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 September 30, 2000
                           Commission File No. 0-23044
                                 ---------------


                               MOTIENT CORPORATION
             (Exact name of registrant as specified in its charter)



               Delaware                              93-0976127
 (State or other jurisdiction of    (I.R.S. Employee Identification Number)
  incorporation or organization)


                            10802 Parkridge Boulevard
                           Reston, Virginia 20191-5416
                                 (703) 758-6000
       (Address, including zip code, and telephone number, including area
             code, of registrant's principal executive offices)

                                 ---------------


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  report(s)),  and (2) has been  subject  to such  filing
requirements for the past 90 days. Yes [X] No[ ]

Number of shares of Common Stock outstanding at November 10, 2000: 49,563,737









                          PART I- FINANCIAL INFORMATION
                          Item 1. Financial Statements


                      Motient Corporation and Subsidiaries

                 Consolidated Condensed Statements of Operations
                      (in thousands, except per share data)
                                   (Unaudited)



                                                                      Three months ended                    Nine months ended
                                                                         September 30,                         September 30,
                                                                         -------------                         -------------
                                                                   2000              1999                2000                1999
                                                                   ----              ----                ----                ----

REVENUES
                                                                                                             
   Services                                                      $ 19,810            $ 17,290              $55,182         $ 50,076
   Sales of equipment                                               6,847               5,680               19,333           15,997
                                                                    -----               -----               ------           ------
         Total Revenues                                            26,657              22,970               74,515           66,073
COSTS AND EXPENSES
   Cost of services and operations                                 18,573              17,287               55,365           51,673
   Cost of equipment sold                                          10,678               6,045               23,883           17,167
   Sales and advertising                                            8,633               5,548               22,479           16,018
   General and administrative                                      32,952              13,119               73,528           22,596
   Depreciation and amortization                                    9,932              14,911               28,220           42,315
                                                                    -----              ------               ------           ------
   Operating Loss                                                 (54,111)            (33,940)            (128,960)         (83,696)

   Interest and Other Income                                        9,015                 990               24,168            4,622
   Interest Expense                                               (15,278)            (18,136)             (46,288)         (50,957)
   Unrealized Loss on Note Receivable From XM Radio                    --                  --                   --           (9,919)
   Gain on Conversion of Convertible Note Payable to
     Related Party                                                     --                  --               32,854               --
   Unrealized (Loss) Gain on Convertible Note Payable to
   Related Party                                                       --              (2,807)               3,925            7,229
    Minority Interest in Loss of XM Radio                          13,391                  --               24,074               --
   Equity in Loss of XM Radio                                          --                  --                   --           (6,692)
                                                                 --------           ----------             --------        ---------
   Net Loss before Extraordinary Item, Preferred
     Dividend, and Beneficial Conversion Charge                   (46,983)            (53,893)             (90,227)        (139,413)

   Extraordinary Loss on Extinguishment of Debt                        --             (12,132)                (417)         (12,132)
                                                                ---------           ----------            ---------       ----------

Net Loss before Preferred Dividend and Beneficial
Conversion Charge                                                 (46,983)            (66,025)             (90,644)        (151,545)

   Preferred Stock Dividend Requirement of XM Radio                (1,914)                 --               (3,165)              --
   Beneficial Conversion and Beneficial Conversion
   Charges of XM Radio                                            (44,438)                 --              (44,438)              --
                                                                  --------          ----------            -------         ----------

   Net Loss Attributable to Common Shareholders                  ($93,335)           ($66,025)           ($138,247)       ($151,545)
                                                                 =========           =========           =========        ==========

Basic and Diluted Loss Per Share of Common Stock                   ($1.88)            ($1.18)              ($2.79)           ($3.79)
   Basic and Diluted Loss Per Share Extraordinary item                 --             ($0.27)               (0.01)           ($0.33)
                                                                ----------            -------             ---------          -------

   Basic and Diluted Net Loss Per  Share of common stock          ($1.88)             ($1.45)              ($2.80)           ($4.12)
                                                                  =======             =======             =========      ===========

   Weighted-Average Common Shares Outstanding During
    the Period                                                     49,532              45,421               49,378           36,740

See notes to consolidated condensed financial statements.
















                      Motient Corporation and Subsidiaries

                      Consolidated Condensed Balance Sheets
                                 (in thousands)

                                                                              September 30, 2000               December 31, 1999
                                                                              ------------------               -----------------
                                                                                  (Unaudited)
ASSETS
CURRENT ASSETS:


                                                                                                              
     Cash and cash equivalents (includes $312,711 from XM Radio
     at September 30, 2000 and $50,698 at December 31, 1999)                         $313,082                        $51,474
     Short-term investments of XM Radio                                                    --                         69,472
     Accounts receivable-trade, net                                                    21,512                         16,594
     Inventory                                                                         27,290                         28,616
     Restricted short-term investments                                                 41,038                         41,038
     Restricted short-term investments of XM Radio                                     93,403                             --
     Other current assets                                                              20,986                         13,100
                                                                                       ------                         ------
         Total current assets                                                         517,311                        220,294
  PROPERTY AND EQUIPMENT, NET                                                         161,545                        116,516
  XM RADIO SYSTEM UNDER CONSTRUCTION                                                  728,773                        357,278
  GOODWILL AND OTHER INTANGIBLES, NET                                                  76,591                         62,211
  RESTRICTED INVESTMENTS                                                               15,635                         31,109
  RESTRICTED INVESTMENTS OF XM RADIO                                                   60,743                             --
  DEFERRED CHARGES AND OTHER ASSETS, NET                                               17,266                         22,540
                                                                                       ------                         ------
         Total Assets                                                              $1,577,864                       $809,948
                                                                                   ==========                       ========


See notes to consolidated condensed financial statements.



                      Motient Corporation and Subsidiaries

                      Consolidated Condensed Balance Sheets
                                 (in thousands)




                                                                                  September 30, 2000            December 31, 1999
                                                                                  ------------------            -----------------
                                                                                      (Unaudited)

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:

                                                                                                                
    Accounts payable and accrued expenses                                                  $102,885                    $67,885
    Obligations under capital leases due within one year                                      4,019                      6,154
    Current portion of vendor financing commitment due to related party                       4,172                      1,977
    Current portion of deferred trade payables                                                3,564                      3,983
    Other current liabilities                                                                13,260                      1,646
                                                                                             ------                      -----
         Total current liabilities                                                          127,900                     81,645
LONG-TERM LIABILITIES:
    Obligations under Senior Notes, net of discount                                         328,249                    327,576
    Senior Secured Notes of XM Radio, net of discount                                       262,815                         --
    Obligations under Bank Financing                                                        121,000                     85,000
    Capital lease obligations                                                                 8,849                        247
    Net assets acquired in excess of purchase price                                             812                      1,333
    Vendor financing commitment due to related party                                          5,058                      2,535
    Convertible note payable due to related party, at fair value                                 --                     50,138
    Other long-term liabilities                                                              24,538                      3,955
                                                                                             ------                      -----
         Total long-term liabilities                                                        751,321                    470,784
         Total liabilities                                                                  879,221                    552,429
                                                                                            -------                    -------

    MINORITY INTEREST IN XM RADIO                                                           650,716                    274,745
    STOCKHOLDERS' EQUITY (DEFICIT):
         Preferred Stock                                                                         --                         --
         Common Stock                                                                           495                        485
         Additional paid-in capital                                                         976,384                    844,181
         Deferred compensation                                                               (3,829)                    (6,536)
         Common Stock purchase warrants and conversion rights                                80,855                     63,290
         Unamortized guarantee warrants                                                     (15,072)                   (18,384)
         Cumulative loss                                                                   (990,906)                  (900,262)
                                                                                           ---------                  --------
         STOCKHOLDERS' EQUITY (DEFICIT)                                                      47,927                    (17,226)
                                                                                             ------                   ---------
         Total Liabilities, Minority Interest, and Stockholders' Equity (Deficit)        $1,577,864                   $809,948
                                                                                         ==========                   =========




See notes to consolidated condensed financial statements.




                      Motient Corporation and Subsidiaries

                 Consolidated Condensed Statements of Cash Flows
                                 (in thousands)
                                   (Unaudited)




                                                                                          Nine months ended September 30,
                                                                                        2000                          1999
                                                                                        ----                          ----

CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                                                               
Net loss                                                                               $(90,644)                     $(151,545)
Adjustments to reconcile net loss to net cash used in operating activities:
     Amortization of Guarantee Warrants and debt related costs                            8,783                         13,151
     Depreciation and amortization                                                       28,220                         42,315
     Equity in loss of XM Radio                                                              --                          6,692
     Net unrealized (gain) loss on marketable securities                                 (3,925)                         2,690
     Extraordinary loss on extinguishment of debt                                           417                         12,132
     Non cash stock compensation of XM Radio                                              8,264                             --
     Gain on conversion of convertible note payable to related party                    (32,854)                            --
     Minority Interest                                                                  (24,074)                            --
     Changes in assets and liabilities, net of acquisitions:
         Inventory                                                                        1,326                         (1,004)
         Prepaid in-orbit insurance                                                        (215)                        (1,449)
         Accounts receivable-trade                                                       (5,594)                        (5,395)
         Other current assets                                                            (4,029)                        (7,629)
         Accounts payable and accrued expenses                                           19,759                         (9,762)
         Deferred trade payables                                                         (1,103)                           975
         Deferred items, net                                                             15,169                            393
                                                                                         ------                            ---
         Net cash used in operating activities                                          (80,500)                       (98,436)

CASH FLOWS FROM INVESTING ACTIVITIES:
Payment of Senior Note interest from escrow                                              20,503                         20,503
Purchase of XM Radio Note Receivable                                                         --                        (21,419)
XM Radio Acquisition costs                                                                   --                           (788)
Purchase of long-term restricted investments                                             (5,030)                        (3,613)
Net Purchase/Maturity of XM Radio's short-term investments                               69,472                             --
System under construction                                                              (347,134)                       (75,579)
Purchase of restricted investments by XM Radio                                         (104,637)                            --
Other investing activities by XM Radio                                                  (55,122)                            --
Asset Sale Agreement to Satellite Ventures                                               10,836                             --
Additions to property and equipment                                                     (51,609)                        (9,928)
                                                                                        --------                        -------
Net cash used in investing activities                                                  (462,721)                       (90,824)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Common Stock                                                    5,584                        121,974
Proceeds from issuance of conversion option to the investors of Satellite                18,411                             --
Ventures
Proceeds from issuance of Common and Preferred Stock by XM Radio                        436,026                             --
Proceeds from Senior Secured Notes and Stock Purchases Warrants issued by               322,898                        250,000
XM Radio
Principal payments under capital leases                                                  (3,463)                        (4,421)
Principal payments under Vendor Financing                                                (2,136)                          (861)
Proceeds from Bank Financing                                                             72,000                         52,000
Repayment of Term Loan                                                                   (1,000)                       (59,000)
Repayment of XM Radio Bank Loan                                                              --                            (73)
Repayment of WorldSpace loan by XM Radio                                                     --                        (75,000)
Proceeds from reduction of interest rate swap                                                --                          6,009
Repayments on Revolver                                                                  (35,000)                       (53,000)
Proceeds from note payable to related party                                                  --                         21,500
Debt issuance costs                                                                      (8,491)                       (10,722)
                                                                                         -------                       --------
Net cash provided by financing activities                                               804,829                        248,406
Net increase in cash and cash equivalents                                               261,608                         59,146
CASH AND CASH EQUIVALENTS, beginning of period                                           51,474                          2,285
                                                                                         ------                          -----
CASH AND CASH EQUIVALENTS, end of period                                               $313,082                        $61,431
                                                                                       ========                        =======

See  notes  to   consolidated   condensed financial statements.





                          PART I. FINANCIAL INFORMATION
                    Item 1. Financial Statements (continued)

                      MOTIENT CORPORATION AND SUBSIDIARIES

              Notes to Consolidated Condensed Financial Statements
                               September 30, 2000
                                   (Unaudited)

1. ORGANIZATION AND BUSINESS

Motient  Corporation  is a leading  provider  of two-way  mobile  communications
services principally to business-to-business customers and enterprises.  Motient
Corporation (with its subsidiaries, "Motient" or the "Company") serves a variety
of markets  including mobile  professionals,  telemetry,  transportation,  field
service,  and  nationwide  voice  dispatch,  to customers in the United  States.
Motient  provides its eLink (SM) two-way  wireless  email  services to customers
accessing email through corporate servers,  Internet Service Providers (ISP) and
Mail Service Provider (MSP) accounts, and paging network suppliers.  In November
2000,  Motient  launched its BlackBerry (TM) by Motient wireless email solution,
developed  by Research in Motion  ("RIM") and  licensed to operate on  Motient's
network.  BlackBerry  by  Motient  is  designed  for  large  corporate  accounts
operating in a Microsoft Exchange  environment and contains advanced  encryption
features.

As of  September  30, 2000,  the Company had an equity  interest in XM Satellite
Radio  Holdings  Inc. ("XM Radio") of  approximately  33.1% (or 21.8% on a fully
diluted basis);  however,  the Company continues to control XM Radio through its
Board of Director  membership and common stock voting rights. The operations and
financing of XM Radio are maintained  separate and apart from the operations and
financing of Motient.  Please refer to XM Radio's audited financial  statements,
included in its reports and filings with the Securities and Exchange  Commission
("SEC"), for more detail about its business plan, risks, and financial results.

Motient is devoting its efforts to expanding its business.  This effort involves
substantial  risk.  Specifically,  future  operating  results will be subject to
significant  business,   economic,   regulatory,   technical,   and  competitive
uncertainties  and  contingencies.  Depending on their extent and timing,  these
factors,  individually or in the aggregate,  could have an adverse effect on the
Company's financial condition and future results of operations.


2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited  consolidated  condensed financial statements included herein have
been  prepared  pursuant  to the  rules  and  regulations  of the  SEC.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted.  While the Company  believes that the disclosures made are
adequate to not make the information  misleading,  these consolidated  condensed
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial statements and related notes included in the Company's filings and the
filings of XM Radio with the SEC.  All filings of the Company  before  April 24,
2000 can be found under the Company's  former name,  American  Mobile  Satellite
Corporation.

The  consolidated  balance  sheet as of  September  30, 2000,  the  consolidated
statements of operations for the three and nine months ended  September 30, 2000
and 1999, and cash flows for the nine months ended  September 30, 2000 and 1999,
have  been  prepared  by the  Company  and  are  unaudited.  In the  opinion  of
management,   all  adjustments  (consisting  of  normal  recurring  adjustments)
necessary to present  fairly the financial  position,  results of operations and
cash flows at September 30, 2000, and for all periods presented have been made.

Consolidation

The  consolidated  financial  statements  include the  accounts of Motient,  its
wholly  owned  subsidiaries,  and its  controlled  subsidiary  -- XM Radio.  All
significant inter-company transactions and accounts have been eliminated.

In July  1999 the  Company  acquired  all of the  outstanding  debt  and  equity
interest  in XM Radio  from its  other  investor  (the "XM  Acquisition").  As a
result,  all of XM Radio's  results  for the period  from July 7, 1999 have been
included in the  Company's  consolidated  condensed  financial  statements.  The
Company  will  continue  to  consolidate  XM Radio  until the  Company no longer
controls  XM Radio.  The  Company  must  request  and  receive  FCC  approval to
relinquish control of XM Radio. Prior to July 7, 1999, the Company's  investment
in XM Radio was accounted for pursuant to the equity method of accounting.

On March 30, 2000, the FCC approved an application filed by XM Radio which would
allow the Company to reduce its voting interest in XM Radio to a minimum of 40%,
provided that the Company retains its right to elect a majority of the directors
of XM  Radio's  Board of  Directors.  The  Company  has not  reduced  its voting
interest in XM Radio and still maintains  control of XM Radio. On July 14, 2000,
XM Radio filed an  application  with the FCC to allow XM Radio to  transfer  its
control from the Company to a diffuse group of owners,  none of whom will have a
controlling interest.  This application is pending with the FCC. Under the terms
outlined  in this  application,  the  Company  will  still  retain  its Board of
Director  membership but will no longer have the right to elect a majority of XM
Radio's Board of Directors.  At such time that the Company  ceases to control XM
Radio,  the Company will account for its  investment in XM Radio pursuant to the
equity method.

Additionally,  Motient Satellite Ventures LLC ("Satellite  Ventures") was formed
on June 29, 2000 (see Note 4 - Motient  Satellite  Ventures  LLC).  Although the
Company has an 80% interest in Satellite  Ventures,  the minority investors have
certain  participative  rights which provide for their  participation in certain
business decisions that may be made in the normal course of business; therefore,
in  accordance  with  Emerging  Issues Task Force Issue No 96-16,  the Company's
investment in Satellite Ventures is recorded pursuant to the equity method.

Loss Per Share

Basic and diluted loss per common share is computed by dividing income available
to  common  stockholders  by  the  weighted-average   number  of  common  shares
outstanding  for the period.  Diluted  earnings per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were  exercised  or  converted  into common stock or resulted in the issuance of
common  stock  that then  shared in the  earnings  of the  entity.  Options  and
warrants to purchase shares of common stock were not included in the computation
of loss per share as the effect would be  antidilutive.  As a result,  the basic
and diluted earnings per share amounts are identical.  As of September 30, 2000,
there were approximately 4.6 million options and warrants that were not included
in this  calculation,  because  the  effect  would  be  antidilutive.  Net  loss
attributable  to common  shareholders  for the quarter ended  September 30, 2000
reflects the deduction from net loss of the Company's  share of XM Radio's 8.25%
Series  B  convertible  redeemable  preferred  stock  dividend,  as  well as the
Company's  share of XM Radio's $123.0  million  Series C convertible  redeemable
preferred stock beneficial  conversion charge accrued for the third quarter. The
dividend was paid on November 1, 2000. See Note  10-Subsequent  events.  For the
nine  months  ended  Sept.  30,  2000,  the  net  loss  attributable  to  common
shareholders reflects the Company's share of the first, second and third quarter
preferred  stock  dividends of XM Radio,  as well as the  beneficial  conversion
charge for XM Radio's placement of the Series C convertible securities.

Comprehensive Income

SFAS No.  130,  "Reporting  of  Comprehensive  Income"  requires  "comprehensive
income" and the components of "other comprehensive income" to be reported in the
financial  statements and/or notes thereto.  Since the Company does not have any
components of "other  comprehensive  income," reported net income is the same as
"comprehensive  income" for the three and nine months ended  September  30, 2000
and September 30, 1999.

