant
to a cost sharing arrangement included in Globalstar's contract with Qualcomm,
and for the engineering and development of subscriber terminals, are being
charged to operations as incurred.

                                        8
<PAGE>   8

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Financing Costs and Interest

     Deferred financing costs represent costs incurred in obtaining a long-term
credit facility and the estimated fair value of a warrant agreement in
connection with a guarantee of this facility (see Note 6-Credit Facility). Such
costs are being amortized over the term of the credit facility as interest.
Total amortization of deferred financing costs for the years ended December 31,
1996 and 1995 was approximately $5,134,000 and $15,000, respectively.

     Interest costs incurred during the construction of the Globalstar System
are capitalized. Total interest costs capitalized for the years ended December
31, 1996 and 1995 was approximately $9,900,000 and $300,000, respectively. No
interest was capitalized for the period ending December 31, 1994.

  FCC License Costs

     Expenditures, including license fees, legal fees and direct engineering and
other technical support, for obtaining the required FCC licenses are capitalized
and will be amortized over 7 1/2 years, the expected life of the first
generation satellites.

  Deferred Revenues

     Advance payments from Globalstar strategic partners to secure exclusive
rights to Globalstar service territories are deferred. These advance payments
are recoverable by the service providers through credits against a portion of
the service fees payable to Globalstar after the commencement of services.

  Vendor Financing

     Globalstar's contract with SS/L calls for a portion of the contract price
to be deferred as vendor financing and to be repaid, over as long as a five-year
period, commencing upon the initial service and full coverage dates of the
Globalstar System. Amounts deferred as vendor financing are capitalized as costs
of the Globalstar System Under Construction as incurred.

  Preferred Partnership Distributions

     Distributions accrue on the redeemable preferred partnership interests at
6 1/2% per annum. Globalstar is increasing the carrying value of the redeemable
preferred partnership interests to their ultimate redemption value. The
distributions are recorded as reductions against the ordinary partnership
capital accounts.

  Stock-Based Compensation

     As permitted by Statement of Financial Standards No. 123, "Accounting for
Stock-Based Compensation," Globalstar accounts for stock-based awards to
employees using the intrinsic value method in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees".

                                        9
<PAGE>   9

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Net (Loss) Income Allocation

     Net losses are allocated among the partners in proportion to their
percentage interests until the adjusted capital account of a partner is reduced
to zero, then in proportion to, and to the extent of, positive adjusted capital
account balances and then to the general partners.

     Net income is allocated among the partners in proportion to, and to the
extent of, the distributions made to the partners from distributable cash flow
for the period, as defined, then in proportion to and to the extent of negative
adjusted capital account balances and then in accordance with percentage
interests.

     Under the terms of the Partnership Agreement, adjusted partners' capital
accounts are calculated in accordance with the principles of U.S. Treasury
Regulations governing the allocation of taxable income and loss including
adjustments to reflect the fair market value (including intangibles) of
partnership assets upon certain capital transactions including a sale of
partnership interests. Such adjustments are not permitted under generally
accepted accounting principles and, accordingly, are not reflected in the
accompanying consolidated financial statements.

  Income Taxes

     Globalstar was organized as a Delaware limited partnership. As such, no
income tax provision (benefit) is included in the accompanying financial
statements since U.S. income taxes are the responsibility of its partners.
Generally, taxable income (loss), deductions and credits of Globalstar will be
passed proportionately through to its partners.

  Reclassifications

     Certain reclassifications have been made to conform prior-year amounts to
the current-year presentation.

3. PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                        ------------------
                                                                         1996        1995
                                                                        -------     ------
                                                                          (IN THOUSANDS)
    <S>                                                                 <C>         <C>
    Property and equipment consists of:
      Leasehold improvements..........................................  $   473     $  401
      Furniture and office equipment..................................    2,469      1,606
                                                                        -------     ------
                                                                          2,942      2,007
      Accumulated depreciation and amortization.......................   (1,222)      (498)
                                                                        -------     ------
                                                                        $ 1,720     $1,509
                                                                        =======     ======
</TABLE>

     Depreciation and amortization expense for the years ended December 31, 1996
and 1995, and for the period March 23 to December 31, 1994, was $724,000,
$383,000 and $115,000, respectively.

