SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 10-Q
(MARK ONE)

/x/   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

      For the quarterly period ended     September 30, 1996

                                       OR

/ /   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

           For the transition period from_____________ to ___________


                           Commission File Nos. 0-26712
                                                -------
                                               33-63284
                                               --------

                              PanAmSat Corporation
                          PanAmSat Capital Corporation
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


            Delaware                                 06-1407851
            Delaware                                 06-1371155
--------------------------------------------------------------------------------
     (State or other Jurisdiction of               (I.R.S.  Employer
      Incorporation or Organization)               Identification No.)


                    One Pickwick Plaza, Greenwich, CT. 06830
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


Registrant's telephone number, including area code:  203-622-6664
                                                    --------------

--------------------------------------------------------------------------------
                     (Former Name, Former Address and Former
                    Fiscal Year if Changed Since Last Report)

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 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 90 days.

                               YES  x   NO
                                   ---     ---

As of September 30, 1996, an aggregate of 19,082,737 shares of the Company's
Common Stock, 40,459,432 shares of the Company's Class A Common Stock and
40,459,431 shares of the Company's Class B Common Stock were outstanding.
<PAGE>
                                                                       FORM 10-Q


                              PanAmSat Corporation
                    For the Quarter Ended September 30, 1996
                    ----------------------------------------

                         PART I - FINANCIAL INFORMATION



ITEM 1 - Financial Statements

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

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

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

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

Notes to Financial Statements.


ITEM 2 - Management's Discussion and Analysis of Financial Condition and
         Results of Operations.



                           PART II - OTHER INFORMATION


ITEM 6 - Exhibits and Reports on Form 8-K

Signature



Cautionary Statement For Purposes Of The "Safe Harbor"
Provisions Of The Private Securities Litigation Reform Act of 1995


The Private Securities Litigation Reform Act of 1995 provides a new "safe
harbor" for certain forward-looking statements. When used in this Form 10-Q the
words "estimate," "project," "anticipate," "expect," "believe" and other
expressions used to indicate future events are intended to identify
forward-looking statements. Such statements are subject to risks and
uncertainties that could cause actual results to differ materially.
<PAGE>
                              PanAmSat Corporation

                                 BALANCE SHEETS

<TABLE>


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

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

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

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

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

OTHER ASSETS                                                             806,054               154,287
                                                                  --------------        --------------
TOTAL ASSETS                                                      $1,569,289,379        $1,438,819,812
                                                                  ==============        ==============

</TABLE>
<PAGE>
                              PanAmSat Corporation
                          BALANCE SHEETS - (continued)

<TABLE>

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

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

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

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

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

COMMITMENTS AND CONTINGENCIES

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

STOCKHOLDERS' EQUITY:
     Class A Common Stock, $0.01 par value,
       100,000,000 shares authorized,
       40,459,432 shares issued and outstanding                                   404,594                   404,594
     Class B Common Stock, $0.01 par value,
       100,000,000 shares authorized,
       40,459,431 shares issued and outstanding                                   404,594                   404,594
     Common Stock, $0.01 par value, 
       400,000,000 shares authorized,
       19,082,737 shares issued and outstanding                                   190,828                   190,812
     Additional paid-in-capital                                               477,324,937               477,297,753
     Retained earnings (deficit)                                               10,916,321                (1,435,299)
                                                                           --------------            ---------------
Total Stockholders' Equity                                                    489,241,274               476,862,454
                                                                           --------------            --------------
     TOTAL LIABILITIES AND EQUITY                                          $1,569,289,379            $1,438,819,812
                                                                           ==============            ==============
</TABLE>
<PAGE>
                              PanAmSat Corporation
                            STATEMENTS OF OPERATIONS
              For the Nine Months Ended September 30, 1996 and 1995
                                   (Unaudited)
<TABLE>
                                                                     September 30,           September 30,
                                                                         1996                    1995
                                                                    ---------------         ---------------
<S>                                                               <C>                      <C>
REVENUES:
     Unaffiliated parties                                            $170,920,581            $ 68,964,209
     Related parties                                                    6,713,364               2,859,283
                                                                     ------------            ------------
                                                                      177,633,945              71,823,492
OPERATING EXPENSES:
     Direct expenses-service agreements                                 6,831,774               3,723,267
     Sales and marketing                                               10,318,748               6,588,476
     Engineering and technical services                                12,334,312               6,952,638
     General and administrative                                        18,641,535              10,521,560
     Depreciation and amortization                                     45,224,473              22,000,388
     Compensatory programs (Notes 1 and 5)                              4,799,933               8,341,040
     Reorganization costs (Note 6)                                      2,528,177                  -
                                                                     ------------            ------------
                                                                      100,678,952              58,127,369
                                                                     ------------            ------------