Segment Disclosures

In accordance  with SFAS 131,  "Disclosures  about Segments of an Enterprise and
Related   Information,"  the  Company  has  two  operating  segments:   wireless
communications  services  and XM Radio's  satellite-based  digital  audio  radio
service.  The  Company  provides  a wide range of  two-way  mobile and  internet
communications  services  principally  to  business-to-business   customers  and
enterprises. The Company's service covers all of the 50 states, Puerto Rico, the
U.S. Virgin Islands,  and hundreds of miles of U.S. coastal waters.  XM Radio is
in the process of  constructing  its satellite  system to provide  digital radio
programming transmitted from satellites to vehicles, homes, and portable radios.
XM  Radio  is  currently  in the  development  stage  and  thus  has no  revenue
generating  operations.  The following  summarizes  the Company's  core wireless
communications services and equipment revenue by major product lines:





                                                       Revenue for the Three            Revenue for the Nine
                                                           Months Ended                     Months Ended
                                                           September 30,                   September 30,
                                                           -------------                   -------------
                                                       2000            1999            2000            1999
                                                       ----            ----            ----            ----

                                                                                          
Data Services                                          $14.0           $ 12.6           $40.0         $ 36.9
Voice Service                                            2.8              3.5             9.7            9.7
Capacity Resellers and Other                             3.0              1.2             5.5            3.5
Equipment                                                6.8              5.7            19.3           16.0



New Accounting Pronouncements

In September  1998,  FASB issued  Statement No. 133,  "Accounting for Derivative
Instruments  and Hedging  Activities,"  which  requires the  recognition  of all
derivatives  as either  assets  or  liabilities  measured  at fair  value.  This
statement  was  originally  effective  for the year ended  December 31, 2000. In
September 1999,  FASB issued  Statement No. 137, which defers the effective date
of Statement No. 133 until fiscal years  beginning  after September 15, 2000. In
September  2000,  the FASB issued  Statement  No. 138,  "Accounting  for Certain
Derivative  Instruments  and  Certain  Hedging  Activities",  which  amends FASB
Statement No. 133. This Statement  limits the scope to certain  derivatives  and
hedging activities.  The effective date of Statement No. 138 is for fiscal years
beginning  after  September  15,  2000.  The Company  does not believe  that the
adoption  of  Statement  No.  138 will have a material  impact on its  financial
position, results of operations and cash flows.

In December 1999,  the SEC issued Staff  Accounting  Bulletin No. 101,  "Revenue
Recognition"  ("SAB  101").  SAB  101  provides  guidance  on  the  recognition,
presentation,  and disclosure of revenue in financial statements. The Company is
currently  evaluating  the  impact  of SAB 101 on its  consolidated  results  of
operations  and  financial  condition.  On September  26, 2000,  the SEC delayed
implementation  of SAB 101 until the fourth  quarter of fiscal  years  beginning
after  December 15,  1999.  Any change in  accounting  principle  required  from
adoption  of SAB 101 will be  reported  as a  cumulative  effect  of a change in
accounting principle as of January 1, 2000.

During the third quarter, XM Radio adopted Financial  Accounting Standards Board
Interpretation  No. 44,  Accounting  for Certain  Transactions  Involving  Stock
Compensation  ("FIN  44"),  effective  July 1, 2000,  to account for all options
repriced  by XM Radio  during  the period  covered  by FIN 44.  The  application
resulted in additional  compensation  expense of $4.8 million  recognized during
the quarter ended September 30, 2000.

Concentrations of Credit Risk

For the nine months ended  September  30, 2000,  five  customers  accounted  for
approximately 26% of the Company's total revenue.

Inventory Valuation

Inventories  are  stated at lower of cost or market  using the  weighted-average
cost method.  In the third  quarter of 2000,  the Company  reocrded an inventory
write-down  of  $3.6 million  associated  with  certain  first-generation  eLink
devices.

Other

The Company paid  approximately  $6.9 million and $6.2 million in the nine-month
period ended September 30, 2000 and September 30, 1999, respectively, to related
parties for capital  assets,  service-related  obligations,  and payments  under
pre-existing  financing agreements.  There were no payments from related parties
in the nine-month  period ended September 30, 2000 and September 30, 1999. Total
indebtedness  to related  parties at September 30, 2000 was  approximately  $8.0
million, and amounts due from related parties totaled $0.3 million. As described
in Note  7-Commitments  and  Contingencies,  XM Radio has contracted with Boeing
Satellite  Systems  International,   Inc.  ("BSS",  formerly  Hughes  Space  and
Communications,  Inc.), a related party to the Company, for the construction and
launch  of  XM  Radio's   satellite.   Obligations   under  this   contract  are
approximately  $541.3  million,  of which $461.1  million had been paid and $1.5
million was accrued as of September 30, 2000.

3.  STOCKHOLDERS' EQUITY (DEFICIT)

Significant activity in stockholders' equity from December 31, 1999 to September
30, 2000 consists of the following:



                                                     Additional
                                         Common       Paid-in          Deferred          Common Stock          Unamortized
                                          Stock       Capital        Compensation      Purchase Warrants   Guarantee Warrants
                                                                                            
Balance December 31, 1999                   $ 485       $844,181          ($6,536)            $63,290       ($18,384)
Warrant Exercises                               5          7,788               --              (7,048)            --
Reduction  in  deferred  compensation
  on restricted stock                          --         (2,707)           2,707                  --             --
Issuance    of   Motient    Satellite
  Ventures LLC  investors'  option to
  convert into  Motient  common stock          --             --               --              18,411             --
  (See Note 4)
Amortization of Guarantee warrants             --             --               --                  --          4,335
Reduction   of   Guarantee   warrants
  related to extinguishment of debt            --             --               --                  --            329
Guarantee Warrant revaluation                  --             --               --               1,352         (1,352)
Common  Stock   Warrants   issued  in
connection with Yahoo! contract                --             --               --               4,850             --
Stock Option Exercises                          4          4,409               --                  --             --
Gain  in  connection  with  XM  Radio
  equity transactions                          --        121,530               --                  --             --
Issuance  of  shares   under   401(k)
  Savings   Plan,    Stock   Purchase
  Plan, and award of bonus stock                1          1,183               --                  --             --
                                         --------     ----------       -----------          ----------     ----------

Ending Balance September 30, 2000            $495       $976,384          ($3,829)            $80,855       ($15,072)
                                         ========     ==========       ===========          ==========     ===========



In July 2000, we signed an agreement with Yahoo!  to promote our newly developed
eLink  Fortified with Yahoo!  wireless  product.  In addition to our advertising
commitment under this contract, we also issued common stock purchase warrants to
Yahoo!  The Yahoo!  warrants were valued at  approximately  $4.9 million.  These
warrants will be amortized to sales and  advertising  expense in accordance with
the roll out of the advertising plan, anticipated to run through July 2002.


4. MOTIENT SATELLITE VENTURES LLC

In June 2000, the Company formed a joint venture  subsidiary,  Motient Satellite
Ventures  LLC  ("Satellite  Ventures"),  in which  the  Company  owns 80% of the
membership interests.  The remaining 20% interest in Satellite Ventures is owned
by three investors controlled by Columbia Capital,  Spectrum Equity Investors LP
and Telcom Ventures, L.L.C. (collectively,  the "Investors"). The Investors paid
$50 million to Satellite Ventures (in the aggregate),  in exchange for their 20%
interest, pursuant to an Investment Agreement, dated June 29, 2000, by and among
Motient, Satellite Ventures, and the Investors.

Of the $50 million payment received by Satellite Ventures, $6.0 million is being
retained by Satellite  Ventures  and will be used to fund  certain  research and
development activities,  with the remaining $44 million paid to Motient Services
Inc.  (which owns the  Company's  satellite  and related  assets),  as described
below.  Motient is not  required to provide  additional  financing  to Satellite
Ventures.

Satellite  Ventures will conduct research and development  activities to explore
the   technical,   strategic,   and  market   potential  of  new  wireless  data
communications  services making use of the Company's existing satellite network.
Satellite  Ventures has signed a Research &  Development,  Marketing and Service
Agreement,  dated June 29, 2000 (the "R&D  Agreement"),  with Motient  Services,
under which Motient Services will provide  technical,  engineering,  and similar
assistance to Satellite  Ventures.  Motient Services will also provide Satellite
Ventures with dedicated  bandwidth on its satellite network,  for the purpose of
Satellite  Ventures'  testing and R&D  activities.  In exchange for these access
rights and  services,  Satellite  Ventures  paid  Motient  Services a  one-time,
up-front  fee of $20  million.  The  R&D  Agreement  would  terminate  upon  any
consummation of the Asset Sale Agreement described below.

At any time during the next two years,  the Investors have the right to elect to
purchase  up to an  additional  40% stake in  Satellite  Ventures,  for an extra
payment of $120 million (which amount will increase by a specified daily amount,
after one year) (such payment is referred to as the "Additional Payment").  Upon
such  exercise,  Satellite  Ventures will  consummate the purchase of all of the
assets owned by Motient Services that relate to the satellite business, pursuant
to the terms of an Asset Sale Agreement dated June 29, 2000,  between  Satellite
Ventures  and  Motient  Services.  This Asset Sale  Agreement  is intended to be
amended to reflect the pending sale of Motient  Services' retail  transportation
business  to Aether  Systems,  Inc.  (see Note 5). The  purchase  price for such
assets  will be  equal to the sum of $24  million  (paid  as a down  payment  in
connection  with the signing of the Asset Sale  Agreement in June of 2000),  and
the Additional Payment received by Satellite Ventures from the Investors.

Also, at any time during the next two years,  if the Investors  decide that they
do not wish to acquire  control of Satellite  Ventures and acquire the satellite
assets of Motient Services as described  above,  they may convert their existing
minority  position in Satellite  Ventures  into shares of the  Company's  common
stock, at a conversion price which will be set at the time of exercise,  between
$12 and $20 per share, as specified in the Investment  Agreement.  The Investors
may not exercise  this right,  however,  until after  December 29, 2000,  except
under certain limited circumstances.

The $44 million  received  by Motient  Services  Inc.  has been  allocated,  for
accounting  purposes,  to the R&D Agreement,  the Asset Sale Agreement,  and the
Investors' right to convert their minority  interest in Satellite  Ventures into
shares of the Company's common stock,  based on each  component's  relative fair
value.  Based on an independent  valuation,  the Company assigned  approximately
$18.6  million to the  Investors'  conversion  right which is recorded as common
stock warrants in the accompanying consolidated condensed balance sheet. The R&D
agreement  and Asset  Sale  Agreement  were  assigned  relative  fair  values of
approximately $14.6 million and $10.8 million,  respectively,  and are reflected
in the accompanying consolidated condensed balance sheet as deferred revenue and
long-  term  deposits,  respectively.  The funds  received  pursuant  to the R&D
Agreement will be recognized as service revenue over two years.

The  Company  received  partial  waivers  from the banks  and the Bank  Facility
Guarantors (as defined in Note 6 below) for the requirement in the Bank Facility
that 50% of certain  proceeds  that the  Company  received  be used to repay and
permanently  reduce the Revolving  Credit  Facility.  In  connection  with these
waivers,  the Company agreed to reprice the remaining  outstanding Bank Facility
Guarantors'  warrants.  Under the terms of the bank facility  waivers  received,
only $2.75 million of the initial $44 million payment received was used to repay
outstanding  amounts,  and permanently reduce  commitments,  under the Company's
Revolving Credit Facility, with the remainder of the initial $44 million payment
retained by the Company.  If the Investors elect to acquire control of Satellite
Ventures and the Additional Payment is made as described above, then the Company
will be required to use 50% of such  proceeds to pay down  outstanding  balances
and/or reduce  commitments,  under our Revolving Credit Facility and/or the Term
Loan  Facility.  As a result of the $2.75  million  permanent  reduction  of the
Revolving  Credit  Facility,  the  Company  recorded  an  extraordinary  loss on
extinguishment of debt of approximately $417,000 consisting of the write off, on
a pro rata basis,  of the deferred  financing fees associated with the placement
of the Bank Financing and warrants held by the Bank Facility Guarantors.


5.  SALE OF RETAIL TRANSPORTATION BUSINESS

On September 19, 2000, the Company signed a binding letter agreement to sell its
retail transportation  business to Aether Systems, Inc. ("Aether").  Aether will
purchase the assets comprising the Company's  wireless  communications  business
for the  transportation  market,  including the  satellite-only  and  MobileMAX2
multi-mode  mobile  messaging  business.  In  addition,  Aether  will enter into
long-term,  prepaid  network  airtime  agreements  pursuant to which Aether will
purchase  airtime on the Company's  satellite and terrestrial  networks.  Aether
will also become an authorized  reseller of the Company's  eLink  wireless email
service  offering.  Aether will  acquire all of the assets used or useful in the
retail transportation business, and will assume the related liabilities.  Aether
will also purchase the existing inventory in the business, and will be granted a
perpetual  license  to use and  modify  any  intellectual  property  owned by or
licensed to the Company in connection with the business.  The purchase price for
these  assets  will be $45  million,  plus the  then-current  book  value of the
inventory for the business.  All of this amount will be paid at closing,  except
for $10  million  which  will be  deposited  in an  escrow  account  and will be
released  to Motient  upon  satisfaction  of certain  criteria  with  respect to
MobileMAX2.  In addition,  the Company has the  opportunity  to receive up to an
additional $22.5 million as an "earn-out"  payment,  subject to the satisfaction
of certain operating results for the business during 2001. Of the proceeds to be
received by the Company  from Aether,  $20 million  will be used to  immediately
repay and permanently  reduce the Revolving Credit Facility.  Proceeds,  if any,
from the $10  million  escrow  and the  earn-out  will also be used to repay and
permanently reduce the Revolving Credit Facility.

To enable Aether to continue to operate the retail transportation business after
the transaction  closes,  the Company and Aether will sign two long-term network
airtime  agreements,  under which Aether will purchase  airtime on the satellite
and terrestrial  networks.  These  agreements have a total value of $25 million,
and Aether will prepay a  significant  portion of such amount upon  closing.  As
part of these  agreements,  Aether  will also become an  authorized  reseller of
Motient's  eLink wireless email service,  as well as BlackBerry (TM) by Motient.
The Company and Aether will also enter into certain transition arrangements with
respect to  certain  facilities  and  functions.  Aether  intends to hire all of
Motient's  employees in the business.  It is expected that the transaction  will
close in the fourth quarter 2000.

In  connection  with this  transaction,  the  Company  and the other  members of
Satellite  Ventures  agreed  to reduce  the  purchase  price in the  asset  sale
agreement  between Satellite  Ventures and Motient Services,  to account for the
fact that Motient  Services  will receive  certain  consideration  in the Aether
transaction  in exchange  for the assets to be acquired by Aether,  which assets
otherwise would have been available to be acquired by Satellite  Ventures.  Upon
closing of the Aether  transaction,  the purchase  price to be paid by Satellite
Ventures for the remaining  assets of Motient Services will be reduced from $120
million  to $80.5  million,  and will be further  reduced by an amount  equal to
one-half of any earn-out consideration received by the Company.


6.  LIQUIDITY AND FINANCING

Adequate  liquidity  and capital are  critical  for the Company to continue as a
going concern and to fund subscriber  acquisition  programs necessary to achieve
positive cash flow and profitable operations. The Company expects to continue to
make significant capital outlays to fund interest expense,  capital expenditures
and working  capital prior to the time it begins to generate  positive cash flow
from operations and for the foreseeable future.

The Company's current operating assumptions and projections reflect management's
best  estimate of subscriber  and revenue  growth and  operating  expenses.  The
Company anticipates that capital expenditures, operating losses, working capital
and debt service  requirements  through 2000 can be met by (i) net proceeds from
the Aether  transaction,  which is expected to close in the fourth quarter, or a
combination of the following:  (ii) cash on hand, (iii) the borrowings available
under the bank  financing  and the  vendor  financing,  (iv)  proceeds  realized
through  the  sale  of  inventory  relating  to  eLink  and  MobileMAX2  and (v)
additional debt or equity financing transactions.  Additionally,  Motient Parent
Company has the  ability to  monetize  its  investment  in XM Radio,  via direct
quarterly sales or other arrangements, and transfer a portion of the proceeds to
its  subsidiaries.  The Company's  ability to meet its projections is subject to
numerous  uncertainties and there can be no assurance that the Company's current
projections  regarding the timing of its ability to achieve  positive  operating
cash flow will be accurate.  If the Company's  cash  requirements  are more than
projected,  the Company may require additional financing in amounts which may be
material.  The type, timing and terms of financing that the Company selects will
be dependent upon its cash needs,  the  availability of other financing  sources
and the  prevailing  conditions in the  financial  markets.  The Company  cannot
guarantee that additional  financing sources will be available at any given time
or available on favorable terms.

XM Radio is operated,  managed,  and funded  separately  from the  Company.  See
consolidating  financial  statements  in  Footnote  9 for  XM  Radio's  separate
financial  statements.  While  the  Company  does  not have  any  obligation  or
commitments to provide  additional  funding to XM Radio,  and does not expect to
provide  such  funding,  it may chose to  provide  additional  financing  in the
future. XM Radio will continue to require significant  additional funding in the
future.  The failure of XM Radio to obtain the necessary  financing could have a
material adverse effect on the value of the Company's investment in XM Radio.


$335 Million Unit Offering

On March 30, 1998,  Motient Holdings Inc.  (formerly AMSC  Acquisition  Company,
Inc.) issued $335 million of Units (the  "Units")  consisting  of 12 1/4% Senior
Notes due 2008 (the "Senior Notes"),  and one warrant to purchase 3.75749 shares
of Common Stock of the Company for each $1,000  principal amount of Senior Notes
(the  "Warrants")  at an exercise  price of $12.51 per share.  The Warrants were
valued  at $8.5  million  and  are  reflected  in the  balance  sheet  as a debt
discount.  In connection with the Senior Notes,  Motient Holdings Inc. purchased
approximately  $112.3 million of restricted  investments that are restricted for
the payment of the first six  interest  payments on the Senior  Notes.  Interest
payments are due  semi-annually,  in arrears,  beginning  October 1, 1998.  As a
result of the automatic  application of certain adjustment  provisions following
the  issuance of 7.0 million  shares in the 1999 public  offering,  the exercise
price of the warrants associated with the Senior Notes was reduced to $12.28 per
share,  the number of shares per warrant was  increased  to 3.83 shares for each
$1,000  principle  amount of Senior Notes,  and the  aggregate  number of shares
issuable upon exercise of such warrants was increased by 24,294.  The additional
Senior Note warrants and re-pricing  were valued at $440,000.  This was recorded
as additional debt discount in the third quarter of 1999.

Bank Financing

In March 1998, the Company entered into two bank  facilities:  (i) the Revolving
Credit Facility,  a $100 million unsecured  five-year  reducing revolving credit
facility  maturing  September 30, 2003, and (ii) the Term Loan Facility,  a $100
million  five-year,  term loan  facility  with up to three  additional  one-year
extensions subject to the lenders' approval.  The Term Loan Facility was reduced
to $40.0 million using proceeds from stock issuances in 1999 and 2000 and is not
available for  re-borrowing,  and the Revolving  Credit Facility was permanently
reduced  to $97.3  million  using the  proceeds  received  in June 2000 from the
Satellite Ventures  transaction.  The Bank Financing is severally  guaranteed by
Hughes  Electronics  Corporation,  Singapore  Telecommunications  Ltd. and Baron
Capital Partners,  L.P.  (collectively,  the "Bank Facility Guarantors").  As of
October 31, 2000, the Company had outstanding  borrowings of $40.0 million under
the Term Loan Facility at 7.6875%,  and $91.0 million under the Revolving Credit
Facility  at  7.625% to 8%.  As noted  above,  upon the  closing  of the  Aether
transaction,  $20  million  will be used to  immediately  repay and  permanently
reduce the  Revolving  Credit  Facility.  Proceeds,  if any, from the Aether $10
million  escrow  and  the  Aether  earn-out  will  also be  used  to  repay  and
permanently reduce the Revolving Credit Facility.

