Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-38228 | |
Entity Registrant Name | Maxar Technologies Inc. | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 832809420 | |
Entity Address, Address Line One | 1300 W. 120th Avenue, | |
Entity Address, City or Town | Westminster | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80234 | |
City Area Code | 303 | |
Local Phone Number | 684-2207 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Security 12b Title | Common stock, at $0.0001 par value | |
Trading Symbol | MAXR | |
Security Exchange Name | NYSE | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001121142 | |
Amendment Flag | false | |
Common Stock | ||
Entity Common Stock, Shares Outstanding | 59,596,880 | |
Series A Junior Participating Preferred Stock | ||
Security 12b Title | Series A Junior Participating Preferred Stock, at $0.01 par value | |
Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Revenues | $ 490 | $ 579 | $ 994 | $ 1,136 |
Costs and expenses: | ||||
Selling, general and administrative | 80 | 133 | 183 | 236 |
Depreciation and amortization | 99 | 113 | 197 | 224 |
Impairment losses | 12 | 12 | ||
Satellite insurance recovery | (183) | (183) | ||
Operating income | 196 | 2 | 192 | 39 |
Interest expense, net | 49 | 50 | 98 | 103 |
Other (income) expense, net | (3) | 4 | 3 | 5 |
Income (Loss) before taxes | 150 | (52) | 91 | (69) |
Income tax expense (benefit) | 2 | (9) | 1 | (41) |
Equity in loss (income) from joint ventures, net of tax | 2 | (3) | 3 | (3) |
Net income (loss) | $ 146 | $ (40) | $ 87 | $ (25) |
Income (Loss) earnings per common share: | ||||
Basic (In dollars per share) | $ 2.45 | $ (0.70) | $ 1.46 | $ (0.44) |
Diluted (In dollars per share) | $ 2.45 | $ (0.70) | $ 1.46 | $ (0.44) |
Product | ||||
Revenues: | ||||
Revenues | $ 190 | $ 257 | $ 384 | $ 485 |
Costs and expenses: | ||||
Product costs, excluding depreciation and amortization | 165 | 254 | 362 | 441 |
Service | ||||
Revenues: | ||||
Revenues | 300 | 322 | 610 | 651 |
Costs and expenses: | ||||
Service costs, excluding depreciation and amortization | $ 121 | $ 77 | $ 231 | $ 196 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed Consolidated Statements of Comprehensive (Loss) Income | ||||
Net income (loss) | $ 146 | $ (40) | $ 87 | $ (25) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | 15 | 5 | 11 | |
Net (loss) on hedge of net investment in foreign operations | 4 | 5 | 12 | |
Unrealized (loss) gain on derivatives | (12) | 3 | (16) | |
Change in pension and other postretirement benefit plans | 2 | |||
Other comprehensive income, net of tax | 3 | 8 | (3) | |
Comprehensive income (loss), net of tax | $ 149 | (32) | 84 | (25) |
Net (loss) on hedge of net investment in foreign operations | $ 4 | $ 5 | $ 12 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 63 | $ 35 |
Trade and other receivables, net | 490 | 464 |
Inventory | 24 | 31 |
Advances to suppliers | 10 | 42 |
Income taxes receivable | 24 | 14 |
Prepaid and other current assets | 54 | 51 |
Total current assets | 665 | 637 |
Non-current assets: | ||
Orbital receivables | 405 | 407 |
Deferred tax assets | 112 | 103 |
Property, plant and equipment, net | 785 | 747 |
Intangible assets, net | 1,120 | 1,232 |
Non-current operating lease assets | 124 | |
Goodwill | 1,763 | 1,751 |
Other assets | 109 | 124 |
Total assets | 5,083 | 5,001 |
Current liabilities: | ||
Accounts payable | 172 | 209 |
Accrued liabilities | 58 | 116 |
Accrued compensation and benefits | 82 | 100 |
Contract liabilities | 267 | 361 |
Current portion of long-term debt | 17 | 17 |
Current operating lease liabilities | 33 | |
Other current liabilities | 56 | 46 |
Total current liabilities | 685 | 849 |
Non-current liabilities: | ||
Pension and other postretirement benefits | 192 | 196 |
Contract liabilities | 29 | 60 |
Operating lease liabilities | 133 | |
Long-term debt | 3,127 | 3,030 |
Other non-current liabilities | 186 | 222 |
Total liabilities | 4,352 | 4,357 |
Stockholders' equity: | ||
Common stock ($0.0001 par value, 240 million common shares authorized and 59.6 million outstanding at June 30, 2019; nil par value, unlimited authorized common shares and 59.4 million outstanding at December 31, 2018) | 1,713 | |
Additional paid-in capital | 1,776 | 59 |
Accumulated deficit | (1,125) | (1,211) |
Accumulated other comprehensive income | 79 | 82 |
Total Maxar stockholders' equity | 730 | 643 |
Noncontrolling interest | 1 | 1 |
Total stockholders' equity | 731 | 644 |
Total liabilities and stockholders' equity | $ 5,083 | $ 5,001 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, no par value | $ 0 | |
Common stock, authorized shares | 240,000,000 | |
Common stock, shares outstanding | 59,600,000 | 59,400,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows provided by (used in) Operating activities: | ||
Net income (loss) | $ 87 | $ (25) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation of property, plant and equipment | 60 | 78 |
Amortization of intangible assets | 137 | 146 |
Stock-based compensation expense | 4 | 9 |
Amortization of debt issuance costs and other noncash interest expense | 4 | 5 |
Impairment losses | 15 | 0 |
Foreign exchange losses | 3 | 8 |
Deferred income tax (benefit) | 6 | (26) |
Other | (3) | 6 |
Changes in operating assets and liabilities: | ||
Trade and other receivables | (12) | (64) |
Accrued compensation and benefits | (22) | (15) |
Trade and other payables | (35) | (31) |
Accrued liabilities | (60) | 24 |
Contract liabilities | (126) | (113) |
Advances to suppliers | 32 | 20 |
Deferred tax assets | (9) | (14) |
Deferred tax liabilities | (5) | 27 |
Other liabilities | (7) | (17) |
Other | (10) | (19) |
Cash provided by (used in) operating activities | 59 | (1) |
Investing activities: | ||
Purchase of property, plant and equipment | (99) | (83) |
Purchase or development of software | (28) | (37) |
Cash collected on note receivable | 5 | |
Disposal of subsidiary and short-term investments | 3 | 5 |
Cash used in investing activities | (124) | (110) |
Financing activities: | ||
Net proceeds from revolving credit facility | 112 | 141 |
Repayments of long-term debt | (13) | (13) |
Settlement of securitization liability | (8) | (6) |
Payment of dividends | (1) | (32) |
Change in overdraft balance | 1 | |
Cash provided by financing activities | 90 | 91 |
Increase (decrease) in cash, cash equivalents, and restricted cash | 25 | (20) |
Effect of foreign exchange on cash, cash equivalents, and restricted cash | 1 | |
Cash, cash equivalents, and restricted cash, beginning of year | 43 | 42 |
Cash, cash equivalents, and restricted cash, end of period | $ 69 | $ 22 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Jun. 30, 2018 |
Reconciliation of cashflow information: | ||
Cash and cash equivalents | $ 63 | $ 12 |
Restricted cash included in prepaid and other current assets | 5 | 9 |
Restricted cash included in other assets | 1 | 1 |
Total cash, cash equivalents, and restricted cash | $ 69 | $ 22 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Change in Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Additional paid in capital | Retained earnings (Accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interest | Total |
Balance at the beginning of period at Dec. 31, 2017 | $ 1,550 | $ 51 | $ 118 | $ 113 | $ 1 | $ 1,833 |
Balance at the beginning of period (in shares) at Dec. 31, 2017 | 56.2 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Common stock issued under employee stock purchase plan | $ 1 | 1 | ||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||
Common stock issued upon vesting or exercise of stock-based compensation awards | $ 7 | (7) | ||||
Common stock issued upon vesting or exercise of stock-based compensation awards (shares) | 0.1 | |||||
Reclassification of liability classified stock-based compensation awards to equity classified | 1 | 1 | ||||
Equity classified stock-based compensation expense | 8 | 8 | ||||
Dividends ($0.01 for 2019 and $0.29 for 2018 per common share) | (16) | (16) | ||||
Comprehensive income (loss) | 15 | (8) | 7 | |||
Balance at the end of period at Mar. 31, 2018 | $ 1,558 | 53 | 117 | 105 | 1 | 1,834 |
Balance at the end of period (in shares) at Mar. 31, 2018 | 56.4 | |||||
Balance at the beginning of period at Dec. 31, 2017 | $ 1,550 | 51 | 118 | 113 | 1 | 1,833 |
Balance at the beginning of period (in shares) at Dec. 31, 2017 | 56.2 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Comprehensive income (loss) | (25) | |||||
Balance at the end of period at Jun. 30, 2018 | $ 1,670 | 61 | 61 | 113 | 1 | 1,906 |
Balance at the end of period (in shares) at Jun. 30, 2018 | 58.7 | |||||
Balance at the beginning of period at Mar. 31, 2018 | $ 1,558 | 53 | 117 | 105 | 1 | 1,834 |
Balance at the beginning of period (in shares) at Mar. 31, 2018 | 56.4 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Common shares issued as part of dissenting shareholders | $ 111 | 111 | ||||
Common shares issued as part of dissenting shareholders (in shares) | 2.2 | |||||
Common stock issued under employee stock purchase plan | $ 1 | 1 | ||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||
Reclassification of liability classified stock-based compensation awards to equity classified | (1) | (1) | ||||
Equity classified stock-based compensation expense | 9 | 9 | ||||
Dividends ($0.01 for 2019 and $0.29 for 2018 per common share) | (16) | (16) | ||||
Comprehensive income (loss) | (40) | 8 | (32) | |||
Balance at the end of period at Jun. 30, 2018 | $ 1,670 | 61 | 61 | 113 | 1 | 1,906 |
Balance at the end of period (in shares) at Jun. 30, 2018 | 58.7 | |||||
Balance at the beginning of period at Dec. 31, 2018 | $ 1,713 | 59 | (1,211) | 82 | 1 | $ 644 |
Balance at the beginning of period (in shares) at Dec. 31, 2018 | 59.4 | 59.4 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Reclassification of APIC due to U.S. Domestication | $ (1,713) | 1,713 | ||||
Common stock issued upon vesting or exercise of stock-based compensation awards (shares) | 0.1 | |||||
Equity classified stock-based compensation expense | 1 | $ 1 | ||||
Dividends ($0.01 for 2019 and $0.29 for 2018 per common share) | (1) | (1) | ||||
Comprehensive income (loss) | (59) | (6) | (65) | |||
Balance at the end of period at Mar. 31, 2019 | 1,774 | (1,271) | 76 | 1 | 580 | |
Balance at the end of period (in shares) at Mar. 31, 2019 | 59.6 | |||||
Balance at the beginning of period at Dec. 31, 2018 | $ 1,713 | 59 | (1,211) | 82 | 1 | $ 644 |
Balance at the beginning of period (in shares) at Dec. 31, 2018 | 59.4 | 59.4 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Comprehensive income (loss) | $ 84 | |||||