                                       10
<PAGE>   10

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. GLOBALSTAR SYSTEM UNDER CONSTRUCTION

  Total System Cost

     As of February 1997, Globalstar estimates the cost for the design,
construction and deployment of the Globalstar System including working capital,
cash interest on anticipated borrowings and operating expenses to be
approximately $2.5 billion, as compared with approximately $2.2 billion
estimated at December 31, 1995. Actual amounts may vary from this estimate and
additional funds would be required in the event of unforeseen delays, cost
overruns, launch failures, technological risks, adverse regulatory developments,
or to meet unanticipated expenses and for system enhancements and measures to
assure system performance and readiness for the space and ground segments.

     In addition, Globalstar has agreed to purchase from SS/L eight additional
spare satellites that will increase Globalstar's ability to have at least 40
satellites in service during 1999, even in the event of launch failures. If the
launch program is successful, the additional satellites will serve as ground
spares, readily available for launch to replenish the constellation as needed to
respond to satellite attrition during the first generation, or to increase
system capacity as required. If Globalstar were to experience a launch failure,
the costs associated with the construction and launch of replacements would be
substantially covered by insurance, and in that event the cost of the additional
satellites used as replacements, currently estimated at $175 million, would be
reimbursed to Globalstar.

     As of February 13, 1997, Globalstar had raised or received commitments for
approximately $2.0 billion, including the vendor financing arrangements.
Globalstar intends to raise the remaining funds required for the Globalstar
System from a combination of sources, including debt issuance (which may include
an equity component), financial support from the Globalstar partners, projected
service provider payments, projected net service revenues from initial
operations, anticipated payments from the sale of gateways and Globalstar phones
and placement of partnership interests with new and existing strategic
investors. Although Globalstar believes it will be able to obtain these
additional funds, there can be no assurance that such funds will be available on
favorable terms or on a timely basis, if at all.

  The Space Segment

     Globalstar has entered into a contract with SS/L, an affiliate of Loral and
a limited partner of LQSS, to design, manufacture, test and launch its 56
satellite constellation. The price of the contract consists of three parts, the
first for non-recurring work at a price not to exceed $117.1 million, the second
for recurring work at a fixed price of $15.6 million per satellite (including
certain performance incentives of up to approximately $1.9 million per
satellite) and the third for launch services and insurance. SS/L has agreed to
obtain launch vehicles and arrange for the launch of Globalstar's satellites on
Globalstar's behalf for all 56 satellites, and obtain insurance to cover the
replacement cost of satellites or launch vehicles lost in the event of a launch
failure. In certain circumstances these amounts are subject to equitable
adjustment in light of future market conditions, which may, in turn, be
influenced by international political developments. Any change in such
assumptions may result in an increase in the costs paid by Globalstar, which may
be substantial. Termination by Globalstar of this contract would result in
termination fees, which may be substantial.

     During 1996, Globalstar authorized SS/L to alter its original launch plans
and procure three launches of the Starsem Soyuz launch vehicle, which will
launch four Globalstar satellites each. The selection of these launch vehicles
is part of a strategy to place on-orbit a constellation of at least 40
satellites by the first quarter of 1999 even in the event of launch failures. As
a result of this decision, total costs for launch vehicles and insurance are
expected to be approximately $455 million.

                                       11
<PAGE>   11

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. GLOBALSTAR SYSTEM UNDER CONSTRUCTION (CONTINUED)
     SS/L has entered into fixed-price subcontracts aggregating approximately
$650 million, with certain of Globalstar's direct or indirect limited partners.
Some of these contracts are subject to adjustment.

     Globalstar's space segment contract with SS/L calls for a portion of the
contract price to be deferred as vendor financing (see Note 5.).

