##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-Q
   QUARTERLY
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
  For the
    quarterly period ended June 30, 2009
  Commission file number 1-14180
  Loral Space &
    Communications Inc.
  600 Third
    Avenue
    New York, New York 10016
    Telephone:
    (212) 697-1105
  Jurisdiction
    of incorporation: Delaware
  IRS
    identification number:
    87-0748324
   þ o
  Regulation S-T o o
  Rule 12b-2
  Large accelerated filer
    o

Accelerated filer
    þ

Non-accelerated filer
    o

Smaller reporting company
    o(Do not check if a smaller reporting company)   þ o
  Rule 12b-2 o þ




---



##### 



LORAL
    SPACE AND COMMUNICATIONS INC.
  INDEX TO
    QUARTERLY REPORT ON
    FORM 10-Q
 For the
    quarterly period ended June 30, 2009
  Page No.PART I  FINANCIAL
    INFORMATIONItem 1:

Financial Statements (Unaudited)Condensed Consolidated Balance Sheets as of
    June 30, 2009 and December 31, 2008


2Condensed Consolidated Statements of Operations
    for the three and six months ended June 30, 2009 and
    June 30, 2008


3Condensed Consolidated Statements of Equity for
    the six months ended June 30, 2009 and June 30,
    2008


4Condensed Consolidated Statements of Cash Flows
    for the six months ended June 30, 2009 and June 30,
    2008


5Notes to Condensed Consolidated Financial
    Statements


6Item 2:

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


41Item 3:

Quantitative and Qualitative Disclosures About
    Market Risk


61Item 4:

Disclosure Controls and Procedures


63PART II  OTHER
    INFORMATIONItem 1:

Legal Proceedings


63Item 1A:

Risk Factors


63Item 4:

Submission of Matters to a Vote of Security
    Holders


64Item 6:

Exhibits


64Signatures


66   1




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##### Table of Contents



PART 1.
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  LORAL
    SPACE & COMMUNICATIONS INC.CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data)
 (Unaudited)
  June 30,


December 31,2009


2008ASSETSCurrent assets:Cash and cash equivalents

$
103,574


$
117,548Contracts-in-process


199,881



213,651Inventories


98,669



109,755Other current assets


33,878



54,286Total current assets


436,002



495,240Property, plant and equipment, net


198,686



188,270Long-term receivables


216,774



184,701Investments in affiliates


159,602



72,642Intangible assets, net


25,939



31,578Other assets


20,607



23,436Total assets

$
1,057,610


$
995,867LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$
106,751


$
91,052Accrued employment costs


39,266



41,819Customer advances and billings in excess of costs and profits


233,991



184,592Other current liabilities


15,941



31,911Total current liabilities


395,949



349,374Borrowings under revolving credit facility






55,000Pension and other post retirement liabilities


229,468



230,660Long-term liabilities


156,947



151,176Total liabilities


782,364



786,210Commitments and contingenciesEquity:Preferred stock, $0.01 par value, 10,000,000 shares
    authorized, no shares issued and outstanding






Common stock:Voting common stock, $.01 par value; 50,000,000 shares
    authorized, 20,317,877 and 20,286,992 shares issued and
    outstanding


203



203Non-voting common stock, $.01 par value;
    20,000,000 shares authorized, 9,505,673 shares issued
    and outstanding


95



95Paid-in capital


1,010,859



1,007,011Accumulated deficit


(687,455
)


(750,922
)Accumulated other comprehensive loss


(48,456
)


(46,730
)Total equity


275,246



209,657Total liabilities and equity

$
1,057,610


$
995,867    2




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.CONDENSED CONSOLIDATED STATEMENTS OF
    OPERATIONS
 (In thousands, except per share
    amounts)
 (Unaudited)
  Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008Revenues

$
271,447


$
208,061


$
483,938


$
426,598Cost of revenues


254,215



184,103



451,416



391,115Selling, general and administrative expenses


24,927



25,562



45,697



47,897Gain on recovery from customer bankruptcy






(6,140
)






(6,140
)Operating (loss) income


(7,695
)


4,536



(13,175
)


(6,274
)Interest and investment income


1,925



1,952



3,578



8,282Interest expense


1,219



(305
)


(47
)


(656
)Gain on litigation recovery






58,295







58,295Impairment of available for sale securities






(3,500
)






(3,500
)Other expense


(12
)


(223
)


(99
)


(296
)(Loss) income before income taxes and equity in net income
    (losses) of affiliates


(4,563
)


60,755



(9,743
)


55,851Income tax provision


(6,418
)


(11,643
)


(6,398
)


(13,419
)(Loss) income before equity in net income (losses) of affiliates


(10,981
)


49,112



(16,141
)


42,432Equity in net income (losses) of affiliates


85,276



2,838



79,608



(61,699
)Net income (loss) attributable to Loral Space &
    Communications Inc.


