Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2020 | Jun. 28, 2019 | |
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity File Number | 001-38228 | ||
Entity Registrant Name | Maxar Technologies Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-2809420 | ||
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 | 684-7660 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 60,059,676 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001121142 | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 466 | ||
Common Stock | |||
Security 12b Title | Common Stock par value of $0.0001 per share | ||
Trading Symbol | MAXR | ||
Security Exchange Name | NYSE | ||
Series A Junior Participating Preferred Stock | |||
Security 12b Title | Preferred Stock Purchase Right | ||
No Trading Symbol Flag | true |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Revenues | $ 1,666 | $ 1,804 | $ 1,257 |
Costs and expenses: | |||
Selling, general and administrative | 325 | 446 | 337 |
Depreciation and amortization | 376 | 439 | 152 |
Impairment losses | 14 | 586 | |
Satellite insurance recovery | (183) | ||
Gain on sale of assets | (136) | (33) | |
Operating income (loss) | 295 | (722) | (156) |
Interest expense, net | 219 | 200 | 97 |
Other (income) expense, net | (1) | 1 | (30) |
Income (loss) before taxes | 77 | (923) | (223) |
Income tax expense (benefit) | 5 | (48) | (168) |
Equity in (income) loss from joint ventures, net of tax | (11) | (2) | 1 |
Net income (loss) from continuing operations | 83 | (873) | (56) |
Income (loss) from discontinued operations, net of tax | 26 | (377) | 116 |
Net income (loss) | $ 109 | $ (1,250) | $ 60 |
Basic income (loss) per common share: | |||
Basic Income (loss) from continuing operations (in dollars per share) | $ 1.39 | $ (15.03) | $ (1.36) |
Basic income (loss) from discontinued operations, net of tax (in dollars per share) | 0.44 | (6.49) | 2.82 |
Basic income (loss) per common share (in dollars per share) | 1.83 | (21.52) | 1.46 |
Diluted income (loss) per common share: | |||
Diluted Income (loss) from continuing operations (in dollars per share) | 1.38 | (15.03) | (1.36) |
Diluted income (loss)from discontinued operations, net of tax (in dollars per share) | 0.43 | (6.49) | 2.82 |
Diluted income (loss) per common share (in dollars per share) | $ 1.81 | $ (21.52) | $ 1.46 |
Product | |||
Revenues: | |||
Revenues | $ 560 | $ 697 | $ 877 |
Costs and expenses: | |||
Product and service costs, excluding depreciation and amortization | 593 | 775 | 764 |
Service | |||
Revenues: | |||
Revenues | 1,106 | 1,107 | 380 |
Costs and expenses: | |||
Product and service costs, excluding depreciation and amortization | $ 382 | $ 313 | $ 160 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Net income (loss) | $ 109 | $ (1,250) | $ 60 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustment | 15 | (19) | 7 |
Unrealized loss on derivatives | (12) | (7) | (3) |
Change in pension and other postretirement benefit plans | (26) | (5) | (14) |
Other comprehensive loss, net of tax | (23) | (31) | (10) |
Comprehensive income (loss), net of tax | $ 86 | $ (1,281) | $ 50 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Net gain (loss) on hedge of net investment in foreign operations | $ 5 | $ (23) | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 59 | $ 19 |
Trade and other receivables, net | 357 | 350 |
Inventory | 20 | 29 |
Advances to suppliers | 42 | 42 |
Prepaid and other current assets | 32 | 35 |
Current assets held for sale | 751 | 203 |
Total current assets | 1,261 | 678 |
Non-current assets: | ||
Orbital receivables | 382 | 407 |
Property, plant and equipment, net | 758 | 725 |
Intangible assets, net | 991 | 1,204 |
Non-current operating lease assets | 176 | |
Goodwill | 1,455 | 1,455 |
Other non-current assets | 134 | 107 |
Non-current assets held for sale | 482 | |
Total assets | 5,157 | 5,058 |
Current liabilities: | ||
Accounts payable | 153 | 149 |
Accrued liabilities | 130 | 124 |
Accrued compensation and benefits | 93 | 80 |
Contract liabilities | 271 | 332 |
Current portion of long-term debt | 30 | 16 |
Current operating lease liabilities | 40 | |
Other current liabilities | 49 | 27 |
Current liabilities held for sale | 230 | 154 |
Total current liabilities | 996 | 882 |
Non-current liabilities: | ||
Pension and other postretirement benefits | 197 | 178 |
Contract liabilities | 4 | 60 |
Operating lease liabilities | 173 | |
Long-term debt | 2,915 | 3,027 |
Other non-current liabilities | 110 | 186 |
Non-current liabilities held for sale | 58 | |
Total liabilities | 4,395 | 4,391 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock ($0.0001 par value, 240 million common shares authorized and 59.9 million outstanding at December 31, 2019; nil par value, unlimited authorized common shares and 59.4 million outstanding at December 31, 2018) | 1,713 | |
Additional paid-in capital | 1,784 | 59 |
Accumulated deficit | (1,082) | (1,188) |
Accumulated other comprehensive income | 59 | 82 |
Total Maxar stockholders' equity | 761 | 666 |
Noncontrolling interest | 1 | 1 |
Total stockholders' equity | 762 | 667 |
Total liabilities and stockholders' equity | $ 5,157 | $ 5,058 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, no par value | $ 0 | |
Common stock, authorized shares | 240 | |
Common Stock, Shares Authorized, Unlimited [Fixed List] | Unlimited | |
Common stock, shares outstanding | 59.4 | 59.9 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows provided by (used in) Operating activities: | |||
Net income (loss) | $ 109 | $ (1,250) | $ 60 |
Net (income) loss from discontinued operations | (26) | 377 | (116) |
Net income (loss) from continuing operations | 83 | (873) | (56) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Impairment losses including inventory | 17 | 651 | |
Depreciation and amortization | 376 | 439 | 152 |
Amortization of debt issuance costs and other noncash interest expense | 11 | 9 | 3 |
Stock-based compensation expense | 20 | 20 | 23 |
Loss from early extinguishment of debt | 22 | 23 | |
Gain on sale of assets | (136) | (33) | |
Deferred income tax expense (benefit) | (48) | (169) | |
Equity in (income) loss from joint ventures, net of tax | (11) | (2) | 1 |
Other | 7 | 28 | (5) |
Changes in operating assets and liabilities: | |||
Trade and other receivables | (20) | (19) | 56 |
Accounts payables and accrued liabilities | 7 | 113 | (7) |
Contract liabilities | (117) | (158) | (15) |
Other | (1) | (13) | 50 |
Cash provided by operating activities - continuing operations | 258 | 114 | 56 |
Cash provided by operating activities - discontinued operations | 59 | 25 | 49 |
Cash provided by operating activities | 317 | 139 | 105 |
Investing activities: | |||
Purchase of property, plant and equipment and development or purchase of software | (314) | (206) | (59) |
Sale of assets | 280 | 68 | |
Cash collected on note receivable | 5 | ||
Cash paid for acquisitions, net of tax | (2,273) | ||
Disposal of subsidiary and short-term investments | 4 | ||
Return of capital from discontinued operations | 28 | ||
Cash used in investing activities - continuing operations | (6) | (129) | (2,332) |
Cash used in investing activities - discontinued operations | (7) | (21) | (9) |
Cash used in investing activities | (13) | (150) | (2,341) |
Financing activities: | |||
Net (payment) proceeds of revolving credit facility | (595) | 3,160 | |
Net proceeds from issuance of 2023 Notes and other long-term debt | 980 | 104 | |
Repayments of long-term debt | (520) | (24) | (779) |
Payment of debt issuance costs | (4) | (3) | |
Refinancing fees paid to creditors | (20) | (63) | |
Repurchase of orbital receivables | (24) | ||
Settlement of securitization liability | (20) | (15) | (15) |
Proceeds from securitization of orbital receivables | 18 | ||
Payment of dividends | (2) | (65) | (47) |
Other | (3) | 1 | |
Cash (used in) provided by financing activities - continuing operations | (208) | 15 | 2,257 |
Cash used in financing activities - discontinued operations | (30) | (2) | (22) |
Cash (used in) provided by financing activities | (238) | 13 | 2,235 |
Increase in cash, cash equivalents, and restricted cash | 66 | 2 | (1) |
Effect of foreign exchange on cash, cash equivalents, and restricted cash | (1) | 4 | |
Cash, cash equivalents, and restricted cash, beginning of year | 43 | 42 | 39 |
Cash, cash equivalents, and restricted cash, end of year | $ 109 | $ 43 | $ 42 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Reconciliation of cash flow information: | |||
Cash and cash equivalents | $ 105 | $ 35 | $ 19 |
Restricted cash included in prepaid and other current assets | 1 | 7 | 6 |
Restricted cash included in other non-current assets | 3 | 1 | 17 |
Total cash, cash equivalents, and restricted cash | $ 109 | $ 43 | $ 42 |
Consolidated Statements of Chan
Consolidated Statements of Change in Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Common StockDigitalGlobe | Common StockNeptec | Common Stock | Additional paid in capital | Retained earnings (Accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interest | DigitalGlobe | Neptec | Total |
Balance at the beginning of period at Dec. 31, 2016 | $ 466 | $ 31 | $ 114 | $ 123 | $ 1 | $ 735 | ||||
Balance at the beginning of period (in shares) at Dec. 31, 2016 | 36.4 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Common shares issued as part of acquisition | $ 1,071 | $ 1,071 | ||||||||
Common shares issued as part of acquisition (in shares) | 19.6 | |||||||||
Common stock issued under employee stock purchase plan | $ 5 | 5 | ||||||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||||||
Common stock issued upon vesting or exercise of stock-based compensation awards | $ 8 | (8) | ||||||||
Common stock issued upon vesting or exercise of stock-based compensation awards (shares) | 0.1 | |||||||||
Issuance of replacement equity-classified awards pursuant to acquisition | 16 | 16 | ||||||||
Equity classified stock-based compensation expense | 12 | 12 | ||||||||
Dividends | (47) | (47) | ||||||||
Comprehensive income (loss) | 60 | (10) | 50 | |||||||
Balance at the end of period at Dec. 31, 2017 | $ 1,550 | 51 | 127 | 113 | 1 | 1,842 | ||||
Balance at the end of period (in shares) at Dec. 31, 2017 | 56.2 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Common stock issued to dissenting shareholders | $ 111 | 111 | ||||||||
Common stock issued to dissenting shareholders (in shares) | 2.2 | |||||||||
Common shares issued as part of acquisition | $ 25 | $ 25 | ||||||||
Common shares issued as part of acquisition (in shares) | 0.5 | |||||||||
Common stock issued under employee stock purchase plan | $ 3 | 3 | ||||||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||||||
Common stock issued upon vesting or exercise of stock-based compensation awards | $ 24 | (24) | ||||||||
Common stock issued upon vesting or exercise of stock-based compensation awards (shares) | 0.4 | |||||||||
Reclassification of liability classified stock-based compensation awards to equity classified | 1 | 1 | ||||||||
Equity classified stock-based compensation expense | 31 | 31 | ||||||||
Dividends | (65) | (65) | ||||||||
Comprehensive income (loss) | (1,250) | (31) | (1,281) | |||||||
Balance at the end of period at Dec. 31, 2018 | $ 1,713 | 59 | (1,188) | 82 | 1 | $ 667 | ||||
Balance at the end 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 under employee stock purchase plan | 1 | $ 1 | ||||||||
Common stock issued under employee stock purchase plan (in shares) | 0.2 | |||||||||
Common stock issued upon vesting or exercise of stock-based compensation awards (shares) | 0.3 | |||||||||
Equity classified stock-based compensation expense | 11 | 11 | ||||||||
Dividends | (3) | (3) | ||||||||
Comprehensive income (loss) | 109 | (23) | 86 | |||||||
Balance at the end of period at Dec. 31, 2019 | $ 1,784 | $ (1,082) | $ 59 | $ 1 | $ 762 | |||||
Balance at the end of period (in shares) at Dec. 31, 2019 | 59.9 | 59.9 |
Consolidated Statements of Ch_2
Consolidated Statements of Change in Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Change in Shareholders' Equity | |||
Dividend per share (in dollars per share) | $ 0.04 | $ 1.14 | $ 1.14 |
General business description
General business description | 12 Months Ended |
Dec. 31, 2019 | |
General business description | |