  The Ground Segment

     Globalstar has entered into a contract with Qualcomm providing for the
design, development, manufacture, installation, testing and maintenance of four
gateways, two ground operations control centers and 100 pre-production
subscriber terminals. The contract provides for reimbursement to Qualcomm,
subject to a cap for certain joint development efforts, for contract costs
incurred, plus a 12% fee thereon. Termination by Globalstar of its contract with
Qualcomm would result in delays and termination fees, which may be substantial.
A portion of the ground operations control center software is being developed by
Globalstar.

     Qualcomm is currently preparing a revised estimate of costs under its
contract with Globalstar and has given Globalstar indication that, due to
additional integration testing procedures to support system readiness on
schedule, scope changes to add features, capabilities and functions, cost growth
and other factors, the total cost may increase to $545 million. The Qualcomm
estimate is subject to further review by Globalstar. In addition, Globalstar has
authorized the expenditure of $25 million for the development of additional
service features and $30 million to fund development efforts of additional
handset suppliers.

     Globalstar and its strategic service providers intend to jointly finance
the procurement of 33 gateways for resale to service providers, thereby
accelerating the deployment of gateways around the world prior to the In-Service
Date. Globalstar has agreed to finance approximately $80 million of the cost of
these gateways and expects to recover its cost from the resale of these gateways
to service providers.

     Globalstar will receive from Qualcomm or its licensee(s) a payment of
approximately $400,000 for each installed gateway sold to a Globalstar service
provider. In addition, Globalstar will receive a payment of up to $10 on each
Globalstar subscriber terminal sold, until Globalstar funding of that design has
been recovered.

     Globalstar has entered into an agreement with Lockheed Martin for the
development and delivery of two satellite operations control centers and 33
telemetry and command units for the Globalstar System. The maximum contract
price is $25.1 million and provides for reimbursement to Lockheed Martin for
contract costs incurred such as labor, materials, travel, license fees,
royalties and general and administrative expenses. Lockheed Martin will receive
a 12% fee under the contract, 6% of which is payable at the time the costs are
incurred, with the remainder payable upon achievement of certain milestones.
Globalstar will own any intellectual property produced under the contract.

5. VENDOR FINANCING LIABILITY

     Globalstar's space segment contract with SS/L calls for approximately $310
million of the contract price to be deferred as vendor financing. Of the $310
million, $90 million is interest bearing at the 30-day LIBOR rate plus 3% per
annum. The remaining $220 million of vendor financing is non-interest bearing.
Globalstar will repay the non-interest bearing portions as follows: $49 million
following the launch and acceptance of 24 or more satellites (the "Preliminary
Constellation"), $61 million upon the

                                       12
<PAGE>   12

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. VENDOR FINANCING LIABILITY (CONTINUED)
launch and acceptance of 48 or more satellites (the "Full Constellation"), and
the remainder in equal installments over the five-year period following
acceptance of the Preliminary and Full Constellations. Payment of the $90
million interest bearing vendor financing will be deferred until December 31,
1998 or the Full Constellation Date, whichever is earlier. Thereafter, interest
and principal will be repaid in twenty equal quarterly installments over the
next five years. At December 31, 1996 and 1995, approximately $72.0 million and
$21.5 million, respectively, of the vendor financing liability was interest
bearing.

6. CREDIT FACILITY

     On December 15, 1995, Globalstar entered into a $250 million credit
agreement (the "Credit Agreement") with a group of banks. Lockheed Martin,
Qualcomm, SS/L and another Globalstar partner have guaranteed $206.3 million,
$21.9 million, $11.7 million and $10.1 million of the Credit Agreement,
respectively. In addition, Loral agreed to indemnify Lockheed Martin for any
liability in excess of $150 million. The Credit Agreement provides that
Globalstar may select loans at varying interest rates, including the Eurodollar
rate plus  5/8%. Globalstar pays a commitment fee on the unused portion. The
Credit Agreement contains covenants requiring Globalstar to meet certain
financial ratios including minimum net worth of $200 million and limits
additional indebtedness and the payment of cash distributions. The Credit
Agreement expires on December 15, 2000.