74,295



51,950



63,467



(19,267
)Preferred dividends






(6,099
)






(12,087
)Net income (loss) applicable to Loral Space &
    Communications Inc. common shareholders

$
74,295


$
45,851


$
63,467


$
(31,354
)Basic and diluted income (loss) per share:Basic income (loss) per share

$
2.50


$
2.27


$
2.13


$
(1.56
)Diluted income (loss) per share

$
2.48


$
2.16


$
2.13


$
(1.56
)Weighted average shares outstanding:Basic


29,753



20,169



29,727



20,162Diluted


29,904



21,614



29,803



20,162    3




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF EQUITY
 (In thousands)
 (Unaudited)
  Series A-1


Series B-1




















AccumulatedConvertible


Convertible


Common Stock








OtherPreferred Stock


Preferred Stock


Voting


Non-Voting








ComprehensiveShares





Shares





Shares





Shares





Paid-In


Accumulated


Income


TotalIssued


Amount


Issued


Amount


Issued


Amount


Issued


Amount


Capital


Deficit


(Loss)


EquityBalance, January 1, 2008


142


$
41,873



901


$
265,777



20,293


$
203










$
663,127


$
(33,939
)

$
36,517


$
973,558Net loss






































(19,267
)Other comprehensive loss










































(2,013
)Comprehensive loss














































(21,280
)Issuance of Series-1 preferred stock as payment for dividend


3



771



37



11,129































11,900Restricted shares surrendered to fund withholding taxes


















(10
)














(232
)










(232
)Stock based compensation


















13















4,155











4,155Preferred stock dividends






































(12,087
)






(12,087
)Balance, June 30, 2008


145


$
42,644



938


$
276,906



20,296


$
203






$



$
667,050


$
(65,293
)

$
34,504


$
956,014Balance, January 1, 2009





$







$




20,287


$
203



9,506


$
95


$
1,007,011


$
(750,922
)

$
(46,730
)

$
209,657Net income






































63,467Other comprehensive loss










































(1,726
)Comprehensive income














































61,741Exercise of stock options


















1















35











35Restricted shares surrendered to fund withholding taxes


















(36
)














(802
)










(802
)Stock based compensation


















66















4,615











4,615Balance, June 30, 2009





$







$




20,318


$
203



9,506


$
95


$
1,010,859


$
(687,455
)

$
(48,456
)

$
275,246    4




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
    FLOWS
 (In thousands)
 (Unaudited)
  Six Months EndedJune 30,2009


2008Operating activities:Net income (loss)

$
63,467


$
(19,267
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Non-cash operating items (Note 3)


(60,547
)


25,541Changes in operating assets and liabilities:Contracts-in-process


2,409



(82,213
)Inventories


11,086



(8,188
)Long-term receivables


(2,733
)


19,140Other current assets and other assets


3,146



(3,142
)Accounts payable


14,846



(6,462
)Accrued expenses and other current liabilities


(17,944
)


(20,343
)Customer advances


32,554



(29,087
)Income taxes payable


16,860



(24,815
)Pension and other postretirement liabilities


(1,192
)


(6,127
)Long-term liabilities


5,288



(1,856
)Net cash provided by (used in) operating activities


67,240



(156,819
)Investing activities:Capital expenditures


(21,778
)


(23,095
)Decrease in restricted cash


9



622Proceeds from the sale of short-term investments and
    available-for-sale
    securities






162Investment in affiliates


(4,480
)


Purchase of short-term investments






(500
)Net cash used in investing activities


(26,249
)


(22,811
)Financing activities:Proceeds from the exercise of stock options


35



Repayment of borrowings under SS/L revolving credit facility


(55,000
)


Net cash used in financing activities


(54,965
)


Net decrease in cash and cash equivalents


(13,974
)


(179,630
)Cash and cash equivalents  beginning of period


117,548



314,694Cash and cash equivalents  end of period

$
103,574


$
135,064    5




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
  1.
    Organization
    and Principal Business        Satellite Manufacturing: direct-to-home
  Satellite Services:
  end-to-end
  1 3
  2.
    Basis of
    Presentation   6




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Form 10-K
  No. 90-7, Financial Reporting of Entities in Reorganization Under the
    Bankruptcy Code (SOP 90-7), Business Combinations
    Use of
    Estimates in Preparation of Financial Statements
      Concentration
    of Credit Risk
  contracts-in-process
 7




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair
    Value Measurements
  Fair Value Measurements
  Level 1:
  Level 2:
  Level 3:
    Assets
    and liabilities measured at Fair Value on Recurring
    Basis
    Level 1


Level 2


Level 3(In thousands)Assets:Marketable securities

$
1,033


$



$
Derivatives, net

$



$
8,514


$
     Assets
    and Liabilities Measured at Fair Value on a Non-recurring
    Basis
    The
    Equity Method of Accounting for Investments in Common Stock,
 8




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Subsequent
    Events
    Recent
    Accounting Pronouncements
  SFAS 141(R)
  Business Combinations
  FSP
    FAS 142-3
  FAS 142-3, Determination of the Useful Life of Intangible Assets FAS 142-3). FAS 142-3 FAS 142-3 FAS 142-3 FAS 142-3
  SFAS 160
  Non-controlling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
  SFAS 161
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133 Disclosure about Fair
    Value of Financial Instruments
 9




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SFAS 165
  Subsequent Events
  SFAS 167
  Amendments to FASB Interpretation No. 46(R) Consolidation of Variable Interest
    Entities  an interpretation of ARB No. 51.
  FSP
    FAS 132(R)-1
  Employers Disclosure about Postretirement Benefit Plan
    Assets Employers
    Disclosure about Postretirement Benefits
  EITF
    08-6
  No. 08-6, Equity Method Investment Accounting
    Considerations (EITF 08-6) EITF 08-6
  FSP
    FAS 107-1
    and APB
    28-1
  FAS 107-1 28-1, Interim Disclosures about Fair Value of Financial
    Instruments Disclosures about Fair Value of Financial Instruments
 10




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Additional
    Cash Flow Information    Six MonthsEnded June 30,2009


2008Non-cash operating items:Equity in net (income) losses of affiliates

$
(79,608
)

$
61,699Deferred taxes


(655
)


797Depreciation and amortization


19,262



16,374Stock based compensation


4,615



4,155Warranty expense accruals (reversals)


(185
)