Balance at the end of period at Jun. 30, 2019 | 1,776 | (1,125) | 79 | 1 | $ 731 | |
Balance at the end of period (in shares) at Jun. 30, 2019 | 59.6 | 59.6 | ||||
Balance at the beginning of period at Mar. 31, 2019 | 1,774 | (1,271) | 76 | 1 | $ 580 | |
Balance at the beginning of period (in shares) at Mar. 31, 2019 | 59.6 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Common stock issued under employee stock purchase plan | 1 | 1 | ||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||
Equity classified stock-based compensation expense | 2 | 2 | ||||
Comprehensive income (loss) | 146 | 3 | 149 | |||
Balance at the end of period at Jun. 30, 2019 | $ 1,776 | $ (1,125) | $ 79 | $ 1 | $ 731 | |
Balance at the end of period (in shares) at Jun. 30, 2019 | 59.6 | 59.6 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Change in Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Change in Shareholders' Equity | ||||
Dividend per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.29 | $ 0.29 |
General business description
General business description | 6 Months Ended |
Jun. 30, 2019 | |
General business description | |
General business description | 1. GENERAL BUSINESS DESCRIPTION Maxar Technologies Inc. (the “Company” or “Maxar”) is a global leader of advanced space technology solutions and is at the nexus of the new space economy, developing and sustaining the infrastructure and delivering the information, services, and systems that unlock the promise of space for commercial and government markets. As a trusted partner, the Company provides vertically integrated capabilities and expertise including satellites, Earth imagery, robotics, geospatial data and analytics to help customers anticipate and address their most complex mission-critical challenges with confidence. Maxar’s common stock trades on the New York Stock Exchange and Toronto Stock Exchange under the ticker MAXR. Maxar’s businesses are organized and managed in three reportable segments: Space Systems, Imagery and Services. On January 1, 2019, the Company completed a reorganization of its corporate structure pursuant to which the Company directly acquired all of the issued and outstanding shares of Maxar Technologies Ltd. (“Maxar Canada”), and the Company replaced Maxar Canada as the publicly-held parent company of the Maxar group (“U.S. Domestication”). Since its inception, Maxar Canada reported to securities regulators in both Canada and the U.S., financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Upon completion of the U.S. Domestication, and including the report herein, the Company has prepared its financial statements in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). |
Trade and other receivables, ne
Trade and other receivables, net | 6 Months Ended |
Jun. 30, 2019 | |
Trade and other receivables, net | |
Trade and other receivables. net | 3. TRADE AND OTHER RECEIVABLES, NET Trade and other receivables, net consisted of the following: June 30, December 31, 2019 2018 Billed $ 205 $ 242 Unbilled 238 172 Total trade receivables 443 414 Orbital receivables, current portion 34 34 Other 14 17 Allowance for doubtful accounts (1) (1) Total trade and other receivables, net $ 490 $ 464 Orbital receivables relate to performance incentives due under certain satellite construction contracts that are paid over the in-orbit life of the satellite. As of June 30, 2019 and December 31, 2018, long-term orbital receivables were $405 million and $407 million, respectively, and are included in Non-current assets on the Unaudited Condensed Consolidated Balance Sheets. During 2018, the Company sold orbital receivables for net proceeds of $18 million. These orbital receivables were purchased in tranches that span multiple years and include longer-term maturities. The orbital receivables that were securitized remain recognized on the consolidated balance sheets as the Company did not meet the accounting criteria for surrendering control of the receivables. The net proceeds received have been recognized as a securitization liability and are subsequently measured at amortized cost using the effective interest rate method. The securitized orbital receivables and the securitization liabilities are being drawn down as payments are received from the customers and passed on to the purchaser of the tranche. The Company continues to recognize orbital interest revenue on the orbital receivables that are subject to the securitization transactions and recognizes interest expense to accrete the securitization. The amount of securitization liabilities was $102 million and $109 million at June 30, 2019 and December 31, 2018, respectively, of which $16 million and $15 million, respectively, was included in Other current liabilities on the Consolidated Balance Sheets. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2019 | |
Inventory | |
Inventory | 4. INVENTORY Inventory consisted of the following: June 30, December 31, 2019 2018 Raw materials $ 15 $ 21 Work in process 9 10 Total inventory $ 24 $ 31 |
Property, plant and equipment,
Property, plant and equipment, net | 6 Months Ended |
Jun. 30, 2019 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 5. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: June 30, December 31, 2019 2018 Satellites $ 397 $ 397 Equipment 230 229 Leasehold improvements 98 97 Computer hardware 94 92 Land and land improvements 88 88 Buildings 46 46 Furniture and fixtures 19 19 Construction in process 236 142 Property, plant and equipment, at cost 1,208 1,110 Accumulated depreciation (423) (363) Property, plant and equipment, net $ 785 $ 747 Depreciation expense for property, plant and equipment was $30 million and $60 million, and $41 million and $78 million for the three and six months ended June 30, 2019 and June 30, 2018, respectively. During the quarter ended June 30, 2019, the Company received insurance recoveries of $183 million related to the loss of the WorldView-4 satellite. The insurance proceeds are included in operating cash flows as they are considered business interruption insurance and represent our satellite’s loss of capacity to produce imagery for sale to our customers. |
Intangible assets
Intangible assets | 6 Months Ended |
Jun. 30, 2019 | |
Intangible assets | |
Intangible assets | 6. INTANGIBLE ASSETS Intangible assets are as follows: June 30, 2019 December 31, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 619 $ (81) $ 538 $ 619 $ (58) $ 561 Backlog 332 (169) 163 332 (120) 212 Technologies 328 (117) 211 330 (86) 244 Software 225 (90) 135 198 (71) 127 Image library 80 (40) 40 80 (32) 48 Trade names and other 41 (12) 29 41 (9) 32 Non-compete agreements 21 (17) 4 21 (13) 8 Total intangible assets $ 1,646 $ (526) $ 1,120 $ 1,621 $ (389) $ 1,232 Amortization expense related to intangible assets was $69 million and $137 million, and $72 million and $146 million for the three and six months ended June 30, 2019 and June 30, 2018, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Leases | 7. LEASES The Company has both operating and finance leases. The majority of the Company’s leases are operating leases related to buildings. The majority of the Company’s finance leases are related to furniture and equipment. The Company’s leases have remaining lease terms of approximately one year to 16 years, some of which include options to extend the lease anywhere from one to ten years, and are included in the lease term when it is reasonably certain the Company will exercise the option. The Company has elected as an accounting policy not to recognize any leases with an initial term of 12 months or less on the balance sheet and will recognize the lease payments on a straight-line basis in the statement of operations. The rate implicit in the lease is typically not readily determinable; in such instances the Company uses an incremental borrowing rate to determine the present value of the lease payments. The Company uses a borrowing rate with a similar term to the lease term and considers any options if they are reasonably certain to be exercised. For adoption, the Company elected to consider the remaining lease term and payments as of the adoption date. The Company elected the practical expedient not to separate lease and non-lease components. The Company also elected to include in minimum lease payments any executory costs that are part of the fixed lease payment. Finance lease cost, variable lease cost, and short-term lease cost are not material. The components of operating lease expense are as follows: Three months ended June 30, Six months ended June 30, Classification 2019 2019 Operating lease expense Selling, general, and administrative expense, Product costs, and Service costs $ 9 $ 17 Supplemental lease balance sheet information consists of the following: June 30, Classification 2019 Assets: Operating Non-current operating lease assets $ 124 Finance Property, plant, and equipment, net 8 Total lease assets $ 132 Liabilities: Current Operating Current operating lease liabilities $ 33 Finance Current portion long-term debt 3 Non-current Operating Operating lease liabilities 133 Finance Long-term debt 3 Total lease liabilities $ 172 Supplemental lease cash flow information is as follows: Three months ended June 30, Six months ended June 30, 2019 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9 $ 18 Other supplemental lease information consists of the following: June 30, 2019 Weighted average remaining lease term Operating leases 9 years Finance leases 3 years Weighted average discount rate Operating leases 7.1% Finance leases 4.7% Maturities of lease liabilities are as follows: 2019 1 2020 2021 2022 2023 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 17 $ 32 $ 29 $ 24 $ 22 $ 100 $ (58) $ 166 Finance leases 2 3 1 1 — — (1) 6 1 |
Restructuring liability
Restructuring liability | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring liability | |
Restructuring liability | 8. RESTRUCTURING LIABILITY On February 27, 2019, the Company announced a restructuring plan to implement cost-saving measures, including a reduction in the Company’s workforce. The reduction in the Company’s workforce was substantially completed in the first quarter of 2019, with cash payments occurring throughout 2019. Restructuring expense is included in Product costs, excluding depreciation and amortization, Service costs, excluding depreciation and amortization, and Selling, general and administrative expense in the Company’s Unaudited Condensed Consolidated Statements of Operations. Changes to restructuring liabilities during the period consisted of the following: Restructuring Liability Balance as of December 31, 2018 $ 6 Obligations incurred 22 Payments (14) Release of reserves (2) Balance as of June 30, 2019 $ 12 |