     In exchange for the guarantee and indemnity, GTL issued warrants to
purchase 4,185,318 shares of GTL common stock at $26.50 as follows: Loral
942,428 warrants, Lockheed Martin 2,511,190 warrants, Qualcomm 367,131 warrants,
SS/L 195,094 warrants and another Globalstar partner 169,475 warrants. Proceeds
from the exercise of the warrants will be used to purchase Globalstar ordinary
partnership interests under a one-for-one exchange arrangement. As part of this
transaction, Globalstar issued GTL warrants to purchase an additional 1,131,168
ordinary partnership interests of Globalstar. The estimated fair value of the
warrant agreement has been recorded as a deferred financing cost in the
accompanying financial statements. Globalstar has also agreed to pay the
guarantors, other than Lockheed Martin, a fee equal to 1.5% per annum of the
average guaranteed amount outstanding under the Credit Agreement. Such fee will
be deferred and will be paid with interest commencing 90 days after the
expiration of the Credit Agreement.

     On February 12, 1997, GTL and the holders of the warrants entered into an
arrangement under which GTL agreed to accelerate the vesting and exercisability
of the warrants to purchase 4,185,318 shares of GTL common stock at $26.50 per
share and the holders agreed to exercise such warrants. GTL also agreed to
register for resale the GTL shares issuable upon exercise of the warrants. In
addition, GTL announced its intention to distribute to the holders of its common
stock rights to subscribe for and purchase 1,131,168 GTL shares for a price of
$26.50 per share of which Loral will receive 159,172 rights. Loral agreed to
purchase all GTL shares not purchased upon exercise of the rights. Upon the
exercise of the warrants and the rights, GTL will receive proceeds of
approximately $140.9 million, which it will use to exercise warrants to purchase
5,316,486 Globalstar ordinary partnership interests at $26.50 per interest.
Globalstar will use such proceeds for the construction of the Globalstar System.

                                       13
<PAGE>   13

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. COMMITMENTS

     The following table presents the future minimum lease payments required
under operating leases that have an initial lease term in excess of one year (in
thousands):

<TABLE>
                <S>                                                   <C>
                1997................................................  $1,045
                1998................................................   1,067
                1999................................................   1,090
                2000................................................     789
                2001................................................     156
                Thereafter..........................................     767
                                                                      ------
                Total minimum payments required.....................  $4,914
                                                                      ======
</TABLE>

     Rent expense for the years ended December 31, 1996 and 1995, and the period
March 23 to December 31, 1994, was approximately $1,067,000, $934,000, and
$373,000, respectively.

8.  SALE OF REDEEMABLE PREFERRED PARTNERSHIP INTERESTS

     On March 6, 1996 and April 3, 1996, GTL purchased 4,615,385 and 153,845
redeemable preferred partnership interests ("RPPIs"), respectively, in
Globalstar using the net proceeds of $299,500,000 from GTL's sale of its
Convertible Preferred Equivalent Obligations (the "CPEOs"). The RPPIs will
convert to ordinary general partnership interests on a one-for-one basis upon
any conversion of the CPEOs, will pay a quarterly preferred distribution to GTL
of 6 1/2% per annum, will be allocated losses of the partnership only after all
adjusted capital accounts of the ordinary partnership interests have been
reduced to zero, and are redeemable on terms comparable to the CPEOs. If still
outstanding, the RPPIs must be redeemed by Globalstar on March 1, 2006 for the
aggregate amount of $310,000,000 plus all unpaid distributions. Globalstar may
elect to make the quarterly preferred distribution and redemption payments to
GTL in cash or general partnership interests. If such distribution is made in
cash, GTL must make its interest payment on the CPEOs in cash. Globalstar may
elect to defer payment of the preferred distribution; in such case, GTL may also
elect to defer interest payment on the CPEOs, however, holders of the CPEOs are
entitled to certain representation rights on the General Partners' Committee of
Globalstar in the event six consecutive interest payments are deferred. Through
December 31, 1996, all payments have been made in cash on a timely basis.