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

INTEREST INCOME                                                       (17,615,682)            (12,745,350)
INTEREST EXPENSE                                                       20,588,872              12,636,131
                                                                     ------------            ------------
     INCOME BEFORE INCOME TAXES                                        73,981,803              13,805,342

INCOME TAXES (NOTE 2)                                                  31,085,000               9,041,000
                                                                     ------------            ------------
     NET INCOME                                                        42,896,803               4,764,342
                                                                     ------------            ------------

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

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

PRO FORMA NET LOSS TO COMMON SHARES:
     HISTORICAL NET INCOME                                                                   $  4,764,342
     PRO FORMA INCOME TAX BENEFIT (NOTE 2)                                                     (1,207,000)
                                                                                               ----------
PRO FORMA NET INCOME                                                                            5,971,342

PREFERRED STOCK DIVIDEND                                                                       16,453,920
                                                                                             ------------
PRO FORMA NET LOSS TO COMMON SHARES                                                          $(10,482,578)
                                                                                             ============

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

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


</TABLE>
<PAGE>
                              PanAmSat Corporation
                            STATEMENTS OF OPERATIONS
             For the Three Months Ended September 30, 1996 and 1995
                                   (Unaudited)

<TABLE>

                                                                       September 30,            September 30,
                                                                           1996                     1995
                                                                      ---------------          ---------------
<S>                                                                  <C>                      <C>
REVENUES:
     Unaffiliated parties                                              $ 64,410,187             $ 27,066,931
     Related parties                                                      2,516,592                  949,625
                                                                       ------------             ------------
                                                                         66,926,779               28,016,556
OPERATING EXPENSES:
     Direct expenses-service agreements                                   3,107,203                1,172,449
     Sales and marketing                                                  3,085,276                2,393,765
     Engineering and technical services                                   4,562,193                2,709,388
     General and administrative                                           6,594,795                3,651,488
     Depreciation and amortization                                       16,132,786                8,051,364
     Compensatory programs (Notes 1 and 5)                                4,799,933                  187,440
     Reorganization costs (Note 6)                                        2,528,177                   -
                                                                       ------------             ------------
                                                                         40,810,363               18,165,894
                                                                       ------------             ------------

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

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

INCOME TAXES (NOTE 2)                                                    11,699,000                4,910,000
                                                                       ------------             ------------

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

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

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


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

  WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                            100,414,456               86,142,774
                                                                       ============             ============
</TABLE>
<PAGE>
                              PanAmSat Corporation
                            STATEMENTS OF CASH FLOWS
              For the Nine Months Ended September 30, 1996 and 1995
                                   (Unaudited)
<TABLE>
                                                                                        September 30,            September 30,
                                                                                            1996                      1995
                                                                                       ---------------          ---------------
<S>                                                                                   <C>                      <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
     Net income                                                                         $ 42,896,803             $  4,764,342
     Adjustments to reconcile net income to
         net cash provided by operating activities:
       Depreciation and amortization                                                      45,224,473               22,000,388
       Deferred income taxes                                                              19,532,310                4,976,000
       Accretion of interest on senior subordinated          
          discount notes                                                                  29,835,300               26,719,491
       (Accretion)collection of interest on marketable       
          securities                                                                      (2,623,629)                 484,390
       Interest expense capitalized                                                      (27,269,311)             (29,172,552)
       Compensation expense related to corporate             
          reorganization                                                                       -                    3,849,300
       Changes in assets and liabilities:
          Increase in accounts receivable                                                 (4,542,151)              (1,680,285)
          Increase in prepaid expenses and other current      
               assets                                                                     (8,122,890)              (2,339,658)
          Decrease in tax distribution receivable                                              -                    6,470,285
          Decrease in accounts payable                                                       (53,532)                (848,727)
          Decrease in accrued interest                                                    (4,265,625)              (4,265,625)
          Increase in accrued liabilities and taxes                                        2,296,606                4,194,764
          Increase in deferred revenue                                                    28,092,779               33,278,933
          Decrease in other liabilities                                                     (135,000)                 (50,000)
                                                                                       -------------              -----------
             NET CASH PROVIDED BY OPERATING ACTIVITIES                                   120,866,133               68,381,046
                                                                                       -------------              -----------

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

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

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

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

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

</TABLE>
<PAGE>
                                                                      FORM 10-Q
                              PanAmSat Corporation