Long-term debt and interest exp
Long-term debt and interest expense | 6 Months Ended |
Jun. 30, 2019 | |
Long-term debt and interest expense | |
Long-term debt and interest expense | 9. LONG-TERM DEBT AND INTEREST EXPENSE June 30, December 31, 2019 2018 Syndicated Credit facility: Revolving credit facility $ 686 $ 595 Operating credit facility in Canadian dollars (June 30, 2019 - C $20 million; December 31, 2018 - C $0 million) 15 — Term Loan A 500 500 Term Loan B 1,970 1,980 Debt issuance costs (37) (41) Obligations under finance leases and other 10 13 Total long-term debt 3,144 3,047 Current portion (17) (17) Non-current portion $ 3,127 $ 3,030 The Syndicated Credit Facility, with an aggregate capacity of up to $3.75 billion, is composed of: (i) a four-year senior secured first lien revolving credit facility and a four-year senior secured first lien operating credit facility (collectively, the “Revolving Credit Facility”), (ii) a senior secured first lien term A facility (“Term Loan A”) and (iii) The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued. As of June 30 , 2019 and December 31, 2018, the Company had $ 16 million and $18 million, respectively, of issued and undrawn letters of credit outstanding under the Revolving Credit Facility. Interest expense on long-term debt and other obligations are as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Interest on long-term debt $ 48 $ 43 $ 93 $ 83 Interest expense on advance payments from customers 4 6 9 14 Interest on orbital securitization liability 2 2 4 4 Imputed interest and other — (1) — 1 Capitalized interest (5) (1) (8) (2) Interest expense on dissenting stockholder liability — 1 — 3 Total interest expense $ 49 $ 50 $ 98 $ 103 |
Financial instruments and fair
Financial instruments and fair value disclosures | 6 Months Ended |
Jun. 30, 2019 | |
Financial instruments and fair value disclosures | |
Financial instruments and fair value disclosures | 10. FINANCIAL INSTRUMENTS AND FAIR VALUE DISCLOSURES Fair value is determined based on the assumptions that market participants would use in pricing the asset or liability. The Company utilizes the following fair value hierarchy in determining fair value: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs) The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring basis categorized by level within the fair value hierarchy. Financial assets and liabilities are classified within the hierarchy based on the lowest level input that is significant to the fair value measurement. These fair values are included as components of Other current liabilities, Other non-current liabilities, Prepaid and other current assets, and Other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets. Recurring Fair Value Measurements of as of June 30, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Long-term investments — 2 12 14 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 4 — 4 $ 3 $ 6 $ 12 $ 21 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 2 $ — $ 2 Interest rate swaps — 20 — 20 $ — $ 22 $ — $ 22 Recurring Fair Value Measurements of as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Long-term investments — 1 24 25 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 5 — 5 $ 3 $ 6 $ 24 $ 33 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 8 $ — $ 8 Interest rate swaps — 4 — 4 $ — $ 12 $ — $ 12 During the three months ended June 30, 2019, the Company noted an observable price change related to its investment in a privately held company and, as a result, recorded an impairment loss of $12 million. There were no impairment losses recognized in the three and six months ended June 30, 2018. The Company determines fair value of its derivative financial instruments based on internal valuation models, such as discounted cash flow analysis, using management estimates and observable market-based inputs, as applicable. Management estimates include assumptions concerning the amount and timing of estimated future cash flows and application of appropriate discount rates. Observable market-based inputs are sourced from third parties and include interest rates and yield curves, currency spot and forward rates, and credit spreads, as applicable. Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are all short-term in nature; therefore, the carrying value of these items approximates their fair value. The following tables provide additional fair value information related to the Company’s financial instruments: As of June 30, 2019 Carrying value Fair value Fair value hierarchy Long-term debt, excluding finance leases and other $ 3,134 $ 2,938 Level 2 Orbital receivables 439 439 Level 2 As of December 31, 2018 Carrying value Fair value Fair value hierarchy Long-term debt, excluding finance leases and other $ 3,034 $ 2,925 Level 2 Orbital receivables 441 441 Level 2 There were no transfers into or out of each of the levels of the fair value hierarchy during the six months ended June 30, 2019 or year ended December 31, 2018 . |
Stockholders' equity
Stockholders' equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' equity | |
Stockholders' equity | 11. STOCKHOLDERS’ EQUITY As a result of the Company’s U.S. Domestication on January 1, 2019, a reclassification between Common Stock and Additional paid-in capital was necessary to reflect the Company’s new par value of $0.0001 . The reclassification between Common Stock and Additional paid-in capital of $1.7 billion was recorded within the Unaudited Condensed Consolidated Statements of Change in Stockholders’ Equity in the first quarter of 2019. Tax Benefit Preservation Plan On May 12, 2019, the Company implemented a Tax Benefit Preservation Plan (“Tax Plan”), with the intent to preserve the value of certain deferred tax benefits (the “Tax Benefits”). The Tax Plan is intended to act as a deterrent to any person or entity acquiring shares of the Company equal to or exceeding 4.9% . For each common stock outstanding as of May 28, 2019, a dividend of one preferred stock purchase right is granted. The Tax Plan gives current shareholders the right to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock (“Series A Preferred”) at a set price of $30.92 which, upon exercise, provides for one additional share of common stock at a 50% discount on the exercise date with no cash settlement options. The Tax Plan reduces the likelihood that changes in the Company’s investor base have the unintended effect of limiting the use of the Company’s Tax Benefits. There is no impact to the financial statements as a result of the Tax Plan. As of June 30, 2019, the Company had 2,400,000 shares authorized and no shares outstanding of the Series A Preferred stock. As of December 31, 2018, the Company had no Series A Preferred stock authorized or outstanding . Changes in the components of Accumulated other comprehensive income (loss) are as follows: Foreign Total Currency Unrecognized Accumulated Other Translation (Loss) Gain on Pension Comprehensive Adjustments 1 Derivatives 2 Adjustments Income (Loss) Balance as of December 31, 2018 $ 111 $ (4) $ (25) $ 82 Other comprehensive (loss) income (4) (4) 3 (5) Tax expense — — (1) (1) Balance as of March 31 2019 107 (8) (23) 76 Other comprehensive income (loss) 15 (12) — 3 Tax expense — — — — Balance as of June 30, 2019 $ 122 $ (20) $ (23) $ 79 1 As a result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent company to a U.S. parent company, the Company’s net investment hedge was no longer necessary from the domestication date onwards. As of December 31, 2018, there was a $51 million net loss on hedge investments in foreign operations. 2 As of January 1, 2019, the Company has discontinued hedge accounting related to the Company’s foreign exchange contracts. The Company still applies hedge accounting to the interest rate swaps related to long-term debt. As of June 30, 2019, the balance consisted of unrecognized loss on the Company’s interest rate swaps. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Revenue | |
Revenue | 12. REVENUE On June 30, 2019, the Company had $2.2 billion of remaining performance obligations, which represents the transaction price of firm orders less inception to date revenues recognized. Remaining performance obligations exclude unexercised contract options and indefinite delivery/indefinite quantity contracts. The Company expects to recognize revenues relating to existing performance obligations of approximately $1.0 billion, $0.5 billion, and $0.7 billion in the six months ended December 31, 2019, year ended 2020 and thereafter, respectively. Contract liabilities by segment are as follows: Space As of June 30, 2019 Systems Imagery 1 Services Total Contract liabilities $ 101 $ 189 $ 6 $ 296 Space As of December 31, 2018 Systems Imagery 1 Services Total Contract liabilities $ 172 $ 247 $ 2 $ 421 1 The contract liability balance associated with the Company’s EnhancedView Contract was $132 million and $184 million as of June 30, 2019 and December 31, 2018, respectively. During the six months ended June 30, 2019, imputed interest on advanced payments increased the contract liability balance by $8 million, which was more than offset by $60 million in revenue recognition. The contract liability balance associated with the Company’s EnhancedView Contract is expected to be recognized as revenue through August 31, 2020. There were no deferred contract costs on the Unaudited Condensed Consolidated Balance Sheets associated with this contract as of June 30, 2019 or December 31, 2018. The decrease in total contract liabilities was primarily due to revenues recognized. The Company’s primary sources of revenues are as follows: Three months ended June 30, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 190 $ — $ — $ — $ 190 Service revenues 26 200 74 — 300 Intersegment 41 1 — (42) — $ 257 $ 201 $ 74 $ (42) $ 490 Three months ended June 30, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 257 $ — $ — $ — $ 257 Service revenues 47 211 64 — 322 Intersegment 26 1 2 (29) — $ 330 $ 212 $ 66 $ (29) $ 579 Six months ended June 30, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 384 $ — $ — $ — $ 384 Service revenues 71 399 140 — 610 Intersegment 76 2 2 (80) — $ 531 $ 401 $ 142 $ (80) $ 994 Six months ended June 30, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 485 $ — $ — $ — $ 485 Service revenues 98 421 132 — 651 Intersegment 40 2 4 (46) — $ 623 $ 423 $ 136 $ (46) $ 1,136 Certain of the Company’s contracts with customers in the Space Systems segment include a significant financing component since payments are received from the customer more than one year after delivery of the promised goods or services. The Company recognized orbital interest revenue of $8 million and $15 million for the three and six months ended June 30, 2019, respectively, as compared to $9 million and $16 million for the three and six months ended June 30, 2018, respectively, related to these contracts, which is included in product revenues. The revenues based on geographic location of customers are as follows: Three Months Ended June 30, 2019 2018 United States $ 349 $ 339 Asia 52 96 Canada 28 53 Europe 34 36 South America 26 45 Other 1 10 Total revenues $ 490 $ 579 Six Months Ended June 30, 2019 2018 United States $ 687 $ 708 Asia 120 172 Canada 53 101 Europe 60 69 South America 65 67 Other 9 19 Total revenues $ 994 $ 1,136 Revenues from significant customers are as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 U.S. Federal Government and agencies $ 263 $ 219 $ 494 $ 451 Canadian Federal Government and agencies 25 31 45 59 |