9.  ORDINARY PARTNERS' CAPITAL

  Initial Capital Subscriptions

     Prior to the commencement of Globalstar's operations on March 23, 1994,
Loral and Qualcomm undertook independent efforts at their own risk to explore
the feasibility of a Globalstar-type system. Efforts to develop the Globalstar
System were formalized with the initial funding of Globalstar on March 23, 1994
through capital subscriptions of $50,000,000 for 18,000,000 general partner
interests and $225,000,000 for an aggregate of 18,000,000 limited partner
interests. In connection with the initial capital subscriptions, the partners of
Globalstar agreed to reimburse Loral and Qualcomm for certain expenditures
totaling $18,382,000, incurred related to such efforts from January 1, 1993
through March 22, 1994. These expenditures included development costs and
marketing, general and administrative expenses related to the Globalstar System.
The statements of operations include the costs for these periods under the
heading Pre-Capital Subscription Period.

                                       14
<PAGE>   14

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ORDINARY PARTNER'S CAPITAL (CONTINUED)
     In addition, costs of $2,235,000 were incurred in connection with the FCC
license application. The aggregate expenditures by Loral and Qualcomm of
$20,617,000 were reimbursed through a credit of $11,309,000 issued to the
general partner as a reduction of its required capital subscription payment and
a payment to Qualcomm of $9,308,000. The reimbursed expenses of $18,382,000 have
been charged to partners' capital as of the date of the capital subscription
agreement and allocated to the partners' capital accounts in accordance with the
partnership agreement. The $2,235,000 of costs relating to the FCC license
application are included in the balance sheet.

  Other Arrangements

     In connection with service provider arrangements in China, under which
China Telecommunications Broadcast Satellite Corporation ("China Sat") will act
as the sole distributor of Globalstar services in China, China Sat has the
right, under certain circumstances, to acquire up to 1,875,000 ordinary
partnership interests at $20 per partnership interest. China Sat may purchase
one-half of this amount currently and one-half upon reaching certain target
revenue levels.

  Stock Option Arrangements

     Officers and employees of Globalstar are eligible to participate in GTL's
1994 Stock Option Plan (the "Plan"), which provides for nonqualified and
incentive stock options. The plan is administered by a stock option committee
(the "Committee"), appointed by the GTL Board of Directors. The Committee
determines the option price, the option's exercise date and the expiration date
of each option (provided no option shall be exercisable after the expiration of
ten years from the date of grant). Proceeds received by GTL for options
exercised will in turn be used to purchase Globalstar ordinary partnership
interests under a one-for-one exchange arrangement.

     In 1995, options to purchase 110,400 shares of GTL common stock and in
1996, options to purchase 122,000 shares of GTL common stock were granted under
the Plan. The options generally expire ten years from the date of grant and
become exercisable over the period stated in each option, generally ratably over
a five-year period. All options granted in 1995 and 1996 were non-qualified
stock options with a price equal to fair market value at the date of grant. As
of December 31, 1996, 18,800 shares of common stock were available for future
grant under the Plan, no options were exercised or are exercisable and 1,200
have been cancelled.

     On September 14, 1995, Loral, in its capacity as managing general partner,
granted certain of its officers options to purchase 140,000 shares of the GTL
common stock owned by Loral at an exercise price of $20.00 per share. On
December 12, 1995 Loral, in its capacity as managing general partner, granted
non-employee directors of Loral options to purchase 200,000 shares of the GTL
common stock owned by Loral at an exercise price of $33.375 per share. Such
exercise prices were greater than or equal to the market price at grant date.
These options are immediately exercisable, and expire 12 years from date of
grant; no options were exercised or cancelled during the year.

     On October 9, 1996, Loral, in its capacity as managing general partner,
granted certain of its officers options to purchase 152,000 shares of the GTL
common stock owned by Loral at a price $25.375 below market price on the grant
date. Such options vest over a three year period and expire 10 years from date
of grant; no options were exercised or cancelled during the year.

     In April and December 1996, Loral granted certain officers and employees of
Globalstar options to purchase 99,000 shares of Loral common stock at $10.50 per
share and 5,000 shares of Loral common stock at $18.9375 per share,
respectively. Such exercise prices were equal to the market price at grant

                                       15
<PAGE>   15

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. ORDINARY PARTNER'S CAPITAL (CONTINUED)
date. These options expire ten years from the date of grant and become
exercisable ratably over a five year period.