The Guarantees

In connection with the Bank  Financing,  the Bank Facility  Guarantors  extended
separate  guarantees of the obligations of Motient Holdings Inc. and the Company
to the banks,  which on a several basis  aggregated  to $200  million.  In their
agreement with Motient  Holdings Inc. and the Company (the  "Guarantee  Issuance
Agreement"),  the Bank  Facility  Guarantors  agreed  to make  their  guarantees
available  for  the  Bank  Financing.  In  exchange  for  the  additional  risks
undertaken  by  the  Bank  Facility  Guarantors  in  connection  with  the  Bank
Financing,  the  Company  agreed to  compensate  the Bank  Facility  Guarantors,
principally in the form of 1 million  additional  warrants and re-pricing of 5.5
million  warrants  previously  issued in connection with the Company's  previous
bank facility (together, the "Guarantee Warrants").  The Guarantee Warrants were
originally  issued with an exercise  price of $12.51,  reduced to $7.50 in April
1999 in exchange  for the  elimination  of certain  covenants  in the  Guarantee
Issuance  Agreement,  and  further  reduced to $7.3571  in  connection  with the
automatic  application  of certain  adjustment  provisions  following  the stock
offering  in 1999.  In  exchange  for the  Bank  Facility  Guarantors'  consents
received in connection with the Satellite Ventures transaction  described above,
the exercise  price of the Guarantee  Warrants was further  reduced to $6.25 per
share. The value of the re-pricing was approximately $1.4 million.

In connection with the Bank Financing, the Company entered into an interest rate
swap agreement, with an implied annual rate of 6.51%. The swap agreement reduces
the impact of interest  rate  increases on the Term Loan  Facility.  The Company
paid a fee of approximately $17.9 million for the swap agreement. Under the swap
agreement, an amount equal to LIBOR plus 50 basis points, is paid on a quarterly
basis directly to the respective  banks on behalf of the Company,  on a notional
amount of $100 million  until the  termination  date of September  30, 2001.  In
connection with the pay down of a portion of the Term Loan Facility in 1999, the
Company  reduced the notional  amount of its swap agreement from $100 million to
$41  million.  The  Company  is  exposed  to a credit  loss in the event of non-
performance by the counter party under the swap agreement.  The Company does not
believe there is a significant risk of  non-performance  as the counter party to
the swap agreement is a major financial institution.

Other Financing

Motorola  has entered  into an  agreement  with the Company to provide up to $15
million  of vendor  financing,  to finance  up to 75% of the  purchase  price of
additional  network base  stations.  As of September 30, 2000,  $9.2 million was
outstanding under this facility at interest rates ranging from 13.0% to 13.629%,
and $2.9 million was available for borrowing.

In July 2000, the Company financed the acquisition of approximately $8.4 million
of network  equipment  through a capital lease. The lease has a three- year term
and an effective interest rate of 14.4%.

The Company has also arranged the financing of certain trade payables, and as of
September 30, 2000, $3.6 million of deferred trade payables were  outstanding at
rates ranging from 5.93% to 7.24%.

Baron XM Radio Convertible Note

In January 1999 the Company issued to Baron Asset Fund ("Baron"),  a stockholder
and guarantor of the Company's Bank Facility,  a $21.5 million note  convertible
into  shares of common  stock of XM Radio  (the  "Convertible  Note  Payable  to
Related  Party"  or  "Baron  XM Radio  Convertible  Note".)  The  Baron XM Radio
Convertible note was indexed to XM Radio stock. Due to a decrease in value of XM
Radio stock, from December 31, 1999 to January 12, 2000, the Company recorded an
unrealized  gain of $3.9  million in the first  quarter of 2000.  On January 13,
2000, Baron notified the Company of its intention to exchange the Baron XM Radio
Convertible  Note for 1,314,914  shares of XM Radio Class B Stock,  subsequently
converted  to  Class  A  Stock  on a  one-for-one  basis.  The  exchange  of the
convertible note resulted in a non-recurring  gain of $32.9 million at March 31,
2000  computed as the  difference  in the  carrying  value of the Baron XM Radio
Convertible  Note and the Company's cost basis in XM Radio stock  exchanged upon
conversion of this note.

XM Radio Financing

In the first quarter of 2000, XM Radio  completed a supplemental  stock offering
of 4.4 million shares of Class A Common Stock, at $32 per share, and 2.0 million
shares of newly designated Series B convertible  redeemable  preferred stock, at
$50 per share. The Series B convertible  redeemable preferred stock provides for
8.25% cumulative dividends that may be paid in Class A common stock or cash. The
Series B convertible  redeemable  preferred  stock is  convertible  into Class A
common stock at a conversion price of $40 per share and is redeemable in Class A
common stock on February 3, 2003.  Net proceeds  raised from this stock offering
were approximately $228.6 million.

In March 2000, XM Radio  completed a high yield debt offering of 325,000  units,
each unit consisting of $1,000  principal amount of 14% Senior Secured Notes due
2010 and one warrant to purchase  8.024815  shares of Class A common stock of XM
Radio at an exercise  price of $49.50 per share.  XM Radio realized net proceeds
of $191.3 million,  excluding  $123.0 million used to acquire  securities  which
will be used to pay  interest  payments  due under the notes for the first three
years.

On August 8, 2000, XM Radio closed on a private  offering of 235,000  shares for
$1,000 per share of its 8.25% Series C convertible  redeemable  preferred stock,
which  yielded  net  proceeds  of  approximately  $206.4  million  and  a  stock
subscription  of $20.0 million.  XM Radio  recorded a $123.0 million  beneficial
conversion charge that reduced earnings  available to common  stockholders.  The
issuance  of the  Series C  preferred  stock  caused the  exercise  price of the
warrants sold in March 2000 to be adjusted to $47.94.

In connection  with the first quarter and third quarter 2000 stock  offering and
in accordance with Staff  Accounting  Bulletin 51 (SAB 51), the Company recorded
an increase to its  investment in XM Radio of  approximately  $121.5  million to
reflect the  increase in the net book value of XM Radio.  SAB 51  addresses  the
accounting  for sales of stock by a subsidiary.  Since XM Radio is a development
stage company, SAB 51 requires that the difference in the carrying amount of the
Company's  investment  in XM Radio and the net book value of XM Radio  after the
equity  transactions,  be reflected as a capital  transaction.  Accordingly  the
$121.5 million increase to the Company's  investment in XM Radio is reflected as
an addition  to  additional  paid-in  capital in the  accompanying  consolidated
condensed balance sheet.


7. COMMITMENTS AND CONTINGENCIES

At September 30, 2000,  the Company had  remaining  contractual  commitments  to
purchase  subscriber  equipment  inventory,   primarily  related  to  eLink  and
MobileMAX2, in the amount of $29.3 million during 2000 and 2001. The Company has
the right to terminate  certain of these commitments by incurring a cancellation
penalty representing a percentage of the unfulfilled portion of the contract. As
of September 30, 2000 the  cancellation  penalty  would have been  approximately
$4.1 million.

The Company has also contracted for the purchase of $800,000 of base stations to
expand its coverage and complete  certain  necessary  site  build-outs,  and has
certain other operating  expense contract  commitments that total  approximately
$1.2 million over the next year.

The aggregate fixed and  determinable  portion of all inventory  commitments and
obligations for other fixed contracts is $31.2 million, of which $6.5 million is
due in 2000 and $23.9 million is due in 2001.

XM Radio is also subject to certain commitments and contingencies.  XM Radio has
a  distribution  agreement  with General  Motors that will  require  significant
expenditures in the future. Under its satellite contract with BSS, XM Radio will
incur  payment  obligations  of  approximately  $541.3  million of which  $461.1
million had been paid,  and $1.5 million had been  accrued,  as of September 30,
2000.  XM Radio has signed a contract  with LCC  International,  Inc. (a related
party to XM Radio), for the engineering of its terrestrial repeater network with
total contract payments expected to be approximately  $115 million through 2001.
As of  September  30,  2000,  XM Radio has paid $30.8  million,  and  accrued an
additional $12.9 million, under this contract.  Effective October 1999, XM Radio
signed  a  contract  with  Hughes   Electronics   Corporation  for  the  design,
development,  and purchase of terrestrial repeater equipment. The total value of
this  contract is $128.0  million and XM Radio has paid $12.9 million under this
contract as of  September  30, 2000.  On February 16, 2000,  XM Radio and Sirius
Satellite  Radio,  a  competitor  of XM Radio,  signed an agreement to develop a
unified  standard for satellite radios to facilitate the ability of consumers to
purchase  one radio  capable of receiving  both XM Radio's and Sirius  Satellite
Radio's  services.  Refer to XM  Radio's  filings  with  the SEC for  additional
information regarding these contractual commitments.

8. LEGAL AND REGULATORY MATTERS

Like other mobile  service  providers in the  telecommunications  industry,  the
Company is subject to substantial domestic, foreign and international regulation
including the need for regulatory  approvals to operate and expand the satellite
network and operate and modify subscriber equipment.

The  ownership  and  operation  of the  mobile  satellite  services  system  and
ground-based  two-way  wireless  data  system  are  subject  to  the  rules  and
regulations of the FCC, which acts under authority granted by the Communications
Act and related federal laws. Among other things,  the FCC allocates portions of
the radio  frequency  spectrum to certain  services  and grants  licenses to and
regulates  individual entities using the spectrum.  Motient operates pursuant to
various licenses granted by the FCC.

The  successful  operation of the satellite  network is dependent on a number of
factors,  including the amount of L-band  spectrum made available to the Company
pursuant  to  an  international  coordination  process.  The  United  States  is
currently  engaged in an  international  process of  coordinating  the Company's
access  to  the  spectrum  that  the  FCC  has  assigned  to the  Company.  This
international  coordination  process is not yet  complete.  In the  absence of a
coordination  agreement,  Motient must operate its system on a non- interference
basis.  The  inability  of the United  States  government  to secure  sufficient
spectrum  could  have an adverse  effect on the  Company's  financial  position,
results of operations and cash flows.

The Company has the necessary regulatory  approvals,  some of which are pursuant
to  special  temporary  authority,  to  continue  its  operations  as  currently
contemplated.  The  Company has filed  applications  with the FCC and expects to
file applications in the future with respect to the continued operations, change
in  operation  and  expansion  of the network and  certain  types of  subscriber
equipment.  Certain of its  applications  pertaining to future service have been
opposed.  While the Company, for various reasons,  believes that it will receive
the necessary  approvals on a timely basis,  there can be no assurance  that the
requests  will be granted,  will be granted on a timely basis or will be granted
on  conditions  favorable  to  the  Company.  Any  significant  changes  to  the
applications resulting from the FCC's review process or any significant delay in
their approval could adversely affect the Company's financial position,  results
of operations and cash flows.

On November 30,1999,  the FCC granted two applications to use TMI Communications
and Company,  Limited  Partnership's (TMI)  Canadian-licensed  system to provide
service in the United  States to up to 125,000  mobile  terminals.  TMI's system
operates in the MSS L-Band and has a satellite  footprint that covers the United
States.  Motient  appealed the FCC's grant of these  applications  to the United
States Court of Appeals for the D.C. Circuit.

The United States Court of Appeals affirmed the FCC's decision. TMI's entry into
the domestic U.S. marketplace provides additional competition to Motient and may
increase TMI's demand for spectrum in the  international  coordination  process.
The FCC is also currently considering applications to use the Inmarsat satellite
system to provide mobile  messaging  service in the United States.  The grant of
any of these applications  would provide additional  competition and may further
adversely impact Motient's ability to coordinate spectrum access.

Motient  is  authorized  to build,  launch,  and  operate  three  geosynchronous
satellites in accordance with a specific schedule.  Motient is not in compliance
with the  schedule for  commencement  and  construction  of its second and third
satellites and has  petitioned  the FCC for changes to the schedule.  Certain of
these  extension  requests have been opposed by third  parties.  The FCC has not
acted  on  Motient's  requests.   The  FCC  has  the  authority  to  revoke  the
authorizations  for the second and third  satellites and in connection with such
revocation could exercise its authority to rescind  Motient's  license.  Motient
believes that the exercise of such authority to rescind the license is unlikely.
The term of the license for each of Motient's three authorized satellites is ten
years,  beginning  when  Motient  certifies  that the  respective  satellite  is
operating in  compliance  with  Motient's  license.  The ten-year term of MSAT-2
began August 21, 1995.  Although Motient  anticipates that the authorization for
MSAT-2 is likely to be extended in due course to  correspond  to the useful life
of the satellite and a new license granted for any replacement satellites, there
is no assurance of such extension or grants.

XM Radio is also  subject to the rules and  regulations  of the FCC. The FCC has
established certain system development  milestones that must be met in order for
XM Radio to  maintain  its  license to operate its  satellite  system.  XM Radio
believes it is in compliance with the FCC milestones.

One of the bidders for the DARS licenses filed an Application  for Review by the
FCC of the  Licensing  Order  which  granted  XM  Radio  its  FCC  license.  The
Application for Review alleges that a prior XM Radio shareholder had effectively
taken  control of XM Radio  without the approval of the FCC. The FCC or the U.S.
Court of Appeals has the  authority  to overturn the award of the FCC license to
XM Radio.  XM Radio  believes that it should be able to maintain its FCC license
since the party  referenced is no longer a stockholder of XM Radio.  XM Radio is
unable to predict the outcome of this Application for Review.

In January 1999, a competitor of XM Radio, Sirius Radio, filed an action against
XM Radio for patent  infringement.  In February 2000,  this suit was resolved in
accordance with the terms of a joint development  agreement between XM Radio and
Sirius Radio in which both companies  agreed to  cross-license  their respective
property.  If this agreement is terminated due to XM Radio failing to perform on
a material covenant or obligation, the suit could be filed again.

9. FINANCIAL STATEMENTS OF SUBSIDIARIES

In connection with the Company's acquisition of Motient  Communications  Company
(formerly known as ARDIS Company) on March 31, 1998 (the "Motient Communications
Acquisition"),  and related financing  discussed above, the Company formed a new
wholly-owned subsidiary, Motient Holdings Inc. ("Motient Holdings"). The Company
contributed  all of its  inter-company  notes  receivables  and  transferred its
rights,  title  and  interests  in  Motient  Services  Inc.  and  certain  other
subsidiaries   that  were   subsequently   dissolved   (together   with  Motient
Communications,  the "Subsidiary  Guarantors") to Motient Holdings,  and Motient
Holdings was the acquirer of Motient Communications and the issuer of the Senior
Notes.  Motient  Corporation  ("Motient  Parent") is a  guarantor  of the Senior
Notes. The Senior Notes contain  covenants that,  among other things,  limit the
ability  of  Motient   Holdings  and  its   Subsidiaries  to  incur   additional
indebtedness, pay dividends or make other distributions,  repurchase any capital
stock or subordinated  indebtedness,  make certain  investments,  create certain
liens, enter into certain transactions with affiliates,  sell assets, enter into
certain  mergers  and   consolidations,   and  enter  into  sale  and  leaseback
transactions.

The Senior Notes are jointly and severally  guaranteed on full and unconditional
basis by the Subsidiary  Guarantors and Motient Parent. The following  unaudited
condensed consolidating information for these entities presents:

o      Condensed  consolidating  balance  sheets  as of  September  30, 2000 and
       December 31, 1999, the condensed  consolidating  statements of operations
       for the three and nine months  ended September 30, 2000 and 1999, and the
       condensed  consolidating  statement  of cash  flows for  the nine  months
       ended September 30, 2000 and 1999.
o      Elimination entries necessary to combine the entities comprising Motient.





                      Condensed Consolidating Balance Sheet

                            As of September 30, 2000
                                   (Unaudited)
                                 (in thousands)




                                                                   Consolidated                                         Consolidated
                                    Subsidiary  Motient   Elimi-     Motient       Motient                                  Motient
                                    Guarantors  Holdings  nations    Holdings      Parent      XM Radio   Eliminations      Parent
                                    ----------  --------  ---------  --------      ------      --------   ------------      ------

                                                                                              ASSETS
CURRENT ASSETS:
                                                                                                
Cash and cash equivalents               $ 371      $ --       $ --      $ 371         $ --    $ 312,711          $ --    $ 313,082
Inventory                              27,290        --         --     27,290           --           --            --       27,290
Accounts receivable -- net             21,512        --         --     21,512           --           --            --       21,512
Restricted short-term investments          --    41,038         --     41,038           --       93,403            --      134,441
Other current assets                   18,285        --         --     18,285        1,277        1,424            --       20,986
                                       ------        --         --     ------        -----        -----            --       ------
   Total current assets                67,458    41,038         --    108,496        1,277      407,538            --      517,311
PROPERTY AND EQUIPMENT -- NET         131,909        --    (11,370)   120,539           --       42,133            --      162,672
SYSTEM UNDER CONSTRUCTION                  --        --         --         --           --      732,727        (5,081)     727,646
GOODWILL AND
   INTANGIBLES -- NET                  52,507    11,696         --     64,203        1,653       24,348       (13,613)      76,591
INVESTMENT IN XM RADIO                     --        --         --         --      284,705           --      (284,705)          --
DEFERRED CHARGES AND OTHER
   ASSETS -- NET                        3,656    11,662         --     15,318      (11,662)      13,656           (46)      17,266
RESTRICTED INVESTMENTS                  2,614       435         --      3,049       12,586       60,743            --       76,378
                                        -----       ---         --      -----       ------       ------     ----------      ------
   Total assets                      $258,144   $64,831   $(11,370)  $311,605     $288,559   $1,281,145    $ (303,445)  $1,577,864
                                     ========   =======   =========  ========     ========   ==========    ===========  ==========


                                                  LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and
  accrued expenses                   $ 27,586  $ 21,423       $ --    $49,009      $ 1,028     $ 52,283    $       --    $ 102,320
Obligations under capital
  leases due within one year            4,019        --         --      4,019           --          565            --        4,584
Current portion long-term debt          7,736        --         --      7,736           --           --            --        7,736
Other current liabilities              10,291        --         --     10,291           --        2,969            --       13,260
                                       ------        --         --     ------           --        -----            --       ------
   Total current liabilities           49,632    21,423         --     71,055        1,028       55,817            --      127,900
DUE TO PARENT/AFFILIATE               815,853    90,666   (904,197)     2,322      213,604           46      (215,972)          --
LONG-TERM LIABILITIES