Segment information
Segment information | 6 Months Ended |
Jun. 30, 2019 | |
Segment information | |
Segment information | 13. SEGMENT INFORMATION The Company’s business is organized into three reportable segments based on the nature of the products and services offered: (i) Space Systems; (ii) Imagery; and (iii) Services. The Space Systems reportable segment supplies space-based and ground-based infrastructure and information solutions including communication and imaging satellites, satellite payloads and antenna subsystems, space-based and airborne surveillance solutions, robotic systems and associated ground infrastructure and support services. The Imagery segment is a supplier of high resolution Earth imagery and radar data sourced from the Company’s owned satellite constellations and third-party providers. The Services segment combines imagery, analytic expertise and innovative technology to deliver integrated intelligence solutions to customers. Transactions between segments are generally negotiated and accounted for under terms and conditions similar to other government and commercial contracts. The reconciling item “corporate and other expenses” includes items such as corporate office costs, regulatory costs, executive and director compensation, foreign exchange gains and losses, and fees for audit, legal and consulting services. The Company’s Chief Operating Decision Maker (“CODM”) measures the performance of each segment based on revenue and Adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization (“EBITDA”) adjusted for certain items affecting comparability as specified in the calculation. Other unallocated expenses include retention costs and foreign exchange gains and losses which are not included in segment Adjusted EBITDA. The following table summarizes the operating performance of the Company’s segments: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues: Space Systems $ 257 $ 330 $ 531 $ 623 Imagery 201 212 401 423 Services 74 66 142 136 Intersegment eliminations (42) (29) (80) (46) Total revenues $ 490 $ 579 $ 994 $ 1,136 Adjusted EBITDA: Space Systems $ 28 $ 13 $ 38 $ 41 Imagery 123 133 244 267 Services 6 6 13 10 Intersegment eliminations (10) (7) (13) (9) Depreciation and amortization (99) (113) (197) (224) Corporate and other expenses (18) (12) (36) (25) Restructuring (2) (13) (22) (13) Acquisition and integration related expense (2) (6) (6) (10) Impairment losses (12) — (15) — Satellite insurance recovery 183 — 183 — CEO severance — — (3) — Interest expense, net (49) (50) (98) (103) Equity loss (income) from joint ventures, net of tax 2 (3) 3 (3) Income (loss) before taxes $ 150 $ (52) $ 91 $ (69) Space Corporate and Three Months Ended June 30, 2019 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 3 $ 51 $ — $ (14) $ 40 Intangible assets - 14 — - 14 $ 3 $ 65 $ — $ (14) $ 54 Space Corporate and Three Months Ended June 30, 2018 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 4 $ 41 $ 1 $ (6) $ 40 Intangible assets 4 15 2 (1) 20 $ 8 $ 56 $ 3 $ (7) $ 60 Space Corporate and Six Months Ended June 30, 2019 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 9 $ 101 $ — $ (11) $ 99 Intangible assets 1 27 — - 28 $ 10 $ 128 $ — $ (11) $ 127 Space Corporate and Six Months Ended June 30, 2018 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 9 $ 79 $ 1 $ (6) $ 83 Intangible assets 4 32 2 (1) 37 $ 13 $ 111 $ 3 $ (7) $ 120 Substantially all of the Company’s long-lived tangible assets were in the United States as of June 30, 2019 and December 31, 2018. |
Employee benefit plans
Employee benefit plans | 6 Months Ended |
Jun. 30, 2019 | |
Employee benefit plans | |
Employee benefit plans | 14. EMPLOYEE BENEFIT PLANS The following table summarizes the components of net periodic benefit cost for the Company’s pension plans: Three Months Ended June 30, Six Months Ended June 30, Pension Pension 2019 2018 2019 2018 Service cost $ 1 $ 1 $ 2 $ 3 Interest cost 6 — 12 — Expected return on plan assets (9) — (15) — Amortization of net loss 1 — 1 — Expenses paid 1 — 1 — Net periodic benefit cost $ — $ 1 $ 1 $ 3 Contributions The funding policy for the Company’s pension plans is to contribute at least the minimum required by applicable laws and regulations or to directly make benefit payments where appropriate. The Company expects to contribute approximately $14 million to its pension plans for the year ending December 31, 2019. As of June 30, 2019, all legal funding requirements had been met. |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income taxes | |
Income taxes | 15. INCOME TAXES On January 1, 2019, the Company completed the U.S. Domestication. The Company has estimated there are no material corporate tax liabilities as a result of the U.S. Domestication; however, the Company's effective tax rate is expected to increase in the future primarily due to related changes in corporate structure and the application of U.S. tax law to the Company. In prior years, the Company's income taxes were described as Canadian and non-Canadian. Following the U.S. Domestication, the Company will describe its income tax in the context of U.S. and non-U.S. Following the U.S. Domestication, the Company is subject to taxation on a material amount of Global Intangible Low-Tax Income (“GILTI”) earned by foreign subsidiaries. The Company has elected to treat the tax effect of GILTI as a current period expense when incurred. The Company expects the net impact of the GILTI for the 2019 fiscal year to be immaterial due to a corresponding change in the valuation allowance. In computing income tax expense for the quarter ended June 30, 2019, the Company applied the estimated annual effective tax rate to non-U.S. pre-tax income. No income tax expense was recognized on U.S. income as the Company does not expect to recognize the benefit of U.S. losses recorded in the year. This resulted in an effective income tax rate of 15.4% for the six months ended June 30, 2019. For the six months ended June 30, 2018, income tax expense was computed as (18.5%) . The effective tax rate increased primarily due to changes in corporate structure, the application of U.S. tax law and a change in the mix of income between jurisdictions. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings per share | |
Earnings per share | 16. EARNINGS PER SHARE The following table includes the calculation of basic and diluted net income (loss) per common share: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) $ 146 $ (40) $ 87 $ (25) Weighted average number of common shares outstanding-basic 59.6 57.2 59.6 56.8 Weighted dilutive effect of equity awards — — — — Weighted average number of common shares outstanding-diluted 59.6 57.2 59.6 56.8 Income (loss) per common share: Basic $ 2.45 $ (0.70) $ 1.46 $ (0.44) Dilutive $ 2.45 $ (0.70) $ 1.46 $ (0.44) |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Contingencies | |
Contingencies | 17. CONTINGENCIES Contingencies in the Normal Course of Business As discussed in Note 3, satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price of the satellite is contingent upon in-orbit performance of the satellite. The Company’s ultimate receipt of orbital performance incentives is subject to the continued performance of its satellites generally over the contractually stipulated life of the satellites. A complete or partial loss of a satellite’s functionality can result in loss of orbital receivable payments or repayment of amounts received by the Company under a warranty payback arrangement. The Company generally receives the present value of the orbital receivables if there is a launch failure or a failure caused by a customer error, but will forfeit some or all of the orbital receivables if the loss is caused by satellite failure or as a result of Company error. The Company recognizes orbital performance incentives in the financial statements based on the amounts that are expected to be received and believes that it will not incur a material loss relating to the incentives recognized. The Company may incur liquidated damages on programs as a result of delays due to slippage, or for programs which fail to meet all milestone requirements as outlined within the contractual arrangements with customers. Losses on programs related to liquidated damages result in a reduction of revenue. The Company enters into agreements in the ordinary course of business with resellers and others. Most of these agreements require the Company to indemnify the other party against third-party claims alleging that one of its products infringes or misappropriates a patent, copyright, trademark, trade secret or other intellectual property right. Certain of these agreements require the Company to indemnify the other party against claims relating to property damage, personal injury or acts or omissions by the Company, its employees, agents or representatives. From time to time, the Company has made guarantees regarding the performance of its systems to its customers. Some of these agreements do not limit the maximum potential future payments the Company could be obligated to make. The Company evaluates and estimates potential losses from such indemnification based on the likelihood that the future event will occur. The Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such indemnification and guarantees in the