<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


                        For Quarter Ended March 31, 2000
                          Commission File Number 1-4929




                               COMSAT CORPORATION
                             6560 Rock Spring Drive
                               Bethesda, MD 20817
                                 (301) 214-3000



                District of Columbia             52-0781863
          (State or other jurisdiction of     (I.R.S. Employer
           incorporation or organization)     Identification No.)





         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (12) months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety (90) days. Yes [X] No [ ]

53,278,465 shares of the Registrant's common stock were outstanding as of March
31, 2000.



<PAGE>


PART I.     Financial Information

Item 1.       Interim Financial Statements for the Corporation (Unaudited)

                       COMSAT CORPORATION AND SUBSIDIARIES
                    Condensed Consolidated Income Statements
<TABLE>
<CAPTION>

                                                                                         Three Months Ended
                                                                                             March 31,
                                                                                     ---------------------------
In thousands, except per share amounts                                                      2000           1999
----------------------------------------------------------------------------------------------------------------

<S>                                                                                     <C>            <C>
Revenues                                                                             $   171,436    $   144,541
                                                                                     ------------   ------------
Operating expenses:
     Cost of services                                                                     91,040         80,502
     Depreciation and amortization                                                        38,749         42,506
     Research and development                                                              2,316          1,720
     General and administrative                                                            6,017          5,201
     Merger costs                                                                          1,291          1,836
                                                                                     ------------   ------------
     Total operating expenses                                                            139,413        131,765
                                                                                     ------------   ------------
Operating income                                                                          32,023         12,776
Other income (expense), net                                                               10,320         17,097
Interest costs, net of amounts capitalized                                                (8,606)        (9,777)
                                                                                     ------------   ------------
Income before income taxes                                                                33,737         20,096
Income tax expense                                                                       (12,745)        (8,070)
                                                                                     ------------   ------------
Net income                                                                           $    20,992    $    12,026
                                                                                     ============   ============

Earnings per common share:
     Basic                                                                           $      0.40    $      0.23
     Assuming dilution                                                                      0.39           0.22


</TABLE>

The accompanying notes are an integral part of these financial statements.

                                        2
<PAGE>


COMSAT CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>

In thousands                                                                          March 31,   December 31,
                                                                                           2000           1999
----------------------------------------------------------------------------------------------------------------
ASSETS
------
Current assets:
     <S>                                                                        <C>              <C>
     Cash and cash equivalents                                                       $    44,694    $    78,632
     Receivables                                                                         167,374        149,973
     Other                                                                                49,438         62,017
                                                                                     ------------   ------------
          Total current assets                                                           261,506        290,622
                                                                                     ------------   ------------

Property and equipment (net of accumulated depreciation
    of $1,268,855 in 2000 and $1,209,924 in 1999)                                        936,815        912,475
Investments                                                                              359,845        327,684
Other assets                                                                             125,685        120,943
                                                                                     ------------   ------------
          Total assets                                                               $ 1,683,851    $ 1,651,724
                                                                                     ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
     Current maturities of long-term debt                                            $       810    $       786
     Accounts payable and accrued liabilities                                            109,304        114,081
     Due to related parties                                                               27,961         27,893
     Other                                                                                14,686          6,928
                                                                                     ------------   ------------
     Total current liabilities                                                           152,761        149,688
                                                                                     ------------   ------------

Long-term debt                                                                           414,716        408,979
Deferred income taxes and investment tax credits                                         117,487        110,214
Accrued post-retirement benefit costs                                                     49,058         49,075
Other long-term liabilities                                                              128,112        136,063
Preferred securities issued by subsidiary                                                200,000        200,000

Stockholders' equity:
     Common stock                                                                        451,010        448,072
     Retained earnings                                                                   248,015        229,681
     Treasury stock                                                                       (9,211)        (8,991)
     Unearned compensation                                                                (3,798)        (2,804)
     Accumulated other comprehensive loss                                                (64,299)       (68,253)
                                                                                     ------------   ------------
          Total stockholders' equity                                                     621,717        597,705
                                                                                     ------------   ------------
          Total liabilities and stockholders' equity                                 $ 1,683,851    $ 1,651,724
                                                                                     ============   ============
</TABLE>

The accompanying notes are an integral part of these financial statements.




                                        3
<PAGE>

                       COMSAT CORPORATION AND SUBSIDIARIES
                   Condensed Consolidated Cash Flow Statements
<TABLE>
<CAPTION>

                                                                                       Three Months Ended March 31,
                                                                                       ------------------------------
In thousands                                                                                2000            1999
---------------------------------------------------------------------------------------------------------------------

<S>                                                                                  <C>            <C>
Cash flows from operating activities:
     Net income                                                                      $   $20,992    $    12,026
     Adjustments to reconcile net income to net cash provided by
     continuing operations:
          Depreciation and amortization                                                   38,749         42,506
          Equity in net earnings of affiliates                                            (4,915)        (5,963)
          Gain on sale of investments                                                     (5,736)       (13,075)
     Changes in operating assets and liabilities                                          (5,252)         8,446
     Other                                                                                (2,438)         1,900
                                                                                     ------------   ------------
     Net cash provided by continuing operations                                           41,400         45,840
     Net cash used by discontinued operations                                             (2,421)        (5,323)
                                                                                     ------------   ------------
     Net cash provided by operating activities                                            38,979         40,517
                                                                                     ------------   ------------