Note payable to /from Issuer/Parent        --    14,000         --     14,000      (14,000)          --            --           --
Obligations under Bank Financing           --    81,000         --     81,000       40,000           --            --      121,000
Senior Notes, net of discount              --   328,249         --    328,249           --      262,815            --      591,064
Other long-term debt                    5,058        --         --      5,058           --          967            --        6,025
Capital lease obligations               7,882        --         --      7,882           --           --            --        7,882
Net assets acquired in excess
  of purchase price                       812        --         --        812           --           --            --          812
Other                                  18,002        --         --     18,002           --        6,536            --       24,538
                                       ------        --         --     ------           --     ---------           --       ------
   Total long-term liabilities         31,754   423,249         --    455,003       26,000      270,318            --      751,321
   Total liabilities                  897,239   535,338   (904,197)   528,380      240,632      326,181      (215,972)     879,221
MINORITY INTEREST                          --        --         --         --           --           --       650,716      650,716
STOCKHOLDERS' EQUITY (DEFICIT)       (639,095) (470,507)   892,827   (216,775)      47,927      954,964      (738,189)      47,927
                                     --------- ---------   -------   ---------      ------    ---------      ---------      ------
   Total Liabilities, Minority
   Interest, and Stockholders'
   Equity (Deficit)                  $258,144   $64,831   $(11,370)  $311,605     $288,559   $1,281,145     $(303,445)  $1,577,864
                                     ========   =======   =========  ========     ========   ==========     ==========  ==========














                      Condensed Consolidating Balance Sheet

                             As of December 31, 1999
                                   (Unaudited)
                                 (in thousands)



                                                                                           Consoli-                       Consoli-
                                                                                            dated                          dated
                                             Subsidiary    Motient   Elimi-      Motient    Motient                        Motient
                                             Guarantors    Holdings  nations     Holdings   Parent  XM Radio Eliminations  Parent
                                             ----------    --------  ---------   --------   ------- -------- ------------  -------

                                                                                              ASSETS
CURRENT ASSETS:

                                                                                                   
Cash and cash equivalents                        $ 776        $ --       $ --      $ 776      $ --   $ 50,698       $ --   $ 51,474
Short-term investments                              --          --         --         --        --     69,472         --     69,472
Inventory                                       28,616          --         --     28,616        --         --         --     28,616
Prepaid in-orbit insurance                       3,381          --         --      3,381        --         --         --      3,381
Accounts receivable-net                         16,594          --         --     16,594        --         --         --     16,594
Restricted short-term investments                   --      41,038         --     41,038        --         --         --     41,038
Other current assets                             6,074          --         --      6,074     2,568      1,077         --      9,719
                                                 -----          --         --      -----     -----      -----         --      -----
   Total current assets                         55,441      41,038         --     96,479     2,568    121,247         --    220,294
PROPERTY AND EQUIPMENT-NET                     126,914          --    (12,949)   113,965        --      2,551         --    116,516
SYSTEM UNDER CONSTRUCITON                           --          --         --         --        --    362,358     (5,080)   357,278
GOODWILL AND INTANGIBLES--NET                   51,158          --         --     51,158        --     25,380    (14,327)    62,211
INVESTMENT IN XM RADIO                              --          --         --         --   190,757         --   (190,757)        --
INVESTMENTIN/DUE FROM SUBSIDIARY
                                                    --     176,450   (176,450)        --  (148,913)        --    148,913         --
DEFERRED CHARGES AND OTHER ASSETS--NET
                                                 2,977      26,507         --     29,484   (10,597)     3,653         --     22,540
RESTRICTED INVESTMENTS                             320      18,360         --     18,680    12,429         --         --     31,109
                                                   ---      ------         --     ------    ------         --         --     ------
  Total assets                                $236,810    $262,355  $(189,399)  $309,766   $46,244   $515,189   $(61,251)  $809,948
                                              ========    ========  ==========  ========   =======   ========   =========  ========

                                                  LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expense          $ 31,073    $ 10,866       $ --   $ 41,939   $ 1,266   $ 24,680       $ --   $ 67,885
Obligations under capital lease due within
one year                                         5,982          --         --      5,982        --        172         --      6,154
Current portion long-term debt                   5,960          --         --      5,960        --         --         --      5,960
Other current liabilities                           --          --         --         --        --      1,646         --      1,646
                                                    --          --         --         --        --      -----         --      -----
  Total current liabilities                     43,015      10,866         --     53,881     1,266     26,498         --     81,645
DUE TO PARENT/AFFILIATE                        769,564          --   (769,626)       (62)  (14,934)        62     14,934         --
LONG-TERM LIABILITIES:Note payable
  to/from Issuer/Parent                             --      14,000         --     14,000   (14,000)        --         --         --
Obligations under Bank Financing                    --      44,000         --     44,000    41,000         --         --     85,000
Senior Notes, net of discount                       --     327,576         --    327,576        --         --         --    327,576
Other long-term debt                             2,535          --         --      2,535    50,138         --         --     52,673
Capital Lease obligations                           35          --         --         35        --        212         --        247
Net assets acquired in excess of purchase        1,333          --         --      1,333        --         --         --      1,333
price
Other long-term liabilities                        555          --         --        555        --      3,400         --      3,955
                                                   ---          --         --        ---        --      -----         --      -----
  Total long-term liabilities                    4,458     385,576         --    390,034    77,138      3,612         --    470,784
  Total liabilities                            817,037     396,442   (769,626)   443,853    63,470     30,172     14,934    552,429
                                               -------     -------   ---------   -------    ------     ------     ------    -------
MINORITY INTEREST                                   --          --         --         --        --         --    274,745    274,745
STOCKHOLDERS' EQUITY (DEFICIT)                (580,227)   (134,087)   580,227   (134,087)  (17,226)   485,017   (350,930)   (17,226)
                                              ---------   ---------   -------   ---------  --------   -------   ---------   --------
  Total liabilities, minority interest, and
stockholders' equity (deficit)                $236,810    $262,355  $(189,399)  $309,766   $46,244   $515,189   $(61,251)  $809,948
                                              ========    ========  ==========  ========   =======   ========   =========  ========









                 Condensed Consolidating Statement of Operations
                      Three Months ended September 30, 2000
                                   (Unaudited)
                                 (in thousands)





                                                                                 Consoli-                                 Consoli-
                                                                                 dated                                     dated
                                            Subsidiary    Motient   Elimi-      Motient    Motient                        Motient
                                            Guarantors    Holdings  nations     Holdings   Parent  XM Radio Eliminations  Parent
                                            ----------    --------  ---------   --------   ------- -------- ------------  -------

REVENUES
                                                                                                   
   Services                                  $19,810        $--        $--      $19,810       $300       $--       $(300)   $19,810
   Sales of equipment                          6,847         --         --        6,847         --        --          --      6,847
                                               -----         --         --        -----         --        --          --      -----
     Total Revenues                           26,657         --         --       26,657        300        --        (300)    26,657
COSTS AND EXPENSES
   Cost of service and operations             18,573         --         --       18,573         --        --          --     18,573
   Cost of equipment sold                     10,678         --         --       10,678         --        --          --     10,678
   Sales and advertising                       8,632         --         --        8,632          1        --          --      8,633
   General and administrative                  5,593        338         --        5,931        222    27,118        (319)    32,952
   Depreciation and amortization               9,181         --         --        9,181         --       991        (240)     9,932
                                               -----         --         --        -----    --------      ---        -----     -----
   Operating Loss                            (26,000)      (338)        --      (26,338)        77   (28,109)        259    (54,111)
Interest and Other Income                        226      4,514     (3,886)         854        400     8,047        (286)     9,015
Minority Interest in Loss of                      --         --         --           --         --        --      13,391     13,391
Subsidiaries
Equity in Loss of Subsidiaries                    --    (30,028)    30,028           --    (43,089)       --      43,089         --
Interest Expense                              (4,254)   (13,909)     3,886      (14,277)    (1,288)        2         285    (15,278)
                                              -------   --------     -----      --------    -------    -----         ---    --------
Net Loss Before
Preferred Dividend and Beneficial
Conversion Charge                            (30,028)   (39,761)    30,028      (39,761)   (43,900)  (20,060)     56,738    (46,983)
Preferred Stock Dividend
Requirement and Beneficial
Conversion Charge                                 --         --         --           --    (46,352)  (140,035)   140,035    (46,352)
                                                  --         --         --           --    --------  ---------   -------    --------
Net Loss Attributable to Common
Shareholders                                ($30,028)  ($39,761)   $30,028     ($39,761)  ($90,252)  ($160,095) $196,773   ($93,335)
                                            =========  =========   =======     =========  =========  ========== ========   =========







                 Condensed Consolidating Statement of Operations
                      Three Months ended September 30, 1999
                                   (Unaudited)
                                 (in thousands)





                                                                                Consoli-                                 Consoli-
                                                                                 dated                                     dated
                                            Subsidiary    Motient   Elimi-      Motient    Motient                        Motient
                                            Guarantors    Holdings  nations     Holdings   Parent  XM Radio Eliminations  Parent
                                            ----------    --------  ---------   --------   ------- -------- ------------  -------

REVENUES
                                                                                                   
     Services                                 $17,290        $--       $ --      $17,290      $300         --      $(300)   $17,290
     Sales of equipment                         5,680         --         --        5,680        --         --         --      5,680
                                                -----         --         --        -----        --         --         --      -----
       Total Revenues                          22,970         --         --       22,970       300         --       (300)    22,970
COSTS AND EXPENSES
   Cost of service and operations              17,287         --         --       17,287        --         --         --     17,287
   Cost of equipment sold                       6,045         --         --        6,045        --         --         --      6,045
   Sales and advertising                        5,524         --         --        5,524        24         --         --      5,548
   General and administrative                   4,316        339         --        4,655       258      8,506       (300)    13,119
   Depreciation and amortization               14,794         --       (526)      14,268        --        865       (222)    14,911
                                               ------         --       -----      ------        --        ---       -----     ------
   Operating Loss                             (24,996)      (339)       526      (24,809)       18     (9,371)       222    (33,940)
Interest and Other Income                          85      4,883     (3,885)       1,083     2,651        854     (3,598)       990
Unrealized Loss on Note Receivable
From XM Radio                                      --         --         --           --    (2,807)        --         --     (2,807)
Unrealized Gain on Note Payable to
Related Party                                      --         --         --           --        --         --         --          --
Equity in Loss of Subsidiaries                     --    (29,437)    29,437           --   (54,407)    54,407         --
Interest Expense                               (4,526)   (12,638)     3,885      (13,279)   (2,324)    (8,885)     6,352    (18,136)
                                               -------   --------     -----      --------   -------   -------      -----    --------
Loss before Extraordinary item                (29,437)   (37,531)    29,963      (37,005)  (56,869)   (17,402)    57,383    (53,893)
Extraordinary Loss on Extinguishment
on Debt                                            --         --         --           --   (12,132)        --         --    (12,132)
                                             ---------  ---------   --------   ---------  ---------  ---------   --------  ---------
Net Loss                                     ($29,437)  ($37,531)    $29,963   ($37,005)  ($69,001)  ($17,402)   $57,383   ($66,025)
                                             =========  =========    =======   =========  =========  =========   ========  =========







                 Condensed Consolidating Statement of Operations
                      Nine Months ended September 30, 2000
                                   (Unaudited)
                                 (in thousands)






                                                                                Consoli-                                 Consoli-
                                                                                 dated                                     dated
                                            Subsidiary    Motient   Elimi-      Motient    Motient                        Motient
                                            Guarantors    Holdings  nations     Holdings   Parent  XM Radio Eliminations  Parent
                                            ----------    --------  ---------   --------   ------- -------- ------------  -------

REVENUES
                                                                                                  
     Services                               $55,182           $--      $--      $55,182      $900         $ --      $(900)  $55,182
     Sales of equipment                      19,333            --       --       19,333        --           --         --    19,333
                                             ------            --       --       ------        --           --         --    ------
       Total Revenues                        74,515            --       --       74,515       900           --       (900)   74,515
COSTS AND EXPENSES
   Cost of service and operations            55,365            --       --       55,365        --           --         --    55,365
   Cost of equipment sold                    23,883            --       --       23,883        --           --         --    23,883
   Sales and advertising                     22,362            --       --       22,362       117           --         --    22,479
   General and administrative                15,639         1,016       --       16,655       862       56,929       (918)   73,528
   Depreciation and amortization             26,930            --       --       26,930        --        2,005       (715)   28,220
                                             ------       -------  --------      ------   -------        -----       -----   ------

   Operating Loss                           (69,664)       (1,016)      --      (70,680)      (79)     (58,934)       733  (128,960)

Interest and Other Income                       421        14,149  (11,573)       2,997       919       21,046       (794)   24,168
Gain on Conversion of Convertible Note
Payable to Related Party                         --            --       --           --    32,854           --         --    32,854
Unrealized Gain on Convertible Note
Payable to Related Party                         --            --       --                  3,925           --         --     3,925
Equity in Loss of Subsidiaries                   --       (82,283)  82,283           --  (124,784)          --    124,784        --
Minority Interest in Loss of                     --            --       --           --        --           --     24,074    24,074
Subsidiaries
Interest Expense                            (13,040)      (41,403)  11,573      (42,870)   (4,213)          --        795   (46,288)
                                            --------      --------  ------      --------   -------    --------        ---   --------
Net Loss before Extraordinary Item,
Preferred Dividend and Beneficial
Conversion Charge                           (82,283)     (110,553)  82,283    (110,553)   (91,378)     (37,888)   149,592   (90,227)
Extraordinary Loss on Extinguishment of
Debt                                             --          (417)      --        (417)        --           --         --      (417)
Preferred Stock Dividend Requirement
and Beneficial Conversion Charge                 --            --       --          --    (47,603)    (143,678)   143,678   (47,603)
                                                 --            --       --          --    --------    ---------   -------   --------
Net Loss Attributable to Common
Shareholders                               ($82,283)    ($110,970) $82,283   ($110,970) ($138,981)   ($181,566)  $293,270 ($138,247)
                                           =========    ========== =======   ========== ==========   ==========  ======== ==========









                 Condensed Consolidating Statement of Operations
                      Nine Months ended September 30, 1999
                                   (Unaudited)
                                 (in thousands)





                                                                                Consoli-                                 Consoli-
                                                                                 dated                                     dated
                                            Subsidiary    Motient   Elimi-      Motient    Motient                        Motient
                                            Guarantors    Holdings  nations     Holdings   Parent  XM Radio Eliminations  Parent
                                            ----------    --------  ---------   --------   ------- -------- ------------  -------

REVENUES
                                                                                                  
     Services                                 $50,076         $--       $ --    $50,076        $900        --      $(900)   $50,076
     Sales of equipment                        15,997          --         --     15,997          --                   --     15,997
                                               ------          --         --     ------          --                   --     ------
       Total Revenues                          66,073          --         --     66,073         900                 (900)    66,073
COSTS AND EXPENSES
   Cost of service and operations              51,673          --         --     51,673          --                   --     51,673
   Cost of equipment sold                      17,167          --         --     17,167          --                   --     17,167
   Sales and advertising                       15,893          --         --     15,893         125                   --     16,018
   General and administrative                  13,355       1,030         --     14,385         605     8,506       (900)    22,596
   Depreciation and amortization               43,251          --     (1,579)    41,672          --       865       (222)    42,315
                                               ------          --     -------    ------          --       ---      -----     ------
   Operating Loss                             (75,266)     (1,030)     1,579    (74,717)        170    (9,371)       222    (83,696)
Interest and Other Income                         257      14,695    (11,530)     3,422       3,944       854     (3,598)     4,622
UNREALIZED LOSS ON NOTE RECEIVABLE FROM
XM RADIO                                           --          --         --         --      (9,919)                  --     (9,919)
UNREALIZED GAIN ON NOTE PAYABLE TO
RELATED PARTY                                      --          --         --         --       7,229                   --      7,229
EQUITY IN LOSS OF SUBSIDIARIES                     --     (88,041)    88,041         --    (135,208)             128,516     (6,692)
INTEREST EXPENSE                              (13,032)    (38,317)    11,530    (39,819)     (8,605)   (8,885)     6,352    (50,957)
                                              --------    --------    ------    --------    -------   -------      -----    --------
LOSS BEFORE EXTRAORDINARY ITEM                (88,041)   (112,693)    89,620   (111,114)   (142,389)  (17,402)   131,492   (139,413)
EXTRAORDINARY LOSS ON EXTINGUISHMENT
OF DEBT                                            --          --         --         --     (12,132)       --         --    (12,132)
                                                   --          --         --         --    --------        --   --------    --------
NET LOSS                                     ($88,041)  ($112,693)   $89,620  ($111,114)  ($154,521) ($17,402)  $131,492  ($151,545)
                                             =========  ==========   =======  ==========  ========== =========  ========  ==========












                 Condensed Consolidating Statement of Cash flow
                      Nine Months Ended September 30, 2000
                                   (Unaudited)
                                 (in thousands)



                                                                                Consoli-                                 Consoli-
                                                                                 dated                                     dated
                                            Subsidiary    Motient   Elimi-      Motient    Motient                        Motient
                                            Guarantors    Holdings  nations     Holdings   Parent  XM Radio Eliminations  Parent
                                            ----------    --------  ---------   --------   ------- -------- ------------  -------


CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                                                  
Net loss                                      ($82,283) ($ 110,970)  $ 82,283 ($ 110,970) ($ 91,378) ($ 37,888) $ 149,592 ($ 90,644)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Amortization of Guarantee Warrants and debt
  discount and issuance costs                       --      5,204          --      5,204      3,579         --         --     8,783
Depreciation and amortization                   26,930         --          --     26,930         --      2,005       (715)   28,220
Non cash stock compensation of  XM Radio            --         --          --         --         --      8,264         --     8,264
Extraordinary loss on extinguishment of debt        --        417          --        417         --         --         --       417
Minority Interest                                   --         --          --         --         --         --    (24,074)  (24,074)
Gain on conversion on convertible note
  payable to related party                          --         --          --         --    (32,854)        --         --   (32,854)
Unrealized gain on marketable securities            --         --          --         --     (3,925)        --         --    (3,925)
Changes in assets  & liabilities
  Inventory                                      1,326         --          --      1,326         --         --         --     1,326
  Prepaid in-orbit insurance                      (215)        --          --       (215)        --         --         --      (215)
  Trade accounts receivable                     (5,594)        --          --     (5,594)        --         --         --    (5,594)
  Other current assets                          (4,953)        --          --     (4,953)     1,272       (348)        --    (4,029)
  Accounts payable and accrued expenses         (4,053)    10,557          --      6,504       (238)    13,493         --    19,759
  Deferred trade payables                       (1,103)        --          --     (1,103)        --         --         --    (1,103)
  Deferred Items--net                           14,031         --          --     14,031      1,138         --         --    15,169
                                                ------         --          --     ------      -----         --         --    ------
Net cash (used in) provided by operating
activities                                     (55,914)   (94,792)     82,283    (68,423)  (122,406)   (14,474)   124,803   (80,500)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment of Senior Note interest from escrow         --     20,503          --     20,503         --         --         --    20,503
Additions to property & equipment              (14,958)        --          --    (14,958)        --    (36,651)        --   (51,609)
Asset Sale agreement to Satellite               10,836         --          --     10,836         --         --         --    10,836
Ventures
System under construction                           --         --          --         --         --   (347,134)        --  (347,134)
Net Purchase/Maturity of short-term
investments                                         --         --          --         --         --     69,472         --    69,472
Other investing activities by XM Radio              --         --          --         --         --    (55,122)        --   (55,122)
Purchase of long-term, restricted investments   (2,294)    (2,579)         --     (4,873)      (157)  (104,637)        --  (109,667)
                                                -------    -------         --     -------      -----  ---------        --  ---------
Net cash (used in) provided by investing        (6,416)    17,924          --     11,508       (157)  (474,072)        --  (462,721)
activities
CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of Common and Preferred Stock            --         --          --         --      5,584    436,026         --   441,610
  Proceeds from issuance of conversion
  option to the investors of
  Satellite Ventures                                --         --          --         --     18,411         --         --    18,411
  Funding from parent/subsidiary                67,524     39,868     (82,283)    25,109     99,694         --   (124,803)       --
  Principal payments under capital leases       (3,463)        --          --     (3,463)        --         --         --    (3,463)
  Principal payments under vendor lease         (2,136)        --          --     (2,136)        --         --         --    (2,136)
  Proceeds from Senior Secured Notes and
Stock Purchase Warrants                             --         --          --         --         --    322,898         --   322,898
  Proceeds from bank financing                      --     37,000          --     37,000     (1,000)        --         --    36,000
  Debt issuance costs                               --         --          --         --       (126)    (8,365)        --    (8,491)
                                               -------  ---------    ---------   -------   ---------    -------  ---------   -------