                          NOTES TO FINANCIAL STATEMENTS


(1)  Principles of Presentation.
     ----------------------------

     PanAmSat, L.P. was the predecessor to PanAmSat Corporation (the "Company")
     and operated as a Delaware limited partnership (the "Partnership"). On
     March 2, 1995, pursuant to the amended Exchange and Subscription Agreement
     and Plan of Reorganization, the Company, the Partnership and its partners
     consummated various transactions (the "Conversion") whereby the Company
     acquired the Partnership and converted it to corporate form. In connection
     therewith, (i) Rene Anselmo and affiliated persons and entities (the
     "Anselmo Group") exchanged their interests in the Partnership for shares of
     Class A Common Stock, representing approximately 49.66% of the outstanding
     common stock of the Company, (ii) Univisa Satellite Holdings,
     Inc.("Univisa") exchanged its interest in the Partnership for shares of
     Class B Common Stock, representing approximately 50.15% of the outstanding
     common stock of the Company and (iii) a partner of the Partnership
     exchanged his interest in the Partnership for shares of common stock,
     representing approximately 0.19% of the outstanding common stock of the
     Company. The Amended and Restated Certificate of Incorporation of the
     Company provides, among other things, that holders of the Class A Common
     Stock will have the right to elect the majority of the members of the
     Company's board of directors and the Anselmo Group and Univisa with a veto
     over certain extraordinary transactions of the Company. On April 21, 1995,
     the Company completed the sale of 275,000 shares of Preferred Stock in a
     public offering and received net proceeds of approximately $262 million. On
     September 27, 1995 the Company completed an initial public offering of
     18,920,000 shares of Common Stock, including 4,595,676 shares held by
     certain selling stockholders, and received net proceeds of approximately
     $229 million.

     The Conversion also resulted in compensation expense consisting of
     (i)approximately $4.5 million during the nine month period ended September
     30, 1995 related to the assumption by the Company of phantom stock plans of
     a predecessor company in the Conversion, and (ii) approximately $3.8
     million, with an offsetting increase to capital, relating to a grant of a
     limited partnership interest in the Partnership to the Executive Vice
     President of the Company.

     The interim unaudited Financial Statements should be read in conjunction
     with the audited Financial Statements and the notes thereto for the year
     ended December 31, 1995 included in the Company's Annual Report on Form
     10-K, as filed with the Securities and Exchange Commission (Commission File
     Number 33-63284) (the "Annual Form 10-K"). The balance sheet as of
     September 30, 1996, and the related statements of operations and cash flows
     for the nine months ended September 30, 1996 and 1995 have been prepared by
     the Company and are unaudited. In the opinion of management, all
     adjustments which are of a normal recurring nature necessary to present
     fairly the financial position, results of operations and cash flows as of
     and for the three and nine month periods ended September 30, 1996 and 1995
     have been made. The accounting policies followed during the interim periods
     reported are in conformity with generally accepted accounting principles
     and are consistent with those applied for annual periods and described in
     the Company's Annual Form 10-K. The results of operations for the nine
     month periods ended September 30, 1996 and 1995 are not necessarily
     indicative of the operating results for the full year.
<PAGE>
                              PanAmSat Corporation

                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

(2)  Income Taxes.
     ---------------

     The Conversion resulted in the establishment by the Company of a deferred
     tax liability of approximately $22.9 million which was recorded during the
     quarter ended March 31, 1995. As a partnership, the Partnership was not
     subject to federal or state income taxes. Accordingly, no income taxes were
     deducted from the net income on the Partnership's financial statements.
     Substantially all of the difference between the Company's book income from
     operations and taxable income for the nine months ended September 30, 1996
     and book income from operations and pro forma taxable loss for the nine
     months ended September 30, 1995 is attributable to the difference in
     depreciation for tax and financial reporting purposes and certain deposits,
     and, in 1995, the temporary difference created by a $4.5 million
     non-recurring charge related to the assumption by the Company of phantom
     stock plans of a predecessor company in the Conversion and the permanent
     difference created by a $3.8 million charge related to a grant of a limited
     partnership interest in the Partnership to the Executive Vice President of
     the Company, for which the income tax benefit was specially allocated to a
     predecessor entity and, in 1996, the permanent difference created by
     certain expenditures incurred in connection with the Company's Agreement
     and Plan of Reorganization (see Note 6).