Cash flows from investing activities:
     Purchase of property and equipment                                                  (42,131)       (28,038)
     Investments in unconsolidated businesses                                             (1,250)             -
     Proceeds from sale of investments                                                     8,243         15,100
     Increase in INTELSAT ownership                                                      (37,121)       (38,064)
     Distribution from Inmarsat                                                                -         31,248
     Other                                                                                 2,241            330
                                                                                     ------------   ------------
     Net cash used in investing activities                                               (70,018)       (19,424)
                                                                                     ------------   ------------

Cash flows from financing activities:
     Common stock issued                                                                     997          1,673
     Cash dividends paid                                                                  (2,658)        (2,631)
     Repayment of long-term debt                                                            (192)        (7,238)
     Payment of satellite performance incentives                                          (1,046)        (1,096)
                                                                                     ------------   ------------
     Net cash used by financing activities                                                (2,899)        (9,292)
                                                                                     -------------- ------------

Net increase (decrease) in cash and cash equivalents                                     (33,938)        11,801
Cash and cash equivalents, beginning of period                                            78,632         30,795
                                                                                     ------------   ------------
Cash and cash equivalents, end of period                                             $    44,694    $    42,596
                                                                                     ============   ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                        4
<PAGE>

                       COMSAT CORPORATION AND SUBSIDIARIES
        Notes to Condensed Consolidated Financial Statements (Unaudited)

1.       Financial Statement Presentation

         COMSAT prepared the accompanying unaudited condensed consolidated
         financial statements pursuant to the rules and regulations of the SEC.
         These financial statements should be read together with the financial
         statements and notes in COMSAT's 1999 Annual Report on Form 10-K filed
         with the SEC. Certain information and footnote disclosures normally
         included in financial statements prepared in accordance with generally
         accepted accounting principles have been condensed or omitted. The
         accompanying condensed consolidated financial statements reflect all
         adjustments and disclosures which, in our opinion, are necessary for a
         fair presentation. All such adjustments are of a normal recurring
         nature. The results of operations for the interim periods are not
         necessarily indicative of the results of the entire year.

         Electromechanical Systems, Inc. was excluded from the COMSAT RSI, Inc.
         sale in 1998 and retained by COMSAT pending its possible sale.
         Effective January 1, 2000, Electromechanical Systems is now reported in
         continuing operations. Prior to 2000, Electromechanical Systems was
         reported in discontinued operations. The assets, revenues and income of
         Electromechanical Systems have not been material to COMSAT's
         consolidated financial position or operating results.

2.       Agreement and Plan of Merger with Lockheed Martin Corporation

         COMSAT and Lockheed Martin Corporation entered into an Agreement and
         Plan of Merger on September 18, 1998. Under the terms of the merger
         agreement, Lockheed Martin will acquire all of the outstanding common
         stock of COMSAT in a two-step transaction. On September 18, 1999,
         Lockheed Martin completed the first step of the transaction, a tender
         offer to purchase 49% of COMSAT's outstanding common stock at a price
         of $45.50 per share. The second step of the transaction, the merger of
         COMSAT with a Lockheed Martin subsidiary in which COMSAT's remaining
         stock will be converted into Lockheed Martin common stock on a
         one-for-one basis, remains subject to satisfaction of several
         conditions, including regulatory approvals. See "Management's
         Discussion and Analysis of Financial Condition and Results of
         Operations - Outlook" of this Form 10-Q and Note 2 to the financial
         statements in our 1999 Form 10-K for additional information regarding
         the merger. Prior to completing the tender offer, COMSAT sold COMSAT
         Government Systems, Inc., an authorized carrier subsidiary, to Lockheed
         Martin at book value.

3.       INTELSAT Share Change

         During the first quarter of 2000, we paid $37.1 million to increase our
         total ownership share of INTELSAT to 22.5% from 20.4% at December 31,
         1999.

                                        5
<PAGE>





4.       Change in Depreciable Lives of Satellites

         Effective July 1, 1999, COMSAT extended the depreciable lives of
         certain INTELSAT satellites by two to three years to reflect the
         current estimated useful lives of those satellites. This change had the
         effect of decreasing depreciation expense by $5.1 million in the first
         quarter of 2000.

5.       Regulatory Environment and Litigation

         Regulatory Environment. COMSAT is subject to regulation by the FCC,
         under the Communications Satellite Act and the Communications Act, with
         respect to various aspects of its COMSAT World Systems (CWS) and COMSAT
         Mobile Communications (CMC) businesses. FCC decisions and policies have
         had and will continue to have a significant impact on the corporation.
         In addition, the telecommunications companies which the corporation
         operates in various developing countries are subject to regulation by
         the local regulatory bodies in those countries. Because the regulatory
         environment in those countries is rapidly evolving as the local
         economies are developing, these companies face increasing business
         uncertainties that could have an adverse effect on their operations.

         In March 2000, Congress passed and the President signed the ORBIT Act.
         The ORBIT Act amends the Satellite Act and repeals upon enactment the
         special restrictions on the ownership of COMSAT common stock and FCC
         regulation of COMSAT's capital structure. See "Management's Discussion
         and Analysis of Financial Condition and Results of Operations -
         Outlook" of this Form 10-Q for additional information regarding the
         merger.

         Litigation. The corporation and its subsidiaries are a party to various
         lawsuits and arbitration proceedings and are subject to various claims
         and inquiries, which generally are incidental to the ordinary course of
         their business. See Note 8 for a description of an arbitration
         proceeding related to the Green Bank contract to which the corporation
         is a party. The outcome of legal proceedings cannot be predicted with
         certainty. Based on currently available information, however,
         management does not believe that the outcome of any matter which is
         pending or threatened, either individually or in the aggregate, will
         have a material adverse effect on the long-term consolidated financial
         condition of the corporation. Nevertheless, the outcome of such matters
         could materially affect consolidated results of operations in a given
         year or quarter.