General business description | 1. GENERAL BUSINESS DESCRIPTION Maxar Technologies Inc. (the “Company” or “Maxar”) is a leading provider of solutions in Earth intelligence and space infrastructure. Maxar helps government and commercial customers to monitor, understand and navigate the changing planet; deliver global broadband communications; and explore and advance the use of space. The Company’s approach combines decades of deep mission understanding and a proven commercial and defense foundation to deliver services with speed, scale and cost effectiveness. The Company works to help customers globally harness the potential of space. Maxar’s stock trades on the New York Stock Exchange and Toronto Stock Exchange under the symbol “MAXR”. 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”). Prior to U.S. Domestication, Maxar Canada reported to securities regulators in both Canada and the U.S., financial statements prepared in accordance with International Financial Reporting Standards 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”). Definitive Agreement to Sell MDA On December 30, 2019, the Company announced that Maxar Technologies Holdings Inc., a Delaware corporation and wholly-owned subsidiary of Maxar (“Maxar Holdings” and, together with the Company, the “Sellers”), and Neptune Acquisition Inc., a corporation existing under the laws of the Province of British Columbia and an affiliate of Northern Private Capital Ltd. (“MDA Purchaser”) entered into a Stock Purchase Agreement, dated as of December 29, 2019 (the “MDA Agreement”), that provides for, among other things, the MDA Purchaser to purchase MDA, the Company’s Canadian subsidiary, from the Sellers for an aggregate purchase price of approximately C$1.0 billion (the “MDA Transaction”). The MDA business encompasses ground stations, radar satellite products, robotics, defense and satellite components. Pursuant to the Agreement, the MDA Purchaser will acquire all of the outstanding shares in the entities that operate Maxar’s MDA business. This expected divestiture represents a strategic shift in the Company’s business and, in accordance with U.S. GAAP, qualifies as a discontinued operation. As a result, the operating results and cash flows related to the MDA business have been reflected as discontinued operations in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows. The assets and liabilities that are to be sold have met the requirements to be classified within the Consolidated Balance Sheets under a held for sale designation. See Note 4 for details. As a result of classifying the MDA reporting segment as discontinued operations, the Company is now comprised of two reportable segments: Earth Intelligence and Space Infrastructure. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all consolidated subsidiary entities. The Company’s Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and the rules and regulations of the U.S. Securities and Exchange Commission. All intercompany balances and transactions are eliminated on consolidation. The Company's Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. References to “C$” refer to Canadian currency. Unless otherwise indicated, amounts provided in the Notes pertain to continuing operations (See Note 4 for information on discontinued operations). Use of estimates, assumptions and judgments The preparation of the 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. Leases The Company has both operating and finance leases. The majority of the Company’s leases are operating leases related to buildings. The Company’s finance leases are primarily related to furniture and equipment. The Company determines if a contract is or contains a lease at inception based on whether it conveys the right to control the use of an identified asset. The Company recognizes lease liabilities and right-of-use assets based on the present value of the future minimum lease payments over the lease term at commencement date. Right-of-use assets are adjusted for any prepayments, lease incentives received, and initial direct costs incurred. If the rate implicit in the lease is not readily determinable, the Company’s incremental borrowing rate with a similar term to the lease term is used to determine the present value of future payments and appropriate lease classification. The lease term includes renewal options that 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. Some of the Company’s building lease agreements contain incentives for leasehold improvements. If the leasehold improvement has been determined to be owned by the lessee, the Company generally records a deferred rent liability and amortizes the deferred rent over the term of the lease as a reduction to rent expense. The Company uses the date of initial possession as the commencement date, which is generally when the Company has been given rights to access the space. Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets and are recognized as lease expense on a straight-line basis in the Consolidated Statements of Operations. Certain leasing arrangements require variable payments, such as insurance and tax payments. Variable lease payments that do not depend on an index or rate are excluded from lease payments in the measurement of the right-of-use asset and lease liability and are recognized as expense in the period in which the payment occurs. The Company does not have any material restrictions or covenants in our lease agreements, sale leaseback transactions or residual value guarantees. The Company recognizes fixed lease expense for operating leases on a straight-line basis Business combinations and divestitures Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date. The excess of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results when the business is classified as held for sale. The results of discontinued operations are reported in Income (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. Assets and liabilities of a discontinued operation are reported separately in the Consolidated Balance Sheets as held for sale and classified as either current or non-current in the prior periods. If it is probable that the sale will occur and proceeds will be collected within one year of meeting the held for sale criteria both assets and liabilities classified as held for sale are reported in the current period Consolidated Balance Sheet as current. Foreign currency Assets and liabilities of non-U.S. subsidiaries that operate in local currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments, net of tax, recorded in Accumulated other comprehensive income (loss) within the Stockholders’ equity section of the Consolidated Balance Sheets. Income and expense accounts are translated at average monthly exchange rates during the year. Revenue recognition Revenue is recognized in accordance with the five-step model set forth by ASC 606, which involves identification of the contract(s), identification of performance obligations in the contract, determination of the transaction price, allocation of the transaction price to the previously identified performance obligations and recognition of revenue as the performance obligations are satisfied. Revenue is measured at the fair value of consideration received or receivable, net of discounts and after eliminating intercompany sales. When consideration received from customers includes advance payments that contain a financing element, the Company imputes interest on such advance payments and recognizes such amounts as a component of revenue. Contract costs generally include direct costs such as materials, labor, and subcontract costs. Costs are expensed as incurred except for incremental costs incurred to obtain or fulfill a contract, which are capitalized and amortized on a systematic basis consistent with the transfer of goods or services to the customer to which the capitalized costs relate. As of December 31, 2019 and December 31, 2018, current costs to obtain or fulfill a contract were $6 million and $3 million, respectively, and are included in Prepaid and other current assets within the Consolidated Balance Sheets. As of December 31, 2019 and December 31, 2018, non-current costs to obtain or fulfill a contract were $37 million and $30 million, respectively, and are included in Other non-current assets within the Consolidated Balance Sheets. Space Infrastructure Revenue in the Space Infrastructure segment is primarily generated from long-term construction contracts. Due to the long-term nature of these contracts, the Company generally recognizes revenue over time using the cost-to-cost method to measure progress. Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred to estimated total costs-at-completion ("EAC"). An EAC includes all direct costs and indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in determining the EAC. Changes to an EAC are recorded as a cumulative adjustment to revenue. During the year ended December 31, 2019, the Company incurred an estimated program loss of $49 million on a commercial satellite contract within the Space Infrastructure segment due to a change in the estimated cost to complete the contract. The scope of this contract included significant development effort which is nearing completion. Satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price is contingent upon in-orbit performance of the satellite. These performance incentives are structured in two forms. As a warranty payback, the customer pays the entire amount of the performance incentive during the period of the satellite construction and such incentives are subject to refund if satellite performance does not achieve certain predefined operating specifications. As an orbital receivable, the customer makes payment of performance incentives over the in-orbit life of the satellite. Performance incentives, whether warranty payback or orbital receivables, are included in revenue during the construction period based on amounts expected to be received. Orbital receivables are recorded at their fair value as of the launch date and adjustments to the amount receivable of the discount during the in-orbit period are recorded as orbital income. As of December 31, 2019 and 2018, long-term orbital receivables were $382 million and $407 million, respectively and are included in Non-current assets on the Consolidated Balance Sheets. In addition to the in-orbit performance incentives, satellite construction contracts may include liquidated damages clauses. Liquidated damages can be incurred 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 related to liquidated damages result in a reduction of revenue recognition. Construction contracts have termination and default clauses. If a contract is terminated for convenience by a customer or due to a customer’s default, the Company is typically entitled to costs incurred plus a reasonable profit. Earth Intelligence Revenue in the Earth Intelligence segment is generated from imagery and geospatial intelligence service contracts. Revenue from imagery service contracts is recognized based on satellite capacity made available to the customer in a particular period, when imagery is delivered to the customer, or ratably over the subscription period. Many of our imagery service contracts relate to the transfer of a series of distinct goods or services over time for which management has determined are a single performance obligation. EnhancedView Follow-On Contract – The EnhancedView Follow-On contract (the “EnhancedView Contract”) includes one performance obligation to deliver a certain amount of capacity to the U.S. government over the 10-year three Direct Access Program – Direct Access Program arrangements generally include construction of the direct access facility, access to the satellites to task and download imagery and facility maintenance services. The facility is generally delivered at the beginning of the contractual period of performance with access and maintenance services delivered over the duration of the contractual term. Under ASC 606, the Company has determined that two performance obligations exist; the access and the facility promised goods/services are included together as a combined performance obligation with maintenance services representing a standalone performance obligation. The access and the facility are considered a single performance obligation as the customer cannot benefit from the facility on its own or with other readily available resources. The transaction price allocated to the combined performance obligation is recognized as access minutes are consumed during the contractual period. The remaining transaction price allocated to the maintenance services is recognized ratably over the maintenance period. Other Imagery Arrangements – Revenue is recognized for imagery licenses when the imagery is delivered to the customer. Revenues related to online imagery subscriptions are generally recognized ratably over the subscription period. Other imagery arrangements transfer a series of distinct goods or services over time for which management has determined are a single performance obligation or include multiple performance obligations. Revenue from geospatial intelligence service contracts is recognized from the rendering of services that compensate the Company at a cost-plus-fixed-fee, firm fixed price, or on a time and materials basis. Revenue is typically recognized for these contracts over time based on the stage of services completed to date as a percentage of total services to be performed, or on the basis of time plus reimbursable costs incurred during the period. As the customer typically controls the related work-in-progress, an input measure is the most appropriate basis with which to measure progress. Finally, as cost of labor is the predominant measure by which these contracts are structured, the Company recognizes revenue using a cost-incurred approach. Contract liabilities Contract liabilities primarily consist of advance payments from customers and deferred revenue. Changes in contract liabilities are primarily due to the timing difference between the Company’s performance of services and payments from customers. To determine revenue recognized from contract liabilities during the reporting periods, the Company allocates revenue to individual contract liability balances and applies revenue recognized during the reporting periods first to the beginning balances of contract liabilities until the revenue exceeds the balances. Earnings per share Earnings per common share is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding during the period. Diluted income per common share is computed by adjusting the basic income per common share calculation, as described above, for the effects of all potentially dilutive shares. The Company calculates the effects of all potentially dilutive shares using the treasury stock method unless they are anti-dilutive. Research and development Research and development costs are expensed in the period incurred. For the years ended December 31, 2019, 2018 and 2017, the Company expensed research and development costs of $10 million, $88 million, and $62 million, respectively in Selling, general and administrative within the Consolidated Statements of Operations. Interest expense Interest expense is comprised of borrowing cost on debt, interest expense on advance payments from customers and other liabilities, interest expense on the orbital securitization liability, losses incurred on the extinguishment of debt, and interest expense on dissenting stockholders liability. Interest expense is recognized within Interest expense, net in the Consolidated Statements of Operations. Debt issuance costs related to the Company’s revolving line of credit are recorded in Prepaid and other current assets and in Other non-current assets in the Consolidated Balance Sheets. Debt issuance costs and debt discount related to the Company’s term loan and senior secured notes are recorded as a direct deduction from the carrying amount of the related debt. Derivative financial instruments and hedging