     The accompanying statements of operations present, on an unaudited pro
     forma basis, net income for the nine months ended September 30, 1995 as if
     the Partnership had been taxed at corporate federal and state tax rates and
     as if the Conversion occurred on January 1, 1995. The pro forma tax effects
     assume the net deferred tax liability as described above would have been
     provided as the related temporary differences arose.
<PAGE>
                              PanAmSat Corporation

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)

(3)  DTH Business.
     -----------------

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

     In November 1995, the Company announced that it would serve as a satellite
     service provider for the Latin America DTH service ("Latin America DTH") to
     be offered by the Globo Organization ("Globo"), Televisa, The News
     Corporation Limited ("News Corp.") and Tele-Communications International,
     Inc. ("TCI") and that the Company would have options to acquire equity
     interests in the joint ventures serving Latin America, the Caribbean and
     the Southern United States, but not Brazil.

     On February 29, 1996, the Company signed a binding letter agreement with
     Globo, Televisa and News Corp. (the "1996 Letter Agreement") to provide
     service to a series of joint ventures (the "Latin America JVs") to be
     formed by them and TCI on 48 transponders ultimately on PAS-5 and PAS-6,
     with temporary service on PAS-3 pending the commencement of service on
     PAS-6. On June 26, 1996, a full-scale agreement was executed for service in
     Brazil on 12 transponders (the "Brazil Agreement"). The 1996 Letter
     Agreement remains in force for the remaining 36 transponders. This capacity
     would enable the Latin America JVs to broadcast to Latin America, the
     Caribbean, and certain areas of the southern United States approximately
     500 digital channels and to permit distribution of program packages of
     approximately 120 digital channels to specific market areas. Also under the
     1996 Letter Agreement, Globo, Televisa, and News Corp. have agreed to
     proportionally guarantee 100 percent of the fees for transponder services
     to the Latin America JVs. These guarantee obligations may be assigned to
     TCI and, with the Company's prior written consent, to new equity
     participants in the Latin America JVs. Globo and News Corp have
     proportionately guaranteed the obligations under the Brazil Agreement. The
     Company will receive minimum service fees equivalent to the Company's best
     estimate of the cost per transponder to the Company of designing,
     launching, operating and insuring each satellite for the transponders used
     by the Latin America JVs. The Company also will receive additional revenue
     based on subscriber revenues of the Latin America JVs above a certain
     threshold, except that the transponders that will be used by the Latin
     America JV operating in Brazil will be charged on a fixed fee basis.
<PAGE>
                              PanAmSat Corporation

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)

     Under a verbal agreement in principle with Televisa, PanAmSat and Televisa
     also intended to form a joint venture to offer DTH services in the Iberian
     Peninsula. Pursuant to a revised memorandum of understanding (the "Revised
     MOU") between the Company and Televisa entered into on September 20, 1996
     which incorporated the prior verbal agreement between the parties and which
     superseded the Original MOU, the Company was granted an option for 10 years
     to obtain 10 to 15 percent interests from Televisa in the Latin America JVs
     that would service Latin America, the Caribbean, and the southern United
     States, but not Brazil. In the event the option is exercised, the purchase
     price would be equal to the Company's pro rata share of Televisa's
     aggregate contributions to the Latin America JVs providing such service,
     less all distributions by such Latin America JVs to Televisa, plus
     interest. The Company has no interest nor any options to acquire an
     interest in the Latin America JVs that will provide DTH service in Brazil.
     In connection with the Agreement and Plan of Reorganization (see Note 6),
     Televisa will purchase the Company's options under the Revised MOU.

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

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


(4)  PAS-3 Placed in Service.
     ---------------------------

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


(5)  Compensation Plan.
     ---------------------

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

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                   (Continued)


(6)  Agreement and Plan of Reorganization.
     ----------------------------------------

     On September 20, 1996 (the "Announcement Date"), the Company and Hughes
     Electronics Corporation ("Hughes") announced that they had agreeed to merge
     their respective satellite service operations into a new publicly held
     company ("New PanAmSat"). Under the terms of the Agreement and Plan of
     Reorganization that was entered into on the Announcement Date, the Galaxy
     business of Hughes will be combined to form New PanAmSat. PanAmSat
     stockholders will have three options to receive payment with respect to the
     outstanding shares of PanAmSat Common Stock and Class A Common Stock: (a)
     one-half share of common stock of New PanAmSat and $15 in cash, (b) one
     share of common stock of New PanAmSat, or (c) $30 in cash. The maximum cash
     consideration to be paid to the Company's stockholders will be equal to $15
     multiplied by the number of shares of Common Stock outstanding. Immediately
     after the merger, Hughes will own 71.5% of New PanAmSat unless the
     Company's stockholders request more shares of New PanAmSat common stock
     than cash and New PanAmSat permits additional shares of its common stock to
     be issued in lieu of cash to the Company's stockholders. In a separate but
     related transaction, New PanAmSat will acquire all of the outstanding
     shares of Univisa, Inc. the indirect holder of all of the Class B Common
     Stock of the Company, for consideration that is equal to that being paid to
     the holders of Common Stock and Class A Common Stock (the "Univisa
     Contribution"). The transaction will require governmental approals,
     including that of the U.S. Federal Communications Commission and the
     Federal Trade Commission, which are expected to be completed within six to
     12 months of the Announcement Date.