1,187Amortization of prior service credits and net actuarial gain


186



(1,658
)Gain on disposition of
    available-for-sale
    securities






(162
)Unrealized loss on non-qualified pension plan assets


(307
)


Gain on litigation recovery






(58,295
)Non-cash net interest (income) expense


(2,994
)


429(Gain) loss on foreign currency transactions and contracts


(572
)


291Amortization of fair value adjustments related to orbital
    incentives


(289
)


(2,839
)Loss on disposition of assets






63Impairment of available for sale securities






3,500Net non-cash operating items

$
(60,547
)

$
25,541Non-cash investing activities:Available for sale securities received in connection with the
    sale of Globalstar do Brazil

$



$
6,000Capital expenditures incurred not yet paid

$
2,559


$
5,832Non-cash financing activities:Issuance of Loral Series-1 Preferred Stock as payment for
    dividend

$



$
11,900Accrued dividends on
    Series A-1
    and
    Series B-1
    preferred stock

$



$
5,166Supplemental information:Interest paid

$
1,379


$
773Tax (refunds) payments

$
(15,178
)

$
34,104    11




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Comprehensive
    Income (Loss)    Three MonthsEnded June 30,2009


2008Net income

$
74,295


$
51,950Amortization of prior service credits and net actuarial gains,
    net of taxes of $335 in 2008


93



(494
)Proportionate share of Telesat Holdco other comprehensive income


2,844



673Unrealized loss on foreign currency hedges:Unrealized loss on foreign currency hedges


(5,220
)


Less: reclassification adjustment for gains included in net
    income


(4,300
)


Net unrealized loss


(9,520
)


Unrealized gain (loss) on securities:Unrealized gain (loss) on
    available-for-sale
    securities, net of taxes of $1,631 in 2008


688



(2,401
)Less: reclassification adjustment for losses included in net
    income, net of taxes of $1,369






2,041Net unrealized gain (loss)


688



(360
)Comprehensive income

$
68,400


$
51,769   Six MonthsEnded June 30,2009


2008Net income (loss)

$
63,467


$
(19,267
)Amortization of prior service credits and net actuarial gains,
    net of taxes of $670 in 2008


186



(988
)Cumulative translation adjustment






(498
)Proportionate share of Telesat Holdco other comprehensive income


2,844



(367
)Unrealized gain on foreign currency hedges:Unrealized gain on foreign currency hedges


1,714



Less: reclassification adjustment for gains included in net
    income


(7,306
)


Net unrealized loss


(5,592
)


Unrealized gain (loss) on securities:Unrealized gain (loss) on
    available-for-sale
    securities, net of taxes of $1,303 in 2008


836



(2,159
)Less: reclassification adjustment for losses included in net
    income, net of taxes $1,339






1,999Net unrealized gain (loss)


836



(160
)Comprehensive income (loss)

$
61,741


$
(21,280
)  12




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Contracts-in-Process
    and Inventories  Contracts-in-process
  June 30,


December 31,2009


2008Contracts-in-Process:Amounts billed (net of allowance for doubtful accounts of $923)

$
113,749


$
122,455Unbilled receivables


86,132



91,196$
199,881


$
213,651Inventories:Inventories-gross

$
125,792


$
136,955Allowance for obsolescence


(27,123
)


(27,200
)$
98,669


$
109,755   contracts-in-process
  6.
    Financial
    Instruments, Derivatives and Hedging Transactions  Financial
    Instruments
  available-for-sale
  Foreign
    Currency
      Foreign Currency


U.S.$(In thousands)Future revenues  Japanese Yen

¥
157,534


$
1,649Future expenditures  Japanese Yen

¥
3,678,370


$
38,497Customer advances  Japanese Yen

¥
1,715


$
18Future expenditures  EUROs


4,695


$
6,596  13




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Derivatives
    and Hedging Transactions
  Accounting for
    Derivative Instruments and Hedging Activities
      Cash Flow
    Hedges
        To SellAt


AtEuro


Contract


MarketMaturity

Amount


Rate


Rate(In thousands)2009


31,640


$
48,148


$
44,4572010


19,210



29,389



27,0392011


23,493



35,663



33,190
74,343


$
113,200


$
104,686  14




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Balance
    Sheet Classification
    Asset DerivativesBalance Sheet Location

Fair Value(In thousands)Derivatives designated as hedging instruments under
    SFAS 133Foreign exchange contracts

Other current assets

$
5,456Foreign exchange contracts

Other assets


2,7968,252Derivatives not designated as hedging instruments under
    SFAS 133Foreign exchange contracts

Other assets

$
262Total Derivatives




8,514   Cash Flow
    Hedge Gains (Losses) Recognition
    Amount of Gain(Loss)Recognized







Loss on Derivativein OCI on


Gain Reclassified from Accumulated


Ineffectiveness andDerivatives in SFAS 133 Cash Flow

Derivative


OCI into Income (Effective Portion)


amounts excluded from Effectiveness TestingHedging Relationships

(Effective Portion)


Location

Amount


Location

Amount(In thousands)




(In thousands)




(In thousands)Foreign exchange contracts

$
1,782


Revenue

$
7,306


Revenue

$
(1,243
)Foreign exchange contracts

$
(68
)







Interest income

$
(46
)   GainRecognized in IncomeCash Flow Derivatives Not Designated as

on DerivativeHedging Instruments under SFAS 133

Location


Amount(In thousands)Foreign exchange contracts


Revenue


$
430    15




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Property,
    Plant and Equipment  June 30,


December 31,2009


2008(In thousands)Land and land improvements

$
26,852


$
26,913Buildings


67,711



59,038Leasehold improvements


11,086



10,870Equipment, furniture and fixtures


143,659



133,916Satellite capacity under construction (see Note 17)


18,634



10,478Other construction in progress


17,757



21,863285,699



263,078Accumulated depreciation and amortization


(87,013
)


(74,808
)$
198,686


$
188,270     8.
    Investments
    in Affiliates    June 30,


December 31,2009


2008(In thousands)Telesat Holdings Inc.