  Net cash provided by (used in) financing      61,925     76,868     (82,283)    56,510    122,563    750,559   (124,803)  804,829
  activities
  Net increase in cash and cash equivalants       (405)        --          --       (405)        --    262,013        --    261,608
  CASH & CASH EQUIVALENTS, beginning of
  period                                           776         --          --        776         --     50,698        --     51,474
                                                   ---         --          --        ---                ------               ------
  CASH & CASH EQUIVALENTS, end of
  period                                         $ 371       $ --        $ --      $ 371       $ --  $ 312,711      $ --  $ 313,082
                                                 =====       ====        ====      =====       ====  =========      ====  =========






                 Condensed Consolidating Statement of Cash Flow
                      Nine Months Ended September 30, 1999
                                   (Unaudited)
                                 (in thousands)




                                                                                Consoli-                                 Consoli-
                                                                                 dated                                     dated
                                            Subsidiary    Motient   Elimi-      Motient    Motient                        Motient
                                            Guarantors    Holdings  nations     Holdings   Parent  XM Radio Eliminations  Parent
                                            ----------    --------  ---------   --------   ------- -------- ------------  -------


CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                                                  
Net loss                                      ($88,041)  ($112,693)    $89,620 ($111,114)  ($154,521) ($17,402)  $131,492 ($151,545)
Adjustments to reconcile net loss to net cash
(used in) provided by operating
activities:
Amortization of Guarantee Warrants and debt
discount and issuance costs                         --       5,823          --     5,823       6,850       478         --    13,151
Depreciation and amortization                   41,673          --          --    41,673          --       642         --    42,315
Extraordinary loss on extinguishment of debt        --          --          --        --      12,132        --         --    12,132
Equity in loss in XM Radio                          --          --          --        --       6,692        --         --     6,692
Unrealized loss on note receivable from XM Radio    --          --          --        --       2,690        --        ---     2,690
  Changes in assets  & liabilities
   Inventory                                    (1,004)         --          --    (1,004)         --        --         --    (1,004)
   Prepaid in-orbit insurance                   (1,449)         --          --    (1,449)         --        --         --    (1,449)
   Accounts receivable--trade                   (5,395)         --          --    (5,395)         --        --         --    (5,395)
   Other current assets                         (7,618)         20          --    (7,598)      3,573    (3,604)        --    (7,629)
   Accounts payable and accrued expenses       (30,315)     37,485          --     7,170         706   (17,654)        --    (9,778)
   Accrued interest on Senior Notes                 --          16          --        16          --        --         --        16
   Deferred trade payables                         975          --          --       975          --        --         --       975
   Deferred Items--net                           1,423          --          --     1,423      (1,030)       --         --       393
                                                 -----          --          --     -----      -------       --         --       ---
   Net cash (used in) provided by operating    (89,751)    (69,349)     89,620   (69,480)   (122,908)  (37,540)   131,492   (98,436)
   activities

CASH FLOWS FROM INVESTING ACTIVITIES:
Payment of Senior Note interest from escrow         --      20,503          --    20,503          --        --         --    20,503
Additions to property & equipment               (9,730)         --          --    (9,730)         --      (198)        --    (9,928)
System under construction                           --          --          --        --          --   (75,579)        --   (75,579)
Purchase of XM Radio note receivable                --          --          --        --     (21,419)       --         --   (21,419)
XM Radio Acquisition costs                          --          --          --        --        (951)      163         --      (788)
Purchase of long-term, restricted investments     (536)     (1,217)         --    (1,753)     (1,860)       --         --    (3,613)
                                                  -----     -------         --    -------     -------       --         --    -------
  Net cash (used in) provided by investing     (10,266)     19,286          --     9,020     (24,230)  (75,614)        --   (90,824)
  activities

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of Common Stock            --          --          --        --     121,974                   --   121,974
  Funding from parent                          110,089      51,063     (89,620)   71,532      56,984     2,976   (131,492)       --
  Principal payments under capital leases       (4,421)         --          --    (4,421)         --        --         --    (4,421)
  Principal payments under vendor Financing       (861)         --          --      (861)         --        --         --      (861)
  Proceeds from bank financing                      --      52,000          --    52,000          --        --         --    52,000
  Proceeds from Series A subordinated               --          --          --        --          --   250,000         --   250,000
  convertible notes
  Repayments on Revolver                            --     (53,000)         --   (53,000)         --        --         --   (53,000)
  Repayment on term loan                            --          --          --        --     (59,000)       --         --   (59,000)
  Repayment on XM Radio bank loan                   --          --          --        --          --       (73)        --       (73)
  Repayment of WorldSpace loan                      --          --          --        --          --   (75,000)        --   (75,000)
  Proceeds from reduction of interest rate swap     --          --          --        --       6,009        --         --     6,009
  Debt issuance costs                               --          --          --        --        (329)  (10,393)        --   (10,722)
  Proceeds from note payable to related party       --          --          --        --      21,500        --         --    21,500
                                               -------      ------     -------    ------      ------   --------  ---------   ------
  Net cash provided by (used in) financing     104,807      50,063     (89,620)   65,250     147,138   167,510   (131,492)  248,406
  activities
  Net increase in cash and cash equivalents      4,790          --          --     4,790          --    54,356         --    59,146
  CASH & CASH EQUIVALENTS,  beginning of
  period                                         2,285          --          --     2,285          --        --         --     2,285
                                                 -----          --          --     -----          --   -------         --     -----
  CASH & CASH EQUIVALENTS, end of period        $7,075         $--         $--    $7,075         $--   $54,356        $--   $61,431
                                                ======         ===         ===    ======          ==   =======        ===   =======









10.  Subsequent Events

On October 5, 2000,  XM Radio  announced its regular  quarterly  dividend on its
8.25% Series B convertible  redeemable preferred stock. The dividend was paid on
November 1, 2000, in shares of Class A common stock and 25,734 shares of Class A
Common stock were issued to the holders of record on October 20,  2000.  The net
loss attributable to common shareholders in the consolidated condensed statement
of operations for quarter and nine months ended  September 30, 2000 reflects the
accrual and  payments  of these  dividend to the  preferred  stockholders  as of
September 30, 2000.











                          PART I- FINANCIAL INFORMATION
                 Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

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

This Quarterly Report on Form 10-Q includes "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.  All statements
regarding our expected financial  position and operating  results,  our business
strategy,   and  our  financing  plans  and  requirements  are   forward-looking
statements.  These  statements  can  sometimes  be  identified  by  our  use  of
forward-looking   words  or  phrases  such  as,  for  example,   "may,"  "will,"
"anticipate,"    "estimate,"    "expect,"    "project,"   or   "intend."   These
forward-looking  statements  reflect our plans,  expectations and beliefs,  and,
accordingly, are subject to certain risks and uncertainties. We cannot guarantee
that any of such forward-looking  statements will be realized.  Factors that may
cause  actual  results  to differ  materially  from those  contemplated  by such
forward-looking  statements  ("Cautionary  Statements")  include,  among others,
those  described  under the caption  "Management's  Discussion  and  Analysis of
Financial  Condition and Results of  Operations  -- Overview,"  and elsewhere in
this  quarterly  report,  including  in  conjunction  with  the  forward-looking
statements  included in this quarterly report. All of our subsequent written and
oral forward-  looking  statements (or statements  that may be attributed to us)
are  expressly  qualified by the  Cautionary  Statements.  You should  carefully
review the risk factors  described in our other filings with the  Securities and
Exchange  Commission (the "SEC") from time to time,  including our  registration
statement on Form S-3 (File No. 333-42104), our Form 10-K Annual Report filed on
March 30, 2000 and our Form 10-Q  Quarterly  Reports to be filed  subsequent  to
this Form  10-Q,  as well as our other  reports  and  filings  with the SEC.  In
addition,  you are urged to review  carefully the most recently filed prospectus
of XM Radio describing the risk factors relating to its business,  as well as XM
Radio's Form 10-K Annual  Report for 1999 and its other  reports filed from time
to time with the SEC.

General

This section provides  information which we believe is relevant to an assessment
and  understanding  of the  financial  condition  and  consolidated  results  of
operations  of Motient  Corporation  (with its  subsidiaries,  "Motient"  or the
"Company").  The discussion  should be read in conjunction with the consolidated
financial   statements   and  notes  thereto.   Motient  has  six   wholly-owned
subsidiaries  which, for purposes of this quarterly  report,  are referred to as
the  core  wireless  business,   and  a  controlling  interest  in  three  other
subsidiaries,  referred to as XM Radio (defined below). On a consolidated basis,
we refer to these entities as Motient.

On June 29, 2000 we formed a new joint  venture  subsidiary,  Motient  Satellite
Ventures  LLC  ('Satellite  Ventures"),  in which  we own 80% of the  membership
interest.  The  remaining  20% interest in Satellite  Ventures is owned by three
investors  controlled  by Columbia  Capital,  Spectrum  Equity  Investors LP and
Telcom Ventures, L.L.C. (collectively,  the "Investors"). The investors paid $50
million to  Satellite  Ventures in exchange  for their 20%  interest.  Satellite
Ventures  will  conduct  research  and  development  activities  to explore  the
technical,  strategic,  and market potential of new wireless data communications
using our existing satellite network. See Item 1-Notes to Consolidated Condensed
Financial Statements for further detail on this transaction.

Core Wireless Business

We are a leading provider of two-way mobile communications  services principally
to business-to-business  customers and enterprises.  Motient serves a variety of
markets  including  mobile  professionals,   telemetry,   transportation,  field
service, and nationwide voice dispatch, to customers in the United States.

We  have  made  substantial  investments  in new  products  --  eLink  (SM)  and
MobileMAX2  (TM).  Our eLink  service  is a two-way  wireless  email  device and
electronic  organizer that uses our terrestrial  network.  We believe that these
products  will  capitalize  on the rapid  expansion  of  internet  email  usage,
particularly   in  the   business-to-business   environment.   We  provide   our
industry-leading  eLink two-way  wireless  email service to customers  accessing
email through  corporate  servers,  Internet  Service  Providers  (ISP) and Mail
Service Provider (MSP) accounts, and paging network suppliers.  Also, in July we
entered  into  an  agreement  with  Yahoo!   Inc.,  a  leading  global  Internet
communications,  commerce and media company, to use our eLink service to provide
Yahoo! users wireless access to Yahoo!  content and services.  In November 2000,
we launched our eLink Fortified with Yahoo!  (TM) service.  In November 2000, we
launched our BlackBerry (TM) by Motient solution specifically designed for large
corporate accounts operating in a Microsoft Exchange environment.  BlackBerry is
a popular wireless email solution developed by Research in Motion ("RIM") and is
being provided on the Motient network under license from RIM.

MobileMAX2 is our second  generation  multi-mode  mobile data messaging  service
which   uses  both  our   satellite   and   terrestrial   networks   to  provide
least-cost-routing  capabilities,  primarily to the transportation  industry. We
believe  MobileMAX2  will  allow for a lower  cost of entry and  contains  added
functionality   that   should   allow   the   increased   penetration   of   the
less-than-truckload  market. On September 19, 2000, the Company signed a binding
letter agreement to sell its retail  transportation  business to Aether Systems,
Inc.  ("Aether").  Aether  will  purchase  the assets  comprising  our  wireless
communications   business  for  the   transportation   market,   including   the
satellite-only and MobileMAX2 multi-mode mobile messaging business.  Aether will
acquire all of the assets used or useful in the retail transportation  business,
and will assume the related liabilities.  Aether will also purchase the existing
inventory in the  business,  and will be granted a perpetual  license to use and
modify any  intellectual  property  owned by or licensed to the us in connection
with the business.  See "Liquidity and Capital Resources" for further details of
this transaction.

We expect that our rollout of eLink,  BlackBerry by Motient and eLink  Fortified
with Yahoo!  will require a significant  investment of financial  resources.  We
believe that the market opportunity represented by these wireless data offerings
is  substantial,  and we have  decided to focus the  majority  of our  available
future  resources on expanding our wireless data business.  As a result of these
factors  and in light of  certain  regulatory  developments  in late  1999  with
respect to our  satellite  voice  business,  we expect that the future  level of
investment  in our voice  business  and  satellite-related  product  lines  will
decrease as a percentage  of our overall  investment.  While we expect that this
shift in resources  will  ultimately  yield an increase in our customer base, we
expect that it will have the effect of driving down average  revenue per unit as
the percentage of voice customers decreases.

XM Radio

As of  September  30,  2000,  we had an equity  interest in XM  Satellite  Radio
Holdings Inc. ("XM Radio") of  approximately  33.1% (or 21.8% on a fully diluted
basis);  however,  we continue to control XM Radio through our Board of Director
membership and common stock voting  rights.  In July 1999 we acquired all of the
outstanding  debt and equity  interest in XM Radio from its other  investor (the
"XM  Acquisition").  As a result,  all of XM Radio's results for the period from
July  7,  1999  have  been  included  in our  consolidated  condensed  financial
statements.  We will continue to consolidate XM Radio until we no longer control
XM Radio.  We must request and receive FCC approval to relinquish  control of XM
Radio.  Prior to July 7, 1999,  our  investment  in XM Radio was  accounted  for
pursuant to the equity method of accounting. On July 14, 2000, XM Radio filed an
application  with the FCC to allow XM Radio to transfer its control from us to a
diffuse  group of owners,  none of whom will have a controlling  interest.  This
application  is  pending  with  the  FCC.  Under  the  terms  outlined  in  this
application,  we will still retain our Board of Director  membership but will no
longer have the right to elect a majority of XM Radio's Board of  Directors.  At
such time that we cease to control XM Radio,  we will account for our investment
in XM Radio pursuant to the equity method.

The operations and financing of XM Radio are maintained  separate and apart from
the operations and financing of Motient.  XM Radio  completed its initial public
offering  in  October  1999.  Please  refer  to  XM  Radio's  audited  financial
statements,  included in its reports and filings  with the SEC,  for more detail
about its business plan, risks, and financial results.

Our significant acquisitions in recent years and the impact of consolidating the
results of XM Radio,  make period to period  comparison of our financial results
less meaningful,  and therefore, you should not rely on them as an indication of
future operating performance.

Overview

We have incurred  significant  operating  losses and negative cash flows in each
year since we started operations,  due primarily to start-up costs, the costs of
developing  and building the  networks and the cost of  developing,  selling and
providing  our products and  services.  We are, and will  continue to be, highly
leveraged (see discussion of Liquidity and Capital Resources -- below).

Our  future  operating  results  could be  adversely  affected  by a  number  of
uncertainties and factors, including:

o         the launch of new  products  or the entry  into new  market  segments,
          which  may  require  us to  continue  to incur  significant  operating
          losses,


o         our ability to complete the Aether  transaction in a timely manner and
          to provide the appropriate resources during the transition period,

o         our ability to fully  recover the value of our  inventory  in a timely
          manner,

o         our ability to gain market  acceptance  of new products and  services,
          including our new product offerings,  eLink, BlackBerry by Motient and
          eLink Fortified with Yahoo!,

o         the  timely  roll-out  of certain  key  customer  initiatives  and new
          products, including for example eLink Fortified with Yahoo!,

o         our  ability to respond and react to changes in our  business  and the
          industry because we have substantial indebtedness,

o         our ability to fund anticipated capital expenditures, operating losses
          and debt  service  requirements  and our ability to secure  additional
          financing as necessary,

o         our ability to modify the  organization,  strategy  and product mix to
          maximize the market opportunities as the market changes,

o         our ability to manage growth effectively,

o         competition  from  existing  companies  that  provide  services  using
          existing   communications   technologies   and  the   possibility   of
          competition from companies using new technology in the future,

o         our ability to maintain,  on commercially  reasonable terms or at all,
          certain technologies licensed from third parties,

o         the loss of one or more of our key customers,

o         our ability to attract and retain key personnel,

o         the timely availability of an adequate supply of subscriber  equipment
          at competitive price points,

o         our dependence on third party  distribution  relationships  to provide
          access to potential customers,

o         our  ability  to  expand  our  networks  on a  timely  basis  and at a
          commercially  reasonable cost, or at all, as additional  future demand
          increases,

o         regulation by the FCC, and

o         technical  anomalies  that may occur  within  the  network,  including
          product development,  which could impact, among other things, customer
          performance,  satisfaction and revenue under contractual  arrangements
          with certain customers,  or the operation of the satellite network and
          the cost, scope or availability of in-orbit insurance.

Additionally,  XM Radio is a development stage company with no revenues, and its
business is subject to a number of significant risks and uncertainties including
the following:

o         the ability to obtain additional  financing  necessary to complete the
          build out of its system and maintain  operations until such time as it
          can reach cash flow positive,

o         satellite  launch  failure,  destruction or damage during launch,  and
          premature  failure  of XM  Radio's  satellite  that  will not be fully
          covered by insurance,

o         the ability of XM Radio to successfully integrate complex technologies
          into a technologically feasible configuration,

o         the  timely   availability  of  XM  Radio   subscriber   equipment  at
          competitive prices,

o         the ability of XM Radio to gain market acceptance of its service, and

o         the  ability  of XM  Radio  to  achieve  profitability  given  certain
          distribution  agreement  obligations  and  joint  development  funding
          requirements.

The Company has a  significant  investment  in XM Radio which may be effected by
the  foregoing  risks and impact the market  price of XM Radio's  stock.  For an
expanded discussion of XM Radio's risk factors,  please refer to XM Radio's most
recently filed prospectus with the SEC.

Quarter and nine months ended September 30, 2000 and September 30, 1999

Revenue and Subscriber Statistics

Service  revenues,  which  includes  our  data,  voice,  and  capacity  reseller
services,  approximated  $19.8  million and $55.2 million for the three and nine
months ended September 30, 2000, respectively, which constituted a $2.5 million,
or 14%  increase  over the three  months  ended  September  30,  1999 and a $5.1
million,  or 10% increase  over the nine months ended  September  30, 1999.  The
increase in service revenues for the third quarter and first nine months of 2000
was primarily attributable to a 44% increase in subscribers, partially offset by
average revenue per user reductions.