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

     Concurrently with the merger and immediately following the Univisa
     Contribution, 7.5 million shares of New PanAmSat Common Stock received by
     Satellite Company, L.L.C., a Nevada limited liability company ("S Company")
     and a subsidiary of Televisa, in connection with the Univisa Contribution
     will be repurchased by New PanAmSat for $225 million. Following such
     repurchase, either Televisa, S Company or their designee will purchase for
     $225 million all of PanAmSat's rights to purchase from Televisa certain
     joint ventures to be formed to offer DTH services in Latin America and the
     Iberian Peninsula.

<PAGE>
                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


     Overview. The Company's first satellite, PAS-1, was launched in 1988 for
     ---------
     service over the Atlantic Ocean Region and is the leading satellite for
     television and cable programming distribution in Latin America. The
     Company's second satellite, PAS-2, was launched in July 1994 for service
     over the Pacific Ocean Region and is a leading satellite for distribution
     in the Asia-Pacific region. The Company's PAS-4 satellite was launched in
     August 1995 for service over the Indian Ocean Region and commenced service
     on September 5, 1995. PAS-4 is the leading satellite for program
     distribution in South Asia and Africa. The Company's PAS-3 satellite (a
     replacement for a satellite lost as a result of a launch failure in
     December 1994) was launched on January 12, 1996 and commenced service on
     February 19, 1996 over the Atlantic Ocean Region.

     During the construction period of each of its new satellites, and
     thereafter, the Company may incur increased operating expenses, including
     expenditures for sales and marketing in excess of the levels historically
     incurred, increased engineering and technical expenses, as well as
     increased general and administrative expenses, which increased expenses may
     not be offset by additional revenues until the new satellites are
     successfully launched and commence service. Also, commencing at the
     in-service date of any successfully launched satellite, all satellite
     construction costs, launch, launch insurance, capitalized interest and
     development costs for such satellite will be depreciated on a straight-line
     basis over the estimated useful life of the satellite. Further, after the
     in-service date of any successfully launched satellite (or upon a launch
     failure), the Company will be required to expense, and no longer will be
     able to capitalize, interest allocable to such satellite's construction,
     launch and development costs.

     Revenues. Total revenues for the three months ended September 30, 1996 were
     ---------
     $66.9 million, an increase of $38.9 million or 139% as compared to the
     comparable period in 1995. Total revenues for the nine months ended
     September 30, 1996 were $177.6 million, an increase of $105.8 million or
     147% as compared to the comparable period in 1995.

     Broadcasting services revenue for the three months ended September 30, 1996
     was $56.1 million, an increase of $35.3 million, or 170% over the same
     period in 1995. Broadcasting services revenue for the nine months ended
     September 30, 1996 was $145.7 million, an increase of $95.3 million, or
     190% over the same period in 1995. The growth in broadcasting services
     revenue during the three and nine month periods was due primarily to
     revenues from video services on PAS-4 and the commencement of revenues from
     video services on PAS-3.
<PAGE>
                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
                                   (Continued)

     Business communications services revenue was $10.4 million in the three
     months ended September 30, 1996, increasing $3.7 million or 55%, over the
     comparable period in 1995. Business communications services revenue was
     $30.7 million in the nine months ended September 30, 1996, increasing $11.0
     million or 56%, over the comparable period in 1995. The increase during the
     three and nine month periods was primarily due to commencement of service
     for several new International Digital Services network and carrier service
     data contracts.

     Long-distance telephone services revenue decreased from $0.5 million for
     the three months ended September 30, 1995 to $0.4 million for the three
     months ended September 30, 1996, a decrease of $0.1 million or 20%.
     Long-distance telephone services revenue decreased from $1.7 million for
     the nine months ended September 30, 1995 to $1.2 million for the nine
     months ended September 30, 1996, a decrease of $0.5 million or 29%.