activities Derivative financial instruments used by the Company consist of foreign currency forward contracts and interest rate swap agreements. The Company uses foreign currency forward contracts to manage foreign exchange risk associated with the cash flows from long-term construction contracts where some portion of the cash flows are denominated in foreign currencies as part of the normal course of business. The Company uses interest rate swap agreements to manage interest rate risk associated with cash outflows from long-term debt. Derivative financial instruments are measured at fair value. When derivative financial instruments are designated in a qualifying hedging relationship and hedge accounting is applied, the effectiveness of the hedges is measured at the end of each reporting period and the effective portion of changes in fair value are deferred in accumulated other comprehensive income. Amounts deferred in accumulated other comprehensive income Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge accounting. At that time, if the forecasted transaction within a cash flow hedge remains probable, any cumulative gain or loss on the hedging instrument recognized in Other comprehensive income (loss) is retained in equity until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss previously recognized in other comprehensive income is transferred to income. As of January 1, 2019, the Company has discontinued hedge accounting on foreign exchange forward contracts related to its manufacturing and service programs, however the Company will continue to hedge its exposure for economic purposes. The Company does not offset the fair value amounts recognized with derivative instruments against the change in fair value of assets, liabilities or firm commitments executed with the same counterparty under a master netting agreement. Cash, cash equivalents and restricted cash Cash and cash equivalents is comprised of cash on hand, cash balances with banks and similar institutions and term deposits redeemable within three months or less from date of acquisition with banks and similar institutions. Restricted cash is excluded from cash and cash equivalents and is included in Prepaid and other current assets or Other non-current assets in the Consolidated Balance Sheets. Trade and other receivables Trade and other receivables include amounts billed to customers, unbilled receivables in which the Company’s right to consideration is unconditional and current portion of orbital receivables (see Note 6). The Company bills customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries. The carrying amount of current trade receivables is stated at cost, net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments, which results in bad debt expense. The Company periodically determines the adequacy of this allowance by evaluating the comprehensive risk profiles of all individual customer receivable balances including, but not limited to, the customer’s financial condition, credit agency reports, financial statements, credit limit and overall current economic conditions. Investments Short-term investments consist of mutual funds and financial instruments purchased with a term to maturity at inception between three months and one year. Short-term investments are measured at fair value through net income. Short-term investments are included within Prepaid and other current assets in the Consolidated Balance Sheets. The Company has investments in joint ventures where it does not have a controlling financial interest but has the ability to exercise significant influence. These investments are accounted for under the equity method and are included within Other non-current assets in the Consolidated Balance Sheets. The Company’s share of the joint venture’s net income or loss is included within Equity in (income) loss from joint ventures, net of tax in the Consolidated Statements of Operations. The Company’s most significant joint venture is Vricon Inc. (“Vricon”), a joint venture with Saab AB, specializing in the production of 3D models using high resolution imagery. The Company has an ownership interest of approximately 50% in Vricon. The following tables present summarized financial information for Vricon as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017. Summarized Consolidated Balance Sheets December 31, December 31, 2019 2018 Current assets $ 49 $ 12 Non-current assets 5 6 Total assets $ 54 $ 18 Total liabilities 1 $ 10 $ 5 1 Summarized Consolidated Statements of Operations Year Ended December 31, 2019 2018 2017 Revenues $ 54 $ 21 $ 14 Gross profit $ 51 $ 19 $ 14 Income from operations $ 32 $ 2 $ 1 Net income $ 24 $ 1 $ 1 Inventor Inventories are measured at the lower of cost or net realizable value and consist primarily of parts and sub-assemblies used in the manufacturing of satellites. The cost of inventories is determined on a first-in-first-out basis or weighted average cost basis, depending on the nature of the inventory. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. Inventory is impaired when it is probable inventory values exceed their net realizable value. Property, plant and equipment Property, plant and equipment is measured at cost less accumulated depreciation. Cost for satellite assets includes amounts related to design, construction, launch and commissioning. Cost for ground system assets include amounts related to construction and testing. Interest expense is capitalized on certain qualifying assets that take a substantial period of time to prepare for their intended use. When the costs of certain components of an item of property, plant and equipment are significant in relation to the total cost of the item and the components have different useful lives, they are accounted for and depreciated separately. Property, plant and equipment under construction are measured at cost less any impairment losses. Depreciation expense is recognized in income on a straight-line basis over the estimated useful life of the related asset to its residual value. Expected useful lives are reviewed at least annually. Land is not depreciated. The estimated useful lives are as follows: Estimated useful life Land improvements 20 years Buildings 7 - 45 years Leasehold improvements lesser of useful life or term of lease Equipment 2 - 40 years Satellites 1 11.5 - 14 years Furniture and fixtures 2 - 10 years Computer hardware 2 - 13 years 1 The estimated useful life over which the Company depreciates its satellites is determined once a satellite has been placed into orbit. The initial determination of a satellites useful life involves an analysis that considers design life, random part failure probabilities, expected component degradation and cycle life, predicted fuel consumption and experience with satellite parts, vendors and similar assets. Intangible assets Intangible assets consist of customer relationships, backlog, acquired technologies and software, image library, trade names, licenses and non-compete agreements. Intangible assets are generally amortized on a straight-line basis over their estimated useful lives and are recorded at fair value at the time of acquisition, or in the case of internally developed software, at cost. Image library intangibles assets are amortized using the double declining balance method. Intangible assets are currently amortized over the following estimated useful lives: Estimated useful life Customer relationships 9 - 21 years Backlog 3 - 5 years Technologies 5 - 13 years Software 3 - 10 years Image library 5 years Trade names and other 5 - 20 years Non-compete agreements 2 years Impairment Intangible assets and property, plant and equipment and other long-lived assets Intangible assets, property, plant and equipment and other long-lived assets are tested for impairment at least annually on October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets and property, plant and equipment and other long-lived assets are reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) are less than the asset’s carrying value. Any required impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value and recorded as a reduction in the carrying value of the related asset . If a satellite were to fail during launch or while in-orbit, the resulting loss would be charged to expense in the period it is determined the satellite is not recoverable. The amount of loss would be reduced to the extent of insurance proceeds received. The timing of the loss and the insurance recovery will likely differ, as an insurance recovery generally cannot be recognized until final settlement with the insurance company is reached. In December 2018, the Company experienced a loss of the Worldview-4 satellite and in 2019, the Company received insurance recoveries of $183 million. The insurance proceeds are included in operating cash flows as they are considered business interruption insurance and represent the Company’s satellite’s loss of capacity to produce imagery for sale to the Company’s customers. Orbital Receivables The Company considers an orbital receivable to be impaired when, based upon current information and events, it believes it is probable the carrying valuing of the amounts to be collected exceed the fair value of the receivables. Orbital receivables are reviewed for impairment at least annually during the fourth quarter or whenever changes in circumstances indicate that the Company will not collect all amounts due according to the contractual terms of the satellite construction agreement. Orbital impairments are typically included in Impairment losses within the Consolidated Statements of Operations. Goodwill Goodwill is tested for impairment at least annually on October 1, or whenever events or changes in circumstances indicate that its carrying amount may be less than its recoverable amount. Goodwill is tested for impairment at the reporting unit level. Management typically uses an income approach to estimate the fair value of a reporting unit. Management uses judgment to estimate the inputs to these assessments including cash flow projections, discount rates and tax rates, and any changes to these inputs could have a material impact on the impairment calculation. An impairment loss is recognized to the extent that the carrying value of a reporting unit exceeds its fair value. The Company evaluates the aggregate fair value of its reporting units against market data to support its fair value estimates. Warranty and after-sale service costs A liability for warranty and after-sale service costs is recognized when the underlying product or service is sold. Warranty and after-sale service provisions are based on management’s best estimate of the expected obligation using historical warranty data and experience. Warranty and after-sale service liabilities related to products and services delivered under construction contracts are included in the EAC for revenue recognition. Warranty and after-sale service liabilities are presented in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets. Warranty and after-sale service costs are recognized within Product and Service costs, excluding depreciation and amortization in the Consolidated Statement of Operations. Restructuring costs A liability for restructuring costs is recognized when the Company has approved a detailed and formal restructuring plan and the restructuring either has commenced or has been announced publicly. Employee benefits Defined benefit pension and other postretirement benefit plans The Company maintains defined benefit pension and other postretirement benefit plans for certain employees within its Space Infrastructure business. The Space Infrastructure pension plan benefits were frozen on December 31, 2013. The Company recognizes the funded status of each pension and other postretirement benefit plan in the Consolidated Balance Sheets. The calculation of pension and other postretirement benefit obligations is performed annually by qualified actuaries using the projected unit credit actuarial cost method. The projected benefit obligation is the sum of the actuarial present value of all pension benefits attributed to benefit service completed to the determination date. Pension and other postretirement plan liabilities are revalued annually, or when an event occurs that requires remeasurement, based on updated assumptions and information about the individuals covered by the plan. The Company’s net obligation in respect of the pension and other postretirement benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the prior periods, discounting that amount and deducting the fair value of associated plan assets. The Company elected to use the net asset value (“NAV”) practical expedient to measure the fair value of the plan’s commingled fund investments. The practical expedient is applied retrospectively for all periods presented. These commingled fund investments for which the fair value is measured using the NAV practical expedient are excluded from the fair value hierarchy. The Company recognizes the amortization of prior service costs as a component of Selling, general and administrative. All other costs are recognized outside of operating income within Other (income) expense, net. The Company recognizes administrative expenses related to frozen plans outside of Operating income (expense) within Other (income) expense, net. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in the net benefit liability that relates to past service or the gain or loss on curtailment is recognized immediately in Accumulated other comprehensive income. The Company recognizes gains or losses on the settlement of a defined benefit plan when settlement occurs. For the Company’s pension and other postretirement benefit plans, accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized on a straight-line basis from the date recognized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants. Defined contribution plans The Company also maintains defined contribution plans for some of its employees whereby the Company pays contributions based on a percentage of the employees’ annual salary. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in operating income as the services are provided. Stock-based compensation plans The Company maintains a number of stock-based compensation plans for certain employees and directors that may be settled with cash and/or equity. For certain stock-based compensation plans, the Company has the ability to mandate equity settlement by issuing reserved shares. Stock-based compensation plans are measured at fair value using either the Black-Scholes option pricing model or Monte Carlo simulation model and the fair value is expensed on a graded vesting schedule over the vesting period. Management uses judgment to determine the inputs to the models including the expected plan lives, underlying stock price volatility and forfeiture rates. Volatility is estimated by considering the Company’s historic stock price volatility over similar periods to the expected life of the awards under consideration. Changes in these assumptions will impact the calculation of fair value and the amount of compensation expense recognized within Selling, general and administrative expense in the Consolidated Statements of Operations. The fair value of liability classified awar |
