NEW YORK - May 9, 2006 - Loral Space & Communications Inc. (NASDAQ: LORL) today reported its financial results for the three months ended March 31, 2006.

"The forward momentum sustained since our emergence from bankruptcy last year has resulted in a very solid performance for Loral in the first quarter," said Michael B. Targoff, Loral's chief executive officer. "Space Systems/Loral's robust order backlog coupled with Loral Skynet's steady fleet utilization rate attest to Loral's health and to its positive prospects."

Loral emerged from bankruptcy on November 21, 2005. Its financial statements reflect fresh-start accounting effective October 1, 2005. Comparisons to first quarter 2005 financial information throughout this release refer to the results of Loral prior to its emergence.

A full discussion of Loral's results is contained in the company's Form 10-Q, filed today with the Securities and Exchange Commission (SEC) and available on Loral's web site at www.loral.com or through the SEC's EDGAR service at www.sec.gov.

Loral's revenue rose 30 percent to $172 million from $132 million last year driven primarily by increased sales at Loral's satellite manufacturing division, Space Systems/Loral (SS/L). Loral's net loss for the quarter was $16 million, versus a net loss of $26 million in the first quarter of 2005. Loral's first quarter Adjusted EBITDA (1) was $11 million versus $5 million in 2005.

Loral's net funded backlog at the end of the first quarter was $1.1 billion.

At March 31, 2006, Loral had $361 million in cash and cash equivalents. All undisputed pre-petition claims and chapter 11 expenses have been satisfied with the exception of $31 million to be paid later in 2006. Loral's principal amount of long-term debt remained unchanged from year-end 2005 at $126 million.

SS/L reported first quarter 2006 revenues before eliminations of $139 million, compared to $100 million in the same quarter in 2005. Adjusted EBITDA before eliminations for SS/L in the first quarter of 2006 was $6 million, versus $4 million in the year-ago quarter. SS/L's increase in Adjusted EBITDA was driven by increased sales, primarily from satellite construction contracts signed in 2004 and 2005, offset by increased expenditures for the year, primarily for research and development and workforce expansion to accommodate future growth.

Backlog at SS/L at March 31, 2006 rose to $830 million, including intercompany backlog of $129 million. Intercompany backlog primarily includes the Telstar 11N satellite being built for Loral's satellite services division, Loral Skynet. At year-end 2005, SS/L's backlog totaled $815 million, with intercompany backlog of $0.3 million. After the close of the quarter, SS/L announced that it has been awarded a contract by Asia Satellite Telecommunications Company Limited (AsiaSat), Hong Kong, to build AsiaSat 5, a new generation communications satellite designed to offer improved power and coverage to AsiaSat's customers across the Asia Pacific region.

In the first quarter of 2006, the SS/L-built Spainsat satellite was successfully launched for Loral's X-band joint venture partner Hisdesat. In addition to Hisdesat's X- and Ka-band capacity aboard the satellite, Spainsat carries an eight-transponder payload to be leased by XTAR and called XTAR-LANT. An additional four SS/L-built satellites are scheduled for launch in 2006, beginning with Satmex 6 later this month.

Loral Skynet's first quarter 2006 revenues before eliminations totaled $36 million, level with revenues of $36 million in the same period of 2005. Increased revenues from transponder leasing and network services were offset by a reduction in revenue from the sale of Loral Skynet's business television service and reduced revenues from professional services. Its Adjusted EBITDA before eliminations for the quarter was $13 million, compared to $9 million in the first quarter of 2005. Utilization on Loral Skynet's satellite fleet at the end of the first quarter was 74 percent compared to 65 percent at the end of the same period in 2005.

Satellite services backlog at March 31, 2006, was $433 million, including intercompany backlog of $19 million. At year-end 2005, backlog totaled $453 million, including intercompany backlog of $20 million.

During the quarter, Loral Skynet resumed marketing its fixed satellite services (FSS) to customers in North America and can now provide complete bandwidth services in every major geographic region of the world. In addition to its current North American coverage on the Telstar 12 and Telstar 14/Estrela do Sul 1 satellites, Loral Skynet will soon offer FSS service on four transponders it will operate aboard Satmex 6. Satmex 6 is a high-power C- and Ku-band satellite covering all of the Americas that is scheduled to launch later this month. Upon completion in 2008 of its Telstar 11N satellite, currently under construction at SS/L, Loral Skynet will provide expanded and enhanced Ku-band service across much of the Americas, including the U.S., Europe, Africa and the maritime Atlantic Ocean Region.

Loral Space & Communications is a satellite communications company. It owns and operates a fleet of telecommunications satellites used to broadcast video entertainment programming, distribute broadband data, and provide access to Internet services and other value-added communications services. Loral also is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications including direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management. For more information, visit Loral's web site at www.loral.com.

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, Loral Space & Communications Inc. or its representatives have made or may make forward-looking statements, orally or in writing, which may be included in, but are not limited to, various filings made from time to time with the Securities and Exchange Commission, press releases or oral statements made with the approval of an authorized executive officer of the company. Actual results could differ materially from those projected or suggested in any forward-looking statements as a result of a wide variety of factors and conditions. Many of these factors and conditions are described under the caption "Risk Factors" in each of the company's annual report on Form 10-K for the fiscal year ended December 31, 2005 and its quarterly reports on Form 10-Q for subsequent periods. The reader is specifically referred to these documents, as well as the company's other filings with the Securities and Exchange Commission.

(1) The common definition of EBITDA is "Earnings Before Interest, Taxes, Depreciation and Amortization". In evaluating financial performance, we use revenues and operating income (loss) from continuing operations before depreciation and amortization, including amortization of stock option compensation, and reorganization expenses due to bankruptcy ("Adjusted EBITDA") as the measure of a segment's profit or loss. Adjusted EBITDA is equivalent to the common definition of EBITDA before: reorganization expenses due to bankruptcy; gain on discharge of pre-petition obligations and fresh-start adjustments, gain (loss) on investments; other income (expense); equity in net income (losses) of affiliates; and minority interest, net of tax. Interest expense has been excluded from Adjusted EBITDA to maintain comparability with the performance of competitors using similar measures with different capital structures. During the period we were in Chapter 11, we only recognized interest expense on the actual interest payments we made. During this period, we did not make any further interest payments on our debt obligations after March 17, 2004, the date we repaid our secured bank debt. Reorganization expenses due to bankruptcy were only incurred during the period we were in Chapter 11. These expenses have been excluded from Adjusted EBITDA to maintain comparability with our results during periods we were not in Chapter 11 and with the results of competitors using similar measures. Adjusted EBITDA should be used in conjunction with U.S. GAAP financial measures and is not presented as an alternative to cash flow from operations as a measure of our liquidity or as an alternative to net income as an indicator of our operating performance.

We believe the use of Adjusted EBITDA along with U.S. GAAP financial measures enhances the understanding of our operating results and is useful to investors in comparing performance with competitors, estimating enterprise value and making investment decisions. A full reconciliation of Adjusted EBITDA to net loss is included in the accompanying tables to this report and also in Loral's quarterly report on Form 10-Q, available on the company's web site at www.loral.com or on the SEC's EDGAR service at www.sec.gov.