         In January 1999, the U.S. Department of Justice announced that it had
         joined a lawsuit filed by former employees of Electromechanical
         Systems, Inc., a wholly-owned subsidiary of the corporation, under the
         qui tam provisions of the Civil False Claims Act. The corporation
         acquired Electromechanical Systems in 1994 as part of the corporation's
         acquisition of Radiation Systems, Inc. The lawsuit names
         Electromechanical Systems, the corporation and several current and
         former Electromechanical Systems employees and seeks potential damages
         estimated at up to $40,000,000. The Department of Justice


                                        6
<PAGE>

         has been granted a stay of the lawsuit pending the outcome of a
         separate criminal investigation into the same allegations that is
         currently being conducted by the U.S. Attorney's office in Tampa,
         Florida. The corporation intends to vigorously defend this matter but
         cannot predict the ultimate outcome or estimate the amount of
         liability, if any, that could result from any civil or criminal
         sanctions the government may seek. There can be no assurances, however,
         that any such liability would not be material.

6.       Earnings Per Share

         The following reconciliation illustrates the calculation of our basic
         and diluted earnings per share amounts for the three month periods
         ended March 31, 2000 and 1999:

<TABLE>
<CAPTION>

                                                                  Three Months Ended
                                                                      March 31,
                                                                 ---------------------
         In millions, except per share amounts                        2000       1999
         -----------------------------------------------------------------------------
         <S>                                                     <C>           <C>

         Net income                                              $    21.0   $   12.0
                                                                 ==========  =========

         Basic:
         Weighted average shares outstanding                          53.1       52.5
                                                                 ==========  =========
             Per share                                           $     0.40  $    0.23
                                                                 ==========  =========

         Assuming dilution:
         Weighted average shares outstanding                          53.1       52.5
         Stock options                                                 0.1        1.1
         Restricted stock awards and units                               -        0.1
                                                                 ----------  ---------
         Total                                                        53.2       53.7
                                                                 ==========  =========
             Per share                                           $     0.39       0.22
                                                                 ==========  =========
         </TABLE>


7.       Comprehensive Income

         Comprehensive income consists of net income and other gains and losses
         affecting our stockholders' equity that, under generally accepted
         accounting principles, are excluded from net income. For COMSAT, such
         items consist primarily of foreign currency translation gains and
         losses and unrealized gains and losses on marketable equity


                                        7
<PAGE>


         securities.  The components of total comprehensive income (loss) are
         presented in the following table:
<TABLE>
<CAPTION>

                                                                   Three Months Ended
                                                                        March 31,
                                                                 -----------------------
         In millions                                                   2000       1999
         -------------------------------------------------------------------------------

         <S>                                                     <C>          <C>
         Net income                                              $    21.0    $  12.0
         Other comprehensive income (loss):
         Unrealized gain (loss) on securities                         (2.2)     (10.5)
         Foreign currency translation                                  6.1      (50.4)
                                                                 ----------  ----------
         Total comprehensive income (loss)                       $    24.9   $  (48.9)
                                                                 ==========  ==========
</TABLE>

         The unrealized loss on securities represents an adjustment to
         reclassify $2.2 million of unrealized gains to net income in the first
         quarter of 2000. Foreign currency translation principally relates to
         the appreciation (devaluation) of the Brazilian currency (the Real).

8.       Discontinued Operations

         On June 25, 1998, we sold substantially all of COMSAT RSI, Inc. In
         connection with the sale, COMSAT and the purchaser agreed to indemnify
         each other against certain losses. Our indemnification obligations
         generally are limited to losses incurred in excess of an agreed
         threshold amount ($6.7 million) and are capped at a maximum agreed
         amount ($28.0 million) in respect of claims made within an agreed
         survival period (generally, approximately two years). In certain
         instances, however, our indemnification obligations are not subject to
         those limitations.

         COMSAT retained a long-term construction contract for a radio astronomy
         telescope in Green Bank, West Virginia. We also retained a claim
         against the prime contractor to recover $29.0 million in costs incurred
         in performing the Green Bank contract, which are in excess of the
         original contract value. The prime contractor has filed a counterclaim
         seeking $13.1 million in damages for delay. The claim and counterclaim
         are currently in arbitration. There can be no assurance that we will be
         successful in collecting all or any portion of this claim, or that we
         will prevail in defense of the counterclaim.

         The loss upon disposition of discontinued operations is based upon our
         best estimates of the estimated costs to complete the Green Bank
         contract, the amount to be realized from the $29.0 million Green Bank
         contract arbitration claim, potential indemnification claims and other
         costs related to the discontinued operations. These estimates could
         change as additional costs are incurred to complete the Green Bank
         contract, upon resolution of the arbitration and upon resolution of
         other matters related to the COMSAT RSI discontinued operations.


                                        8

<PAGE>

         The net assets of COMSAT RSI remaining were $11.6 million at March 31,
         2000 and $10.5 million at December 31, 1999. The net assets consist
         primarily of receivables on long-term contracts, fixed assets, current
         liabilities and the remaining reserve for the estimated loss on
         disposal.

9.       New Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards (SFAS) No. 133, "Accounting for
         Derivative Instruments and Hedging Activities." The statement requires
         companies to recognize all derivatives as either assets or liabilities,
         with the instruments measured at fair value. The accounting for changes
         in fair value and gains or losses depends on the intended use of the
         derivative and its resulting designation. The statement was originally
         effective for fiscal years beginning after June 15, 1999. In June 1999,
         FASB delayed implementation of this statement by one year, to June 15,
         2000. The corporation will adopt SFAS No. 133 in the first quarter of
         2001 and is evaluating the impact that implementation of this statement
         will have on its consolidated financial statements.