$
81,136


$
XTAR, LLC


76,343



70,547Other


2,123



2,095$
159,602


$
72,642     Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Telesat Holdings Inc.

$
80,583


$
6,959


$
78,292


$
(53,343
)XTAR, LLC


4,693



(4,121
)


1,316



(8,356
)$
85,276


$
2,838


$
79,608


$
(61,699
)  16




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Revenues

$
16,595


$
29,085


$
40,843


$
48,434Elimination of Lorals proportionate share of losses
    (profits) relating to affiliate transactions


2,055



(2,625
)


(243
)


(3,814
)(Losses) profits relating to affiliate transactions not
    eliminated


(1,143
)


1,471



152



2,140   1 3
       17




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Telesat
      Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Revenues

$
172,150


$
172,383


$
337,397


$
338,887Operating expenses


(52,870
)


(66,746
)


(103,204
)


(133,863
)Depreciation, amortization and stock-based compensation


(55,604
)


(56,757
)


(106,122
)


(115,221
)Operating income


63,676



48,880



128,071



89,803Interest expense


(54,410
)


(53,281
)


(108,546
)


(115,484
)Other income (expense)


141,089



39,789



106,635



(48,524
)Income tax provision


(8,400
)


(20,346
)


(15,423
)


(3,327
)Net income (loss)


141,954



15,042



110,736



(77,532
)     June 30,


December 31,2009


2008(In thousands)Current assets

$
190,395


$
179,769Total assets


4,421,874



4,273,162Current liabilities


143,054



171,423Long-term debt, including current portion


2,883,546



2,901,620Total liabilities


3,767,728



3,760,164Redeemable preferred stock


121,685



116,044Shareholders equity


532,461



396,954     XTAR
    o o XTAR-LANT,
 18




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    XTAR-LANT XTAR-LANT XTAR-LANT
  paid-in-kind
        Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Revenues

$
8,230


$
4,720


$
14,591


$
9,448Operating expenses


(8,684
)


(8,667
)


(17,145
)


(17,252
)Depreciation and amortization


(2,404
)


(2,407
)


(4,809
)


(4,841
)Operating loss


(2,858
)


(6,354
)


(7,363
)


(12,645
)Net income (loss)


8,390



(7,407
)


2,374



(14,962
)  19




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    June 30,


December 31,2009


2008(In thousands)Current assets

$
9,525


$
9,107Total assets


111,046



115,437Current liabilities


43,967



41,314Total liabilities


64,621



79,386Members equity


46,425



36,051   Other
    available-for-sale
  9.
    Intangible
    Assets and Amortization of Fair Value Adjustments    Weighted AverageRemaining


June 30, 2009


December 31, 2008Amortization Period


Gross


Accumulated


Gross


Accumulated(Years)


Amount


Amortization


Amount


Amortization(In thousands)


(In thousands)Internally developed software and technology


2


$
59,027


$
(40,563
)

$
59,027


$
(35,154
)Trade names


16



9,200



(1,725
)


9,200



(1,495
)$
68,227


$
(42,288
)

$
68,227


$
(36,649
)  20




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009

$
11,2762010


9,1922011


2,9312012


2,3152013


460   contracts-in-process,
  June 30,


December 31,2009


2008(In thousands)Gross fair value adjustments

$
(36,896
)

$
(36,896
)Accumulated amortization


17,965



19,084$
(18,931
)

$
(17,812
)     10.
    Debt  SS/L
    Credit Agreement
      June 30,


December 31,2009


2008Letters of credit outstanding

$
7,921


$
4,927Borrowings





$
55,000Interest rate on revolver borrowings






4.2575
%   Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008Interest expense (including commitment and letter of credit fees)

$
186


$



$
711


$
Amortization of issuance costs

$
219


$



$
438


$
  21




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Income
    Taxes  paid-in-capital.
          12.
    Equity  Common
    Stock
  In re: Loral
    Space and Communications Consolidated Litigation
 22




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Preferred
    Stock
  Series A-1 Series A-1 Series B-1 Series B-1 Series A-1
    Series A-1
  Series B-1
 23




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Series A-1 Series B-1
    Stock
    Plans
              (SS/L
   24




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    13.
    Pensions
    and Other Employee Benefit Plans    Pension Benefits


Other BenefitsThree Months


Three MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Service cost

$
2,261


$
2,039


$
264


$
335Interest cost


5.996



5,787



1,050



1,164Expected return on plan assets


(4,273
)


(6,157
)


(13
)


(20
)Amortization of prior service credits and net actuarial (gain)
    or loss


226



(707
)


(133
)


(122
)$
4,210


$
962


$
1,168


$
1,357   Pension Benefits


Other BenefitsSix Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Service cost

$
4,522


$
4,078


$
528


$
670Interest cost


11,992



11,574



2,100



2,328Expected return on plan assets


(8,546
)


(12,314
)


(26
)


(40
)Amortization of prior service credits and net actuarial (gain)
    or loss


452



(1,414
)


(266
)


(244
)$
8,420


$
1,924


$
2,336


$
2,714   14.
    Commitments
    and Contingencies  Financial
    Matters
    Balance of deferred amounts at January 1, 2009

$
36,255Warranty costs incurred including payments


(657
)Accruals relating to pre-existing contracts (including changes
    in estimates)