New standards and interpretatio
New standards and interpretations not yet adopted | 12 Months Ended |
Dec. 31, 2019 | |
New standards and interpretations not yet adopted | |
New standards and interpretations not yet adopted | 3. NEW STANDARDS AND INTERPRETATIONS 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. ASC 326, as amended, significantly changes the impairment model for most financial assets and certain other instruments. ASC 326, as amended, 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 and related amendments effective January 1, 2020. The Company has performed an evaluation of its in-scope receivables, which consist primarily of trade receivables and orbital receivables. Based on this analysis the Company does not expect the adoption to have a material impact on its Consolidated Financial Statements. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also simplifies aspects of accounting for franchise taxes and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and interim financial statement periods beginning after December 15, 2020, with early adoption permitted. The Company is currently assessing the effect that this guidance may have on its Consolidated Financial Statements. |
Discontinued operations
Discontinued operations | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued operations | |
Discontinued Operations | 4. DISCONTINUED OPERATIONS On December 29, 2019, the Company entered into the MDA Transaction with the MDA Purchaser to sell all issued and outstanding shares of MDA, the Company’s Canadian subsidiary, for an aggregate purchase price of approximately C$1 billion, subject to customary purchase price adjustments set forth in the MDA Agreement as well as a negative purchase price adjustment of up to C$65 million for a complete loss or failure of RADARSAT-2, such that it cannot be used for the intended commercial purposes of the Company. The closing of the MDA Transaction is conditioned on customary closing conditions and on specified regulatory approvals. The MDA Agreement contains specific termination rights for the Company and the MDA Purchaser, including, among others, if the consummation of the MDA Transaction has not occurred by June 29, 2020, subject to extension to September 29, 2020 for the purpose of obtaining regulatory approvals in the U.S. and Canada and appealing any injunctions preventing consummation. The MDA Agreement also provides that the MDA Purchaser will be required to pay the Company a reverse termination fee of C$55 million under specified circumstances, including, among others, where the Agreement is terminated because (i) MDA Purchaser has materially breached its representations and warranties or the MDA Purchaser fails to perform its covenants in all material respects, subject to a cure period, or (ii) all of the conditions to closing of the MDA Transaction (other than those conditions that by their terms are to be satisfied at closing) have been satisfied or waived, the Company has confirmed in writing to the MDA Purchaser that the Company stands ready, willing and able to consummate the MDA Transaction and the MDA Purchaser fails to consummate the closing (including for a failure of the MDA Purchaser’s debt financing) within two business days of receipt of the notice from the Company. The Company intends to use the net cash proceeds from the MDA Transaction, as determined by the Company’s Original Syndicated Credit Facility, the 2023 Notes and the MDA Agreement, to pay down long-term debt. The net cash proceeds include the netting of certain fees and liabilities which include the indemnification of the MDA Purchaser for certain liabilities including a dispute with the Ukrainian customer. See Note 23 for details. As of December 31, 2019, the Company had recorded a liability for the matters which it expects to withhold proceeds from the sale in the amount of $60 million which is reflected in Accrued liabilities within the Consolidated Balance Sheet. The Company does not expect any material tax consequences in connection with the MDA Transaction. In addition to the MDA Transaction, upon closing, the Company and the MDA Purchaser will enter into a Transition Services Agreement pursuant to which the MDA Purchaser will receive certain services (the “Services”). The Services will be provided at a cost for a period of up to 12 months from the closing date of the MDA Transaction, with an option to extend up to six months for certain services. The Company determined that as of December 29, 2019, the MDA business meets the criteria to be classified as held for sale. The MDA business was a separate reportable segment prior to the announcement of the MDA Transaction and constitutes all the Company’s Canadian operations. As the MDA Transaction represents a strategic shift that has a major effect on the Company’s operations it meets the criteria to be reported as a discontinued operation in accordance with ASC 205-20 – Discontinued Operations. The assets and liabilities of MDA are classified as held for sale in the Consolidated Balance Sheets with results classified as discontinued operations in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows for all periods presented. Income (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations consist of the following: Year Ended December 31, 2019 2018 2017 Revenues: Product $ 206 $ 238 $ 275 Service 161 182 150 Total revenues $ 367 $ 420 $ 425 Costs and expenses: Product costs, excluding depreciation and amortization $ 149 $ 149 $ 158 Service costs, excluding depreciation and amortization 84 114 86 Selling, general and administrative 88 59 54 Depreciation and amortization 11 10 10 Impairment losses 12 477 — Operating income (loss) 23 (389) 117 Interest expense, net 1 1 1 Other expense (income), net 3 — (6) Income (loss) before taxes 19 (390) 122 Income tax (benefit) expense (7) (13) 6 Income (loss) from discontinued operations, net of tax $ 26 $ (377) $ 116 The Company performed its annual goodwill impairment analysis as of October 1, 2019. This analysis was updated upon announcement of the MDA Transaction for the year ended December 31, 2019. The Company concluded that there were no impairment indicators related to goodwill at either of the dates the impairment analyses were performed. For the year ended December 31, 2018, as a result of triggering events identified, which included a sustained decline in the Company’s stock price, the Company recorded a $477 million non-cash goodwill impairment charge. MDA holds an investment in a privately held company in which it does not have significant influence and the fair value of which cannot be reliably measured through external indicators. The investment is evaluated quarterly for impairment. In 2019, the Company noted an observable price change related to its investment and, as a result, recorded an impairment loss of $12 million. There were no investment impairment losses recognized for the years ended December 31, 2018 or 2017. The carrying amounts of the major classes of assets and liabilities, which are classified as held for sale in the Consolidated Balance Sheets, are as follows: December 31, December 31, 2019 2018 Assets Cash and cash equivalents $ 45 $ 16 Trade and other receivables, net 168 156 Deferred tax assets 117 — Property, plant and equipment 29 — Intangible assets 27 — Goodwill 310 — Other assets 1 55 31 Current assets held for sale $ 751 $ 203 Deferred tax assets — 104 Property, plant and equipment — 28 Intangible assets — 28 Goodwill — 296 Other non-current assets — 26 Non-current assets held for sale $ — $ 482 Liabilities Accounts payable $ 88 $ 68 Accrued liabilities 18 21 Accrued compensation and benefits 21 20 Contract liabilities 29 24 Pension and other postretirement benefit liabilities 21 — Other liabilities 2 53 21 Current liabilities held for sale $ 230 $ 154 Pension and other postretirement benefit liabilities $ — $ 18 Other non-current liabilities — 40 Non-current liabilities held for sale $ — $ 58 1 Other assets include income tax receivables, operating lease assets, prepaid and other current assets. 2 On July 16, 2018, the Company acquired Neptec Design Group Ltd. (“Neptec”), a leading electro-optical and electro-mechanical systems and high-performance intelligent light detection and ranging company for $30 million, net of cash acquired, comprised of approximately $6 million in cash and the balance in common shares of Maxar. As a result of the transaction, the Company recognized $21 million of goodwill (not deductible for tax purposes), $11 million of intangible assets, and $2 million of net liabilities. Neptec’s operating results are included in discontinued operations within consolidated financial statements beginning from the date of acquisition and had an immaterial effect on the Company’s consolidated financial results for the year ended December 31, 2018. Direct transaction costs of the Neptec acquisition were not material and were expensed as incurred. |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2019 | |
Business combinations | |
Business combinations | 5. BUSINESS COMBINATIONS On October 5, 2017, the Company completed the acquisition of DigitalGlobe, Inc. (“DigitalGlobe”) for a combination of equity and cash consideration totaling $2,328 million (the “DigitalGlobe Transaction”). Headquartered in Westminster, Colorado, DigitalGlobe is a global leading provider of high-resolution Earth imagery, data and analysis. Under the terms of the merger agreement with DigitalGlobe, each DigitalGlobe common share was exchanged for $17.50 in cash and 0.3132 common shares of the Company. The fair value of the common shares issued as consideration was based on the closing price of a Maxar share on the Toronto Stock Exchange on October 4, 2017 of $54.57 per share. Share issuance costs of $3 million which were directly attributable to the issue of the shares have been netted against equity. In order to finance the acquisition, the Company entered into a $3.8 billion senior secured syndicated credit facility (the “Syndicated Credit Facility”). On October 5, 2017, the Company made an initial draw under the Syndicated Credit Facility of $3.1 billion, net of debt issuance costs of $63 million, and used this amount, along with DigitalGlobe cash on hand, to acquire DigitalGlobe’s equity and pay out DigitalGlobe’s equity award holders ($1.2 billion), to refinance DigitalGlobe’s debt ($1.3 billion), to refinance the Company’s debt ($742 million) and to pay transaction fees and expenses of both the Company and DigitalGlobe, fund working capital and for general corporate purposes. As part of the merger agreement, DigitalGlobe’s stock-based awards were converted into the right to receive a combination of cash and common shares of the Company, except for the stock component of certain unvested time-based awards that were replaced by equivalent stock-based awards of the Company. The fair value of the replacement awards attributable to the pre-acquisition and post-acquisition service periods were $16 million and $14 million, respectively. The pre-acquisition amount has been included as part of the purchase consideration and the post-acquisition amount will be expensed over the remaining vesting period of the replacement awards. In addition, certain unvested performance-based DigitalGlobe stock-based awards and the cash component of the unvested time-based awards became fully vested and were paid the merger consideration on the closing of the transaction. Since this accelerated vesting was triggered by the actions of the Company, the component of the fair value of the consideration attributable to the accelerated stock-based awards relating to post acquisition services of $33 million has been recognized in the Company’s Consolidated Statements of Operations. The component relating to pre-acquisition services has been included as part of the purchase consideration. The merger consideration paid out on the closing of the transaction excluded amounts due to 80,000 dissenting DigitalGlobe preferred stockholders and 352,225 dissenting common stockholders. On June 15, 2018, the Company entered into an agreement to settle all pending litigation with the preferred stockholders (the “Settlement Agreement”). Under the Settlement Agreement, the preferred stockholders received (i) 2,206,464 common shares of Maxar and (ii) a payment in cash for the interest that has accrued on the merger consideration from the closing of the DigitalGlobe Transaction. In January 2019, the Company settled with the remaining dissenting common stockholders. In the period from October 5, 2017 to December 31, 2017, DigitalGlobe contributed revenue of $222 million and income before taxes of $8 million to the Company’s consolidated results of operations. Assuming an acquisition date of January 1, 2017, the Company’s unaudited pro-forma revenue for the year ended December 31, 2017 was $2.3 billion. The following table summarizes the fair value of the consideration transferred and the estimated fair values of the major classes of assets acquired and liabilities assumed at the acquisition date. The fair value of satellite assets and intangible assets acquired has been determined using valuation techniques that require estimation of replacement costs, future net cash flows and discount rates. October 5, 2017 Cash paid $ 1,131 Shares issued 1,063 Merger consideration to be settled 3 Liability to dissenting stockholders 115 Issuance of replacement equity-settled awards 16 Purchase consideration $ 2,328 Assets Cash and cash equivalents $ 171 Trade and other receivables, net 142 Property, plant and equipment, net 696 Intangible assets, net 1,440 Other assets 106 $ 2,555 Liabilities Accounts payable 83 Other current liabilities 4 Pension and other postretirement benefit liabilities 29 Long-term debt 1,276 Other non-current liabilities 504 $ 1,896 Fair value of net identifiable assets acquired 659 Goodwill $ 1,669 The following table summarizes the intangible assets acquired from the DigitalGlobe Transaction by class and useful life: Carrying value Weighted average useful life Finite-lived intangible assets: Customer relationships $ 608 14 years Backlog 331 4 years Technologies 318 5 years Software 46 3 years Image library 80 5 years Trade names and trademarks 37 10 years Other 20 2 years Total intangible assets $ 1,440 The goodwill is attributable mainly to the human capital of DigitalGlobe’s workforce, market presence and the synergies expected to be achieved from integrating DigitalGlobe with the Company’s existing capabilities. No goodwill is deductible for income tax purposes. During the year ended December 31, 2017, the Company incurred costs of $60 million for investment banking fees, legal, tax, consulting and other acquisition and integration costs related to the DigitalGlobe Transaction. These costs have been recognized in Selling, general, and administrative expense in the Company’s Consolidated Statements of Operations and in operating cash flows in the Consolidated Statements of Cash Flows. |