     As described in Note 2, Globalstar accounts for its stock-based
compensation using the intrinsic value method in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and
its related interpretations. Except for $317,000 of compensation expense in 1996
related to the below market option grant, no compensation expense has been
recognized in Globalstar's financial statements for stock-based compensation.

     Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation"  ("SFAS 123") requires the disclosure of pro forma net
income and earnings per share had Globalstar adopted the fair value method as of
the beginning of 1995. Under SFAS 123, the fair value of stock-based awards to
employees is calculated through the use of option pricing models, even though
such models were developed to estimate the fair value of freely tradable, fully
transferable options without vesting restrictions, which significantly differ
from Globalstar's stock option awards. These models also require subjective
assumptions, including future stock price volatility and expected time to
exercise, which greatly affect the calculated values. Globalstar's calculations
were made using the Black-Scholes option pricing model with the following
weighted average assumptions: expected life, six months following vesting; stock
volatility, 30%; risk free interest rates, 6.25% in 1996 and 6% in 1995; and no
dividends during the expected term. Globalstar's calculations are based on a
multiple option valuation approach and forfeitures are recognized as they occur.
If the computed fair values of the 1996 and 1995 awards (including the
stock-based awards made by Loral to its officers and directors on Globalstar's
behalf) had been amortized to expense over the vesting period of the awards, the
pro forma net loss applicable to ordinary partnership interests would have
increased by $1,755,000 to $73,724,000 in 1996 and would have increased by
$156,000 to $68,393,000 in 1995.

     A summary of the status of the GTL stock option plan at December 31, 1996
and changes during the year then ended is presented below:

<TABLE>
<CAPTION>
                                                                                  WEIGHTED
                                                                                  AVERAGE
                                                                                  EXERCISE
                                                                      SHARES       PRICE
                                                                      -------     --------
    <S>                                                               <C>         <C>
    Granted in 1995 (weighted average fair value $5.33 per share)...  110,400     $ 16.625
    Outstanding at December 31, 1995................................  110,400       16.625
    Granted (weighted average fair value $18.04 per share)..........  122,000       54.90
    Forfeited.......................................................   (1,200)      16.625
                                                                      ---------
    Outstanding at December 31, 1996................................  231,200       36.824
                                                                      =========
</TABLE>

     The following table summarizes information about the stock options
outstanding at December 31, 1996:

<TABLE>
<CAPTION>
                                                                              WEIGHTED AVERAGE
                                                               NUMBER            REMAINING
                        EXERCISE PRICES                      OUTSTANDING   CONTRACTUAL LIFE-YEARS
    -------------------------------------------------------  -----------   ----------------------
    <S>                                                      <C>           <C>
    $16.625 ...............................................     109,200              8.7
     50.375 ...............................................      80,000              9.4
     63.5313...............................................      42,000              9.9
</TABLE>

                                       16
<PAGE>   16
                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)


10. PENSIONS AND OTHER EMPLOYEE BENEFITS

     Prior to April 23, 1996, Globalstar employees were eligible to participate
in the employee benefit plans of Old Loral. Globalstar was charged for the
actual costs of these benefits which for the period March 23 through December
31, 1994, amounted to $321,000, including $55,000 relating to pensions and
retiree health care and life insurance benefits. The costs incurred for the year
ended December 31, 1995 amounted to $710,000, including $121,000 relating to
pensions and retiree health care and life insurance benefits. In April 1996,
separate pension, postretirement health care and life insurance and employee
savings plans were established by Globalstar.

     Pensions:  Globalstar maintains a noncontributory pension plan and a
supplemental pension plan covering certain employees. Eligibility for
participation in these plans vary and benefits are generally based on members'
compensation and years of service. Plan assets are generally invested in U.S.
government and agency obligations and listed stocks and bonds.