668Balance of deferred amounts at June 30, 2009

$
36,266  25




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    start-up
     26




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5 8
    Transactions with
    Affiliates  Telesat
  Satellite
    Matters
     27




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    contract-in-process
  and/or
      Transactions with
    Affiliates  Telesat
  Regulatory
    Matters
   28




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Legal
    Proceedings
  Delaware
    Shareholder Litigation
  In re: Loral Space and Communications
    Inc. Consolidated Litigation
  New York
    Shareholder Litigation
  Babus v. Targoff, et al.
  Insurance
    Coverage Litigation
     29




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  In re: Loral Space and Communications Inc.
    Consolidated Litigation Babus
      Informal
    SEC Inquiry
    Reorganization
    Matters
  No. 03-41710 03-41709 03-41728
  Disputed Claims.
 30




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Indemnification Claims of Directors and Officers of Old
    Loral. Old Loral Class Action Securities Litigations
  Old Loral
    Class Action Securities Litigations
  Beleson. Rule 10b-5 Beleson
 31




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Reorganization Matters  Indemnification
    Claims.
  Christ. Rule 10b-5 Reorganization
    Matters  Indemnification Claims.
  Other and
    Routine Litigation
   32




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    Earnings
    (Loss) Per Share    Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008Net income (loss) applicable to common shareholders

$
74,295


$
45,851


$
63,467


$
(31,354
)Dividends on Loral Series A-1 Preferred Stock






814







Net income (loss) for diluted income (loss) per share calculation

$
74,295


$
46,665


$
63,467


$
(31,354
)Common and potential common shares:Weighted average common shares outstanding


29,753



20,169



29,727



20,162Unvested restricted stock units


143







72



Unvested restricted stock


8







4



Assumed conversion of Loral
    Series A-1
    Preferred Stock






1,445







Common and potential common shares


29,904



21,614



29,803



20,162Diluted income (loss) per share

$
2.48


$
2.16


$
2.13


$
(1.56
)     June 30,2009


2008Stock options outstanding


2,157,952



2,034,202Shares of non-vested restricted stock


50,898



118,312Non-vested restricted stock units


23,250



   16.
    Segments  Disclosures about
    Segments of an Enterprise and Related Information
 33




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       34




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)RevenuesSatellite manufacturing:External revenues

$
254,858


$
178,976


$
443,108


$
378,164Intersegment
    revenues(1)


21,001



31,268



49,198



51,867Satellite manufacturing revenues


275,859



210,244



492,306



430,031Satellite services
    revenues(2)


172,150



172,383



337,397



338,887Operating segment revenues before eliminations


448,009



382,627



829,703



768,918Intercompany
    eliminations(3)


(4,412
)


(2,183
)


(8,368
)


(3,433
)Affiliate
    eliminations(2)


(172,150
)


(172,383
)


(337,397
)


(338,887
)Total revenues as reported

$
271,447


$
208,061


$
483,938


$
426,598Segment Adjusted EBITDASatellite manufacturing

$
12,109


$
10,188


$
22,546


$
14,865Satellite
    services(2)


119,280



111,777



234,193



211,164Corporate(4)


(6,352
)


(1,497
)


(10,751
)


(6,240
)Adjusted EBITDA before eliminations


125,037



120,468



245,988



219,789Intercompany
    eliminations(3)


(525
)


(329
)


(1,092
)


(509
)Affiliate
    eliminations(2)


(119,280
)


(105,637
)


(234,193
)


(205,024
)Adjusted EBITDA

$
5,232


$
14,502


$
10,703


$
14,256Depreciation, Amortization and Stock-Based CompensationSatellite manufacturing

$
(12,202
)

$
(8,723
)

$
(22,132
)

$
(17,382
)Satellite
    services(2)


(55,604
)


(56,757
)


(106,122
)


(115,221
)Corporate


(725
)


(1,244
)


(1,745
)


(3,147
)Segment depreciation before affiliate eliminations


(68,531
)


(66,724
)


(129,999
)


(135,750
)Affiliate
    eliminations(2)


55,604



56,757



106,122



115,221Depreciation, amortization and stock-based compensation as
    reported

$
(12,927
)

$
(9,967
)

$
(23,877
)

$
(20,529
)Operating (loss) income as reported

$
(7,695
)

$
4,536


$
(13,175
)

$
(6,274
)   35




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  June 30,


December 31,2009


2008(In thousands)Total AssetsSatellite manufacturing

$
797,310


$
799,476Satellite services (includes goodwill of $2.1 billion and
    $2.5 billion)(2)


4,421,874



4,273,162Corporate


260,300



196,391Total Assets before affiliate eliminations


5,479,484



5,269,029Affiliate
    eliminations(2)


(4,421,874
)


(4,273,162
)Total assets as
    reported(5)

$
1,057,610


$
995,867     (1)

    
    Intersegment revenues for satellite manufacturing includes
    affiliate revenue of $16.6 million and $29.1 million
    for the three months ended June 30, 2009 and 2008,
    respectively and $40.8 million and $48.4 million for
    the six months ended June 30, 2009 and 2008, respectively.(2)

    
    Satellite services represents Telesat. Satellite services
    Adjusted EBITDA also includes approximately $6 million for
    the three and six months ended June 30 2008, related to the
    distribution from a bankruptcy claim against a former customer
    of Loral Skynet. Affiliate eliminations represent the
    elimination of amounts attributable to Telesat whose results are
    reported under the equity method of accounting in our condensed
    consolidated statements of operations (see Note 8).(3)

    
    Represents the elimination of intercompany sales and
    intercompany Adjusted EBITDA, primarily for satellites under
    construction by SS/L for Loral.(4)