     Direct Expenses. Direct expenses were $3.1 million, or 5% of total
     ----------------
     revenues, in the three months ended September 30, 1996, an increase of $1.9
     million or 158%, from the same period in 1995 when direct expenses were 4%
     of total revenues. Direct expenses were $6.8 million, or 4% of total
     revenues, in the nine months ended September 30, 1996, an increase of $3.1
     million or 84%, from the same period in 1995 when direct expenses were 5%
     of total revenues.

     Sales and Marketing Expenses. Sales and marketing expenses were $3.1
     -----------------------------
     million, or 5% of total revenues, in the three months ended September 30,
     1996, compared to $2.4 million, or 9% of total revenues, in the three
     months ended September 30, 1995. Sales and marketing expenses were $10.3
     million, or 6% of total revenues, in the nine months ended September 30,
     1996, compared to $6.6 million, or 9% of total revenues, in the nine months
     ended September 30, 1995. The dollar increase in sales and marketing
     expenses over the three and nine month periods was primarily attributable
     to the Company's efforts in marketing capacity on the PAS Global System and
     the pursuit of direct-to-home opportunities worldwide.


<PAGE>
                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
                                   (Continued)

     Engineering and Technical Expenses. Engineering and technical expenses were
     -----------------------------------
     $4.6 million in the three month period ended September 30, 1996, or 7% of
     total revenues, compared to $ 2.7 million, or 10% of total revenues, for
     the comparable period in 1995. Engineering and technical expenses were
     $12.3 million in the nine month period ended September 30, 1996, or 7% of
     total revenues, compared to $7.0 million, or 10% of total revenues, for the
     comparable period in 1995. The dollar increase in engineering and technical
     expenses during the three and nine month periods was primarily due to
     telemetry, tracking and control costs for PAS-3 and PAS-4 as well as costs
     associated with contracts to provide carrier monitoring services.

     General and Administrative Expenses. General and administrative expenses
     ------------------------------------
     were $6.6 million, or 10% of total revenues, in the three months ended
     September 30, 1996, an increase of $2.9 million or 78%, as compared to the
     same period in 1995, when general and administrative expenses were $3.7
     million, or 13% of total revenues. General and administrative expenses were
     $18.6 million, or 10% of total revenues, in the nine months ended September
     30, 1996, an increase of $8.1 million or 77%, as compared to the same
     period in 1995, when general and administrative expenses were $10.5
     million, or 15% of total revenues. The dollar increase in general and
     administrative expenses during the three and nine month periods was
     primarily attributable to in-orbit insurance costs for PAS-3 and PAS-4 and
     additional personnel costs associated with the Company's expansion.

     Depreciation and Amortization. Depreciation and amortization was $16.1
     ------------------------------
     million in the three months ended September 30, 1996, as compared to $8.1
     million in the three months ended September 30, 1995, an increase of $8.0
     million or 99%. Depreciation and amortization was $45.2 million in the nine
     months ended September 30, 1996, as compared to $22.0 million in the nine
     months ended September 30, 1995, an increase of $23.2 million or 105%. The
     dollar increase in the three and nine month periods was primarily due to
     depreciation expense associated with PAS-3 and PAS-4 and new communication
     equipment at the Company's teleports.

     Compensatory Programs. Compensatory program expense was $4.8 million in the
     ----------------------
     three months ended September 30, 1996 compared to $0.2 million for the
     comparable period in 1995, an increase of $4.6 million. Compensatory
     program expense was $4.8 million in the nine months ended September 30,
     1996 compared to $8.3 million for the comparable period in 1995, a decrease
     of $3.5 million. Compensatory program expense during 1996 represents a cash
     bonus paid to employees who would otherwise have qualified for the grant of
     stock options under the Company's Long-Term Stock Investment Plan.
     Compensatory program expense during 1995 is related to the assumption by
     the Company of phantom stock plans of a predecessor company and the grant
     of a limited partnership interest in the Partnership to the Executive Vice
     President of the Company.
<PAGE>
                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
                                   (Continued)

     
     Reorganization Costs. Reorganization costs of $2.5 million for the three
     ---------------------
     and nine months ended September 30, 1996 consist of legal, accounting, and
     investment banking fees associated with the Agreement and Plan of
     Reorganization with Hughes announced in September 1996.

     Interest. Interest income, primarily earned from highly liquid investment
     ---------
     funds, was $5.3 million for the three months ended September 30, 1996
     compared to $5.0 million for the comparable period in 1995, an increase of
     $0.3 million. Interest income was $17.6 million for the nine months ended
     September 30, 1996 compared to $12.7 million for the comparable period in
     1995, an increase of $4.9 million. The increase in interest income during
     the three and nine month periods was primarily a result of interest earned
     on cash flow from operations as well as the proceeds from the offerings of
     the Preferred Stock and the Common Stock in the second and third quarters
     of 1995, respectively, that had not been applied to satellite systems under
     development.