10.      Segment Information

         Selected information regarding our operating segments, World Systems
         (CWS), Mobile Communications (CMC), International (CI) and Laboratories
         (Labs) follows:

<TABLE>
<CAPTION>

Three Months Ended
(in millions)                    CWS       CMC       CI       Labs       Other       Total
--------------------------------------------------------------------------------------------------

March 31, 2000:
Revenues:
<S>                              <C>      <C>      <C>        <C>       <C>       <C>
   External customers          $  98.5   $  29.0   $  28.2   $  11.0   $   4.7    $  171.4
   Intersegment                    0.6       0.8       0.1       0.9      (2.4)          -
                               --------  --------  --------  --------  --------   ---------
   Total                       $  99.1   $  29.8   $  28.3   $  11.9   $   2.3    $  171.4
                               ========  ========  ========  ========  ========   =========

Segment income (loss)          $  50.4   $   6.9   $  (6.7)  $  (1.0)  $ (15.9)   $   33.7
                               ========  ========  ========  ========  ========   =========

March 31, 1999:
Revenues:
External customers             $  78.4   $  29.6   $  27.7   $   8.8   $     -    $  144.5
Intersegment                       0.5       0.1         -       1.1      (1.7)          -
                               --------  --------  --------  --------  --------   ---------
Total                          $  78.9   $  29.7   $  27.7   $   9.9   $  (1.7)   $  144.5
                               ========  ========  ========  ========  ========   =========

Segment income (loss)          $  29.3   $   4.8   $   8.8   $  (1.5)  $ (21.3)   $   20.1
                               ========  ========  ========  ========  ========   =========
</TABLE>

We evaluate the performance of our operating segments based on income (loss)
before income taxes and interest costs. The "Other" column includes
Electromechanical Systems, the elimination of intersegment revenues, corporate
related items and interest costs, net of amounts capitalized.


                                        9
<PAGE>


Item 2:  Management's Discussion and Analysis of Financial Condition and Results
         of Operations for the Quarter Ended March 31, 2000



                             ANALYSIS OF OPERATIONS

Consolidated Operations

Revenues

         Consolidated revenues for the first quarter of 2000 were $171.4
million, which was $26.9 million or 19% better than the first quarter of 1999.
This was primarily due to increased revenues in World Systems. In addition,
revenue improvements were recorded in all other segments as compared to the same
period of 1999.

Operating Income

         Operating income for the three months ended March 31, 2000 was $32.0
million, or $19.2 million higher than the same period of last year. This was
principally due to increased operating income in World Systems. Operating income
also improved in Mobile Communications and the Laboratories. The operating loss
in International was higher in the first quarter of 2000, as compared to the
same period of 1999. In addition, the first quarter 2000 results included $1.3
million in expenses related to the proposed merger with Lockheed Martin
Corporation as compared to $1.8 million during the first quarter of 1999.

Other Income (Expense), Net

         Other income (expense), net for the first quarter of 2000 was income of
$10.3 million, which compares to income of $17.1 million for the same period of
1999. The first three months of 2000 included gains of $5.7 million from the
sale of investments. The comparative quarter of 1999 included a $13.1 million
gain from the sale of an investment.

Interest Costs, Net of Amounts Capitalized

         Interest costs, net of amounts capitalized, for the first three months
of 2000 were $8.6 million, which was $1.2 million below the first quarter of
1999. This change was primarily due to an increase in the amount of interest we
capitalized related to the construction of INTELSAT satellites.

Income Before Income Taxes

         Income before income taxes for the first quarter of 2000 was $33.7
million, which was $13.6 million higher than the same period of 1999. This
increase was primarily the result of a $21.1 million improvement in World
Systems income before taxes. In addition, increases in income before taxes in
Mobile Communications and Laboratories were partially offset by


                                       10
<PAGE>

increased losses in International. Gains on the sale of investments were $5.7
million during the first quarter of 2000, compared to $13.1 million in the first
quarter of 1999.

Income Tax Expense

         Income tax expense for the first quarter of 2000 was $12.7 million,
compared to expense of $8.1 million in the first quarter of l999 and was higher
due to increased income.

Net Income

         Net income for the three months ended March 31, 2000 was $21.0 million,
or $9.0 million higher than the same period last year. The earnings per share on
a fully diluted basis for the first quarter of 2000 was $0.39, as compared to
$0.22 for the first quarter of 1999.

Segment Operating Results

         We report our operating results in four segments: World Systems, Mobile
Communications, International and the Laboratories. We evaluate the performance
of our operating segments based on segment income (loss) before taxes and
interest costs. Prior to January 1, 2000, Electromechanical Systems, Inc. was
included in discontinued operations. Beginning in 2000, Electromechanical
Systems is being reported in continuing operations in the "other" categories
listed below.