    
    Represents corporate expenses incurred in support of our
    operations.(5)

    
    Amounts are presented after the elimination of intercompany
    profit.  17.
    Related
    Party Transactions  Transactions
    with Affiliates
  Telesat
     36




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Three Months

Six MonthsEnded June 30,

Ended June 30,2009

2008

2009

2008(In thousands)

(In thousands)Revenues from Telesat satellite construction contracts

$
16,571


$
29,055


$
40,819


$
48,404Milestone payments received from Telesat


16,894



29,774



31,618



51,261      37




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               38




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##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SS/L makes
  XTAR
    MHR
    Fund Management LLC
      Three Months


Six MonthsEnded June 30,


Ended June 30,2008


2008Dividends paid in the form of additional shares:Number of shares


19,915



39,465Amount

$
6.0


$
11.9  39




---



##### Table of Contents



LORAL
    SPACE & COMMUNICATIONS INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Other
    Relationships
   40




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis should be read in
    conjunction with our unaudited condensed consolidated financial
    statements (the financial statements) included in
    Item 1 and our latest Annual Report on
    Form 10-K
    filed with the Securities and Exchange Commission.
  INDEX
  Topic

LocationOverview

Page 42Future Outlook

Page 43Consolidated Operating Results

Page 44Liquidity and Capital Resources:Loral

Page 55Space Systems/Loral

Page 56Telesat

Page 58Contractual Obligations

Page 60Statement of Cash Flows

Page 60Affiliate Matters

Page 61Commitments and Contingencies

Page 61Other Matters

Page 61       Disclosure
    Regarding Forward-Looking Statements
  Except for the historical information contained in the
    following discussion and analysis, the matters discussed below
    are not historical facts, but are forward-looking
    statements as that term is defined in the Private
    Securities Litigation Reform Act of 1995. In addition, we or our
    representatives have made and may continue to make
    forward-looking statements, orally or in writing, in other
    contexts. These forward-looking statements can be identified by
    the use of words such as believes,
    expects, plans, may,
    will, would, could,
    should, anticipates,
    estimates, project, intend,
    or outlook or other variations of these words. These
    statements, including without limitation, those relating to
    Telesat, are not guarantees of future performance and involve
    risks and uncertainties that are difficult to predict or
    quantify. Actual events or results may differ materially as a
    result of a wide variety of factors and conditions, many of
    which are beyond our control. For a detailed discussion of these
    and other factors and conditions, please refer to the
    Commitments and Contingencies section below and to our other
    periodic reports filed with the Securities and Exchange
    Commission (SEC). We operate in an industry sector
    in which the value of securities may be volatile and may be
    influenced by economic and other factors beyond our control. We
    undertake no obligation to update any forward-looking
    statements.
 41




---



##### Table of Contents



Overview
  Businesses
    Satellite
    Manufacturing
  direct-to-home
    sub-assemblies.
      Satellite
    Services
     42




---



##### Table of Contents



Future
    Outlook
      1 3
       43




---



##### Table of Contents



Ka-band end-to-end
  Consolidated
    Operating Results
  Critical Accounting Matters Form 10-K
  Changes in Critical Accounting Policies
  Consolidated Operating Results 
 44




---



##### Table of Contents



Disclosures about Segments of an
    Enterprise and Related Information.
    Revenues:
  Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Satellite Manufacturing

$
275.8


$
210.2


$
492.3


$
430.0Satellite Services


172.2



172.4



337.4



338.9Segment revenues


448.0



382.6



829.7



768.9Eliminations(1)


(4.4
)


(2.1
)


(8.4
)


(3.4
)Affiliate
    eliminations(2)


(172.2
)


(172.4
)


(337.4
)


(338.9
)Revenues as
    reported(3)

$
271.4


$
208.1


$
483.9


$
426.6    45




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##### Table of Contents



Adjusted
    EBITDA:
  Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Satellite Manufacturing

$
12.1


$
10.2


$
22.5


$
14.9Satellite Services


119.3



111.8



234.2



211.2Corporate
    expenses(4)


(6.3
)


(1.5
)


(10.7
)


(6.3
)Segment Adjusted EBITDA before eliminations


125.1



120.5



246.0



219.8Eliminations(1)


(0.6
)


(0.4
)


(1.1
)


(0.6
)Affiliate
    eliminations(2)


(119.3
)


(105.6
)


(234.2
)


(205.0
)Adjusted EBITDA

$
5.2


$
14.5


$
10.7


$
14.2      46




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##### Table of Contents



Reconciliation
    of Adjusted EBITDA to Net Income (Loss):
  Three Months


Six MonthsEnded June 30,


Ended June 30,2009


2008


2009


2008(In thousands)


(In thousands)Adjusted EBITDA

$
5.2


$
14.5


$
10.7


$
14.2Depreciation, amortization and stock-based compensation


(12.9
)


(10.0
)


(23.9
)


(20.5
)Operating (loss) income


(7.7
)


4.5



(13.2
)


(6.3
)Interest and investment income


1.9



1.9



3.6



8.3Interest expense


1.2



(0.3
)






(0.7
)Gain on litigation recovery






58.3







58.3Impairment of available for sale securities






(3.5
)






(3.5
)Other expense






(0.2
)


(0.1
)


(0.3
)Income tax provision


(6.4
)


(11.6
)


(6.4
)


(13.4
)Equity in net income (losses) of affiliates


85.3



2.9



79.6



(61.7
)Net income (loss)

$
74.3


$
52.0


$
63.5


$
(19.3
)     (1)

    
    Represents the elimination of intercompany sales and
    intercompany Adjusted EBITDA for satellites under construction
    by SS/L for Loral.(2)