                                                             Three Months Ended
                                                                September 30,
                          Summary of Revenue                 2000           1999          Change         % Change
                                                                               (in millions)
                                                                                                
                 Data Services                               $ 14.0          $ 12.6       $ 1.4              11%
                 Voice Service                                  2.8             3.5        (.07)            (20)
                 Capacity Resellers and Other                   3.0             1.2         1.8             150
                 Equipment Revenue                              6.8             5.7         1.1              19
                                                             ------          ------         ---
                     Total                                   $ 26.6           $23.0        $3.6              16%
                                                             ======          ======        ====






                                                              Nine Months Ended
                                                                September 30,
                          Summary of Revenue                 2000           1999          Change         % Change
                                                                               (in millions)
                                                                                                  
                 Data Services                                $40.0           $36.9        $3.1               8%
                 Voice Service                                  9.7             9.7         ---             ---
                 Capacity Resellers and Other                   5.5             3.5         2.0              57
                 Equipment Revenue                             19.3            16.0         3.3              21
                                                              -----           -----         ---
                     Total                                    $74.5           $66.1        $8.4              13%
                                                              =====           =====        ====




Our  data  service  revenue  increased  as  a  result  of  approximately  53,000
additional  subscribers at September 30, 2000 as compared to September 30, 1999,
broken down as follows:




                                                     Revenue Growth
                                       Subscribers
                                                       
             eLink                        29,300             $1.4
             Transportation               26,400              6.7
             Field Service                (4,700)            (5.8)
             Telemetry                     2,000              0.6
                                          -------            -----
                Total                     53,000             $2.9
                                          =======            =====



The growth in our  transportation  segment was primarily for UPS and  multi-mode
customers.  The  decrease in field  service was a result of (i)  contract  price
reductions  from existing  large  customers  and (ii) the  expiration of a large
contract.

The increase in service  revenue from voice services was primarily the result of
an increase in our voice  subscribers  of  approximately  25% from September 30,
1999 to September 30, 2000. This was offset by a decrease in our average revenue
per unit ("ARPU")  caused by a shift in customer usage to lower-usage  emergency
response  services,  and a  continued  drop in average  revenue per user for our
maritime customers.

Service  revenue  from  capacity  resellers,  who  handle  both  voice  and data
services,  increased  primarily  as a result of  approximately  $1.8  million in
revenue under our Research and  Development  agreement with Satellite  Ventures,
offset by a reduction of  approximately  $260,000 in quarterly  revenue from one
customer who cancelled their back-up satellite capacity channels.

For the first nine months of 2000 we  experienced an 14% decrease in ARPU caused
by (i) late quarter subscriber  additions and delayed sales through the reseller
channels for our eLink product that did not add materially to revenues, (ii) the
impact of a one-time voice contract credit, and (iii) a larger percentage of our
customers using our data service, versus our voice service, which typically have
a higher ARPU, offset by an increase in the ARPU related to the revenue from the
Research and  Development  Agreement for which no subscribers  were added.  When
normalized for the late quarter  loading,  one-time  adjustment and revenue from
the Research and Development Agreement, our ARPU decreased by 16% as compared to
the ARPU as of December 31, 1999.

The  increase in revenue for the nine months ended  September  30, 2000 from the
sale of equipment  reflects the sale of hardware  equipment  associated with our
eLink offerings of approximately $10.0 million, offset by a decrease in sales of
single-mode,  multi-mode and voice equipment of approximately  $6.7 million.  We
expect this trend to continue with additional eLink offerings and the shift away
from the voice business.

As is common in our  industry,  we report  subscriber  information  and  average
revenue per unit per month statistics.  Although these measures are not required
under Generally Accepted Accounting  Principles  ("GAAP"),  we believe that this
information helps to demonstrate important trends in our business.






                                                         Subscribers
                                                     As of September 30,
                                                     -------------------
                                                    2000             1999
                                                    ----             ----
                                                            
                  eLink                            30,653           1,312
                  Field Service                    43,878          48,544
                  Transportation                   73,637          47,232
                  Telemetry                        15,121          13,120
                  Maritime                          6,423           5,248
                  Other                            19,494          15,744
                                                  -------         -------
                           Total                  189,206         131,200
                                                  =======         =======

                  Average revenue per user            $37             $45
                                                      ===             ===





Expenses

                                                             Three Months Ended
                                                                September 30,
                          Summary of Expense                 2000           1999          Change         % Change
                          ------------------                 ----           ----          ------         --------
                                                                               (in millions)
                                                                                                
                 Cost of Service & Operations                 $18.6           $17.3        $1.3               8%
                 Cost of Equipment Sales                       10.7             6.1         4.6              75
                 Sales & Advertising                            8.6             5.5         3.1              56
                 General & Administration-core                  5.8             4.6         1.2              26
                 wireless
                 General & Administration-XM Radio             27.1             8.5        18.6             219
                 Depreciation & Amortization-core               9.2            14.3        (5.1)            (36)
                 wireless
                 Depreciation & Amortization-XM Radio           0.8             0.6         0.2              33
                                                              -----           -----         ---
                     Total                                    $80.8           $56.9        $23.9             42%
                                                              =====           =====        =====







                                                              Nine Months Ended
                                                                September 30,
                          Summary of Expense                 2000           1999          Change         % Change
                          ------------------                 ----           ----          ------         --------
                                                                               (in millions)
                                                                                                
                 Cost of Service & Operations                $ 55.4           $51.7         3.7               7%
                 Cost of Equipment Sales                       23.9            17.2         6.7              39
                 Sales & Advertising                           22.5            16.0         6.5              40
                 General & Administration-core                 16.6            14.1         2.5              18
                 wireless
                 General & Administration-XM Radio             56.9             8.5        48.4             569
                 Depreciation & Amortization-core              26.9            41.7       (14.8)             35
                 wireless
                 Depreciation & Amortization-XM Radio           1.3             0.6         0.7             117
                                                             ------          ------         ---
                     Total                                   $203.5          $149.8        $53.7             36%
                                                             ======          ======        =====



Effective July 7, 1999, we assumed control of XM Radio and we  consolidated  its
results  with ours from that point  forward.  Consequently,  the results for the
three  and nine  months  ended  September  30,  2000  reflect  the  costs of the
consolidated  entity.  The results for the three and nine months ended September
30, 1999 include  expenses on a  consolidated  basis from July 7, 1999  forward.
Results of XM Radio  prior to July 7, 1999 were  accounted  for under the equity
method of accounting.

Cost of service and  operations  includes  costs to support  subscribers  and to
operate the network.  As a  percentage  of total  revenues,  cost of service and
operations  was 70 % for the three months ended  September  30, 2000 and 74% for
nine months ended September 30, 2000,  compared to 75% and 78% for the three and
nine months ended September 30, 1999, respectively.  The dollar increase in cost
of service and  operations  for the nine  months  ended  September  30, 2000 was
primarily attributable to (i) a 28% increase in communication charges associated
with  increased  service usage and more base stations and increased  rates under
communication  contracts to that  support the  terrestrial  network,  (ii) a 15%
increase in maintenance  costs  primarily for  maintenance of our base stations,
(iii) an 8% increase in headcount  as we continue  the  build-out of our network
and to support  our  network,  and (iv) a 17%  increase  for site  rental  costs
associated  with the  build  out of the  terrestrial  network,  offset  by (i) a
reduction  of  approximately  $2.6  million  in Year  2000  costs and (ii) a 23%
reduction in in-orbit insurance premiums.

The $6.7 million  increase in cost of  equipment  sold for the nine months ended
September 30, 2000,  as compared to the first nine months of 1999,  was a result
of our growth in the sales of our eLink  product line,  which was  introduced in
the  third  quarter  of 1999,  offset  by a $3.6  million  inventory  write-down
associated with certain of these first generation devices.  Additionally,  sales
of our single mode,  multi mode and voice  products  were down 43% from the same
period last year, which is reflected in the associated decrease in cost of those
sales.

Sales  and   advertising   expenses  as  a  percentage  of  total  revenue  were
approximately  32% and 30% for the quarter and nine months ended  September  30,
2000,  respectively,  compared  to 24% for the  quarter  and nine  months  ended
September  30, 1999.  The increase in sales and  advertising  expenses  from the
quarter and nine months ended  September 30, 1999 to the quarter and nine months
ended September 30, 2000 was primarily  attributable to (i) increased trade show
activity in the third quarter and first nine months of 2000 compared to the same
periods in 1999,  (ii) costs incurred in connection with our company name change
in April 2000,  (iii) an increase  in  advertising  for the first nine months of
2000 to  heighten  our  presence in the  marketplace  and to  highlight  our new
product  offerings,  and (iv) eLink customer  acquisition costs. We expect these
costs to continue to increase as we increase our customer acquisitions and brand
recognition  efforts. XM Radio did not incur any sales and advertising  expenses
in the first nine months of 2000.

In July 2000, we signed an agreement with Yahoo! to promote our  newly-developed
eLink  Fortified with Yahoo!  wireless  product.  In addition to our advertising
commitment under this contract, we also issued common stock purchase warrants to
Yahoo!  The Yahoo!  warrants were valued at  approximately  $4.9 million.  These
warrants will be amortized to sales and  advertising  expense in accordance with
the roll out of the advertising plan, anticipated to run through July 2002.

General  and  administrative  expenses  for  the  core  wireless  business  as a
percentage  of total  revenue  were  approximately  22% for the quarter and nine
months ended September 30, 2000, compared to 20% and 21% for the same periods in
1999.  The increase  from the nine months ended  September  30, 1999 to the nine
months  ended  September  30,  2000 in our core  wireless  business  general and
administrative expenses was attributable to (i) a 15% increase in headcount from
the prior year causing an increase in employee-related  costs, (ii) increases in
facility costs as a result of increased  space rental,  and (iii) an increase in
regulatory costs,  associated  principally with our appeal of the FCC's decision
to grant applications to competitors to provide mobile satellite services in the
United States. See "Regulation" below.

General and administrative  expenses for XM Radio increased as XM Radio prepares
for the launch of service.  Increases in costs are associated  with research and
development   efforts,   additional  facility  charges,  and  headcount  related
expenses. Additionally, in the third quarter of 2000, XM Radio incurred non-cash
compensation charges of approximately $8.3 million for  performance-based  stock
options and as a result of  adopting  the  provisions  of  Financial  Accounting
Standards  Board  ("FASB")   Interpretation   No.  44,  Accounting  for  Certain
Transactions  Involving Stock Compensation ("FIN 44"). XM Radio will continue to
recognize  quarterly  non-cash  compensation  charges in accordance  with FIN 44
depending on the market value of XM Radio's Class A common stock at the end each
quarter.

Depreciation and amortization for the core wireless  business was  approximately
34% and 36% of total  revenue for the three and nine months ended  September 30,
2000, respectively, compared to 62% and 63% during the same periods in 1999. The
decrease in  depreciation  and  amortization  expense for the nine months  ended
September  30,  2000 was  primarily  attributable  to the  $97.4  million  asset
impairment  charge related to our satellite and satellite related ground segment
assets  taken in the fourth  quarter of 1999.  This  resulted in a reduction  in
depreciation  expense of  approximately  $12.2 million for the nine months ended
September 30, 2000. Further  reductions in depreciation  expense are a result of
older assets,  particularly those associated with the mobile messaging business,
being fully depreciated by the end of 1999.

Interest  and other income was $9.0 million (of which $8.0 million was earned by
XM  Radio)  for the third  quarter  of 2000 and $24.2  million  (of which  $21.0
million was earned by XM Radio) for the nine months ended September 30, 2000, as
compared to $1.0 million and $4.6 million for the same periods in 1999, of which
$1.0 million was earned by XM Radio.  Excluding  interest  earned by XM Radio on
its restricted  investments,  interest earned by the core wireless  business was
essentially  flat and reflected  interest earned on overnight  investments.  The
reduction in interest earned on our escrow established for the Senior Notes as a
result of lower escrow  balances,  was essentially  offset by interest earned in
1999 on our note  receivable  from XM Radio, as XM Radio was accounted for under
the equity method of accounting during the first six months of 1999.

We incurred  $15.3 million of interest  expense in the third quarter of 2000 and
$46.3 million for the nine months ended  September  30, 2000,  compared to $18.1
million and $51.0 million during the same periods in 1999, of which $8.2 million
was incurred by XM Radio. The net increase,  excluding XM Radio, of $3.5 million
for the nine months  ended  September  30,  2000 was a result of a $6.2  million
decrease in amortization of warrants,  prepaid  interest and debt offering costs
due  to  the  debt  discount  costs  that  were  written  off in  1999  when  we
extinguished  $59  million of debt on the Term Loan  Facility,  offset by higher
debt  balances as well as an  approximate  1% increase in interest  rates on our
bank facility.  We expect that interest costs will continue to be significant as
we continue to draw down on our bank revolver.

In January  1999,  we issued a note  payable  in the amount of $21.5  million to
Baron Asset Fund, a stockholder  and a guarantor of our bank facility.  The note
was secured and exchangeable for a portion of our shares of XM Radio.  Since the
note was indexed to XM Radio stock,  which decreased in value from December 1999
to January 2000, we recorded an unrealized  gain of $3.9 million before the note
was  exchanged.  The note  payable was  exchanged  for XM Radio stock in January
2000, and we recorded a  non-recurring  gain of $32.9 million for the difference
between the  carrying  value of the debt and XM Radio stock  exchanged to settle
the obligation.

Net  capital  expenditures,  excluding  XM  Radio,  for the  nine  months  ended
September  30, 2000 for property and equipment  were $15.0  million  compared to
$9.7  million in the same period of 1999.  Expenditures  consisted  primarily of
assets  necessary  to  continue  the build out of our  terrestrial  network.  In
addition,  XM Radio  expended $36.7 million in the first nine months of 2000 for
leasehold  improvements  on their  new  office  building,  as well as for  other
expenditures for office furniture and equipment.

Net capital  expenditures for property under construction  represent those costs
associated  with the build out of the XM Radio network.  It is anticipated  that
these  expenditures  will continue to be  significant  as XM Radio  continues to
build out its satellites and ground segments. For the first nine months of 2000,
XM Radio expended $347.1 million for property under construction.

Liquidity and Capital Resources

Core Wireless Business

Adequate  liquidity  and  capital  are  critical to our ability to continue as a
going concern and to fund subscriber  acquisition  programs necessary to achieve
positive  cash flow and  profitable  operations.  We expect to  continue to make
significant  capital  outlays to fund interest  expense,  new product  rollouts,
capital  expenditures  and working capital before we begin to generate  positive
cash  flow  from  operations.  We  expect  these  outlays  to  continue  for the
foreseeable future.

As noted  above,  we have signed a binding  letter  agreement to sell our retail
transportation  business  to  Aether.  In  addition,   Aether  will  enter  into
long-term, prepaid network airtime agreements with a total value of $25 million,
pursuant to which Aether will purchase  airtime on the  Company's  satellite and
terrestrial  networks.  Aether  will also become an  authorized  reseller of our
eLink  and  BlackBerry  by  Motient  wireless  email  service  offering.   These
transactions are described below.  Aether will acquire all of the assets used or
useful in the  retail  transportation  business,  and will  assume  the  related
liabilities.  Aether will also purchase the existing  inventory in the business,
and will be granted a  perpetual  license  to use and  modify  any  intellectual
property  owned by or licensed to the Company in  connection  with the business.
The purchase price for these assets will be $45 million,  plus the  then-current
book value of the inventory for the business. All of this amount will be paid at
closing, except for $10 million which will be deposited in an escrow account and
will be released to Motient upon  satisfaction of certain  criteria with respect
to MobileMAX2.  In addition, the Company has the opportunity to receive up to an
additional $22.5 million as an "earn-out"  payment,  subject to the satisfaction
of certain operating results for the business during 2001. Of the proceeds,  $20
million will be used to immediately  repay and permanently  reduce the Revolving
Credit  Facility.  Proceeds,  if any, from the $10 million escrow and the Aether
earn-out will also be used to repay and permanently  reduce the Revolving Credit
Facility.

To enable Aether to continue to operate the retail transportation business after
the transaction  closes,  the Company and Aether will sign two long-term network
airtime  agreements,  under which Aether will purchase  airtime on the satellite
and terrestrial  networks.  These  agreements have a total value of $25 million,
and Aether will prepay a  significant  portion of such amount upon  closing.  As
part of these  agreements,  Aether  will also become an  authorized  reseller of
Motient's  eLink wireless email service,  as well as BlackBerry (TM) by Motient.
The Company and Aether will also enter into certain transition arrangements with
respect to  certain  facilities  and  functions.  Aether  intends to hire all of
Motient's employees in the business.

Summary of Liquidity and Financing Sources for Core Wireless Business

Our current operating  assumptions and projections  reflect our best estimate of
subscriber  and revenue  growth and  operating  expenses.  We  anticipates  that
capital  expenditures,  operating  losses,  working  capital  and  debt  service
requirements   through  2000  can  be  met  by  (i)  proceeds  from  the  Aether
transaction,  which is expected to close in the fourth quarter, or a combination
of the following:  (ii) cash on hand,  (iii) the borrowings  available under the
bank financing and the vendor financing, (iv) proceeds realized through the sale
of inventory  relating to eLink and MobileMAX2 and (v) additional debt or equity
financing transactions.  Additionally, Motient Parent Company has the ability to
monetize  its  investment  in XM  Radio,  via  direct  quarterly  sales or other
arrangements,  and transfer a portion of the proceeds to its  subsidiaries.  Our
ability to meet our projections is subject to numerous  uncertainties  and there
can be no assurance  that our current  projections  regarding  the timing of our
ability to achieve  positive  operating cash flow will be accurate.  If our cash
requirements  are more than projected,  we may require  additional  financing in
amounts which may be material.  The type, timing and terms of financing that the
we select will be  dependent  upon our cash  needs,  the  availability  of other
financing  sources and the prevailing  conditions in the financial  markets.  We
cannot  guarantee  that  additional  financing  sources will be available at any
given time or available on favorable terms.

Our current financing arrangements are summarized below:

o         A $137.3  million bank financing  facility,  consisting of (i) a $97.3
          million  unsecured  five-year  reducing  revolving credit facility and
          (ii) a $40  million  five-year  term loan  facility,  with up to three
          additional one-year extensions subject to the lenders' approval, which
          is secured by the assets of the Company, principally our stockholdings
          in XM Radio.  The bank  financing  is severally  guaranteed  by Hughes
          Electronics Corporation,  Singapore Telecommunications Ltd., and Baron
          Capital Partners,  L.P. Both facilities bear interest,  generally,  at
          100 basis points above London Interbank Offered Rate-- LIBOR.  Certain
          proceeds  that we may  receive  are  required  to be used to repay and
          reduce the bank financing,  unless otherwise waived by the lenders and
          the guarantors.  As of October 31, 2000, we had outstanding borrowings
          of $40 million  under the term loan  facility  at  7.6875%,  and $91.0
          million  under the  revolving  credit  facility at rates  ranging from
          7.625% to 8.0%.  Additionally,  in connection with the bank financing,
          we entered  into an interest  rate swap  agreement  which  reduces the
          impact of interest rate increases on the term loan facility. Under the
          swap agreement, we will receive an amount equal to LIBOR plus 50 basis
          points, paid directly to the banks on a quarterly basis, on a notional
          amount of $41 million  until the  termination  date of  September  30,
          2001. The  unamortized fee paid for the swap agreement is reflected as
          an asset in the accompanying financial statements. We are exposed to a
          credit loss in the event the counter party does not perform under this
          agreement;  however,  we do not believe there is a significant risk of
          non  performance,  since the counter party to the swap  agreement is a
          major financial institution.