<TABLE>
<CAPTION>

Results by Segment:

                                              Quarter Ended March 31,
                                           --------------------------------
In millions                                      2000                 1999
---------------------------------------------------------------------------
REVENUES
--------
<S>                                          <C>                  <C>
World Systems                                $  99.1              $  78.9
Mobile Communications                           29.8                 29.7
International                                   28.3                 27.7
Laboratories                                    11.9                  9.9
Eliminations and other                           2.3                 (1.7)
                                             -----------------------------
         Total                               $ 171.4                144.5
                                             =============================

SEGMENT INCOME (LOSS)
---------------------
World Systems                                $  50.4              $  29.3
Mobile Communications                            6.9                  4.8
International                                   (6.7)                 8.8
Laboratories                                    (1.0)                (1.5)
                                             -----------------------------
         Total segment income                   49.6                 41.4

General and administrative expenses             (6.0)                (5.2)
Merger costs                                    (1.3)                (1.8)
Interest costs, net of amounts capitalized      (8.6)                (9.8)
Other income (expense), net                        -                 (4.5)
                                             ------------------------------
         Total                               $  33.7              $  20.1
                                             ==============================

</TABLE>

                                       11

<PAGE>

World Systems

         World Systems revenues in the first three months of 2000 were $99.1
million, which was $20.2 million or 26% higher than the same period last year.
World Systems first quarter 2000 segment income was $50.4 million, as compared
to $29.3 million for the same period of 1999. These results include $9.2 million
in segment income realized from the settlement of a commercial lawsuit. Of this
amount, $5.7 million was included in revenues. The remainder of the improvement
in revenues was principally due to increased demand for Internet services and
other high-speed data traffic and our increased ownership in INTELSAT. The
improvement in segment income was primarily the result of the settlement of the
lawsuit, the change in the depreciable lives of satellites in the second half of
1999 and increased ownership in INTELSAT. In March 2000, we paid $37.1 million
to increase our total ownership share of INTELSAT from 20.4% to 22.5%.

Mobile Communications

         Mobile Communications first quarter 2000 revenues were $29.8 million,
which was $100,000 above the same period last year. This was primarily the
result of increased revenue from the U.S. Navy lease contract, offset by lower
analog telephone traffic. Mobile Communications segment income in the first
quarter was $6.9 million, or $2.1 million above the first three months of 1999.
The increase in segment income was due to a $2.0 million decrease in operating
expenses and a $2.4 million gain from the sale of a portion of Mobile
Communications stock in ICO Global Communications (Holdings) Limited. COMSAT
wrote off its investment in ICO after ICO filed for bankruptcy in the third
quarter of 1999. Partially offsetting these improvements were the following
items related to our investment in Inmarsat. As a result of the privatization of
Inmarsat in April 1999, Mobile Communications share of Inmarsat's results now
include income taxes that were not reported in Mobile Communications results in
the first quarter of 1999. The income taxes decreased Mobile Communications
first quarter 2000 segment income by $1.5 million. In addition, Mobile
Communications 1999 results included $1.5 million from its share of a gain
realized by Inmarsat in March 1999.

International

         International's first quarter 2000 revenues were $28.3 million, or 2%
above the $27.7 million reported in the comparative period of last year. This
improvement was due to revenue increases in Argentina and Turkey, offset in part
by declines in Mexico and Colombia. International's segment loss in the first
quarter of 2000 was $6.7 million, which compares to segment income of $8.8
million in the first quarter of 1999. During the first quarter of 1999,
International sold a portion of its investment in Viatel, Inc. and recognized a
$13.1 million gain. Exclusive of this gain, International's loss in the first
quarter of 2000 was $2.4 million higher than the same period of 1999. This
increase in International's segment loss was primarily due to higher operating
costs in Brazil and lower revenues in Mexico and Colombia.


                                       12

<PAGE>

Laboratories

         The Laboratories revenues in the first quarter of 2000 were $11.9
million, which was $2.0 million or 20% higher than the same period last year.
The segment loss for the Laboratories for the first quarter was $1.0 million, or
$500,000 less than the loss for the first quarter of 1999. The improvement in
both revenues and segment loss was due primarily to growth in the Laboratories'
systems and technology business.


                                     OUTLOOK

         Many of the statements that follow are forward looking and relate to
anticipated future events and operating results. You should consider the factors
described under "Forward-Looking Statements--Safe Harbor Provisions" in
evaluating the forward-looking statements in this report.

Business Combination with Lockheed Martin

         COMSAT entered into an Agreement and Plan of Merger with Lockheed
Martin on September 18, 1998. Under that agreement, Lockheed Martin agreed to
acquire all of COMSAT's outstanding common stock in a two-step transaction.

         The first step, a cash tender offer to purchase up to 49% of COMSAT's
common stock at a price of $45.50 per share, was completed on September 18,
1999. As a result, Lockheed Martin now owns approximately 49% of COMSAT's common
stock.

         The second step is the merger of COMSAT with a wholly-owned subsidiary
of Lockheed Martin. In the merger, shareholders will receive one share of
Lockheed Martin common stock for each share of COMSAT common stock that they
own.

         The Open-Market Reorganization for the Betterment of International
Telecommunications Act (commonly referred to as the "ORBIT Act"), which was
passed by Congress and signed by the President in March 2000, removes the
ownership limitation on COMSAT's common stock contained in the Communications
Satellite Act of 1962 and will permit the merger to be completed following
receipt of required regulatory approvals and satisfaction of closing conditions.
Other provisions of the ORBIT Act are described under "Legislative and
Regulatory Developments." COMSAT expects that the required regulatory approvals
will be received and other closing conditions will be satisfied so that the
merger can be concluded this summer.

         Completion of the merger remains subject to satisfaction of the
conditions set forth in the merger agreement. The principal remaining conditions
are:


   o     Receipt of transfer of control authorization from the FCC and remaining
         consents from other governmental authorities; and

   o     There is no event that has had or would reasonably be expected to have
         a significant adverse effect on COMSAT.