Trade and other receivables
Trade and other receivables | 12 Months Ended |
Dec. 31, 2019 | |
Trade and other receivables | |
Trade and other receivables | 6. TRADE AND OTHER RECEIVABLES December 31, December 31, 2019 2018 U.S. government receivables: Billed $ 88 $ 96 Unbilled 46 60 134 156 Other governments and commercial receivables: Billed 123 99 Unbilled 54 59 177 158 Total trade receivables 311 314 Orbital receivables, current portion 43 34 Other 4 3 Allowance for doubtful accounts (1) (1) Trade and other receivables, net $ 357 $ 350 Orbital receivables are recognized as revenue when measuring progress under the cost-to-cost method during the construction period and were discounted to present value using discount rates ranging from 6% - 10% for the years ended December 31, 2019 and 2018. The Company has orbital receivables from 14 customers and the largest customer represents 27% of the orbital receivables. During the years ended December 31, 2019 and December 31, 2018, the Company recognized orbital impairments of $14 million and $22 million, respectively, primarily due to a decrease in customer credit ratings. The expected timing of total contractual cash flows, including principal and interest payments for orbital receivables is as follows: 2020 2021 2022 2023 2024 Thereafter Total Contractual cash flows from satellites $ 65 $ 69 $ 73 $ 74 $ 72 $ 370 $ 723 During the year ended December 31, 2019, the Company did not sell any eligible orbital receivables and repurchased $24 million of specifically identified orbital receivables. The orbital receivables were repurchased as a result of its customer transferring the obligation to another entity which did not meet the credit criteria of its lenders. During the year ended December 31, 2018, the Company sold orbital receivables for net proceeds of $18 million and did not repurchase any receivables. These sold 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 liability. The amount of securitization liabilities was $65 million and $109 million at December 31, 2019 and 2018, respectively, of which $17 million and $15 million, respectively, was included in Other current liabilities on the Consolidated Balance Sheets. Non-current securitization liabilities of $48 million and $94 million are included in Other non-current liabilities on the Consolidated Balance Sheets at December 31, 2019 and 2018, respectively. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2019 | |
Inventory | |
Inventory | 7. INVENTORY December 31, December 31, 2019 2018 Raw materials $ 13 $ 20 Work in process 7 9 Inventory $ 20 $ 29 |
Property, plant and equipment,
Property, plant and equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 8. PROPERTY, PLANT AND EQUIPMENT, NET December 31, December 31, 2019 2018 Satellites $ 397 $ 397 Equipment 196 199 Leasehold improvements 75 75 Computer hardware 67 62 Land and land improvements — 85 Buildings — 41 Furniture and fixtures 15 15 Construction in process 388 147 Property, plant and equipment, at cost 1,138 1,021 Accumulated depreciation (380) (296) Property, plant and equipment, net $ 758 $ 725 Depreciation expense for property, plant and equipment was $107 million, $150 million and $55 million for the years ended December 31, 2019, 2018 and 2017, respectively. Sale leaseback On December 10, 2019, the Company completed the sale and subsequent leaseback of Company owned properties in Palo Alto, California for net proceeds of $280 million. The Company recognized a gain on the sale of the properties of $136 million, which was adjusted for off-market leaseback terms, and is included in Gain on sale of assets in the Company’s Consolidated Statement of Operations. Sale of building During the fourth quarter of 2018, the Company completed the sale of one of its buildings in Palo Alto, California for net proceeds of $68 million. The sale resulted in a gain of $33 million from the sale, which is included in Gain on sale of assets in the Company’s Consolidated Statements of Operations. |
Intangible assets and goodwill
Intangible assets and goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets and goodwill | |
Intangible assets and goodwill | 9. INTANGIBLE ASSETS AND GOODWILL December 31, 2019 December 31, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 615 $ (102) $ 513 $ 615 $ (58) $ 557 Backlog 330 (217) 113 330 (120) 210 Technologies 320 (144) 176 323 (83) 240 Software 213 (83) 130 159 (50) 109 Image library 80 (48) 32 80 (32) 48 Trade names and other 37 (10) 27 37 (5) 32 Non-compete agreements — — — 20 (12) 8 Intangible assets $ 1,595 $ (604) $ 991 $ 1,564 $ (360) $ 1,204 Amortization expense related to intangible assets was $269 million, $289 million and $97 million for the years ended December 31, 2019, 2018 and 2017, respectively. The decrease in expense for the year ended December 31, 2019 compared to 2018 was primarily due to impairments of intangible assets in the second half of 2018. The increase in expense for the year ended December 31, 2018 compared to 2017 was primarily due to the inclusion of a full year of amortization expense related to the additions of intangible assets from the acquisition of DigitalGlobe, as compared to approximately one quarter of amortization expense in 2017. The estimated annual amortization expense related to finite-lived intangible assets as of December 31, 2019, is as follows: Year Ended December 31, 2020 2021 2022 2023 2024 2025 and thereafter Amortization expense $ 246 $ 181 $ 140 $ 56 $ 49 $ 319 Goodwill balances for each reporting segment are as follows: Goodwill is as follows: Earth Intelligence Space Infrastructure Total Balance as of December 31, 2017 Goodwill $ 1,600 $ 17 $ 1,617 Accumulated impairment losses — — — 1,600 17 1,617 Impairment losses (142) (17) (159) Disposal of immaterial subsidiary (3) — (3) Balance as of December 31, 2018 Goodwill 1,597 17 1,614 Accumulated impairment losses (142) (17) (159) 1,455 — 1,455 Balance as of December 31, 2019 Goodwill 1,597 17 1,614 Accumulated impairment losses (142) (17) (159) $ 1,455 $ — $ 1,455 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 10. LEASES The Company’s leases have remaining lease terms up to 15 years, some of which options one Sale Leaseback On December 10, 2019, the Company completed the sale and subsequent leaseback of Company owned properties in Palo Alto, California. The Company determined the leaseback of both properties to be operating leases, as the criteria to be classified as financing leases were not met. The Company recorded operating lease assets and liabilities of $63 million, representing the fair value of the minimum lease payments associated with the agreements to lease the assets back over a period of two The Company recorded the current portions of the operating lease liabilities and the financial liability in Current lease liabilities and Other current liabilities, respectively, in the Consolidated Balance Sheet. The non-current portions of the operating lease assets, the operating lease liabilities and the financial liability have been recorded in Non-current operating lease assets, Non-current operating lease liabilities and Other non-current liabilities, respectively, in the Consolidated Balance Sheet. Interest expense on the financial liability has been recorded in Interest expense, net in the Consolidated Statement of Operations. Finance lease cost, variable lease cost, and short-term lease cost are not material. The components of operating lease expense are as follows: Year ended December 31, Classification 2019 Operating lease expense Selling, general, and administrative expense, Product costs, and Service costs 1 $ 27 1 Operating lease rent expense for the years ended December 31, 2018 and 2017, was $26 million and $31 million, respectively. Supplemental lease balance sheet information consists of the following: December 31, Classification 2019 Assets: Operating Non-current operating lease assets $ 176 Finance Property, plant, and equipment, net 5 Total lease assets $ 181 Liabilities: Current Operating Current operating lease liabilities $ 40 Finance Current portion long-term debt 2 Non-current Operating Operating lease liabilities 173 Finance Long-term debt 1 Total lease liabilities $ 216 Supplemental lease cash flow information is as follows: Year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 30 Gain on sale leaseback (136) Right-of-use assets obtained in exchange for lease obligations: Operating leases 72 Other supplemental lease information consists of the following: December 31, 2019 Weighted average remaining lease term Operating leases 9 years Finance leases 3 years Weighted average discount rate Operating leases 6.4% Finance leases 3.5% Maturities of lease liabilities are as follows: 2020 2021 2022 2023 2024 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 42 $ 40 $ 30 $ 27 $ 25 $ 117 $ (68) $ 213 Finance leases 2 1 1 — — — (1) 3 |
Warranty and restructuring cost
Warranty and restructuring costs | 12 Months Ended |
Dec. 31, 2019 | |
Changes to warranty and after sale service liabilities | |
Warranty and restructuring costs | 11. WARRANTY AND RESTRUCTURING COSTS In response to changes in the geostationary communications satellite market, in 2018 the Company enacted a restructuring plan to reduce headcount at its Palo Alto manufacturing facility and to implement enterprise improvement initiatives aimed at reducing overhead costs, reducing general and administrative costs, increasing supply chain value and increasing efficiency of production processes. In February 2019, the Company announced another 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 half of 2019, with cash payments occurring throughout 2019. Changes to warranty and restructuring liabilities during the years ended December 31, 2019 and 2018, are as follows: Warranty and after-sale service Restructuring Balance as of December 31, 2017 $ 39 $ 1 Obligations incurred 5 13 Payments/uses (4) (11) Balance as of December 31, 2018 $ 40 $ 3 Obligations incurred 3 18 Payments/uses (2) (19) Balance as of December 31, 2019 $ 41 $ 2 |
Long-term debt and interest exp
Long-term debt and interest expense | 12 Months Ended |
Dec. 31, 2019 | |
Long-term debt and interest expense | |