          As noted  above,  upon the  closing  of the  Aether  transaction,  $20
          million will be used to immediately  repay and permanently  reduce the
          Revolving  Credit Facility.  Proceeds,  if any, from the Aether escrow
          and  earn-out  will also be used to repay and  permanently  reduce the
          Revolving Credit Facility.

o         A vendor financing commitment from Motorola,  Inc., a stockholder,  to
          provide up to $15 million of vendor  financing to finance up to 75% of
          the purchase  price of additional  terrestrial  network base stations.
          Loans under this  facility bear interest at a rate equal to LIBOR plus
          7.0%  and are  guaranteed  by  Motient  and  each of its  wholly-owned
          subsidiaries.  The terms of the facility require that amounts borrowed
          be secured by the  equipment  purchased  therewith.  As of October 31,
          2000  there  was $2.9  million  available  for  borrowing  under  this
          facility.

o         An $8.4 million capital lease for network  equipment  acquired in July
          2000.  The lease has a term of three years and an  effective  interest
          rate of 14.4%.

o         $335  million  of  senior  notes  issued  at the  time of the  Motient
          Communications  Acquisition.  The  notes  bear  interest  at  12  1/4%
          annually  and are due in 2008.  A portion of the net  proceeds  of the
          sale of the  notes was used to  finance  pledged  securities  that are
          intended to provide for the payment of the first six interest payments
          on these notes.  Interest payments are due semi-annually,  in arrears,
          and began on October 1, 1998. The notes were issued by a subsidiary of
          Motient, and are fully guaranteed by Motient.

o         We have also arranged the financing of certain trade payables,  and as
          of September 30, 2000,  $3.6 million of deferred  trade  payables were
          outstanding  at rates  ranging  from 5.93% to 7.24% and are  generally
          payable by the end of 2000.

Commitments

At September  30, 2000,  we had remaining  contractual  commitments  to purchase
subscriber  equipment inventory,  primarily related to eLink and MobileMAX2,  in
the amount of $29.3 million during 2000 and 2001. We have the right to terminate
certain of these commitments by incurring a cancellation  penalty representing a
percentage of the unfulfilled portion of the contract.  As of September 30, 2000
the cancellation penalty would have been approximately $4.1 million.

We have also  contracted for the purchase of $800,000 of base stations to expand
our coverage and complete certain  necessary site  build-outs,  and have certain
other operating  expense  contract  commitments  that total  approximately  $1.2
million over the next year.

The aggregate fixed and  determinable  portion of all inventory  commitments and
obligations for other fixed contracts is $31.2 million, of which $6.5 million is
due in 2000 and $23.9 million is due in 2001.

XM Radio

XM Radio is operated,  managed,  and funded  separately  from our core  wireless
business.  While  we do not  have  any  obligation  or  commitments  to  provide
additional  funding to XM Radio,  and do not expect to  provide  any  additional
funding, we may choose to do so in the future. XM Radio will require significant
additional funding in the future. If XM Radio is not successful in obtaining the
additional  required  financing,  our investment in XM Radio could be negatively
impacted.

In the first quarter of 2000, XM Radio raised an  additional  $228.6  million in
net proceeds  through a follow-on  offering of 4.4 million shares of its Class A
common stock and 2.0 million shares of Series B convertible redeemable preferred
stock.  In March 2000, XM Radio  completed a high yield debt offering of 325,000
units,  each unit  consisting of $1,000  principal  amount of 14% Senior Secured
Notes due 2010 and one  warrant to  purchase  8.024815  shares of Class A common
stock of XM Radio at an exercise  price of $49.50 per share.  XM Radio  realized
net  proceeds  of $191.3  million,  excluding  $123.0  million  used to  acquire
securities  which will be used to pay interest  payments due under the notes for
the first three  years.  In August 2000,  XM Radio closed a private  offering of
235,000 shares for $1,000 per share of its 8.25% Series C convertible redeemable
preferred  stock and raised  additional  net  proceeds of  approximately  $206.4
million and a stock  sbuscription  of $20.0 million.  XM Radio recorded a $123.0
million  beneficial  conversion charge that reduced earnings available to common
stockholders.  The issuance of the Series C preferred  stock caused the exercise
price of the warrants sold in March 2000 to be adjusted to $47.94.

XM Radio is also subject to certain commitments and contingencies.  XM Radio has
a  distribution  agreement  with General  Motors that will  require  significant
expenditures in the future.  Under its satellite  contract with Boeing Satellite
Systems  International,  Inc. ("BSS",  formerly Hughes Space and Communications,
Inc.), XM Radio will incur payment  obligations of approximately  $541.3 million
of which $461.1 million had been paid, and $1.5 million had been accrued,  as of
September 30, 2000. XM Radio has signed a contract with LCC International,  Inc.
(a related party to XM Radio),  for the engineering of its terrestrial  repeater
network with total contract payments  expected to be approximately  $115 million
through 2001. As of September  30, 2000,  XM Radio has paid $30.8  million,  and
accrued an additional  $12.9  million,  under this contract.  Effective  October
1999, XM Radio signed a contract  with Hughes  Electronics  Corporation  for the
design,  development,  and purchase of terrestrial repeater equipment. The total
value of this  contract is $128.0  million  and XM Radio has paid $12.9  million
under this contract as of September 30, 2000. On February 16, 2000, XM Radio and
Sirius Satellite Radio, a competitor of XM Radio, signed an agreement to develop
a unified  standard for satellite  radios to facilitate the ability of consumers
to purchase one radio capable of receiving both XM Radio's and Sirius  Satellite
Radio's services.

Satellite Ventures

As noted above, we formed a new joint venture subsidiary, Satellite Ventures, in
which we own 80% of the  membership  interests.  The  remaining  20% interest in
Satellite Ventures is owned by the Investors.  The Investors paid $50 million to
Satellite  Ventures (in the aggregate),  in exchange for their 20% interest.  Of
the $50 million payment  received by Satellite  Ventures,  $6.0 million is being
retained by Satellite  Ventures  and will be used to fund  certain  research and
development activities,  with the remaining $44 million paid to Motient Services
Inc. ("Motient  Services") (which owns our satellite and related assets). Of the
$44  million  paid to Motient  Services,  $20  million  was for a  Research  and
Development,  Marketing  and  Service  Agreement,  and $24 million was a deposit
under the Asset Sale  Agreement.  Motient is not required to provide  additional
financing to Satellite Ventures.

At any time during the next two years,  the Investors have the right to elect to
purchase  up to an  additional  40% stake in  Satellite  Ventures,  for an extra
payment of $120 million (which amount will increase by a specified daily amount,
after one year).  Upon such  exercise,  Satellite  Ventures will  consummate the
purchase  of all of the assets  owned by  Motient  Services  that  relate to the
satellite  business.  The purchase  price for such assets will be $144  million,
comprised of the $24 million described above as the deposit, and additional cash
of $120.0 million at closing.

In connection with the Aether transaction, we and the other members of Satellite
Ventures agreed to reduce the purchase price in the asset sale agreement between
Satellite  Ventures and Motient  Services,  to account for the fact that Motient
Services  will  receive  certain  consideration  in the  Aether  transaction  in
exchange for the assets to be acquired by Aether,  which assets  otherwise would
have been  available to be acquired by Satellite  Ventures.  Upon closing of the
Aether transaction,  the purchase price to be paid by Satellite Ventures for the
remaining  assets of Motient Services will be reduced from $120 million to $80.5
million,  and will be further  reduced  by an amount  equal to  one-half  of any
earn-out consideration received by the Company.

Also at any time during the next two years, if the Investors decide that they do
not wish to acquire  control of  Satellite  Ventures  and acquire the  satellite
assets of Motient Services as described  above,  they may convert their existing
minority  position in Satellite  Ventures into shares of our common stock,  at a
conversion price which will be set at the time of exercise,  between $12 and $20
per share,  as specified in the  Investment  Agreement.  The  Investors  may not
exercise  this right,  however,  until after  December  29,  2000,  except under
certain limited circumstances.

We  received  partial  waivers  from  the  banks  and  the  guarantors  for  the
requirement in the bank facility that 50% of certain proceeds  received by us be
used to repay and permanently  reduce the Revolving Credit  Facility.  Under the
terms of the bank facility waivers  received,  only $2.75 million of the initial
$44  million  payment  received  was  used to  repay  outstanding  amounts,  and
permanently reduce commitments,  under our bank facility,  with the remainder of
the initial  $44  million  payment  retained  by us. If the  Investors  elect to
acquire  control of  Satellite  Ventures and the  Additional  Payment is made as
described  above,  then the Company will be required to use 50% of such proceeds
to pay down  outstanding  balances  and/or  reduce  commitments,  under our bank
facility.

Other




                                                     Nine Months Ended September 30, 2000      Nine Months Ended September 30, 1999
                                                     ------------------------------------      ------------------------------------


                                                       Core                                     Core
                                                     Business     XM Radio   Consolidated     Business   XM Radio (1)   Consolidated
                                                   ----------- ------------ -------------- ------------ --------------  ------------

                                                                                                        
Cash Used In Operating                               ($66,026)    ($14,474)    ($80,500)    ($60,896)      ($37,540)      ($98,436)

Cash Provided by (Used in) Investing                   11,351     (474,072)    (462,721)     (15,210)       (75,614)       (90,824)
Cash Provided by Financing:
    Common stock/warrant issuances                     23,995      436,026      460,021      121,974            ---        121,974
    Debt  payments on capital leases,
    vendor  financing                                  (5,599)          --       (5,599)      (5,282)           (73)        (5,355)
    Net funding from (repayment of) notes              37,000           --       37,000      (32,491)       175,000        142,509
    High yield financing                                  ---      322,898      322,898          ---            ---            ---
    Other                                              (1,126)      (8,365)      (9,491)      (3,305)        (7,417)       (10,722)
                                                      -------      -------      -------      -------        -------       --------
  Total Provided by Financing                          54,270      750,559      804,829       80,896        167,510        248,406
                                                       ------      -------      -------       ------        -------        -------

Total Net Cash Flow                                     ($405)    $262,013     $261,608       $4,790        $54,356        $59,146
                                                       ======     ========     ========       ======        =======        =======

Cash and Cash Equivalents                                $371     $312,711     $313,082       $7,075        $54,356        $61,431
Working Capital                                        40,401      351,675      392,076       50,936         41,970         92,906
Restricted Investments included in
    working capital                                   (41,038)     (93,403)    (134,441)     (41,038)            ---       (41,038)



(1) As noted above,  the nine month period ended September 30, 1999 includes the
results  of XM  Radio  from  July  7,  1999.  Results  prior  to that  were  not
consolidated.

The $5.1  million  increase in cash used in  operating  activities  for the core
business was  primarily  attributable  to (i) increased  operating  losses as we
incurred  additional  expenses to operate the  network and  increase  our market
awareness,   (ii)   inventory   purchases  for  our  new  products,   without  a
corresponding  amount of sales,  and (ii) the  timing of  payments  on  accounts
payable, offset by proceeds from Satellite Services for the prepaid research and
development agreement.

Excluding $10.8 million  representing the amount of the proceeds received in the
Motient Ventures  transaction  allocated to the Asset Sale Agreement,  the $15.7
million  decrease in cash used in investing  activities of the core business was
primarily  attributable to the purchase of the XM Radio Note Receivable in 1999,
offset by higher payments in 2000 for property and equipment.

The $26.6 million decrease in cash provided by financing  activities in the core
business was a result of (i) $116.6  million  reduction  in proceeds  from stock
issuances  and  warrant  exercises,  offset by (ii)  $48.0  million  in net bank
financings,  (iii)  proceeds of $18.6  million  representing  the portion of the
proceeds  received  in  the  Motient  Ventures  transaction   allocated  to  the
investors' option to convert to Motient Common Stock, (ii) the proceeds received
from a related party in 1999 of $21.5 million, and (iii) higher payments in 2000
for debt  obligations.  None of the cash and working capital held by XM Radio is
available for our use.

Regulation

The  ownership  and  operations  of our  communication  systems  are  subject to
significant  regulation by the FCC,  which acts under  authority  granted by the
Communications Act of 1934, as amended (the  "Communications  Act"), and related
federal  laws.  A number of our  licenses are subject to renewal by the FCC and,
with respect to our satellite operations, are subject to international frequency
coordination. In addition, current FCC regulations generally limit the ownership
and control of Motient by non-U.S. citizens or entities to 25%. We cannot assure
that  the  rules  and  regulations  of the FCC  will  continue  to  support  our
operations  as  presently  conducted  and  contemplated  to be  conducted in the
future, or that all existing licenses will be renewed and requisite  frequencies
coordinated.

In November 1999 the FCC granted two applications to use a Canadian competitor's
satellite system to provide mobile satellite services in the United States. This
decision represents a departure from the FCC's previous statements that there is
only enough  spectrum in the mobile  satellite  services  L-band to  authorize a
single mobile satellite services system to provide service in the United States.
The  United  States  Court of Appeals  affirmed  the FCC's  decision  and we are
seeking a rehearing.  Additional assignments of spectrum for such uses may occur
in the future and could make it easier for new  competitors to enter the market.
In addition,  increased competition has resulted in downward pressure on pricing
for certain of the Company's products.

Accounting Standards

In September  1998,  FASB issued  Statement No. 133,  "Accounting for Derivative
Instruments  and Hedging  Activities,"  which  requires the  recognition  of all
derivatives  as either  assets  or  liabilities  measured  at fair  value.  This
statement  was  originally  effective  for the year ended  December 31, 2000. In
September 1999, FASB issued Statement No. 137, which deferred the effective date
of Statement No. 133 until fiscal years  beginning  after September 15, 2000. In
June 2000, the FASB issued Statement No. 138, "Accounting for Certain Derivative
Instruments  and Certain  Hedging  Activities",  which amends FASB Statement No.
133.  This  Statement  limits  the  scope to  certain  derivatives  and  hedging
activities.  The  effective  date  of  Statement  No.  138 is for  fiscal  years
beginning  after  September  15,  2000.  We do not believe  that the adoption of
Statement No. 138 will have a material impact on our financial position, results
of operations and cash flows.

In December 1999,  the SEC issued Staff  Accounting  Bulletin No. 101,  "Revenue
Recognition"  ("SAB  101").  SAB  101  provides  guidance  on  the  recognition,
presentation,  and  disclosure  of  revenue  in  financial  statements.  We  are
currently  evaluating  the  impact  of SAB 101 on our  consolidated  results  of
operations  and  financial  condition.   On  June  26,  2000,  the  SEC  delayed
implementation  of SAB 101 until the fourth  quarter of fiscal  years  beginning
after  December 15,  1999.  Any change in  accounting  principle  required  from
adoption  of SAB 101 will be  reported  as a  cumulative  effect  of a change in
accounting principle as of January 1, 2000.

In  March  2000,   the  Financial   Accounting   Standards   Board  issued  FASB
Interpretation  No. 44,  Accounting  for Certain  Transactions  Involving  Stock
Compensation  ("FIN 44"). FIN 44 further  defines the accounting  consequence of
various  modifications  to the terms of a previously fixed stock option or award
under APB Opinion  No. 25,  Accounting  for Stock  Issued to  Employees.  FIN 44
became  effective  on July 1,  2000,  but  certain  conclusions  in FIN 44 cover
specific  events that  occurred  after  either  December 15, 1998 or January 12,
2000.  In July 1999, XM Radio  repriced  certain  options.  FIN 44 requires that
these  options be accounted  for as variable  awards from July 1, 2000 until the
date the  award is  exercised,  forfeited,  or  expires  unexercised.  For those
options  that have vested as of July 1, 2000,  compensation  cost is  recognized
only to the extent that the  exercise  price  exceeds the stock price on July 1,
2000.  For those options that have not vested as of July 1, 2000, the portion of
the award's  intrinsic  value  measured at July 1, 2000 is  recognized  over the
remaining vesting period.  Additional compensation cost is measured for the full
amount  of any  increases  in  stock  price  after  the  effective  date  and is
recognized  over the remaining  vesting  period.  Any adjustment to compensation
cost for further  changes in the stock price after the award vests is recognized
immediately.  The effects of implementing  FIN 44 required XM Radio to recognize
additional  non-cash  compensation  of  approximately  $6.0 million in the third
quarter of 2000.


       Item 3. Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk

We are  exposed to the impact of  interest  rate  changes  related to our credit
facilities.  We manage  interest rate risk through the use of a  combination  of
fixed and  variable  rate  debt.  Currently,  except for the  interest  rate cap
described  below, we do not use derivative  financial  instruments to manage our
interest rate risk.  We have minimal cash flow exposure due to general  interest
rate changes for our fixed rate, long-term debt obligations.  We invest our cash
in  short-term  commercial  paper,  investment-grade  corporate  and  government
obligations and money market funds.

Under our Term Loan and Revolving Credit Facility, interest is paid generally at
100 basis points above LIBOR.  The  exposure to interest  rate  fluctuations  is
limited  because the interest rate paid on a monthly basis is variable and based
on current  market  conditions.  We have also entered into an interest rate swap
agreement  which reduces the impact of interest rate  increases on the Term Loan
Facility.  Under this  agreement,  we  receive an amount  equal to LIBOR plus 50
basis  points paid  directly  to the banks on a  quarterly  basis until the swap
agreement  terminates on September 30, 2001. Our Senior Notes bear interest at a
fixed rate of 12 1/4%.  We run the risk that market  rates will  decline and the
required payments will exceed those based on current market rates.










                           PART II. OTHER INFORMATION


Item 2.        Changes in Securities and Use of Proceeds

(c)

               On July 24,  2000,  Motient  Corporation  issued a  warrant  (the
               "Warrant") to purchase up to 457,122 shares (the "Shares") of its
               common stock, par value $0.01 per share (the "Common Stock"),  to
               Yahoo! Inc.  ("Yahoo!").  The Warrant entitles Yahoo! to purchase
               the  Shares at an  exercise  price of  $14.7375  per  share.  The
               Warrant is  exercisable  until the earlier of: (i) July 24, 2004,
               and (ii) the effective  date of the  termination of the Promotion
               and Distribution  Agreement,  dated July 24, 2000, between Yahoo!
               and Motient (the "Promotion Agreement").

               The Warrant was not registered  under the Securities Act of 1933,
               as amended  (the  "Securities  Act").  The  Warrant was issued to
               Yahoo!  pursuant  to the  terms of the  Promotion  Agreement.  No
               underwriters  were engaged in connection with the issuance of the
               Warrant.  Such issuance was made in reliance upon Section 4(2) of
               the  Securities  Act as a  transaction  not  involving  a  public
               offering,  Yahoo!  having  acquired  the  Warrant for its account
               without a view to the distribution thereof.