     Interest expense, net of capitalized interest, increased from $3.2 million
     in the quarter ended September 30, 1995 to $5.7 million in the same quarter
     in 1996. Interest expense, net of capitalized interest, increased from
     $12.6 million in the nine months ended September 30, 1995 to $20.6 million
     in the same period in 1996. This additional interest expense during the
     three and nine month periods was primarily the result of interest expense
     on the satellite performance incentives and additional accretion of the
     Discount Notes, coupled with a decrease in the amount of capitalized
     interest related to satellite systems under development.

     Income Taxes. The Company had an income tax provision of $11.7 million for
     -------------
     the three months ended September 30, 1996 compared to $4.9 million for the
     comparable period in 1995. The Company had an income tax provision of $31.1
     million for the nine months ended September 30, 1996 compared to $9.0
     million for the comparable period in 1995.

     Preferred Stock Dividend. The Company had Preferred Stock dividends of
     -------------------------
     $10.5 million for the three months ended September 30, 1996 compared to
     $9.3 million for the comparable period in 1995. The Company had Preferred
<PAGE>
                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
                                   (Continued)


     Stock dividends of $30.5 million for the nine months ended September 30,
     1996 compared to $16.5 million for the comparable period in 1995. The
     Preferred Stock dividends are a result of the issuance of the Company's
     Preferred Stock on April 21, 1995.

     EBITDA. EBITDA was $42.2 million in the three months ended September 30,
     -------
     1996, an increase of $24.3 million or 136%, as compared to $17.9 million
     for the comparable period in 1995. EBITDA was $122.2 million in the nine
     months ended September 30, 1996, an increase of $86.5 million or 242%, as
     compared to $35.7 million for the comparable period in 1995. EBITDA was 69%
     of total revenues in the first nine months of 1996 as compared to 50% of
     total revenues for the same period in the prior fiscal year. The dollar
     increase in EBITDA for the three and nine month periods ended September 30,
     1996 was due primarily to the increase in total revenues.

     Liquidity and Capital Resources. Since inception, the Company and its
     --------------------------------
     predecessors have financed their operations through a combination of debt
     and equity financing, vendor financing, bank financing, equipment leases
     and cash flow from operations. On August 5, 1993 the Company completed the
     sale of $175 million aggregate principal amount of Senior Secured Notes and
     $460.2 million aggregate principal amount of Discount Notes (collectively,
     the "Notes") and received net proceeds of approximately $425.5 million. The
     original PAS-3 satellite was destroyed during a launch failure on December
     1, 1994. The Company collected in 1995 the insurance proceeds in the amount
     of $214.0 million for the original PAS-3 satellite. On April 21, 1995, the
     Company completed the sale of 275,000 shares of Preferred Stock in a public
     offering and received net proceeds of approximately $261.8 million. On
     September 27, 1995, the public offering of 18,920,000 shares of Common
     Stock was completed and the Company received net proceeds of approximately
     $229 million.

     The total cost for the construction and launch of PAS-5 and PAS-6,
     including launch insurance, certain components for spare satellites, ground
     facilities and related development expenses (but excluding capitalized
     interest expense) is estimated to be approximately $473 million. The
     Company expects to fund $296.3 million of such costs with the net proceeds
     from the offering of Preferred Stock and $70.0 million from vendor
     financing. The balance of such costs and any additional costs due to cost
     overruns, delays or other unanticipated expenses is anticipated to be
     funded from vendor financing and future cash flow from operations.

<PAGE>
                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
                                   (Continued)


     The total cost for the construction and launch of PAS-7 and PAS-8,
     including launch insurance, ground facilities and related development
     expenses (but excluding capitalized interest expense) is estimated to be
     approximately $420.0 million. The Company expects to fund $224.6 million of
     such costs with the net proceeds from the offering of the Common Stock. The
     balance of such costs and any additional costs due to cost overruns, delays
     or other unanticipated expenses is expected to be funded from vendor
     financing and future cash flow from operations.

     The Company believes that the net proceeds to it from the offerings of
     Preferred Stock and Common Stock, vendor financing, future cash flow from
     operations (assuming PAS-5 and PAS-6 are successfully launched and commence
     service on the schedule currently contemplated) and cash on hand will be
     sufficient to fund the Company's operations, its remaining costs for the
     construction and launch of PAS-5 and PAS-6, its anticipated minimum
     contractual commitments for the construction and launch of PAS-7 and PAS-8,
     as well as to pursue international opportunities for DTH services which may
     be identified by the Company in the future. Any additional costs due to
     cost overruns, delays or other unanticipated expenses are expected to be
     funded from additional vendor financing and future cash flow from
     operations.