Unaudited Condensed Consolidated Financial Statements. The Company has entered into industrial cooperation agreements, sometimes referred to as offset agreements, as a condition to entering into contracts for its products and services from certain customers in foreign countries. These agreements are designed to return economic value to the foreign country and may be satisfied through activities that do not require a direct cash payment, including transferring technology, providing manufacturing, training and other consulting support to in-country projects. These agreements may provide for penalties in the event the Company fails to perform in accordance with offset requirements. The Company has historically not been required to pay any such penalties. Legal Proceedings In 2010, the Company entered into an agreement with a Ukrainian customer to provide a communication satellite system. In 2014, following the annexation of Crimea by the Russian Federation, the Company declared force majeure with respect to the program. The Ukrainian customer accepted that an event of force majeure had occurred. Following various unsuccessful efforts to arrive at a new contractual framework to take account of the changed circumstances (including the force majeure and various financial issues), the contract with the Ukrainian customer was terminated by Maxar. Maxar completed work on the spacecraft, which is in storage. In July 2018, the Ukrainian customer issued a statement of claim in the arbitration it had commenced against Maxar, challenging the Company’s right to terminate for force majeure, purporting to terminate the contract for default by Maxar (a position since withdrawn), and seeking recovery from Maxar in the amount of approximately $227 million. Discovery has concluded, and the matter is scheduled to be heard by the arbitration panel in December 2019. The Company believes it has sound defenses to the petitioner’s claims, and will vigorously defend the claims asserted. The Company has accrued an amount that it believes is within the range of probable outcomes for resolving this matter; the amount is not material to the consolidated financial statements. However, the outcome of any arbitration is difficult to predict, and in the event that the arbitration results in a finding against the Company in excess of the amount reserved, the Company could incur additional amounts and its results of operations and financial condition could be adversely affected. In January 2019, a Maxar stockholder filed a putative class action lawsuit captioned Durant v. Maxar Technologies Inc., Schwartz v. Maxar Technologies Inc., Durant Charles O’Brien vs. Maxar Technologies Inc. The Company is a party to various other legal proceedings and claims that arise in the ordinary course of business as either a plaintiff or defendant. As a matter of course, the Company is prepared both to litigate these matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. The Company has established accrued liabilities for these matters where losses are deemed probable and reasonably estimable. The outcome of any of these other proceedings, either individually or in the aggregate, is not expected to have a material adverse effect on the Company’s financial position, results of operations or liquidity. |
Supplemental cash flow
Supplemental cash flow | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental cash flow | |
Supplemental cash flow | 18. SUPPLEMENTAL CASH FLOW Selected cash payments and non-cash activities are as follows: Six Months Ended June 30, 2019 2018 Supplemental cash flow information: Cash paid for interest $ (128) $ (98) Income tax payments (4) (3) Supplemental non-cash investing and financing activities: Accrued capital expenditures 19 3 Impairment loss on equity investment 12 — |
Summary of significant accounti
Summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of significant accounting policies | |
Basis of preparation | Basis of preparation The Unaudited Condensed Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all of its consolidated subsidiaries. The Company’s Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). All intercompany balances and transactions are eliminated in consolidation. The Company’s Unaudited Condensed Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K filed with the SEC. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. In management’s opinion, all adjustments of a normal recurring nature that are necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included. |
Use of estimates, assumptions and judgments | Use of estimates, assumptions and judgments The preparation of the Unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) Leases Upon adoption, the Company recognized operating lease right-of-use assets and lease liabilities of $133 million and $176 million, respectively in its Unaudited Condensed Consolidated Balance Sheets. There were no material impacts to the Unaudited Condensed Consolidated Statements of Operations or Unaudited Condensed Consolidated Statements of Cash Flows. Taxes In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) . The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 ("2017 Tax Act") from accumulated other comprehensive income into retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company adopted the update on January 1, 2019. There was no material impact on the Unaudited Condensed Consolidated Financial Statements. |
Recent Accounting Guidance Not Yet Adopted | Recent Accounting Guidance Not Yet Adopted Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which together with subsequent amendments is included in ASC 326 – Financial Instruments – Credit Losses . ASU 2016-13 significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans and other financial instruments. These updates are effective for annual and interim financial statement periods beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. The Company will adopt this standard effective January 1, 2020. The Company is currently evaluating the impact the adoption of this guidance may have on the Company’s financial statements. |
Trade and other receivables, _2
Trade and other receivables, net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Trade and other receivables, net | |
Schedule of trade and other receivables, net | June 30, December 31, 2019 2018 Billed $ 205 $ 242 Unbilled 238 172 Total trade receivables 443 414 Orbital receivables, current portion 34 34 Other 14 17 Allowance for doubtful accounts (1) (1) Total trade and other receivables, net $ 490 $ 464 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory | |
Schedule of inventory | June 30, December 31, 2019 2018 Raw materials $ 15 $ 21 Work in process 9 10 Total inventory $ 24 $ 31 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment, net | Property, plant and equipment, net consisted of the following: June 30, December 31, 2019 2018 Satellites $ 397 $ 397 Equipment 230 229 Leasehold improvements 98 97 Computer hardware 94 92 Land and land improvements 88 88 Buildings 46 46 Furniture and fixtures 19 19 Construction in process 236 142 Property, plant and equipment, at cost 1,208 1,110 Accumulated depreciation (423) (363) Property, plant and equipment, net $ 785 $ 747 |
Intangible assets (Tables)
Intangible assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Intangible assets | |
Schedule of intangible assets | June 30, 2019 December 31, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 619 $ (81) $ 538 $ 619 $ (58) $ 561 Backlog 332 (169) 163 332 (120) 212 Technologies 328 (117) 211 330 (86) 244 Software 225 (90) 135 198 (71) 127 Image library 80 (40) 40 80 (32) 48 Trade names and other 41 (12) 29 41 (9) 32 Non-compete agreements 21 (17) 4 21 (13) 8 Total intangible assets $ 1,646 $ (526) $ 1,120 $ 1,621 $ (389) $ 1,232 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Schedule of components of lease expense | Three months ended June 30, Six months ended June 30, Classification 2019 2019 Operating lease expense Selling, general, and administrative expense, Product costs, and Service costs $ 9 $ 17 |
Supplemental lease balance sheet information | June 30, Classification 2019 Assets: Operating Non-current operating lease assets $ 124 Finance Property, plant, and equipment, net 8 Total lease assets $ 132 Liabilities: Current Operating Current operating lease liabilities $ 33 Finance Current portion long-term debt 3 Non-current Operating Operating lease liabilities 133 Finance Long-term debt 3 Total lease liabilities $ 172 |
Schedule of supplemental lease cash flow information | Three months ended June 30, Six months ended June 30, 2019 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9 $ 18 |
Schedule of other supplemental lease information | June 30, 2019 Weighted average remaining lease term Operating leases 9 years Finance leases 3 years Weighted average discount rate Operating leases 7.1% Finance leases 4.7% |
Schedule of maturities of finance lease liabilities | 2019 1 2020 2021 2022 2023 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 17 $ 32 $ 29 $ 24 $ 22 $ 100 $ (58) $ 166 Finance leases 2 3 1 1 — — (1) 6 1 |
Schedule of maturities of operating liabilities | 2019 1 2020 2021 2022 2023 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 17 $ 32 $ 29 $ 24 $ 22 $ 100 $ (58) $ 166 Finance leases 2 3 1 1 — — (1) 6 1 |
Restructuring liability (Tables
Restructuring liability (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring liability | |
Schedule of changes to restructuring liabilities | Restructuring Liability Balance as of December 31, 2018 $ 6 Obligations incurred 22 Payments (14) Release of reserves (2) Balance as of June 30, 2019 $ 12 |
Long term debt and interest exp
Long term debt and interest expense (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Long-term debt and interest expense | |
Summary of long term debt | June 30, December 31, 2019 2018 Syndicated Credit facility: Revolving credit facility $ 686 $ 595 Operating credit facility in Canadian dollars (June 30, 2019 - C $20 million; December 31, 2018 - C $0 million) 15 — Term Loan A 500 500 Term Loan B 1,970 1,980 Debt issuance costs (37) (41) Obligations under finance leases and other 10 13 Total long-term debt 3,144 3,047 Current portion (17) (17) Non-current portion $ 3,127 $ 3,030 |
Schedule of interest expense on long term debt and other obligations | Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Interest on long-term debt $ 48 $ 43 $ 93 $ 83 Interest expense on advance payments from customers 4 6 9 14 Interest on orbital securitization liability 2 2 4 4 Imputed interest and other — (1) — 1 Capitalized interest (5) (1) (8) (2) Interest expense on dissenting stockholder liability — 1 — 3 Total interest expense $ 49 $ 50 $ 98 $ 103 |