Long-term debt and interest expense | 12. LONG-TERM DEBT AND INTEREST EXPENSE December 31, December 31, 2019 2018 Syndicated Credit facility: Revolving credit facility $ — $ 595 Term Loan A — 500 Term Loan B 1,960 1,980 2023 Notes 1,000 — Deferred financing 33 — Debt discount and issuance costs (54) (41) Obligations under finance leases and other 6 9 Total long-term debt 2,945 3,043 Current portion of long-term debt (30) (16) Non-current portion of long-term debt $ 2,915 $ 3,027 Syndicated Credit Facility As of December 31, 2019, the Company’s senior secured syndicated credit facility (the “Original Syndicated Credit Facility”, as amended prior to December 31, 2019, including as described below, the “Syndicated Credit Facility”) is composed of: (i) a senior secured first lien revolving credit facility maturing in December 2023 (the “Revolving Credit Facility”) and (ii) a senior secured first lien term B facility maturing in October 2024 (the “Term Loan B”). In October 2017, in connection with the acquisition of DigitalGlobe, the Company entered into the Original Syndicated Credit Facility in the aggregate principal amount of $3.75 billion, which was comprised of: (i) a four-year senior secured first lien revolving credit facility, (ii) a four-year senior secured first lien operating facility, (iii) a senior secured first lien term A facility (“Term Loan A”) and (iv) the Term Loan B. The net proceeds of the Original Syndicated Credit Facility were used, along with cash on hand, to consummate the acquisition of DigitalGlobe, to refinance all amounts outstanding under the Company’s existing syndicated credit facility and senior term loans, to repay DigitalGlobe’s outstanding indebtedness, to pay transaction fees and expenses, to fund working capital and for general corporate purposes. The Company incurred a loss from early extinguishment of debt of $23 million included as part of Interest expense, net within the Consolidated Statements of Operations. The loss was comprised of a make-whole premium to terminate the previous term notes of $20 million and a write-off of the unamortized balance of capitalized debt issuance costs of $3 million relating to both the syndicated credit facility and the previous term notes. In December 2018, the Company amended the Original Syndicated Credit Facility (the “Second Amending Agreement”). The Second Amending Agreement provided that, so long as certain conditions were satisfied (the period during which such conditions are satisfied, the “Covenant Relief Period”) the maximum consolidated debt leverage ratios permitted under the Original Syndicated Credit Facility were increased and the interest rate incurred by the Company thereunder at certain consolidated debt leverage ratios were increased. The Second Amending Agreement also adjusted the definition of EBITDA for the purpose of calculating the financial ratios under U.S. GAAP. In addition to the above, during the Covenant Relief Period, the Second Amending Agreement restricted the use of certain asset sale proceeds, limited the type of new debt issuances and limited certain restricted payments and permitted acquisitions under the Syndicated Credit Facility. In November 2019, the Company further amended the Original Syndicated Credit Facility (the “Third Amending Agreement”), certain portions of which became effective immediately and certain portions of which became effective in December 2019 upon the issuance of the 2023 Notes. The Third Amending Agreement, during the Covenant Relief Period, (i) modified the priority of the application of certain voluntary prepayments resulting from certain asset sales (but which did not affect the prepayments owed to the Term Loan B), and (ii) restricted use of proceeds of future borrowings. In addition, the Third Amending Agreement increased the maximum consolidated debt leverage ratios permitted under the Original Syndicated Credit Facility to 7.25x at the end of the fiscal quarter ended December 31, 2019, 7.50x at the end of the fiscal quarter ending March 31, 2020, 7.75x at the end of each fiscal quarter thereafter until the fiscal quarter ending September 30, 2021, 7.50x at the end of each fiscal quarter thereafter until the quarter ending September 30, 2022, 6.50x at the end of each fiscal quarter thereafter until the fiscal quarter ending March 31, 2023, and 5.75x for each fiscal quarter thereafter (subject to a 0.25x reduction in each maximum level upon a disposition of a business line for greater than $500 million). The Third Amending Agreement also extended the maturity of the Revolving Credit Facility by two years to December 2023, updated the Interest Coverage Ratio to be less than 2.0x at the end of each fiscal quarter, restricted investment capacity in certain permitted investments, restricted future increases in quarterly dividend payment levels and modified certain margin and standby fee terms. In addition, the Company canceled the operating credit facility and reduced committed borrowing capacity under the Revolving Credit Facility from $1.25 billion to $500 The Syndicated Credit Facility is guaranteed by the Company and certain designated subsidiaries (the “Subsidiary Guarantors”) of the Company. The security for the Syndicated Credit Facility, subject to customary exceptions, includes substantially all the tangible and intangible assets of the Company and its Subsidiary Guarantors. The Company is required to make mandatory prepayments of the outstanding principal and accrued interest of the Syndicated Credit Facility (i) upon the occurrence of certain events and (ii) to the extent of a specified percentage of annual excess cash flow that is not reinvested or used for other specified purposes. The Syndicated Credit Facility is subject to customary affirmative and negative covenants, default provisions, representations and warranties and other terms and conditions. Term Loan A The Company used the proceeds from the 2023 Notes and the previously announced closing of its Palo Alto real estate sale leaseback transaction to repay the Original Syndicated Credit Facility borrowings under Term Loan A that were outstanding as of September 30, 2019. This resulted in a loss on debt extinguishment of $22 million for the year ended December 31, 2019, which is included as part of Interest expense, net within the Consolidated Statements of Operations. Term Loan B The Term Loan B bears interest at the Company’s option, either (i) U.S. dollar LIBOR plus 275 basis points per annum or (ii) adjusted base rate, plus a margin of 175 basis points per annum. The Company must make equal quarterly installment payments in aggregate annual amounts equal to 1% of the original principal amount of the Term Loan B, with the final balance payable at maturity on October 5, 2024. The Term Loan B may be repaid by the Company, in whole or in part, together with accrued interest, without premium or penalty. Revolving Credit Facility The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued. As of December 31, 2019 and December 31, 2018, the Company had $18 million of issued and undrawn letters of credit outstanding under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (i) U.S. dollar LIBOR, plus a margin of 120 - 425 basis points per annum, based on the Company’s total leverage ratio, or (ii) adjusted base rate, plus a margin of 20-325 basis points per annum, based on the Company’s total leverage ratio. The Revolving Credit Facility is payable at maturity on December 10, 2023. The Revolving Credit Facility may be repaid by the Company, in whole or in part, together with accrued interest, without premium or penalty. Senior Secured Notes due 2023 In December 2019, the Company issued $1.0 billion in principal amount of 9.75% Senior Secured Notes due 2023 (“2023 Notes”) in a private placement to institutional buyers. The 2023 Notes were issued at a price of 98% and bear interest at the rate of 9.75% per year, payable semi-annually in cash in arrears, which interest payments will commence in June 2020. The 2023 Notes are guaranteed on a senior secured basis by each of our existing and future subsidiaries that guarantee the Syndicated Credit Facility. Leaseback Deferred Financing In December 2019, the Company completed the sale and subsequent leaseback of company owned properties in Palo Alto, California for proceeds of $291 million. The Company determined that the leaseback terms were off-market. In accordance with ASC 842 – Leases, the Company accounted for the excess of the leaseback payments over the present value of market rental payments as additional financing, separate from the lease liability. This resulted in recognition of a deferred financing liability of $33 million, which is repayable over the 10 year leaseback term. This liability was calculated using a weighted average discount rate of 4.62% . The deferred financing liability is recorded as part of Current portion of long-term debt and Long-term debt within the Consolidated Balance Sheets. Refer to Note 8 and 10 for additional information. Interest expense, net on long-term debt and other obligations are as follows: Year Ended December 31, 2019 2018 2017 Interest on long-term debt $ 194 $ 171 $ 57 Interest expense on advance payments from customers 15 26 8 Interest on orbital securitization liability 7 7 8 Imputed interest and other — — 1 Capitalized interest (19) (7) — Loss on debt extinguishment 22 — 23 Interest expense on dissenting stockholder liability — 3 — Interest expense, net $ 219 $ 200 $ 97 Scheduled minimum debt repayments are as follows for the year ending December 31, 2019 are as follows: 2020 2021 2022 2023 2024 Thereafter Total Syndicated credit facility $ 20 $ 20 $ 20 $ 20 $ 1,880 $ — $ 1,960 2023 Notes — — — 1,000 — — 1,000 Deferred financing 6 6 2 2 2 15 33 Finance leases 2 1 — — — — 3 Debt discount and issuance costs (11) (12) (13) (13) (5) (54) $ 17 $ 15 $ 9 $ 1,009 $ 1,877 $ 15 $ 2,942 |
Financial instruments and fair
Financial instruments and fair value disclosures | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments and fair value disclosures | |
Financial instruments and fair value disclosures | 13. FINANCIAL INSTRUMENTS AND FAIR VALUE DISCLOSURES Factors used in determining the fair value of financial assets and liabilities are summarized into three categories in accordance with ASC 820 - Fair Value Measurements: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted 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 based on unobservable inputs The following tables present assets and liabilities that are measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Recurring Fair Value Measurements of as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 1 $ — $ — $ 1 Orbital receivables 1 — 425 — 425 $ 1 $ 425 $ — $ 426 Liabilities Interest rate swaps $ — $ 18 $ — $ 18 Long-term debt 2 — 3,004 — 3,004 $ — $ 3,022 $ — $ 3,022 Recurring Fair Value Measurements of as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Long-term investments $ 1 $ — $ — $ 1 Orbital receivables 1 — 441 — 441 $ 1 $ 441 $ — $ 442 Liabilities Interest rate swaps $ — $ 4 $ — $ 4 Long-term debt 2 — 2,925 — 2,925 $ — $ 2,929 $ — $ 2,929 1 2 The Company determines the fair value of its orbital receivables using a discounted cash flow model, based on stated interest rates and observable market yield curves associated with the instruments. 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. The fair value of derivative financial instruments are included as components of Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets. The fair value of foreign exchange forward contracts at December 31, 2019 and 2018 were not material. The Company determines fair value of its long-term debt using market interest rates for debt with terms and maturities similar to the Company's existing debt arrangements. Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are all short-term in nature and the carrying value of these items approximates their fair value. There were no transfers into out each the levels fair |
Derivatives and Hedging
Derivatives and Hedging | 12 Months Ended |
Dec. 31, 2019 | |
Derivatives and Hedging | |
Derivatives and Hedging | 14. DERIVATIVES AND HEDGING Cash Flow Hedges The Company is exposed to fluctuations in interest rates under the Syndicated Credit Facility. On April 5, 2018, the Company entered in to several interest rate swap agreements in order to fix the base interest rate to be paid over an aggregate amount of the Company’s variable rate long-term debt, at an average rate of 2.56% (excluding the margin specified in the Syndicated Credit Facility). The Company is also exposed to foreign exchange risks on certain sales and purchase contracts. The Company enters into foreign exchange forward contracts to hedge the exposure arising from expected foreign currency denominated cash flows on these sales and purchase contracts. As of January 1, 2019, the Company discontinued hedge accounting related to these sales and purchase contracts. The Company continues to hedge foreign exchange exposure on sales and purchase contracts for economic purposes. As of December 31, 2019 Notional amount Maximum Contract term Derivatives designated as hedging instruments Interest rate swaps 1,000 2.3 years Derivatives not designated as hedging instruments Foreign exchange forward contracts Sales contracts settled in U.S. dollars Euro 10 0.1 years As of December 31, 2018 Notional amount Maximum Contract term Derivatives designated as hedging instruments Interest rate swaps 1,000 3.3 years Foreign exchange forward contracts Purchase contracts settled in U.S. dollars Euro 9 0.3 years Japanese Yen 177 0.2 years Sales contracts settled in U.S. dollars Euro 20 0.5 years Japanese Yen 177 0.2 years The effective portion of losses included in Other comprehensive income (loss), net of tax related to the Company’s interest rate swaps was $18 million, $4 million and $0 million for the years ended December 31, 2019, 2018 and 2017, respectively. The gain/loss from foreign exchange forward contracts was not material for the years ended December 31, 2019, 2018 and 2017, respectively. In implementing all its derivative financial instruments, the Company deals with counterparties and is therefore exposed to credit related losses in the event of non-performance by these counterparties. However, the Company deals with counterparties that are major financial institutions and does not expect any of the counterparties to fail to meet their obligations. Net Investment Hedge At December 31, 2018, the Company had designated $271 million of its Term Loan B as a hedge of its investment in certain U.S. subsidiaries. Foreign exchange gains and losses arising from the translation of the designated portion of the Term Loan B were recognized in Other comprehensive income (loss), net of tax to the extent that the hedges were effective and are recognized in the Consolidated Statements of Operations to the extent that the hedges were ineffective. The fair value of the designated portion of Term Loan B was $256 million as of December 31, 2018. 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 Syndicated Credit Facility is now in a USD functional currency entity. Due to this change, the net investment hedge was no longer necessary from the domestication date onwards. |
Accumulated other comprehensive
Accumulated other comprehensive income (loss) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated other comprehensive income (loss) | |
Accumulated other comprehensive income (loss) | 15. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in the components of Accumulated other comprehensive income (loss) are as follows: Foreign Currency Translation Adjustments 1 Unrecognized (Loss) Gain on Derivatives 2 Loss on Pension and Other Postretirement Plans Total Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2016 $ 123 10 (10) 123 Other comprehensive income (loss) 7 (3) (8) (4) Tax benefit (expense) — — (6) (6) Balance as of December 31, 2017 130 7 (24) 113 Other comprehensive loss (19) (10) (4) (33) Tax benefit (expense) — 3 (1) 2 Balance as of December 31, 2018 $ 111 $ — $ (29) $ 82 Other comprehensive (loss) income 14 (12) (26) (24) Tax benefit (expense) 1 — — 1 Balance as of December 31, 2019 $ 126 $ (12) $ (55) $ 59 1 2 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue | |
Revenue | 16. REVENUE On December 31, 2019, the Company had $1.6 billion billion billion Contract liabilities by segment are as follows: As of December 31, 2019 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 130 $ 145 $ 275 As of December 31, 2018 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 243 $ 149 $ 392 1 The contract liability balance associated with the Company’s EnhancedView Contract was $78 million and $184 million as of December 31, 2019 and 2018, respectively. During the year ended December 31, 2019, imputed interest on advanced payments increased the contract liability balance by $15 million, and $120 million in revenue was recognized, decreasing the contract liability balance. The contract liability balance associated with the Company’s EnhancedView Contract is expected to be recognized as revenue through August 31, 2020. The decrease in total contract liabilities was primarily due to revenue recognized. The Company’s primary sources of revenue are as follows: Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 560 $ — $ 560 Service revenues 1,085 21 — 1,106 Intersegment — 125 (125) — $ 1,085 $ 706 $ (125) $ 1,666 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 697 $ — $ 697 Service revenues 1,058 49 — 1,107 Intersegment 1 77 (78) — $ 1,059 $ 823 $ (78) $ 1,804 Year Ended December 31, 2017 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 877 $ — $ 877 Service revenues 331 49 — 380 Intersegment — 6 (6) — $ 331 $ 932 $ (6) $ 1,257 Certain of the Company’s contracts with customers in the Space Infrastructure segment include a significant financing component as payments are received from the customer more than one year after delivery of the promised goods or services. The Company recognized orbital interest revenue related to these contracts of $31 million, $32 million and $35 million for the years ended December 31, 2019, 2018 and 2017, respectively, which is included in product revenues. The approximate revenue based on geographic location of customers is as follows: Year Ended December 31, 2019 2018 2017 United States $ 1,240 $ 1,238 $ 698 Asia 161 213 228 South America 97 133 16 Europe 69 54 127 Middle East 57 90 41 Australia 22 17 22 Canada 10 49 123 Other 10 10 2 Total revenues $ 1,666 $ 1,804 $ 1,257 Revenues from significant customers is as follows: Year Ended December 31, 2019 2018 2017 U.S. Federal Government and agencies $ 940 $ 816 $ 276 Commercial and other 726 988 981 The majority of revenue from the U.S. Federal Government and agencies is derived from the Earth Intelligence segment. |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2019 | |
Segment information | |
Segment information | 17. SEGMENT INFORMATION During the fourth quarter of 2019, following a number of changes, the chief operating decision maker (“CODM”) changed the way in which he assesses performance and allocates resources. As a result, the Company has revised its reportable segments to reflect how the CODM currently reviews financial information and makes operating decisions. The Company’s operating and reportable segments are: Earth Intelligence, Space Infrastructure and MDA. With the Company’s announcement of the MDA Transaction on December 30, 2019 the MDA segment has been classified within Income (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations. All prior-period amounts have been adjusted to reflect the reportable segment change. The Earth Intelligence reportable segment is a supplier of high resolution space-based optical and radar imagery products and analytics. The Space Infrastructure reportable segment is a provider of Space Infrastructure that designs, builds, integrates and tests solutions for space-based communication satellites, on-orbit servicing, robotic assembly and space exploration. The Company’s 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. Certain items affecting comparability include restructuring, impairments, satellite insurance recovery, gain on sale of assets, CEO severance and transaction and integration related expense. Transaction and integration related expense includes costs associated with de-leveraging activities, acquisitions and dispositions and the integration of acquisitions. Other unallocated expenses include retention costs and foreign exchange gains and losses which are not included in segment Adjusted EBITDA. 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. Intersegment sales are generally recorded at cost-plus a specified margin, which may differ from what the segment may be able to obtain on sales to external customers. The following table summarizes the operating performance of the Company’s segments: Year Ended December 31, 2019 2018 2017 Revenues: Earth Intelligence $ 1,085 $ 1,059 $ 331 Space Infrastructure 706 823 932 Intersegment eliminations (125) (78) (6) Total revenues $ 1,666 $ 1,804 $ 1,257 Adjusted EBITDA: Earth Intelligence $ 548 $ 516 $ 152 Space Infrastructure (17) (75) (59) Intersegment eliminations (29) (9) — Corporate and other expenses (86) (49) (8) Restructuring (18) (13) — Transaction and integration related expense (16) (33) (60) Impairment losses, including inventory (17) (652) — Satellite insurance recovery 183 — — Gain on sale of assets 136 33 — CEO severance (3) — — Depreciation and amortization (376) (439) (152) Interest expense, net (219) (200) (97) Interest income 1 2 — — Equity in (income) loss from joint ventures, net of tax (11) (2) 1 Income (loss) from continuing operations before taxes $ 77 $ (923) $ (223) 1 The Company’s capital expenditures are as follows: Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Corporate and eliminations Total Property, plant and equipment $ 237 $ 16 $ 4 $ 257 Intangible assets 56 3 (2) 57 $ 293 $ 19 $ 2 $ 314 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Corporate and eliminations Total Property, plant and equipment $ 158 $ 22 $ (30) $ 150 Intangible assets 55 1 — 56 $ 213 $ 23 $ (30) $ 206 Year Ended December 31, 2017 Earth Intelligence Space Infrastructure Corporate and eliminations Total Property, plant and equipment $ 16 $ 37 $ (10) $ 43 Intangible assets 12 4 — 16 $ 28 $ 41 $ (10) $ 59 Substantially all of the Company’s long-lived tangible assets were in the United States as of December 31, 2019 and 2018, respectively. |
Impairment Losses
Impairment Losses | 12 Months Ended |
Dec. 31, 2019 | |
Impairment Losses | |
Impairment Losses | 18. IMPAIRMENT LOSSES Property, plant and equipment impairment For the year ended December 31, 2018, the Company recognized impairment losses of $271 million on its property, plant and equipment. In December 2018, WorldView-4 experienced a failure in its control moment gyros, preventing the satellite from collecting imagery. As a result, the Company recognized an impairment loss of $150 million for the remaining book value of the satellite in the Earth Intelligence segment. In 2018, due to degradation of the GeoComm business, the Company recognized impairment losses of $121 million related to obsolescence and reduced future use of equipment and buildings. The 2018 impairment loss in the Space Infrastructure segment was based on fair value less cost of disposal for those assets in an orderly liquidation. Fair value was based on observable inputs where possible (Level 2), in which market data could be applied. However, due to the specialized nature of the majority of these assets, inputs for the valuation were unobservable (Level 3). There were no impairment losses for the years ended December 31, 2019 and 2017. Goodwill impairment For the year ended December 31, 2018, the Company recorded a non-cash goodwill impairment loss of $142 million and $17 million related to its previously reported Imagery and SSL GeoComm reporting units, respectively. In conjunction with the Company’s revision of its reportable segments in the fourth quarter of 2019, these reporting units were revised and renamed to the Earth Intelligence and Space Infrastructure reporting units, respectively. Subsequent to October 1, 2018 and before the Company completed its annual goodwill impairment test, the Company experienced triggering events suggesting that the fair value of the Company had decreased substantially since October 1, 2018. These triggering events required an additional goodwill impairment test, which was completed as of December 31, 2018. The triggering events included a sustained decline in the Company’s stock price, further declines in the SSL GeoComm business, and the loss of the WorldView-4 satellite. There were no impairment losses for the years ended December 31, 2019 and 2017. Intangible asset impairment For the year ended December 31, 2018, the Company recognized impairment losses of $124 million. The Company identified triggering events for impairment during the second half of 2018 related to intangible assets of its GeoComm business, a reporting unit in the former Space Systems segment. Due to the decline in the GeoComm market, and the uncertainty surrounding the future of the Company’s GeoComm business, a $122 million impairment loss was recognized, primarily due to future cash flows associated with the intangible assets not being sufficient to cover the total book value of those assets. The Company also recognized an additional $2 million of impairment losses related to software intangible assets associated with the WorldView-4 satellite. There were no impairment losses for the years ended December 31, 2019 and 2017. Inventory impairment For the years ended December 31, 2019, 2018 and 2017, the Company recorded inventory impairment losses of $3 million, $66 million and $0 million, respectively, which is included in Product costs, excluding depreciation and amortization on the Consolidated Statement of Operations. In the third quarter of 2018, the Company re-evaluated the carrying value of its inventory that was previously pegged to forecasted usage. All GeoComm inventory subject to future use based on forecasts was assessed for possible obsolescence. The result of the reassessment of future usage of the on-hand inventory was inventory impairment of $66 million for the year ended December 31, 2018. Other impairment For the years ended December 31, 2019 and 2018, the Company recorded impairment losses of $14 million and $22 million, respectively, related to orbital receivables within the Space Infrastructure segment primarily due to a decrease in customer credit ratings. There were no impairment losses for the year ended December 31, 2017. For the year ended December 31, 2018, the Company recorded impairment losses of $10 million related to future premium payments and other assets related to the WorldView-4 satellite. |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Dec. 31, 2019 | |
Employee benefit plans | |
Employee benefit plans | 19. EMPLOYEE BENEFIT PLANS Defined contribution plans The Company maintains a defined contribution plan for some of its employees in the U.S., whereby the Company pays contributions based on a percentage of the employees’ annual salary. For the years ended December 31, 2019, 2018 and 2017, the Company recorded expense of $12 million, $12 million and $11 million, respectively, related to the plan. Pension and other postretirement benefit plans The Company maintains a defined benefit pension plan covering a portion of its employees in within the SSL business. The Space Infrastructure pension and other postretirement plan benefits were frozen on December 31, 2013. The defined benefit plan provides pension benefits based on various factors including prior earnings and length of service. The defined benefit plan is funded and the Company’s funding requirements are based on the plans’ actuarial measurement framework as established by the plan agreements or applicable laws. The funded plans’ assets are legally separated from the Company and are held by an independent trustee. The trustee is responsible for ensuring that the funds are protected as per applicable laws. The Company also provides for other postretirement benefits, comprised of life insurance covering a portion of its employees within the SSL business. The cost of these benefits is primarily funded out of operating income. The table below summarizes changes in the benefit obligation, the fair value of plan assets and funded status for the Company’s pension and other postretirement benefit plans, as well as the aggregate balance sheet impact. Pension Other Postretirement 2019 2018 2019 2018 Change in benefit obligation: Benefit obligation at beginning of year $ 519 $ 568 $ 13 $ 16 Service cost 2 2 — — Interest cost 21 19 1 1 Actuarial losses (gains) 71 (37) — (2) Benefits paid (30) (33) — (2) Benefit obligation at end of year $ 583 $ 519 $ 14 $ 13 Change in fair value of plan assets: Fair value of plan assets at beginning of year $ 352 $ 391 $ — $ — Actuarial return (loss) on plan assets 70 (19) — — Employer contributions 12 13 — 2 Benefits paid (28) (31) — (2) Expenses paid (2) (2) — — Fair value of plan assets at end of year 404 352 — — Unfunded status at end of year $ (179) $ (167) $ (14) $ (13) Assets and (liabilities) recognized in the Consolidated Balance Sheets: Accrued compensation and benefits $ (1) $ (1) $ (1) $ (1) Pension and other postretirement benefits (178) (166) (13) (12) $ (179) $ (167) $ (14) $ (13) The $64 million increase in the pension benefit obligation from 2018 to 2019 was primarily due to the decrease in the discount rate. The $52 million increase in the fair value of plan assets from 2018 to 2019 was primarily due to increased return on assets. The accumulated benefit obligation for the defined pension benefit plans was $583 million and $519 million at December 31, 2019 and 2018, respectively. Amounts recognized in accumulated other comprehensive income consist of the following: Pension Other Postretirement 2019 2018 2019 2018 Net (loss) gain $ (70) $ (45) $ 10 $ 12 The following table summarizes the weighted average assumptions used to determine the benefit obligations for the Company’s pension and other postretirement plans at December 31: Pension Other Postretirement 2019 2018 2019 2018 Discount rate 