    
    Represents the elimination of amounts attributed to Telesat
    whose results are reported under the equity method of accounting
    in our consolidated statements of operations (see Note 8 to
    the financial statements).(3)

    
    Includes revenues from affiliates of $16.6 million and
    $29.1 million for the three months ended June 30, 2009
    and 2008, respectively and $40.8 million and
    $48.4 million for the six months ended June 30, 2009
    and 2008, respectively.(4)

    
    Represents corporate expenses incurred in support of our
    operations.  Three
    Months Ended June 30, 2009 Compared With Three Months Ended
    June 30, 2008
    Revenues
    from Satellite Manufacturing
  Three MonthsEnded June 30,


% Increase/2009


2008


(Decrease)(In millions)Revenues from Satellite Manufacturing

$
276


$
210



31
%Eliminations


(5
)


(2
)


150
%Revenues from Satellite Manufacturing as reported

$
271


$
208



30
%    47




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##### Table of Contents



Cost
    of Satellite Manufacturing
  Three MonthsEnded June 30,


% Increase/2009


2008


(Decrease)(In millions)Cost of Satellite Manufacturing includes:Cost of Satellite Manufacturing before the following specific
    identified charges

$
242


$
175



38
%Depreciation, amortization and stock-based compensation


12



9



33
%Total cost of Satellite Manufacturing as reported

$
254


$
184



38
%Cost of Satellite Manufacturing as a% of Satellite Manufacturing
    revenues as reported


94
%


88
%     Selling,
    General and Administrative Expenses
  Three MonthsEndedJune 30,


% Increase/2009


2008


(Decrease)(In millions)Selling, general and administrative expenses

$
25


$
26



(4
)%% of revenues as reported


9
%


12
%     Gain
    on Recovery from Customer Bankruptcy
    Interest
    and Investment Income
  Three MonthsEndedJune 30,2009


2008(In millions)Interest and investment income

$
2


$
2    48




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##### Table of Contents



Interest
    Expense
  Three MonthsEndedJune 30,2009


2008(In millions)Interest expense

$
(1
)

$
     Gain
    on Litigation Recovery
    Impairment
    of Available for Sale Securities
  other-than-temporary
  Other
    Expense
    Income
    Tax Provision
  paid-in-capital.
     49




---



##### Table of Contents



Equity
    in Net Income (Losses) of Affiliates
    Three MonthsEndedJune 30,2009


2008(In millions)Telesat

$
80.6


$
6.9XTAR


4.7



(4.1
)$
85.3


$
2.8       Three MonthsEnded June 30,2009


2008(In millions)Statement of Operations Data:Revenues

$
172.2


$
172.4Operating expenses


(52.9
)


(66.7
)Depreciation, amortization and stock-based compensation


(55.6
)


(56.8
)Operating income


63.7



48.9Interest expense


(54.4
)


(53.3
)Other income


141.1



39.8Income tax provision


(8.4
)


(20.3
)Net income


141.9



15.1           December 31, 2008


1.225March 31, 2009


1.260June 30, 2009


1.162July 31, 2009


1.078  50




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##### Table of Contents



Six
    Months Ended June 30, 2009 Compared With Six Months Ended
    June 30, 2008
    Revenues
    from Satellite Manufacturing
  Six MonthsEnded June 30,


% Increase/2009


2008


(Decrease)(In millions)Revenues from Satellite Manufacturing

$
492


$
430



14
%Eliminations


(8
)


(3
)


167
%Revenues from Satellite Manufacturing as reported

$
484


$
427



13
%     Cost
    of Satellite Manufacturing
  Six MonthsEnded June 30,


% Increase/2009


2008


(Decrease)(In millions)Cost of Satellite Manufacturing includes:Cost of Satellite Manufacturing before the following specific
    identified charges

$
429


$
374



15
%Depreciation, amortization and stock-based compensation


22



17



29
%Total cost of Satellite Manufacturing as reported

$
451


$
391



15
%Cost of Satellite Manufacturing as a% of Satellite Manufacturing
    revenues as reported


93
%


92
%    51




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##### Table of Contents



Selling,
    General and Administrative Expenses
  Six MonthsEnded June 30,


% Increase/2009


2008


(Decrease)(In millions)Selling, general and administrative expenses

$
46


$
48



(4
)%% of revenues as reported


9
%


11
%     Gain
    on Recovery from Customer Bankruptcy
    Interest
    and Investment Income
  Six MonthsEnded June 30,2009


2008(In millions)Interest and investment income

$
4


$
8     Interest
    Expense
  Six MonthsEnded June 30,2009


2008(In millions)Interest expense

$



$
1     Gain
    on Litigation Recovery
    Impairment
    of Available for Sale Securities
  other-than-temporary
 52




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##### Table of Contents



Other
    Expense
    Income
    Tax Provision
  paid-in-capital.
      Equity
    in Net Income (Losses) of Affiliates
    Six MonthsEndedJune 30,2009


2008(In millions)Telesat

$
78.3


$
(53.3
)XTAR


1.3



(8.4
)$
79.6


$
(61.7
)    53




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##### Table of Contents



Six MonthsEnded June 30,2009


2008(In millions)Statement of Operations Data:Revenues

$
337.4


$
338.9Operating expenses


(103.2
)


(133.9
)Depreciation, amortization and stock-based compensation


(106.1
)


(115.2
)Operating income


128.1



89.8Interest expense


(108.5
)


(115.5
)Other income (expense)


106.6



(48.5
)Income tax provision


(15.4
)


(3.3
)Net income (loss)