                                       13

<PAGE>


         Before the merger can be completed, Lockheed Martin must obtain FCC
approval for the transfer of control, of COMSAT. On April 22, 2000, the waiting
period under the Hart-Scott-Rodino Antritrust Improvements Act expired with
respect to the notice previously filed by Lockheed Martin to report its proposed
secondary acquisition, via the merger, of certain minority interests that COMSAT
currently holds (e.g., Inmarsat and New Skies). In addition, Lockheed Martin and
COMSAT have filed notices pursuant to antitrust laws with the applicable
competitive authorities in several foreign jurisdictions. We expect that the FCC
and foreign antitrust authorities will grant the final required approvals and
consents. Their response time could affect the estimated time frame for closing
the merger. We do not believe that passage of the ORBIT Act has had a
significant adverse effect on COMSAT. There can be no assurance that a
subsequent event will not occur which could reasonably be expected to have a
significant adverse effect on COMSAT. If the merger is not completed by
September 18, 2000, either Lockheed Martin or COMSAT may terminate the merger
agreement.

         For the merger to qualify as a tax-free reorganization, in addition to
certain other conditions, the value of the Lockheed Martin common stock
exchanged for COMSAT common stock in the merger must be at least 40% of the
total consideration received by COMSAT shareholders in the tender offer and
merger combined, assuming that the tender offer and merger are treated as a
single integrated transaction for U.S. federal income tax purposes. COMSAT
shareholders received $45.50 per share in cash for shares tendered in the tender
offer. Whether the merger will qualify as a tax-free reorganization will depend
upon Lockheed Martin's stock price immediately prior to the merger, as well as
the number of COMSAT shares outstanding at the time of the merger and the number
of fractional share interests paid in cash. Based on the number of COMSAT shares
outstanding as of March 31, 2000, if the trading price of Lockheed Martin common
stock is less than approximately $28.83 per share immediately prior to
consummation of the merger and assuming other conditions are met, the
consideration to be received by COMSAT shareholders in the merger will be
taxable for U.S. federal income tax purposes to the extent of any applicable
gain or loss. If the merger had been consummated as of May 8, 2000, based on the
price for Lockheed Martin common stock as of that date and assuming integration
of the tender offer and merger, the merger would not have qualified as a
tax-free reorganization, and COMSAT shareholders would have recognized gain or
loss on the exchange of shares in the merger. The tax consequences of the merger
to shareholders will depend on their own situation. Therefore, shareholders
should consult their tax advisors for a full understanding of these tax
consequences.

Restructuring of INTELSAT

         INTELSAT is continuing its efforts to transform itself from a
treaty-based, intergovernmental organization to a private, commercial company.
In October 1999, INTELSAT's Assembly of Parties (a meeting of the member
governments of INTELSAT) unanimously approved a plan targeting the privatization
of INTELSAT as early as April 1, 2001. Following privatization, INTELSAT would
operate as a private corporation without intergovernmental privileges and
immunities. While the new privatized company initially would not be publicly
traded, it is contemplated that an initial public offering would take place in
2002, subject to market conditions and the actual date operations are
transferred to the restructured INTELSAT. COMSAT is committed to privatizing
INTELSAT in a pro-competitive manner at the earliest possible time. As a


                                       14

<PAGE>

minority shareholder and the U.S. Signatory to INTELSAT, however, we lack the
ability to independently effect a restructuring of INTELSAT. The success and
timing of our efforts will depend on our ability to achieve a consensus among
other Signatories and participating member governments.

Legislative and Regulatory Developments

         In March 2000, Congress passed and the President signed the ORBIT Act.
The ORBIT Act amends the Communications Satellite Act of 1962 and repeals upon
enactment the special restrictions on the ownership of COMSAT stock. The
legislation will permit the merger with Lockheed Martin to be completed
following receipt of the remaining required regulatory approvals.

         The ORBIT Act also establishes an April 1, 2001 deadline for the
privatization of INTELSAT, as well as criteria for determining whether the
privatizations of INTELSAT, Inmarsat and New Skies will be deemed
"pro-competitive." These criteria include the requirement that each entity
conduct an initial public offering by a date certain, that such public offerings
substantially dilute existing ownership of the satellite systems and that each
entity's board have a majority of independent directors. The FCC may extend the
deadlines for completion of the public offering in consideration of market
conditions and relevant business factors related to the timing of the offering,
but the extensions may not permit the offering to occur after a specified date.
The dates prescribed by the ORBIT Act for the initial public offerings to occur
and the last extension dates are:

   o     For INTELSAT--October 1, 2001 (unless extended by the FCC but not later
         than December 31, 2002);

   o     For Inmarsat--October 1, 2000 (unless extended by the FCC but not later
         than December 31, 2001); and

   o     For New Skies--July 1, 2000 (unless extended by the FCC but not later
         than July 31, 2001).

         The ORBIT Act provides that, if these and other criteria are not met,
the FCC may not license U.S. users (or may limit such licenses) to access the
satellite capacity of the privatized entities for so-called "non-core" services.
Non-core services include, for INTELSAT and New Skies, everything but capacity
for public-switched voice communications and occasional use television, and for
Inmarsat, all commercial services. COMSAT believes that the privatization
criteria are achievable within the statutory deadlines and, therefore, does not
believe that severe sanctions (other than possible user license conditions) are
likely to be imposed. The ORBIT Act also includes an exception for national
security, law enforcement and public safety applications, and various other
qualifications.

         During the transition to privatization, the ORBIT Act also restricts
INTELSAT, Inmarsat and New Skies from providing "additional services." Unlike
the bill that previously passed the House, however, the ORBIT Act's definition
of additional services does not include any services that COMSAT is currently
providing. Thus, the ORBIT Act is not expected to disrupt the provision of


                                       15

<PAGE>

existing services, such as Internet and high-speed data transmission, by COMSAT
to its customers.