Financial instruments and fai_2
Financial instruments and fair value disclosures (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Financial instruments and fair value disclosures | |
Summary of financial instruments measured at fair value in the accompanying consolidated balance sheets | Recurring Fair Value Measurements of as of June 30, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Long-term investments — 2 12 14 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 4 — 4 $ 3 $ 6 $ 12 $ 21 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 2 $ — $ 2 Interest rate swaps — 20 — 20 $ — $ 22 $ — $ 22 Recurring Fair Value Measurements of as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Long-term investments — 1 24 25 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 5 — 5 $ 3 $ 6 $ 24 $ 33 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 8 $ — $ 8 Interest rate swaps — 4 — 4 $ — $ 12 $ — $ 12 |
Summary of financial instruments recorded at carrying value in the accompanying consolidated balance sheets | As of June 30, 2019 Carrying value Fair value Fair value hierarchy Long-term debt, excluding finance leases and other $ 3,134 $ 2,938 Level 2 Orbital receivables 439 439 Level 2 As of December 31, 2018 Carrying value Fair value Fair value hierarchy Long-term debt, excluding finance leases and other $ 3,034 $ 2,925 Level 2 Orbital receivables 441 441 Level 2 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' equity | |
Schedule of changes in the components of accumulated other comprehensive income (loss) | Foreign Total Currency Unrecognized Accumulated Other Translation (Loss) Gain on Pension Comprehensive Adjustments 1 Derivatives 2 Adjustments Income (Loss) Balance as of December 31, 2018 $ 111 $ (4) $ (25) $ 82 Other comprehensive (loss) income (4) (4) 3 (5) Tax expense — — (1) (1) Balance as of March 31 2019 107 (8) (23) 76 Other comprehensive income (loss) 15 (12) — 3 Tax expense — — — — Balance as of June 30, 2019 $ 122 $ (20) $ (23) $ 79 1 As a result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent company to a U.S. parent company, the Company’s net investment hedge was no longer necessary from the domestication date onwards. As of December 31, 2018, there was a $51 million net loss on hedge investments in foreign operations. 2 As of January 1, 2019, the Company has discontinued hedge accounting related to the Company’s foreign exchange contracts. The Company still applies hedge accounting to the interest rate swaps related to long-term debt. As of June 30, 2019, the balance consisted of unrecognized loss on the Company’s interest rate swaps. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue | |
Summary of contract assets and contract liabilities by segment | Space As of June 30, 2019 Systems Imagery 1 Services Total Contract liabilities $ 101 $ 189 $ 6 $ 296 Space As of December 31, 2018 Systems Imagery 1 Services Total Contract liabilities $ 172 $ 247 $ 2 $ 421 1 The contract liability balance associated with the Company’s EnhancedView Contract was $132 million and $184 million as of June 30, 2019 and December 31, 2018, respectively. During the six months ended June 30, 2019, imputed interest on advanced payments increased the contract liability balance by $8 million, which was more than offset by $60 million in revenue recognition. The contract liability balance associated with the Company’s EnhancedView Contract is expected to be recognized as revenue through August 31, 2020. There were no deferred contract costs on the Unaudited Condensed Consolidated Balance Sheets associated with this contract as of June 30, 2019 or December 31, 2018. |
Summary of revenue by primary sources | Three months ended June 30, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 190 $ — $ — $ — $ 190 Service revenues 26 200 74 — 300 Intersegment 41 1 — (42) — $ 257 $ 201 $ 74 $ (42) $ 490 Three months ended June 30, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 257 $ — $ — $ — $ 257 Service revenues 47 211 64 — 322 Intersegment 26 1 2 (29) — $ 330 $ 212 $ 66 $ (29) $ 579 Six months ended June 30, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 384 $ — $ — $ — $ 384 Service revenues 71 399 140 — 610 Intersegment 76 2 2 (80) — $ 531 $ 401 $ 142 $ (80) $ 994 Six months ended June 30, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 485 $ — $ — $ — $ 485 Service revenues 98 421 132 — 651 Intersegment 40 2 4 (46) — $ 623 $ 423 $ 136 $ (46) $ 1,136 |
Summary of revenue by geographic location | Three Months Ended June 30, 2019 2018 United States $ 349 $ 339 Asia 52 96 Canada 28 53 Europe 34 36 South America 26 45 Other 1 10 Total revenues $ 490 $ 579 Six Months Ended June 30, 2019 2018 United States $ 687 $ 708 Asia 120 172 Canada 53 101 Europe 60 69 South America 65 67 Other 9 19 Total revenues $ 994 $ 1,136 |
Schedule of revenue from significant customers | Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 U.S. Federal Government and agencies $ 263 $ 219 $ 494 $ 451 Canadian Federal Government and agencies 25 31 45 59 |
Segment information (Tables)
Segment information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment information | |
Summary of operating performance of the reporting segments | Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues: Space Systems $ 257 $ 330 $ 531 $ 623 Imagery 201 212 401 423 Services 74 66 142 136 Intersegment eliminations (42) (29) (80) (46) Total revenues $ 490 $ 579 $ 994 $ 1,136 Adjusted EBITDA: Space Systems $ 28 $ 13 $ 38 $ 41 Imagery 123 133 244 267 Services 6 6 13 10 Intersegment eliminations (10) (7) (13) (9) Depreciation and amortization (99) (113) (197) (224) Corporate and other expenses (18) (12) (36) (25) Restructuring (2) (13) (22) (13) Acquisition and integration related expense (2) (6) (6) (10) Impairment losses (12) — (15) — Satellite insurance recovery 183 — 183 — CEO severance — — (3) — Interest expense, net (49) (50) (98) (103) Equity loss (income) from joint ventures, net of tax 2 (3) 3 (3) Income (loss) before taxes $ 150 $ (52) $ 91 $ (69) |
Schedule of capital expenditures by segment | Space Corporate and Three Months Ended June 30, 2019 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 3 $ 51 $ — $ (14) $ 40 Intangible assets - 14 — - 14 $ 3 $ 65 $ — $ (14) $ 54 Space Corporate and Three Months Ended June 30, 2018 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 4 $ 41 $ 1 $ (6) $ 40 Intangible assets 4 15 2 (1) 20 $ 8 $ 56 $ 3 $ (7) $ 60 Space Corporate and Six Months Ended June 30, 2019 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 9 $ 101 $ — $ (11) $ 99 Intangible assets 1 27 — - 28 $ 10 $ 128 $ — $ (11) $ 127 Space Corporate and Six Months Ended June 30, 2018 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 9 $ 79 $ 1 $ (6) $ 83 Intangible assets 4 32 2 (1) 37 $ 13 $ 111 $ 3 $ (7) $ 120 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Employee benefit plans | |
Summary of the components of net periodic benefit (credits) cost | Three Months Ended June 30, Six Months Ended June 30, Pension Pension 2019 2018 2019 2018 Service cost $ 1 $ 1 $ 2 $ 3 Interest cost 6 — 12 — Expected return on plan assets (9) — (15) — Amortization of net loss 1 — 1 — Expenses paid 1 — 1 — Net periodic benefit cost $ — $ 1 $ 1 $ 3 |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings per share | |
Summary of calculation of basic and diluted EPS | Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) $ 146 $ (40) $ 87 $ (25) Weighted average number of common shares outstanding-basic 59.6 57.2 59.6 56.8 Weighted dilutive effect of equity awards — — — — Weighted average number of common shares outstanding-diluted 59.6 57.2 59.6 56.8 Income (loss) per common share: Basic $ 2.45 $ (0.70) $ 1.46 $ (0.44) Dilutive $ 2.45 $ (0.70) $ 1.46 $ (0.44) |
Supplemental cash flow (Tables)
Supplemental cash flow (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental cash flow | |
Schedule of supplemental cash flow | Six Months Ended June 30, 2019 2018 Supplemental cash flow information: Cash paid for interest $ (128) $ (98) Income tax payments (4) (3) Supplemental non-cash investing and financing activities: Accrued capital expenditures 19 3 Impairment loss on equity investment 12 — |
General business description (D
General business description (Details) | 6 Months Ended |
Jun. 30, 2019segment | |
General business description | |
Number of reportable segments | 3 |
Summary of significant accoun_2
Summary of significant accounting policies - Narratives (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 |
Leases | ||
Operating lease right-of-use assets | $ 124 | |
Operating lease liability | $ 166 | |
ASU 2016-02 | ||
Leases | ||
Operating lease right-of-use assets | $ 133 | |
Operating lease liability | $ 176 |
Trade and other receivables, _3
Trade and other receivables, net (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Trade and other receivables, net | ||
Billed | $ 205 | $ 242 |
Unbilled | 238 | 172 |
Total trade receivables | 443 | 414 |
Orbital receivables, current portion | 34 | 34 |
Other | 14 | 17 |
Allowance for doubtful accounts | (1) | (1) |
Total trade and other receivables, net | $ 490 | $ 464 |
Trade and other receivables, _4
Trade and other receivables, net - Orbital receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2019 | |
Trade and other receivables | ||
Orbital receivables | $ 407 | $ 405 |
Orbital receivables | ||
Proceeds from sale of orbital receivables | 18 | |
Securitization liabilities | 109 | 102 |
Other current liabilities | ||
Orbital receivables | ||
Securitization liabilities | $ 15 | $ 16 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory | ||
Raw materials | $ 15 | $ 21 |
Work in process | 9 | 10 |
Total inventory | $ 24 | $ 31 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property, plant and equipment | |||||
Property, plant and equipment, at cost | $ 1,208 | $ 1,208 | $ 1,110 | ||
Accumulated depreciation | (423) | (423) | (363) | ||
Property, plant and equipment, net | 785 | 785 | 747 | ||
Depreciation | 30 | $ 41 | 60 | $ 78 | |
Satellite insurance recovery | 183 | 183 | |||
Satellites | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 397 | 397 | 397 | ||
Satellite insurance recovery | 183 | ||||
Equipment | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 230 | 230 | 229 | ||
Leasehold improvements | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 98 | 98 | 97 | ||