     Cash flows provided by operating activities increased to $120.9 million in
     the nine months ended September 30, 1996, from $68.4 million in the nine
     months ended September 30, 1995. The 1996 increase is due primarily to the
     significant growth in revenues for the nine months ended September 30, 1996
     and the effect of non-cash charges. The Company has and will continue to
     have significant non-cash charges including depreciation of satellites and
     other equipment and amortization of original issue discount on its Senior
     Subordinated Discount Notes, as well as significant cash interest payments
     that are capitalized rather than being currently expensed.

     Net cash used in investing activities decreased to $128.4 million in the
     nine months ended September 30, 1996 from $579.8 million in the nine months
     ended September 30, 1995. This decrease primarily reflects $235.7 million
     of expenditures for satellite systems under development partially funded by
     $125.3 million of proceeds from maturity of marketable securities. This
     compares to $244.8 million in expenditures for satellite systems under
     development and $561.3 million of purchases of marketable securities

<PAGE>
                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
                                   (Continued)


     during the first nine months of 1995 partially funded with $191.1 million
     of insurance proceeds collected on the launch failure of the original PAS-3
     satellite.

     Net cash used in financing activities decreased to $2.7 million in the nine
     months ended September 30, 1996 from $490.9 million provided by financing
     activities in the nine months ended September 30, 1995. This decrease
     reflects $2.7 million in repayments of long-term debt for the nine months
     ended September 30, 1996 compared to $1.4 million of repayments of
     long-term debt during the first nine months of 1995 funded by $263.4
     million of net proceeds collected on the offering of Preferred Stock and
     $228.9 million of net proceeds collected on the issuance of Common Stock.
     The remaining net proceeds were used to purchase marketable securities.

<PAGE>
                           PART II - OTHER INFORMATION


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

   (a)   EXHIBITS

2.3         Agreement and Plan of Reorganization dated September 20, 1996, among
            Hughes Communications, Inc., Hughes Communications Galaxy, Inc.,
            Hughes Communications Satellite Services, Inc., Hughes
            Communications Services, Inc., Hughes Communications Carrier
            Services, Inc., Hughes Communications Japan, Inc., Magellan
            International, Inc., and PanAmSat Corporation.

2.4         Stock Contribution and Exchange Agreement dated as of September 20,
            1996 by and among Grupo Televisa, S.A., Satellite Company, LLC,
            Magellan International, Inc., and Hughes Communications, Inc.

10.10.4     Amendment Number 3 to Launch Services Agreement LKEC-9411-002 dated
            14 November 1994, through Amendment No.2, dated 9 June 1995, entered
            into on August 23, 1996, by and between PanAmSat Corporation and
            Lockheed-Khrunichev-Energia International, Inc. (Portions of this
            exhibit have been omitted subject to a request for confidential
            treatment to the Securities and Exchange Commission).

10.13.1     DTH Option Purchase Agreement dated September 20, 1996, between
            PanAmSat Corporation, Grupo Televisa, S.A., and Satellite Company,
            L.L.C.

10.13.2     Revised DTH System in Latin America Memorandum of Understanding
            dated as of September 20, 1996, between PanAmSat Corporation and
            Grupo Televisa, S.A.

10.14.1     Amendment Number 1 to the PAS-5 Satellite Purchase Contract between
            Hughes Aircraft Company and PanAmSat Corporation effective as of
            September 3, 1996. (Portions of this exhibit have been omitted
            subject to a request for confidential treatment to the Securities
            and Exchange Commission).

10.16       Full-Time Transponder Service Agreement From PAS-3 (European Beam)
            entered into as of September 20, 1996, by and between PanAmSat
            Corporation and Televisa, S.A. (Portions of this exhibit have been
            omitted subject to a request for confidential treatment to the
            Securities and Exchange Commission).

27          Financial Data Schedule

   (b)      REPORTS ON FORM 8-K

            During the quarter ended September 30, 1996, PanAmSat Corporation
            filed a current report on Form 8-K dated September 23, 1996,
            announcing it had agreed to enter into the Agreement and Plan of
            Reorganization.
<PAGE>
                                    SIGNATURE


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



                                               PanAmSat Corporation

Date:  November 14, 1996                       /s/Patrick J. Costello
                                               ----------------------
                                               Patrick J. Costello
                                               Chief Financial Officer
                                               and a Duly Authorized Officer
                                               of the Company