         The ORBIT Act codifies an FCC action taken in 1999 that permits U.S.
users and telecommunication providers to acquire satellite capacity directly
from INTELSAT without going through COMSAT ("Level 3" direct access). Unlike the
bill previously passed by the House, however, the ORBIT Act does not allow
"Level 4" direct access (direct investment in INTELSAT by other U.S. system
users and telecommunication providers). As a result, COMSAT will remain the sole
U.S. investor in INTELSAT until privatization.

         The ORBIT Act repeals the provisions of the Satellite Act that require
COMSAT to have three Presidentially-appointed directors. Two of those three
positions were vacant pending Presidential appointment. The term of COMSAT's
remaining Presidentially-appointed director expired upon enactment of the ORBIT
Act.

         In addition, the ORBIT Act removes COMSAT's immunity from suit in its
capacity as an INTELSAT Signatory. A limited exception is provided for actions
taken to carry written out instructions of the U.S. Government.

         Prior to enactment of the legislation, on September 15, 1999, the FCC
adopted a new policy of direct access to INTELSAT in the United States.
Specifically, the FCC authorized "Level 3" direct access. The FCC rejected
requests to allow entities other than COMSAT to invest in INTELSAT proportionate
to their usage, finding that the FCC lacked the authority under the Satellite
Act to permit "Level 4" direct access. In addition, the FCC authorized COMSAT to
file a tariff to charge all direct access users a surcharge to recover costs
incurred by COMSAT as Signatory to INTELSAT. COMSAT's new direct access tariff
became effective on December 6, 1999. Under the tariff, direct access users in
2000 must pay COMSAT 5.58% of the rate the direct access users pay to INTELSAT
for capacity ordered directly. The level of this surcharge will be reviewed in
late 2000, and the surcharge will be eliminated upon privatization of INTELSAT.

         In the direct access proceeding, the FCC also rejected claims that
COMSAT's long-term carrier contracts should be subject to government abrogation
under the "fresh look" doctrine, thus preserving COMSAT's backlog of contracted
capacity commitments. Moreover, the FCC declined at that time to pursue claims
for "portability" of COMSAT's capacity to users.

         The ORBIT Act, however, requires the FCC to complete a proceeding
within six months of enactment to determine if users or providers of
telecommunications services have sufficient opportunity to access INTELSAT space
segment capacity directly from INTELSAT. If the FCC determines that such
opportunity does not exist, the FCC must take appropriate action to facilitate
direct access.

         COMSAT pays required fees to the FCC for applications and other filings
and for annual regulatory fees applicable to it as a U.S. common carrier. The
FCC has not, however, imposed "space station" regulatory fees on COMSAT with
respect to the satellites of INTELSAT and Inmarsat. In December 1999, the U.S.
Court of Appeals for the D.C. Circuit reviewed the FCC order setting regulatory
fees for 1998. The Court remanded the case to the FCC to reconsider COMSAT's

                                       16

<PAGE>

long-standing exemption from space station regulatory fees. The ORBIT Act
clarifies that the FCC has authority to impose regulatory fees on COMSAT similar
to the regulatory fees that it imposes on other entities providing similar
services. It is unclear whether space station regulatory fees can be imposed on
COMSAT, since COMSAT is a satellite services provider and not a satellite system
operator. Moreover, if such fees were imposed, it is unclear how such fees would
be calculated and which satellites would be affected. It is not expected that
space station regulatory fees would be imposed on COMSAT subsequent to the
privatization of INTELSAT and Inmarsat. Pending completion of a proceeding by
the FCC, it is difficult to quantify the level of space station fees that might
be imposed. We do not believe that such fees will have a material adverse effect
on COMSAT's long-term financial condition. Nevertheless, the imposition of such
fees could materially affect consolidated results of operations in a given year
or quarter.

Year 2000 Issue (Year 2000 Readiness Disclosure)

         Since January 1, 2000, we have not experienced any material year 2000
issue problems. The year 2000 issue stemmed from existing computer programs that
were written using two digits rather than four digits to define the applicable
year (e.g., "99" for 1999). It was expected that some computer programs with
date-sensitive software might not operate properly when the last two digits
become "00," as occurred on January 1, 2000. We are continuing to monitor all
functions for year 2000 compliance.

Forward-Looking Statements--Safe Harbor Provisions

        This report contains "forward-looking statements" within the meaning of
the federal securities laws. Those statements are not based on historical fact
and may not prove to be accurate. Words such as "believe," "estimate,"
"anticipate," "project," "intend," "expect," "plan," "scheduled" and similar
expressions are intended to identify forward-looking statements.

        Statements that look forward in time are based on management's current
expectations and assumptions, which may be affected by subsequent developments
and business conditions. All forward-looking statements involve risks and
uncertainties. Forward-looking statements and COMSAT's future operating results
may be affected by various factors. These factors include, among others:

   o     the timing and outcome of regulatory and other governmental proceedings

   o     implementation of the ORBIT Act, including INTELSAT's reaction to its
         enactment

   o     the proposed merger of COMSAT with Lockheed Martin

   o     developments concerning the privatization of INTELSAT

   o     marketconditions and other factors affecting the ability of INTELSAT,
         Inmarsat and New Skies to complete their planned initial public
         offerings

                                       17

<PAGE>


   o     international business conditions (e.g., foreign currency devaluation
         and economic instability in foreign Markets)

   o     increased competition for satellite and networking services

   o     the recent ability of users to access the INTELSAT satellite system
         directly without contracting through COMSAT

   o     the responsiveness of customers to COMSAT's existing and new service
         offerings

   o     the outcome of contingencies, including litigation and other matters

   o     economic, political and technological risks and uncertainties, and

   o     subsequent developments and changes in business conditions not
         currently known or anticipated.