Computer hardware | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 94 | 94 | 92 | ||
Land and Land improvements | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 88 | 88 | 88 | ||
Buildings | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 46 | 46 | 46 | ||
Furniture and fixtures | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 19 | 19 | 19 | ||
Construction in process | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | $ 236 | $ 236 | $ 142 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Finite-lived intangible assets: | |||||
Gross carrying value | $ 1,646 | $ 1,646 | $ 1,621 | ||
Accumulated amortization | (526) | (526) | (389) | ||
Net carrying value | 1,120 | 1,120 | 1,232 | ||
Amortization of intangible assets | 69 | $ 72 | 137 | $ 146 | |
Trade names and other | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 41 | 41 | 41 | ||
Accumulated amortization | (12) | (12) | (9) | ||
Net carrying value | 29 | 29 | 32 | ||
Customer relationships | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 619 | 619 | 619 | ||
Accumulated amortization | (81) | (81) | (58) | ||
Net carrying value | 538 | 538 | 561 | ||
Backlog | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 332 | 332 | 332 | ||
Accumulated amortization | (169) | (169) | (120) | ||
Net carrying value | 163 | 163 | 212 | ||
Technologies | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 328 | 328 | 330 | ||
Accumulated amortization | (117) | (117) | (86) | ||
Net carrying value | 211 | 211 | 244 | ||
Software | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 225 | 225 | 198 | ||
Accumulated amortization | (90) | (90) | (71) | ||
Net carrying value | 135 | 135 | 127 | ||
Image library | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 80 | 80 | 80 | ||
Accumulated amortization | (40) | (40) | (32) | ||
Net carrying value | 40 | 40 | 48 | ||
Non-compete agreements | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 21 | 21 | 21 | ||
Accumulated amortization | (17) | (17) | (13) | ||
Net carrying value | $ 4 | $ 4 | $ 8 |
Leases (Details)
Leases (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Option to extend - Operating | true |
Option to extend - Finance | true |
Minimum | |
Leases | |
Remaining lease term - Operating | 1 year |
Remaining lease term - Finance | 1 year |
Option to extend - Operating | 1 year |
Option to extend - Finance | 1 year |
Maximum | |
Leases | |
Remaining lease term - Operating | 16 years |
Remaining lease term - Finance | 16 years |
Option to extend - Operating | 10 years |
Option to extend - Finance | 10 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Selling, general, and administrative expense, Product costs, and Service costs | ||
Leases | ||
Operating lease cost | $ 9 | $ 17 |
Leases - Supplemental lease bal
Leases - Supplemental lease balance sheet information (Details) $ in Millions | Jun. 30, 2019USD ($) |
Leases | |
Non-current operating lease assets | $ 124 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Non-current operating lease assets |
Finance | $ 8 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net |
Total leased assets | $ 132 |
Current operating lease liabilities | $ 33 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current operating lease liabilities |
Operating lease liability, non current | $ 133 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liability, non current |
Finance lease liability, current | $ 3 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current |
Finance lease liability, non current | $ 3 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent |
Total leased Liabilities | $ 172 |
Leases - Supplemental lease cas
Leases - Supplemental lease cash flow information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 9 | $ 18 |
Leases - Other Supplemental lea
Leases - Other Supplemental lease information (Details) | Jun. 30, 2019 |
Leases | |
Operating leases - Weighted average remaining lease term (Years) | 9 years |
Finance leases - Weighted average remaining lease term (Years) | 3 years |
Operating leases - Weighted average discount rate | 7.10% |
Finance leases - Weighted average discount rate | 4.70% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Millions | Jun. 30, 2019USD ($) |
Operating leases | |
2019 | $ 17 |
2020 | 32 |
2021 | 29 |
2022 | 24 |
2023 | 22 |
Thereafter | 100 |
Less: imputed interest | (58) |
Total minimum lease payments | 166 |
Finance leases | |
2019 | 2 |
2020 | 3 |
2021 | 1 |
2022 | 1 |
Less: imputed interest | (1) |
Total minimum lease payments | $ 6 |
Restructuring liability (Detail
Restructuring liability (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restructuring liability | ||||
Balance as of December 31, 2018 | $ 6 | |||
Obligations incurred | $ 2 | $ 13 | 22 | $ 13 |
Payments | (14) | |||
Release of reserves | (2) | |||
Balance as of March 31, 2019 | $ 12 | $ 12 |
Long term debt and interest e_2
Long term debt and interest expense (Details) $ in Millions, $ in Millions | Jun. 30, 2019CAD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) |
Long-term debt and interest expenses | ||||
Debt issuance costs | $ (37) | $ (41) | ||
Obligations under finance leases and other | 10 | 13 | ||
Total long-term debt | 3,144 | 3,047 | ||
Current portion | (17) | (17) | ||
Non-current portion | 3,127 | 3,030 | ||
Revolving loan payable | ||||
Long-term debt and interest expenses | ||||
Long-term debt | 686 | 595 | ||
Operating loan payable | ||||
Long-term debt and interest expenses | ||||
Long-term debt | $ 20 | 15 | $ 0 | |
Term Loan A | ||||
Long-term debt and interest expenses | ||||
Long-term debt | 500 | 500 | ||
Term Loan B | ||||
Long-term debt and interest expenses | ||||
Long-term debt | $ 1,970 | $ 1,980 |
Long term debt and interest e_3
Long term debt and interest expense - Syndicated credit facility (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Letter of credit | ||
Long-term debt and interest expenses | ||
Maximum borrowing capacity | $ 200 | |
Letter of credit outstanding | $ 16 | $ 18 |
DigitalGlobe | Senior secured first lien revolving credit facility | ||
Long-term debt and interest expenses | ||
Term of debt | 4 years | |
DigitalGlobe | Senior Secured First Lien Operating Facility | ||
Long-term debt and interest expenses | ||
Term of debt | 4 years | |
DigitalGlobe | Term Loan B | ||
Long-term debt and interest expenses | ||
Term of debt | 7 years | |
Aggregate principal amount | $ 3,750 |
Long term debt and interest e_4
Long term debt and interest expense - Interest expense on long term debts and other obligations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Interest expenses | ||||
Interest on long-term debt | $ 48 | $ 43 | $ 93 | $ 83 |
Interest expense on advance payments from customers | 4 | 6 | 9 | 14 |
Interest on orbital securitization liability | 2 | 2 | 4 | 4 |
Imputed interest and other | (1) | 1 | ||
Capitalized interest | (5) | (1) | (8) | (2) |
Interest expense on dissenting stockholder liability | 1 | 3 | ||
Total interest expense | $ 49 | $ 50 | $ 98 | $ 103 |
Financial instruments and fai_3
Financial instruments and fair value disclosures - Financial instruments measured at fair value (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Liabilities | |||||
Impairment losses | $ 12 | $ 0 | $ 15 | $ 0 | |
Recurring | |||||
Assets | |||||
Short-term investments | 3 | 3 | $ 3 | ||
Long-term investments | 14 | 14 | 25 | ||
Assets fair value | 21 | 21 | 33 | ||
Liabilities | |||||
Liabilities fair value | 22 | 22 | 12 | ||
Recurring | Foreign exchange forward contracts & embedded derivatives | |||||
Assets | |||||
Derivative financial instruments | 4 | 4 | 5 | ||
Liabilities | |||||
Derivative financial instruments | 2 | 2 | 8 | ||
Recurring | Interest rate swaps | |||||
Liabilities | |||||
Derivative financial instruments | 20 | 20 | 4 | ||
Recurring | Level 1 | |||||
Assets | |||||
Short-term investments | 3 | 3 | 3 | ||
Assets fair value | 3 | 3 | 3 | ||
Recurring | Level 2 | |||||
Assets | |||||
Long-term investments | 2 | 2 | 1 | ||
Assets fair value | 6 | 6 | 6 | ||
Liabilities | |||||
Liabilities fair value | 22 | 22 | 12 | ||
Recurring | Level 2 | Foreign exchange forward contracts & embedded derivatives | |||||
Assets | |||||
Derivative financial instruments | 4 | 4 | 5 | ||
Liabilities | |||||
Derivative financial instruments | 2 | 2 | 8 | ||
Recurring | Level 2 | Interest rate swaps | |||||
Liabilities | |||||
Derivative financial instruments | 20 | 20 | 4 | ||
Recurring | Level 3 | |||||
Assets | |||||
Long-term investments | 12 | 12 | 24 | ||
Assets fair value | $ 12 | $ 12 | $ 24 |
Financial instruments and fai_4
Financial instruments and fair value disclosures - Financial instruments recorded at carrying value (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Financial instruments and fair value disclosures | ||
Fair value assets level 1 to level 2 transfers | $ 0 | $ 0 |
Fair value assets level 2 to level 1 transfers | 0 | 0 |
Fair value assets transfers into level 3 | 0 | 0 |
Fair value assets transfers out of level 3 | 0 | 0 |
Fair value liabilities level 1 to level 2 transfers | 0 | 0 |
Fair value liabilities level 2 to level 1 transfers | 0 | 0 |
Fair value liabilities transfers into level 3 | 0 | 0 |
Fair value liabilities transfers out of level 3 | 0 | 0 |
Level 2 | Carrying value | ||
Financial instruments and fair value disclosures | ||
Long-term debt, excluding finance leases and other | 3,134 | 3,034 |
Orbital receivable | 439 | 441 |
Level 2 | Fair value | ||
Financial instruments and fair value disclosures | ||
Long-term debt, excluding finance leases and other | 2,938 | 2,925 |
Orbital receivable | $ 439 | $ 441 |
Stockholders' equity - Componen
Stockholders' equity - Components of accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | $ 643 | ||
Balance at the end of period | $ 730 | ||
Net loss on hedge investments in foreign operations | $ 51 | ||
Accumulated other comprehensive income (loss) | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 76 | 82 | |
Other comprehensive (loss) income | 3 | (5) | |
Tax expense | (1) | ||
Balance at the end of period | 79 | 76 | |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 107 | 111 | |
Other comprehensive (loss) income | 15 | (4) | |
Balance at the end of period | 122 | 107 | |
Unrecognized (Loss) Gain on Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | (8) | (4) | |
Other comprehensive (loss) income | (12) | (4) | |
Balance at the end of period | (20) | (8) | |
Pension Adjustments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | (23) | (25) | |