     Pension cost for the year ended December 31, 1996 includes the following
components (in thousands):
<TABLE>
    <S>                                                      <C>           <C>
    Service cost-benefits earned during the period.........  $       213
    Interest cost on projected benefit obligation.............................       195
    Actual return on plan assets..............................................      (134)
    Net amortization and deferral.............................................      (151)
                                                                                --------
              Total pension cost..............................................  $    123
                                                                                ========
</TABLE>

     The following presents the plan's funded status and amounts recognized in
the balance sheet at December 31, 1996 (in thousands):

<TABLE>
    <S>                                                                         <C>
    Actuarial present value of benefit obligations:
      Vested benefits.........................................................  $  2,944
                                                                                ========
      Accumulated benefits....................................................  $  3,129
      Effect of projected future salary increases.............................       764
                                                                                --------
      Projected benefits......................................................     3,893
    Plan assets at fair value.................................................     4,156
                                                                                --------
    Plan assets in excess of projected benefit obligation.....................       263
    Unrecognized net gain.....................................................       386
                                                                                --------
    Pension liability.........................................................  $    123
                                                                                ========
</TABLE>

     The principal actuarial assumptions were:

<TABLE>
    <S>                                                                           <C>
    Discount rate...............................................................    7.75%
    Rate of increase in compensation levels.....................................    4.50%
    Expected long-term rate of return on plan assets............................    9.50%
</TABLE>

     Postretirement Health Care and Life Insurance Benefits:  In addition to
providing pension benefits, Globalstar provides certain health care and life
insurance benefits for retired employees and dependents. Participants are
eligible for these benefits when they retire from active service and meet the
eligibility requirements for Globalstar's pension plan. These benefits are
funded primarily on a pay-as-you-go basis with the retiree generally paying a
portion of the cost through contributions, deductibles and coinsurance
provisions.

                                       17
<PAGE>   17

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. PENSIONS AND OTHER EMPLOYEE BENEFITS (CONTINUED)
     Postretirement health care and life insurance costs for the year ended
December 31, 1996 include the following components (in thousands):

<TABLE>
    <S>                                                                         <C>
    Service cost -- benefits earned during the period.........................  $     29
    Interest cost on accumulated postretirement benefit obligation............        32
    Net amortization and deferral.............................................        26
    Return on assets..........................................................        (2)
                                                                                --------
              Total postretirement health care and life insurance costs.......  $     85
                                                                                ========
</TABLE>

     At December 31, 1996, the total accumulated postretirement benefit
obligation was $641,000. Actuarial assumptions used in determining the
accumulated postretirement benefit obligation include a discount rate of 7.75%
at December 31, 1996, and an assumed health care cost trend rate of 10.6%
decreasing gradually to an ultimate rate of 5.5% by the year 2004. Changing the
assumed health care cost trend by 1% in each year would change the accumulated
postretirement benefit obligation at December 31, 1996 by $110,000 and the
aggregate service and interest cost components by $12,000 for the year ended
December 31, 1996.

11. RELATED PARTY TRANSACTIONS

     In addition to the transactions described in Notes 4, 5, 6, 8 and 9,
Globalstar has a number of other transactions with its affiliates. Globalstar
believes that the arrangements are as favorable to Globalstar as could be
obtained from unaffiliated parties. The following describes these related-party
transactions.

     Globalstar has granted to SS/L an irrevocable, royalty-free, non-exclusive
license to use certain intellectual property expressly developed in connection
with the SS/L agreement provided that SS/L will not use, or permit others to
use, such license for the purpose of engaging in any business activity that
would be in material competition with Globalstar. Globalstar has similarly
agreed that it will not license such intellectual property if it will be used
for the purpose of designing or building satellites that would be in competition
with SS/L.

     Globalstar has granted to Qualcomm an irrevocable, non-exclusive, worldwide
perpetual license to intellectual property owned by Globalstar in the Ground
Segment and developed pursuant to the Qualcomm agreement. Qualcomm may, pursuant
to such grant, use the intellectual property for applications other than the
Globalstar System provided that Qualcomm may not for a period of three years
after its withdrawal as a strategic partner or prior to the third anniversary of
the Full Constellation Date, whichever is earlier, engage in any business
activity that would be in competition with the Globalstar System. The grant of
intellectual property to Qualcomm described above is generally royalty free.
Under certain specified circumstances, however, Qualcomm will be required to pay
a 3% royalty fee on such intellectual property.