Item 6.           Exhibits and Reports on Form 8-K

(a)      Exhibits

10.22a     -   Amendment  No.  2,  dated   September  1,  2000,  to  the  Credit
               Agreement,  dated as of June 17,  1998,  by and between  Motorola
               Inc. and Motient  Communications Company (formerly known as ARDIS
               Company) (filed herewith).

10.39a     -   Amended and Restated Shareholders' Agreement,  dated as of August
               8, 2000, by and among XM Satellite  Radio Holdings Inc.,  Motient
               Corporation,  Baron Asset Fund,  Baron  iOpportunity  Fund, Baron
               Capital Asset Fund, Clear Channel Investments,  Inc., Columbia XM
               Radio Partners,  LLC,  Columbia Capital Equity Partners III (QP),
               L.P.,   Columbia  XM  Satellite   Partners  III,   LLC,   DIRECTV
               Enterprises,  Inc., General Motors Corporation,  Madison Dearborn
               Capital Partners III, L.P., Special Advisors Fund I, LLC, Madison
               Dearborn Special Equity III, L.P., American Honda Motor Co., Inc.
               and Telcom-XM  Investors,  L.L.C.  (incorporated  by reference to
               Exhibit  10.1  to  Amendment  No.  1 to XM  Radio's  Registration
               Statement on Form S-1 (File No. 333-39176)).

27.0       -   Financial Data Schedule (filed herewith)


(b)      Current Reports on Form 8-K

               On September 19, 2000, the Company filed a Current Report on Form
               8-K, in  response  to Item  5-Other  Events,  reporting  that the
               Company  had  entered  into a  transaction  to  sell  its  retail
               transportation business to Aether Systems, Inc.






                                   SIGNATURES


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

                                         MOTIENT CORPORATION
                                         (Registrant)


November 14, 2000                        /s/W. Bartlett Snell
                                         --------------------
                                         W. Bartlett Snell
                                         Senior Vice President and
                                          Chief Financial Officer
                                          (principal financial and accounting
                                          officer and duly authorized officer
                                          to sign on behalf of the registrant)








                                  EXHIBIT INDEX

Number            Description

10.22a     -   Amendment  No.  2,  dated   September  1,  2000,  to  the  Credit
               Agreement,  dated as of June 17,  1998,  by and between  Motorola
               Inc. and Motient  Communications Company (formerly known as ARDIS
               Company) (filed herewith).

10.39a     -   Amended and Restated Shareholders' Agreement,  dated as of August
               8, 2000, by and among XM Satellite  Radio Holdings Inc.,  Motient
               Corporation,  Baron Asset Fund,  Baron  iOpportunity  Fund, Baron
               Capital Asset Fund, Clear Channel Investments,  Inc., Columbia XM
               Radio Partners,  LLC,  Columbia Capital Equity Partners III (QP),
               L.P.,   Columbia  XM  Satellite   Partners  III,   LLC,   DIRECTV
               Enterprises,  Inc., General Motors Corporation,  Madison Dearborn
               Capital Partners III, L.P., Special Advisors Fund I, LLC, Madison
               Dearborn Special Equity III, L.P., American Honda Motor Co., Inc.
               and Telcom-XM  Investors,  L.L.C.  (incorporated  by reference to
               Exhibit  10.1  to  Amendment  No.  1 to XM  Radio's  Registration
               Statement on Form S-1 (File No. 333-39176)).


27.0       -   Financial Data Schedule (filed herewith)








                                                                  Exhibit 10.22a


                                                                  EXECUTION COPY

                       AMENDMENT NO. 2 TO CREDIT AGREEMENT


         This Amendment No. 2 to Credit Agreement (this  "Amendment") is entered
into  as of  September  1,  2000  by and  between  Motorola,  Inc.,  a  Delaware
corporation  ("Motorola") and Motient  Communications Company (formerly known as
ARDIS Company),  a New York general  partnership  ("you" or the "Borrower"),  to
amend the Credit  Agreement  dated as of June 17, 1998, by and between  Motorola
and  Borrower  as amended by  Amendment  No. 1 to Credit  Agreement  dated as of
October 15,  1998 (the Credit  Agreement,  as so amended  the  "Original  Credit
Agreement";  and the  Original  Credit  Agreement  as  further  amended  by this
Amendment,  the "Agreement" or the "Credit  Agreement").  Capitalized terms used
herein  without  definition  have the  meanings  ascribed  to them in the Credit
Agreement.

         1.    Amendment  to Section 1. The first two  sentences of Section 1 of
               -----------------------
the Credit  Agreement are hereby deleted,  and replaced in their entirety by the
following language:

               The  aggregate  maximum  principal  amount of Credit  that may be
drawn under this Credit Agreement shall be $15,000,000.  You may obtain Advances
under  this  Credit  Agreement  until  December  31,  2001,  if,  at the time of
requesting an Advance, you have complied with all Requirements for Advances.

2.       Certain Definitions.
         -------------------

(a)       All references to ARDIS Company in the Original  Credit  Agreement are
          amended  to be  deemed  to be  references  to  Motient  Communications
          Company.

(b)       All  references  to  American  Mobile  Satellite  Corporation  in  the
          Original Credit Agreement are amended to be deemed to be references to
          Motient Corporation.

(c)       All  references  to AMSC  Acquisition  Company,  Inc. in the  Original
          Credit  Agreement are amended to be deemed to be references to Motient
          Holdings Inc.

(d)       Capitalized terms used in this Amendment  without  definition have the
          meanings  assigned to them or  incorporated  into the Original  Credit
          Agreement unless the context otherwise clearly requires.


         3. Representations and Warranties. In order to induce Motorola to enter
            ------------------------------
into this Amendment and to provide you with the Credit, you hereby represent and
warrant to Motorola the following,  except as otherwise disclosed to Motorola in
writing concurrently with the execution of this Amendment:

         3.1. Status.  You are duly incorporated or formed, and validly existing
              ------
under  the laws of the state of  incorporation  or  formation.  You (a) have the
power and  authority  and the legal right to own and operate your  property,  to
lease the  property  you  operate,  and to conduct the business in which you are
currently engaged and in which you propose to engage, (b) are in compliance with
all  Requirements  of Law  except  to the  extent  that the  failure  to  comply
therewith  could not, in the aggregate,  have a material  adverse effect on your
business,  operations,  assets (taken in the aggregate) or financial  condition,
and  could  not  materially  adversely  affect  your  ability  to  perform  your
obligations  under the  Agreement,  and (c) have qualified to do business in all
jurisdictions  where your  ownership,  lease or  operation  of  property  or the
conduct of your business requires such qualification or recording, except to the
extent  that the  failure to so  qualify  could not,  in the  aggregate,  have a
material  adverse  effect on your  business,  operations,  assets  (taken in the
aggregate) or financial  condition,  and could not materially  adversely  affect
your ability to perform your obligations under the Agreement.

         3.2. Power and Authority. You have the power, authority and legal right
              -------------------
to execute,  deliver and perform the  Amendment  and the Agreement and to borrow
thereunder,  and have taken all necessary  action to authorize the Credit on the
terms and conditions of this  Amendment and the Agreement,  and to authorize the
execution,  delivery and performance of this Amendment and the Agreement and the
related  documents   described  herein  and  therein.   Where  any  Governmental
Authority,  including without limitation any PUC, requires consents,  filings or
authorizations  prior to the Credit,  you shall have obtained all such consents,
filings or authorizations.  Other than such consents, filings or authorizations,
no consent or  authorization  or filing with, or other act by or with respect to
any Governmental  Authority, is required in connection with the Credit under the
Agreement   or  with  the   execution,   delivery,   performance,   validity  or
enforceability  of the Amendment or the  Agreement.  The Amendment has been duly
executed and  delivered  and the  Agreement  constitutes  your legal,  valid and
binding  obligation,  which  obligation  shall  be  enforceable  against  you in
accordance  with the terms of the  Agreement,  except as  enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar laws  affecting  the  enforcement  of  creditors'  rights  generally and
general equitable principles.

         3.3. No  Violations.  The  execution,  delivery and  performance of the
              --------------
Amendment  and the  Agreement and the use of the proceeds of the Credit (i) will
not violate,  be in conflict with, result in a breach of or constitute a default
under, any Requirement of Law or any of your contractual obligations,  except to
the extent such violations, in the aggregate,  could not have a material adverse
effect on (a) your  business,  operations,  assets  (taken in the  aggregate) or
financial  condition,  or (b) your ability to perform your obligations under the
Agreement,  and (ii) will not result in, or require,  the creation or imposition
of any Lien on any of your properties or revenues pursuant to any Requirement of
Law or contractual obligation,  other than pursuant to the Agreement. You are in
compliance with the Employee  Retirement  Income Security Act of 1974 as amended
from time to time (ERISA),  and neither the execution nor the performance of the
Agreement by you will result in any violation of ERISA. Any benefit plan that is
subject to ERISA has been properly  accounted for in your  Financial  Statements
attached to the Credit Agreement.

         3.4. No Pending Actions. No litigation, investigation or proceedings of
              ------------------
or before any  arbitrator  or  Governmental  Authority  is pending,  or, to your
knowledge  is  threatened,  against you or,  against any of your  properties  or
revenues  (a)  with  respect  to  the  Agreement  or  any  of  the  transactions
contemplated  thereby,  or (b)  which is  reasonably  expected  to be  adversely
determined,  and which, if adversely determined,  could,  individually or in the
aggregate, have a material adverse effect on your business,  operations,  assets
(taken in the aggregate) or financial condition.

         3.5. No Defaults.  You are not in default  under or with respect to any
              -----------
contractual  obligation  where such default could be materially  adverse to your
business, operations, assets (taken in the aggregate) or financial condition, or
which  could  materially  and  adversely  affect  your  ability to perform  your
obligations under the Agreement. No Default or Event of Default has occurred and
is continuing.

         3.6. Good Title.  Any of your leases are in full force and effect,  and
              ----------
you enjoy peaceful and undisturbed  possession  thereunder;  you have a recorded
title in fee  simple to all your owned real  property,  and good and  marketable
title to all your other personal property.

         3.7.  Taxes.  You have  filed or caused to be filed  all  material  tax
               -----
returns which are required by law to be filed,  and have paid all taxes shown to
be due and payable on said returns or on any assessment made by any Governmental
Authority  (other than those the amount or validity of which is currently  being
contested  in good faith by  appropriate  proceedings  and with respect to which
reserves in conformity  with GAAP have been provided on your books);  and no tax
Liens have been filed and, to your knowledge,  no claims are being asserted with
respect to any such taxes,  fees or other charges other than inchoate  Liens for
taxes not yet due.

         3.8. No Extending of Credit.  Neither you nor any  guarantor is engaged
              ----------------------
or will  generally  engage in the business of purchasing or selling Margin Stock
(as  defined  in  Regulation  G, T, U or X of the Board of  Governors  or of the
Federal Reserve System)  extending  credit for the purpose of purchasing  Margin
Stock.

         3.9.  No Subsidiaries. Except as disclosed on Exhibit "D" to the Credit
               ---------------
Agreement, you have no subsidiaries and do not control,  directly or indirectly,
any other business entity.

         3.10. Patents, Trademarks, etc. You own or have the right to use all of
               ------------------------
the patents,  trademarks,  permits,  service  marks,  trade  names,  copyrights,
licenses and  franchises or rights with respect to the  foregoing  (collectively
"patents"),   necessary   for  the  conduct  of  your   business  as   presently
contemplated, without any known conflict with the rights of others.

         3.11.  Information,  Reports,  etc. All information,  reports and other
                ---------------------------
papers and data  furnished  to  Motorola by you on or at any time after the date
hereof  are or will be,  at the time the  same are so  furnished,  complete  and
correct in all material respects;  and all projections  concerning your business
furnished by you, as  supplemented,  will be prepared or presented in good faith
by you and have a reasonable basis. No fact is known to you which materially and
adversely  affects or in the future may (so far as you can  reasonably  foresee)
materially  and adversely  affect the business,  operations,  assets (taken as a
whole) or your financial condition which has not been set forth in the Financial
Statements or in such information, reports, papers and data.

         3.12. Security Documents. The provisions of the Agreement are effective
               ------------------
to create in favor of Motorola a legal, valid and enforceable  security interest
in all your  right,  title and  interest in the  Collateral  in which a security
interest may be created under Article 9 of the Uniform Commercial Code; and when
(i)  financing  statements  have been filed in the offices in the  jurisdictions
listed in Exhibit "E" to the  Agreement,  and (ii) except for any further filing
or taking of possession  which may be required under Section 9-306 of the UCC in
order to perfect a security  interest  in  proceeds  of the  Collateral  and any
taking of possession  which may be required  under the UCC in order to perfect a
security  interest in  instruments,  the Agreement will create and grant a fully
perfected  first Lien on, and  security  interest in the  Collateral  (including
proceeds) in which a security  interest may be perfected  under Article 9 of the
UCC.

         3.13. Governmental Regulation. You hold sufficient FCC licenses for the
               -----------------------
conduct  of your  business  in each area in which  you  currently  conduct  your
business.  All of such  licenses  are valid,  uncontested  and in full force and
effect.

         3.14. Assumed Names. You are not doing business under any fictitious or
               -------------
assumed names, except as disclosed in Exhibit "F" to the Agreement.

         3.15. Principal  Place of Business.   Your chief  executive  office and
               ----------------------------
principal place of business are located at the notice address shown next to your
signature block on the Credit Agreement.  Your books and records with respect to
the Collateral are kept at this address.

         3.16.  Environmental  and Safety Matters.  You are in compliance in all
                ---------------------------------
  material  respects  with  all  federal,   state,  local  and  other  statutes,
  ordinances,  orders,  judgments,  rulings  and  regulations  relating  to  the
  environment,  environmental regulation or control, employee health and safety,
  or the  generation,  use,  storage,  disposal  or  transportation  of toxic or
  hazardous  materials,  substances  or  wastes  (collectively,   "Environmental
  Laws").

         3.17  Collateral.  You  represent  that each of the items of Collateral
               ----------
  delivered  prior to the date of this  Amendment is identified by serial number
  in  Exhibit  B to  this  Amendment,  and is  located  as of the  date  of this
  Amendment in the jurisdiction listed in Exhibit B.

         4.    Conditions to Effectiveness.
               ---------------------------

         This Amendment  shall become  effective,  and Motorola's  commitment to
provide the Credit to you as set forth herein shall be  conditioned  upon,  your
satisfaction of each of the following conditions precedent:

(a)            No  Default  or Event  of  Default  shall  have  occurred  and be
               continuing,   and  you  shall  have   delivered   to  Motorola  a
               certificate of Randy S. Segal,  Senior Vice President and General
               Counsel, to such effect.

(b)            You shall have  delivered to Motorola  executed  counterparts  of
               this  Amendment,  and an  executed  original  of the  Amended and
               Restated Promissory Note in the form attached hereto as Exhibit A
               (the "Note").

(c)            You  shall  have  delivered  to  Motorola  a  certificate  of the
               Secretary  or other  authorized  officer  of the  Borrower  as to
               resolutions of the Board of Directors of the Borrower authorizing
               the execution,  delivery and  performance by the Borrower of this
               Amendment,  the Note, and the other  documents and instruments to
               be delivered by the Borrower hereunder.

(d)            You shall have  delivered  to Motorola  an Amended  and  Restated
               Guarantee  Agreement  of each of  Motient  Corporation  (formerly
               American Mobile Satellite  Corporation) and Motient Holdings Inc.
               (formerly  AMSC  Acquisition  Company,  Inc.),  each in form  and
               substance satisfactory to Mototorola.

(e)            You  shall  have  delivered  to  Motorola  a  certificate  of the
               Secretary or other  authorized  officer of each of the Guarantors
               as to  resolutions  of the Board of Directors  of such  Guarantor
               authorizing  the  execution,  delivery  and  performance  by such
               Guarantor of the Amended and Restated  Guarantee  Agreement to be
               delivered by it hereunder and the other documents and instruments
               to be delivered by the Borrower hereunder.

(f)            You  shall  have   delivered   to  Motorola  a   certificate   or
               certificates certifying the incumbency of the officer or officers
               executing  this  Amendment,  the Note,  each Amended and Restated
               Guarantee  Agreement,  and each  other  document  and  instrument
               delivered hereunder.

(g)            You shall  have  delivered  to  Motorola  an  opinion  of counsel
               satisfactory to Motorola as to (i) the due organization and valid
               existence of each of the Borrower  and each  Guarantor,  (ii) the
               due authorization,  execution, delivery and enforceability of the
               Credit  Agreement,  as amended by the  Amendment,  the Note,  the
               Guarantees,  and each other  document  and  instrument  delivered
               hereunder,  (iii) the absence of any violation or breach of other
               agreements  or  applicable  Laws,  (iv) the  absence of  material
               litigation  pending or  threatened  against the Borrower and each
               Guarantor, and (v) and as to such other matters as Motorola shall
               reasonably request.

(h)            You shall have  delivered  each other  document and instrument as
               Motorola shall have reasonably requested.

         Motorola's obligation to fund Advances under the Credit Agreement shall
be  subject  to each of the  conditions  set forth in Section 8 of the Terms and
Conditions.

         5. Release of Guarantee of Motient  Services  Inc.  From and after the
            -----------------------------------------------
effectiveness of this Amendment,  Motorola hereby releases Motient Services Inc.
(formerly AMSC  Subsidiary  Corporation)  from all  obligations  and liabilities
under  its  Guarantee  Agreement  dated  as of June 17,  1998  with  respect  to
obligations of the Borrower  under the Original  Credit  Agreement,  and Motient
Services Inc.  shall  thereafter  have no liability or obligations in respect of
the Borrower's obligations under the Credit Agreement.

         6.  Notices.   The  Notice address for Motorola set forth in the Credit
             -------
Agreement is hereby amended as follows:


         Notice Address:
         Motorola, Inc.
         1303 East Algonquin Road
         Schaumburg, Illinois 60196
         Telephone:  (847) 725-4502
         Telecopy:  (847) 725-5097

         With a copy to:
         Motorola Credit Corporation
         1301 East Algonquin Road
         5th Floor
         Schaumburg, Illinois 60196
         Attention:  Director, North America Customer Finance

         6.  Ratification  of  Credit  Agreement.    Except as  amended  hereby,
             -----------------------------------
Motorola and the Borrower  hereby ratify and confirm the Credit  Agreement,  and
all of the terms set forth or incorporated therein.

         7.  Governing  Law.  This  Amendment  will  be  governed  by the law of
             --------------
Illinois without regard to its conflicts of law rules.


         8.  Counterparts.  This  Amendment  may  be  executed  in  one or  more
             ------------
counterparts   which,  taken  together,   shall  constitute  one  and  the  same
instrument.

                            [Signature page follows]







                  Executed by the parties  hereto as of the date first set forth
above.


                         MOTIENT COMMUNICATIONS COMPANY

                         By: /s/Richard J. Burnheimer

                         Its: Vice President and Treasurer


                         MOTOROLA, INC.

                         By: /s/Walter F. Keating III

                         Its: Vice President