Other comprehensive (loss) income | 3 | ||
Tax expense | (1) | ||
Balance at the end of period | $ (23) | $ (23) |
Stockholders' equity (Details)
Stockholders' equity (Details) $ / shares in Units, $ in Millions | May 28, 2019item$ / shares | May 12, 2019 | Mar. 31, 2019USD ($) | Jun. 30, 2019$ / sharesshares | Jan. 01, 2019$ / shares | Dec. 31, 2018shares |
Stockholders' equity | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Series A Junior Participating Preferred Stock | ||||||
Stockholders' equity | ||||||
Preferred stock, authorized shares | shares | 2,400,000 | 0 | ||||
Preferred stock, shares outstanding | shares | 0 | 0 | ||||
Rights offering | ||||||
Stockholders' equity | ||||||
Percentage of shares acquired by entity under tax plan | 4.90% | |||||
Number of preferred stock purchase right granted as dividend | item | 1 | |||||
Number of additional shares of common stock upon exercise | item | 1 | |||||
Percentage of discount on additional shares of common stock upon exercise | 50.00% | |||||
Rights offering | Series A Junior Participating Preferred Stock | ||||||
Stockholders' equity | ||||||
Percentage of right to purchase shares of preferred stock | 0.01% | |||||
Share price | $ / shares | $ 30.92 | |||||
Common Stock | ||||||
Stockholders' equity | ||||||
Reclassification of APIC due to U.S. Domestication | $ | $ (1,713) | |||||
Additional paid in capital | ||||||
Stockholders' equity | ||||||
Reclassification of APIC due to U.S. Domestication | $ | $ 1,713 |
Revenue - Remaining performance
Revenue - Remaining performance obligations (Details) $ in Billions | Jun. 30, 2019USD ($) |
Revenue | |
Remaining performance obligation | $ 2.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue | |
Remaining performance obligation | $ 1 |
Revenue | |
Expected timing of satisfaction | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue | |
Remaining performance obligation | $ 0.5 |
Revenue | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue | |
Remaining performance obligation | $ 0.7 |
Revenue | |
Expected timing of satisfaction |
Revenue - Contract assets and l
Revenue - Contract assets and liabilities (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Contract assets and contract liabilities | ||
Contract Liabilities | $ 296 | $ 421 |
Space Systems | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 101 | 172 |
Imagery | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 189 | 247 |
Imagery | EnhancedView contract | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 132 | 184 |
Increase in contract liability due to imputed interest on advance payments | 8 | |
Revenue recognized | 60 | |
Deferred contract costs | 0 | 0 |
Services | ||
Contract assets and contract liabilities | ||
Contract Liabilities | $ 6 | $ 2 |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue by source (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | ||||
Revenues | $ 490 | $ 579 | $ 994 | $ 1,136 |
Product | ||||
Revenue | ||||
Revenues | 190 | 257 | 384 | 485 |
Service | ||||
Revenue | ||||
Revenues | 300 | 322 | 610 | 651 |
Space Systems | ||||
Revenue | ||||
Orbital interest revenue | 8 | 9 | 15 | 16 |
Operating Segments | Product | ||||
Revenue | ||||
Revenues | 190 | 257 | 384 | 485 |
Operating Segments | Service | ||||
Revenue | ||||
Revenues | 300 | 322 | 610 | 651 |
Operating Segments | Space Systems | ||||
Revenue | ||||
Revenues | 257 | 330 | 531 | 623 |
Operating Segments | Space Systems | Product | ||||
Revenue | ||||
Revenues | 190 | 257 | 384 | 485 |
Operating Segments | Space Systems | Service | ||||
Revenue | ||||
Revenues | 26 | 47 | 71 | 98 |
Operating Segments | Imagery | ||||
Revenue | ||||
Revenues | 201 | 212 | 401 | 423 |
Operating Segments | Imagery | Service | ||||
Revenue | ||||
Revenues | 200 | 211 | 399 | 421 |
Operating Segments | Services | ||||
Revenue | ||||
Revenues | 74 | 66 | 142 | 136 |
Operating Segments | Services | Service | ||||
Revenue | ||||
Revenues | 74 | 64 | 140 | 132 |
Intersegment eliminations | ||||
Revenue | ||||
Revenues | (42) | (29) | (80) | (46) |
Intersegment eliminations | Space Systems | ||||
Revenue | ||||
Revenues | 41 | 26 | 76 | 40 |
Intersegment eliminations | Imagery | ||||
Revenue | ||||
Revenues | $ 1 | 1 | 2 | 2 |
Intersegment eliminations | Services | ||||
Revenue | ||||
Revenues | $ 2 | $ 2 | $ 4 |
Revenue - Disaggregation of r_2
Revenue - Disaggregation of revenue on geographic location of customers (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | ||||
Revenues | $ 490 | $ 579 | $ 994 | $ 1,136 |
U.S. | ||||
Revenue | ||||
Revenues | 349 | 339 | 687 | 708 |
Asia | ||||
Revenue | ||||
Revenues | 52 | 96 | 120 | 172 |
Canada | ||||
Revenue | ||||
Revenues | 28 | 53 | 53 | 101 |
Europe | ||||
Revenue | ||||
Revenues | 34 | 36 | 60 | 69 |
South America | ||||
Revenue | ||||
Revenues | 26 | 45 | 65 | 67 |
Other | ||||
Revenue | ||||
Revenues | $ 1 | $ 10 | $ 9 | $ 19 |
Revenue - Disaggregation of r_3
Revenue - Disaggregation of revenue from significant customers (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | ||||
Revenues | $ 490 | $ 579 | $ 994 | $ 1,136 |
U.S. Federal Government and agencies | ||||
Revenue | ||||
Revenues | 263 | 219 | 494 | 451 |
Canadian Federal Government and agencies | ||||
Revenue | ||||
Revenues | $ 25 | $ 31 | $ 45 | $ 59 |
Segment information - Operating
Segment information - Operating performance (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Segment information | ||||
Number of reportable segments | segment | 3 | |||
Total revenues | $ 490 | $ 579 | $ 994 | $ 1,136 |
Depreciation and amortization | (99) | (113) | (197) | (224) |
Corporate and other unallocated expenses | (18) | (12) | (36) | (25) |
Restructuring Charges | 2 | 13 | 22 | 13 |
Acquisition and integration related expense | (2) | (6) | (6) | (10) |
Impairment losses | (12) | 0 | (15) | 0 |
Satellite insurance recovery | 183 | 183 | ||
CEO severance | (3) | |||
Interest expense, net | (49) | (50) | (98) | (103) |
Equity loss from joint ventures, net of tax | 2 | (3) | 3 | (3) |
Income (Loss) before taxes | 150 | (52) | 91 | (69) |
Operating Segments | Space Systems | ||||
Segment information | ||||
Total revenues | 257 | 330 | 531 | 623 |
Adjusted EBITDA | 28 | 13 | 38 | 41 |
Operating Segments | Imagery | ||||
Segment information | ||||
Total revenues | 201 | 212 | 401 | 423 |
Adjusted EBITDA | 123 | 133 | 244 | 267 |
Operating Segments | Services | ||||
Segment information | ||||
Total revenues | 74 | 66 | 142 | 136 |
Adjusted EBITDA | 6 | 6 | 13 | 10 |
Intersegment eliminations | ||||
Segment information | ||||
Total revenues | (42) | (29) | (80) | (46) |
Adjusted EBITDA | (10) | (7) | (13) | (9) |
Intersegment eliminations | Space Systems | ||||
Segment information | ||||
Total revenues | 41 | 26 | 76 | 40 |
Intersegment eliminations | Imagery | ||||
Segment information | ||||
Total revenues | $ 1 | 1 | 2 | 2 |
Intersegment eliminations | Services | ||||
Segment information | ||||
Total revenues | $ 2 | $ 2 | $ 4 |
Segment information - Capital e
Segment information - Capital expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment information | ||||
Capital expenditures, property, plant and equipment | $ 40 | $ 40 | $ 99 | $ 83 |
Capital expenditures, intangible assets | 14 | 20 | 28 | 37 |
Capital expenditures | 54 | 60 | 127 | 120 |
Operating Segments | Space Systems | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 3 | 4 | 9 | 9 |
Capital expenditures, intangible assets | 4 | 1 | 4 | |
Capital expenditures | 3 | 8 | 10 | 13 |
Operating Segments | Imagery | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 51 | 41 | 101 | 79 |
Capital expenditures, intangible assets | 14 | 15 | 27 | 32 |
Capital expenditures | 65 | 56 | 128 | 111 |
Operating Segments | Services | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 1 | 1 | ||
Capital expenditures, intangible assets | 2 | 2 | ||
Capital expenditures | 3 | 3 | ||
Intersegment eliminations | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | (14) | (6) | (11) | (6) |
Capital expenditures, intangible assets | (1) | (1) | ||
Capital expenditures | $ (14) | $ (7) | $ (11) | $ (7) |
Employee benefit plans - Compon
Employee benefit plans - Components of net periodic benefit (credits) cost (Details) - Pensions Plans - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Employee benefit plans | ||||
Service cost | $ 1 | $ 1 | $ 2 | $ 3 |
Interest cost | 6 | 12 | ||
Expected return on plan assets | (9) | (15) | ||
Amortization of net loss | 1 | 1 | ||
Expenses paid | $ 1 | 1 | ||
Net periodic benefit (credit) cost | $ 1 | $ 1 | $ 3 |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) $ in Millions | Jun. 30, 2019USD ($) |
Pensions Plans | |
Employee benefit plans | |
Expected future contribution by the employer | $ 14 |
Income taxes - Income tax rate
Income taxes - Income tax rate (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income taxes | ||||
Income tax expense (benefit) | $ 2 | $ (9) | $ 1 | $ (41) |
Effective income tax rate | 15.40% | (18.50%) |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings per share | ||||
Net (loss) income | $ 146 | $ (40) | $ 87 | $ (25) |
Weighted average number of common shares outstanding - basic (in shares) | 59.6 | 57.2 | 59.6 | 56.8 |
Weighted average number of common shares outstanding-diluted | 59.6 | 57.2 | 59.6 | 56.8 |
Income (loss) per common share: | ||||
Basic (In dollars per share) | $ 2.45 | $ (0.70) | $ 1.46 | $ (0.44) |
Diluted (In dollars per share) | $ 2.45 | $ (0.70) | $ 1.46 | $ (0.44) |
Contingencies (Details)
Contingencies (Details) - Pending Litigation $ in Millions | 1 Months Ended | 3 Months Ended |
Jul. 31, 2018USD ($) | Mar. 31, 2019item | |
Ukranian customer | ||
Contingencies | ||
Recovery amount sought | $ | $ 227 | |
Durant v. Maxar Technologies Inc. and Schwartz v Maxar Technologies Inc. | ||
Contingencies | ||
Number of actions tol be consolidated | item | 2 | |
Time period for lead plaintiff to file a consolidated amended complaint after the court appoints a lead plaintiff | 60 days | |
Time period for the Company to file a response to the consolidated amended complaint | 60 days |
Supplemental cash flow - (Detai
Supplemental cash flow - (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Supplemental cash flow information: | |||
Cash paid for interest | $ (128) | $ (98) | |
Income tax payments | (4) | (3) | |
Supplemental non-cash investing and financing activities: | |||
Accrued capital expenditures | 19 | $ 3 | |
Impairment loss on equity investment | $ 12 | $ 12 |