110.7



(77.5
)           December 31, 2008


1.225June 30, 2009


1.162July 31, 2009


1.078       Backlog
    June 30,


December 31,2009


2008Satellite Manufacturing

$
1,762


$
1,381Satellite Services


4,372



4,207Total backlog before eliminations


6,134



5,588Satellite Manufacturing eliminations


(17
)


(25
)Satellite Services eliminations


(4,372
)


(4,207
)Total backlog

$
1,745


$
1,356  54




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##### Table of Contents



Liquidity
    and Capital Resources
  Loral
    Cash and
    Available Credit
    Liquidity
       55




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##### Table of Contents



Space
    Systems/Loral
  Cash
    Available
    Credit and Liquidity
  sub-limit.
             56




---



##### Table of Contents



SS/Ls
  contract-in-process
   57




---



##### Table of Contents



Telesat
  Cash and
    Available Credit
      Liquidity
    day-to-day
 58




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##### Table of Contents



Debt
    June 30,


December 31,Maturity

Currency

2009


2008(In CAD millions)Senior Secured Credit Facilities:Revolving facility

October 31, 2012

CAD or USD
    equivalent






Canadian term loan facility

October 31, 2012

CAD


190



195U.S. term loan facility

October 31, 2014

USD


1,972



2,087U.S. term loan II facility

October 31, 2014

USD


169



179Senior notes

November 1, 2015

USD


777



819Senior subordinated notes

November 1, 2017

USD


243



256CAD


3,351



3,536Current portion



CAD


(21
)


(23
)Long term portion



CAD


3,330



3,513          59




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##### Table of Contents



Interest
    Expense
    Derivatives
        Interest
    rate risk
    Capital
    Expenditures
    Contractual
    Obligations
  Form 10-K
  Statement
    of Cash Flows
  Net
    Cash Provided by (Used In) Operating Activities
   60




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##### Table of Contents



(contracts-in-process, Contracts-in-process build-up
    Net
    Cash Used in Investing Activities
      Net
    Cash Used in Financing Activities
    Affiliate
    Matters
    Commitments
    and Contingencies
    Other
    Matters
  Recent
    Accounting Pronouncements
    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk  Foreign
    Currency
  Loral
   61




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##### Table of Contents



Foreign Currency


U.S.$(In thousands)Future revenues  Japanese Yen

¥
157.5


$
1.6Future expenditures  Japanese Yen

¥
3,678.4


$
38.5Customer advances  Japanese Yen

¥
1.7


$
Future expenditures  EUROs


4.7


$
6.6   Derivatives
      To SellAt


AtEuro


Contract


MarketMaturity

Amount


Rate


Rate(In millions)2009


31.6


$
48.1


$
44.52010


19.2



29.4



27.02011


23.5



35.7



33.2
74.3


$
113.2


$
104.7       Telesat
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Liquidity and Capital Resources  Telesat Derivatives
 62




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##### Table of Contents



Interest
      Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Liquidity and Capital Resources  Telesat Derivatives
  Item 4.
    Disclosure
    Controls and Procedures  Disclosure controls and
    procedures. Rules 13a-15(e) 15d-15(e)
  Internal control over financial
    reporting. Rules 13a-15(f) 15-d-15(f))
 PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Form 10-Q
 Item 1A.  Risk
    Factors  Form 10-K Form 10-K, and/or
 63




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##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders      Year TermName

For


Withheld


ExpiresDr. Mark H. Rachesky


14,792,336



4,609,539



2012Mr. Sai Devabhaktuni


15,096,832



4,305,043



2012Mr. Hal Goldstein


15,098,132



4,303,743



2012       For


16,087,634Against


19,810Abstain


1,278     Common
    Stock
  For


15,377,255Against


728,880Abstain


2,587   Non-Voting
    Common Stock
      For


19,305,805Against


94,899Abstain


1,171   Item 6.
    Exhibits    Form 8-K
   64




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##### Table of Contents



Form 8-K
 65




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##### Table of Contents



SIGNATURES      Loral Space &
    Communications Inc.
  /s/  Harvey
    B. Rein    Senior Vice President and
 Chief Financial Officer
 (Principal Financial Officer)
 and Registrants Authorized Officer
   66




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##### Table of Contents



EXHIBIT INDEX
  Exhibit 2.1



Restated Certificate of Incorporation of Loral Space &
    Communications Inc. dated May 19, 2009 (incorporated by
    reference form the Companys Current Report on
    Form 8-K
    filed on May 20, 2009).Exhibit 31.1



Certification of Chief Executive Officer pursuant to
    18 U.S.C. §1350, as adopted pursuant to § 302 of
    the Sarbanes-Oxley Act of 2002.Exhibit 31.2



Certification of Chief Financial Officer pursuant to
    18 U.S.C. §1350, as adopted pursuant to § 302 of
    the Sarbanes-Oxley Act of 2002.Exhibit 32.1



Certification of Chief Executive Officer pursuant to
    18 U.S.C. §1350, as adopted pursuant to §906 of
    the Sarbanes-Oxley Act of 2002.Exhibit 32.2



Certification of Chief Financial Officer pursuant to
    18 U.S.C. §1350, as adopted pursuant to §906 of
    the Sarbanes-Oxley Act of 2002.Exhibit 99.1



Letter Agreement, dated as of June 30, 2009, by and among
    Loral Space & Communications Inc, MHR Capital Partners
    Master Account LP, MHR Capital Partners (100) LP, MHR
    Institutional Partners LP, MHRA LP, MHRM LP, MHR Institutional
    Partners II LP, MHR Institutional Partners IIA LP and MHR
    Institutional Partners III LP. (incorporated by reference
    form the Companys Current Report on
    Form 8-K
    filed on June 30, 2009).  67