         Accordingly, there can be no assurance that actual future results will
not differ materially from anticipated results.

         You should not place undue reliance on forward-looking statements which
speak only as of the date of this report. We do not undertake any obligation to
update the forward-looking statements to reflect events or circumstances or
changes in expectations after the date of this report or to reflect the
occurrence of subsequent events. The forward-looking statements in this document
are intended to be subject to the safe harbor protection provided by the federal
securities laws.

         For additional discussion identifying some important factors that could
cause actual results to vary materially from those anticipated in the
forward-looking statements, see our SEC filings, including but not limited to
our Annual Report on Form 10-K for 1999, as well as the matters identified
throughout this report.


                         LIQUIDITY AND CAPITAL RESOURCES

         The primary source of cash during the first quarter of 2000 was cash
from operations. COMSAT's working capital at March 31, 2000 was $108.7 million,
which was $32.2 million lower than at the end of 1999. This decrease in working
capital was the result of COMSAT using $37.1 million of cash to purchase an
additional 2.1% of INTELSAT ownership share in March 2000.

         We have access to short-term and long-term financing at favorable
rates. Our current long-term debt ratings are A- from Standard and Poor's and
Baa1 from Moody's. Our current commercial paper ratings are A2 from Standard and
Poor's and P2 from Moody's. Following the announcement of the proposed merger
with Lockheed Martin, both Standard and Poor's and Moody's placed their ratings
on our long-term debt under review for possible downgrades. Shortly after
completion of the tender offer, Moody's downgraded COMSAT's long-term debt and


                                       18


<PAGE>


the Monthly Income Preferred Securities issued by COMSAT Capital I, L.P. from A3
to Baa1. Ratings from both Moody's and Standard and Poor's remain under review
for possible further downgrades as a result of the merger. The ratings for
commercial paper are not under review at this time.

         Our commercial paper program had no borrowings outstanding at March 31,
2000. A $140 million credit agreement, expiring at December 15, 2000, backs up
our commercial paper program. We had $36 million remaining under a $100 million
medium-term note program at March 31, 2000. The medium-term note program is part
of a $200 million debt securities shelf registration program initiated in 1994.


                                       19

<PAGE>


Item 3.      Quantitative and Qualitative Disclosures About Market Risk

         We do not hold or issue derivative financial instruments. We finance
our operations and manage our interest rates through a combination of fixed-rate
long-term debt and Monthly Income Preferred Securities (MIPS) issued by a
subsidiary. The MIPS pay a fixed dividend. Borrowing under our short-term
commercial paper program could expose our operating results to changes in
short-term rates. No commercial paper was outstanding during the three months
ended March 31, 2000.

         The corporation invests its excess cash in highly liquid investments
with a maturity of three months or less. Such investments can expose our
operating results to changes in short-term rates.

         International conducts its operations primarily through majority-owned
and wholly-owned subsidiaries. We have financed International's subsidiaries
through capital contributions. International's largest subsidiaries utilize the
local currency as their functional currency. Therefore, fluctuations in exchange
rates relative to the U.S. Dollar are recorded as cumulative translation
adjustments as a component of our stockholders' equity. Fluctuations in exchange
rates relative to the U.S. Dollar have not had a material impact on our cash
flows or results of operations.


                                       20


<PAGE>


                           PART II. Other Information

Item 1.           Legal Proceedings
                  -----------------
                  See note 5 of this Form 10-Q, note 11 to financial statements
                  contained in our 1999 Form 10-K and Item 3 of our 1999 Form
                  10-K, which are incorporated herein by reference.

                  COMSAT World Systems results for the first quarter of 2000
                  include $9.2 million in segment income realized from the
                  settlement of a commercial lawsuit.

                  In June 1999, after a competitive procurement, the U.S. Navy
                  awarded a contract to COMSAT Mobile Communications for
                  leased-channel high-speed data satellite communications
                  services. A competing bidder, Stratos Mobile Networks (a
                  subsidiary of Stratos Global), sued in the U.S. Court of
                  Federal Claims to challenge the award. The court denied
                  preliminary injunctive relief, and COMSAT began performing the
                  contract. In September 1999, however, the court concluded that
                  Stratos had been deprived of a fair opportunity to bid,
                  because of a latent ambiguity in the solicitation criteria.
                  The court ordered a recompetition of the contract to be held
                  by January 2000, with the winner to begin performing the
                  contract in January 2001. Both COMSAT and the Navy appealed,
                  and in April 2000 the U.S. Court of Appeals for the Federal
                  Circuit reversed and vacated the decision of the lower court.

Item 2.           Change in Securities
                  ---------------------
                  None

Item 3.           Defaults Upon Senior Securities
                  -------------------------------
                  None

Item 4.           Submission of Matters to a Vote of Security Holders
                  ----------------------------------------------------
                  None

Item 5.           Other Information
                  -----------------
                  None

Item 6.           Exhibits and Reports on Form 8-K
                  --------------------------------
                  (a)      Exhibits
                           --------

                           27 - Financial Data Schedule

                  (b)      Reports on Form 8-K
                           --------------------

                           None


                                       21

<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                               COMSAT Corporation
                               ------------------




                              By: /s/ Alan Korobov
                              --------------------
                                  Alan Korobov
                                   Controller


Date:    May 9, 2000




                                       22