     A support agreement was entered into among Qualcomm, Loral and Globalstar
pursuant to which Qualcomm agreed to (i) assist Globalstar and SS/L with
Globalstar's system design, (ii) support Globalstar and Loral with respect to
various regulatory matters, including the FCC application and (iii) assist
Globalstar and Loral in their marketing efforts with respect to Globalstar. For
the years ended December 31, 1996 and 1995, and for the period March 23 through
December 31, 1994, Qualcomm has received approximately $1,823,000, $2,712,000
and $2,431,000, respectively, for costs incurred in rendering such support and
assistance.

                                       18
<PAGE>   18

                                GLOBALSTAR, L.P.
                   (A DEVELOPMENT STAGE LIMITED PARTNERSHIP)

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. RELATED PARTY TRANSACTIONS (CONTINUED)
     Certain of Globalstar's limited partners have signed agreements granting
them the right to provide Globalstar System services to users in specific
countries on an exclusive basis, as long as specified minimum levels of
subscribers are met. These service providers will receive certain discounts from
Globalstar's expected pricing schedule generally over a five-year period.

     Globalstar has entered into consulting agreements with certain limited
partners. Costs incurred under these arrangements for the years ended December
31, 1996 and 1995, and for the period March 23 through December 31, 1994, were
$496,000, $1,411,000 and $471,000, respectively. Globalstar anticipates that
similar agreements may be entered into with other strategic partners in the
future.

     Current payable to affiliates consists of:

<TABLE>
<CAPTION>
                                                                     DECEMBER 31,
                                                                 ---------------------
                                                                  1996          1995
                                                                 -------       -------
                                                                    (IN THOUSANDS)
        <S>                                                      <C>           <C>
        SS/L...................................................  $22,572       $26,126
        Qualcomm...............................................   40,903        21,443
        Loral..................................................      462            --
                                                                 -------       -------
        Total..................................................  $63,937       $47,569
                                                                 =======       =======
</TABLE>

     Commencing after the initiation of Globalstar services, LQP, the general
partner of LQSS, will be paid an annual management fee equal to 2.5% of
Globalstar's revenues up to $500 million plus 3.5% of revenues in excess of $500
million. Should Globalstar incur a net loss in any year following commencement
of services, the management fee for that year will be reduced by 50% and LQP
will reimburse Globalstar for management fee payments, if any, received in any
prior quarter of such year, sufficient to reduce its management fee for the year
to 50%. No management fees have been paid to date.

12. REGULATORY MATTERS

     Globalstar and its operations are, and will be, subject to substantial U.S.
and international regulation, including required regulatory approvals in each
country in which Globalstar intends to provide service. Globalstar's business
may be significantly affected by regulatory activities.

13. SUBSEQUENT EVENT

     On February 13, 1997, Globalstar and GTL sold units consisting of $500
million principal amount of Globalstar's 11 3/8% Senior Notes due 2004 and
warrants to purchase 1,032,250 shares of GTL common stock in a private offering.
The notes are senior in right of payment to the redeemable preferred partnership
interests, may not be redeemed prior to February 2002 and are subject to a
prepayment premium prior to 2004. Interest on the notes is payable
semi-annually.

     The indenture for the notes contains certain covenants that among other
things limit the ability of Globalstar to incur additional debt, issue preferred
stock, or pay dividends and certain distributions. In certain limited
circumstances involving a change of control of Globalstar, as defined, each note
is redeemable at the option of the holder for 101% of the principal amount plus
accrued interest.

     The warrants are exercisable on February 19, 1998 at a price of $69.575 per
share. The warrants represent approximately 1.7% of Globalstar's total
partnership interests on a fully diluted basis.

     Globalstar will use the net proceeds of approximately $484 million from the
offering for the construction and deployment of the Globalstar System.

                                       19