3.0 % 4.1 % 3.0 % 4.1 % The following table summarizes the components of net periodic benefit cost for the Company’s pension and other postretirement benefit plans for the years ended December 31: Pension Other Postretirement 2019 2018 2017 2019 2018 2017 Interest cost $ 21 $ 19 $ 21 $ 1 $ 1 $ 2 Expected return on plan assets (24) (27) (24) — — — Amortization of prior service credit — — — — — (2) Amortization of net gain — — — (1) (1) (1) Curtailment gain 1 — — — — — (26) Expenses paid 2 2 2 — — — Net periodic benefit cost $ (1) $ (6) $ (1) $ — $ — $ (27) 1 The following table summarizes the components recognized in other comprehensive loss (income) for the Company’s pension and other postretirement benefit plans for the years ended December 31: Pension Other Postretirement 2019 2018 2017 2019 2018 2017 Net loss (gain) $ 25 $ 9 $ 5 $ — $ (2) $ (1) Amortization of prior service credit — — — — — 2 Amortization of net gain — — — 1 1 1 Curtailment loss — — — — — 1 Total recognized in other comprehensive loss (income) $ 25 $ 9 $ 5 $ 1 $ (1) $ 3 Total recognized in net periodic benefit cost (credit) and other comprehensive loss (income) $ 24 $ 3 $ 4 $ 1 $ (1) $ (24) The following table summarizes the weighted average assumptions used to determine the net periodic benefit (credit) cost for the Company’s pension and other postretirement benefit plans for the years ended December 31: Pension Other Postretirement 2019 2018 2017 2019 2018 2017 Discount rate 4.1 % 3.4 % 3.9 % 4.1 % 3.4 % 3.9 % Expected long-term return on plan assets 7.0 % 7.0 % 7.0 % N/A N/A N/A % The expected long-term return on plan assets assumption represents the average rate that the Company expects to earn over the long-term on the assets of the Company’s benefit plans, including those from dividends, interest income and capital appreciation. The Company utilizes a third-party consultant to assist in the development of the expected long-term return on plan assets, which is based on expectations regarding future long-term rates of return for the plans investment portfolio, with consideration given to the allocation of investments by asset class and historical rates of return for each individual asset class. Plan Assets. The Committee has established a target allocation that the plan assets may be invested in for each major asset category and has established guidelines regarding diversification within asset categories to limit risk and exposure to a single or limited number of securities. The investment manager is required to rebalance the portfolio within two percentage points for any individual asset or combination of assets defined within policy targets. Asset allocation targets are re-balanced quarterly and re-assessed annually for the upcoming year. The investments of the plan include a diversified portfolio of both equity and fixed income investments. Equity investments are further diversified across U.S. and international stocks, small to large capitalization stocks, and growth and value stocks. Fixed income assets are diversified across U.S. and international issuers, corporate and governmental issuers, and credit quality. The following table presents a summary of target asset allocations for each major category of the plan assets as well as the actual asset allocations at December 31, 2019: Asset Allocation Target Actual Cash and cash equivalents 0 % 1 % U.S. equity securities 26 % 26 % Global equity securities 36 % 35 % Fixed income 34 % 34 % Other 4 % 4 % 100 % Cash and cash equivalents consist of cash and short-term investments. U.S. and global equity securities, fixed income and other investment assets are primarily commingled fund investments. The pension plans’ commingled fund investments are managed by several fund managers and are valued at the net asset value per share for each fund. Although the majority of the underlying assets in the funds consist of actively traded equity securities and bonds, the unit of account is considered to be at the fund level . These funds are traded daily and settled the following day at the net asset value per share. The Committee regularly monitors the investment of plan assets to ensure that the actual asset allocation remains in proximity to the target. The Committee also regularly measures and monitors investment risk through ongoing performance reporting and investment manager reviews. The following table presents the fair value of the Company’s pension plan assets by asset category segregated by level within the fair value hierarchy, as described below: December 31, 2019 December 31, 2018 Asset Category Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 5 $ — $ — $ 5 $ 2 $ — $ — $ 2 Global equity securities — — 1 1 — — 1 1 Commingled Funds 1 398 349 Total assets at fair value $ 5 $ — $ 1 $ 404 $ 2 $ — $ 1 $ 352 1 Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not required to be classified in the fair value hierarchy table. The total fair value of these amounts are presented in this table to permit reconciliation of the fair value hierarchy to the amounts presented for total defined benefit pension plan assets Contributions. Estimated Future Benefit Payments. 2020 2021 2022 2023 2024 2025 through 2029 Pension $ 31 $ 31 $ 31 $ 32 $ 32 $ 159 Other Postretirement 1 1 1 1 1 5 $ 32 $ 32 $ 32 $ 33 $ 33 $ 164 |
Stock-based compensation plans
Stock-based compensation plans | 12 Months Ended |
Dec. 31, 2019 | |
Stock-based compensation plans | |
Stock-based compensation plans | 20. STOCK-BASED COMPENSATION PLANS The Company’s stock-based compensation plans were established to attract and retain key personnel by providing them the opportunity to acquire an equity interest in the Company or other incentive compensation measured by reference to the value of shares or other performance objectives and align the interests of key personnel with those of stockholders. Long-Term Incentive Plans Omnibus Equity Incentive Plan – 2019 Incentive Award Plan – Deferred Stock Unit Plan – Legacy Employee Stock Purchase Plan – 31, 2019, 2018 and 2017, 22,541, 41,288 and 38,169, common shares were issued, respectively, at an average price of C$6.20, C$42.20, C$59.55 under the legacy employee stock purchase plan. Maxar Technologies Inc. Employee Stock Purchase Plan – DigitalGlobe Equity Plan – Stock Appreciation Rights The Company awards SARs to certain employees under its 2017 Plan and Omnibus Plan. Certain awards issued under the Pre-2017 Plans, the 2017 Plan and Omnibus Plan remain outstanding as of December 31, 2019. The SARs issued under the Pre-2017 Plans vest over a period of three years, in the amount of one issued 2017 one from SARs Accounted for as Liability Classified Awards A summary of the SARs accounted for as liability classified awards for the year ended December 31, 2019 is presented below: Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value SARs outstanding at December 31, 2018 774,430 $ 63.86 Exercised — — Cancelled or expired (195,110) 63.30 SARs outstanding at December 31, 2019 579,320 63.12 1.56 $ — SARs vested and expected to vest at December 31, 2019 579,320 63.12 1.56 $ — SARs exercisable at December 31, 2019 566,340 $ 63.46 1.43 $ — The weighted average grant-date estimated fair value of SARs accounted for as liability classified awards granted during the year ended December 31, 2017 was C$68.84. No SARs accounted for as liability classified awards were granted during 2019 and 2018. The total intrinsic value of SARs exercised during the years ended December 31, 2018 and 2017 was $0 and $1 million, respectively. No SARs were exercised during the year ended December 31, 2019. As of December 31, 2019, total unrecognized compensation expense related to nonvested SARs accounted for as liability classified awards was not significant. SARs Accounted for as Equity Classified Awards A summary of the SARs accounted for as equity classified awards for the year ended December 31, 2019 is presented below: Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value SARs outstanding at December 31, 2018 1,219,028 $ 51.05 Granted — — Exercised — — Cancelled or expired (293,437) 50.66 SARs outstanding at December 31, 2019 925,591 51.18 6.71 $ — SARs vested and expected to vest at December 31, 2019 925,591 51.18 6.71 $ — SARs exercisable at December 31, 2019 588,076 $ 50.75 6.57 $ — The weighted average grant-date estimated fair value of SARs accounted for as equity classified awards granted during the years ended December 31, 2018 and 2017 was C$10.37 and C$75.09, respectively. No SARs accounted for as equity classified awards were granted during 2019. The total intrinsic value of SARs exercised during the years ended December 31, 2018 and 2017 was $0 million, respectively. No SARs were exercised during the year ended December 31, 2019. As of December 31, 2019, total unrecognized compensation expense related to nonvested SARs accounted for as equity classified awards was not significant. Restricted Share Units The Company issues RSUs to certain employees under the Omnibus Plan and 2019 Plan. The RSUs vest over a period of three years, in the amount of one RSUs Accounted for as Liability Classified Awards A summary of the RSUs accounted for as liability classified awards for the year ended December 31, 2019 is presented below: Weighted Average Number of Grant Date Awards 1 Fair Value 1 Nonvested RSUs at December 31, 2018 - $ - Granted 1,054,658 6.93 Vested — - Cancelled or expired (108,377) 6.92 Nonvested RSUs at December 31, 2019 946,281 $ 6.93 1 As of December 31, 2019, total unrecognized compensation expense related to nonvested RSUs was $8 million and is expected to be recognized over a weighted average remaining period of 1.4 years. RSUs Accounted for as Equity Classified Awards As part of the acquisition of DigitalGlobe, the Company provided replacement RSUs for a certain portion of the unvested RSU’s previously granted to DigitalGlobe employees. The replacement RSUs will continue to vest over the next three years, based on the terms of the original plan. A summary of the status of the Company’s nonvested RSU awards under the 2019, Omnibus Plan and the DigitalGlobe Equity Plan as of December 31, 2019 and changes during the year then ended is presented below: Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Awards 1 Fair Value 1 Awards 2 Fair Value 2 Awards 3 Fair Value 3 Nonvested RSUs at December 31, 2018 - $ - 419,512 $ 51.99 273,861 $ 54.57 Granted 1,086,004 7.90 77,259 4.75 — - Vested (16,934) 6.59 (150,337) 52.88 (117,346) 54.57 Cancelled or expired (82,335) 8.03 (98,936) 52.74 (55,844) 54.57 Nonvested RSUs at December 31, 2019 986,735 $ 7.91 247,498 $ 36.42 100,671 $ 54.57 1 2 3 During the years ended December 31, 2019, 2018, and 2017, the total fair value of RSUs that vested was $14 million, $19 million and $5 million, respectively. As of December 31, 2019, total unrecognized compensation expense related to nonvested RSUs was $7 million and is expected to be recognized over a weighted average remaining period of 1.2 years. Performance Share Units The Company issues PSUs to certain employees under the Omnibus Plan and 2019 Plan. The PSUs vest over a period of three years from the beginning date of a pre-determined performance period to the extent the Company has met its adjusted cash leverage (ACL) performance criteria during the performance period. Each unit has the ability to earn up to two common shares and the total number of shares earned is based upon both the ACL and total shareholder return (TSR), which compares the Company's relative TSR performance against the total shareholder return of the Russel 2000 index over the term of the award. Performance related to both the ACL and TSR can be 0-200%. The total payout is the average of the ACL and TSR and the maximum payout percentage for all PSUs granted by the Company is 200%. The payout for performance up to 100% will be in equity and any performance greater than 100% will be paid out in cash. A summary of the PSU awards for the year ended December 31, 2019 is presented below: Weighted Average Number of Grant Date Awards Fair Value Nonvested PSUs at December 31, 2018 - $ - Granted 1,060,253 6.81 Vested — - Cancelled or expired (96,851) 6.62 Nonvested PSUs at December 31, 2019 963,402 $ 6.83 As of December 31, 2019, total unrecognized compensation expense related to nonvested PSUs was $7 million and is expected to be recognized over a weighted average remaining period of 1.5 years. Deferred Share Units A summary of the DSU awards for the year ended December 31, 2019 is presented below: Number of Awards Weighted Average Issuance Price DSUs outstanding at December 31, 2018 107,603 C$ 51.52 Issued — — Redeemed (41,993) 49.96 DSUs outstanding at December 31, 2019 65,610 C$ 52.76 During the years ended December 31, 2019 and 2017, the total intrinsic value of redeemed DSUs was not material. No DSUs were redeemed during the year ended December 31, 2018. Expense related to DSUs is recognized fully as stock-based compensation expense at the time they are issued. Stock-Based Compensation Expense The following table presents stock-based compensation expense (benefit) from continuing operations included in the Company’s Consolidated Statements of Operation: Year ended December 31, Classification 2019 2018 2017 Stock-based compensation expense Selling, general, and administrative expense, Product costs, and Service costs $ 20 $ 20 $ 48 Valuation of Stock-Based Compensation Awards Valuation of Liability Classified SARs The fair value of the SARs were estimated at each reporting period using the Black-Scholes option pricing model with the following weighted average assumptions: Year Ended December 31, 2019 2018 2017 Risk-free interest rate 1.7 - 1.9 % 1.7 - 1.9 % 1.7 - 1.9 % Dividend yield 0.5 % 1.8 % 1.8 % Expected lives (in years) 0.2 - 4.6 0.3 - 5.4 1.0 - 6.5 Volatility 57 - 130 % 14 - 23 % 14 - 25 % Valuation of Equity Classified SARs and DSUs The fair value of equity classified SARs and DSUs were estimated on the date of the grant or the date of accounting reclassification using the Black-Scholes option pricing model with the following weighted average assumptions: Year Ended December 31, 2019 1 2018 2017 Risk-free interest rate 1.9 - 2.3 % 0.6 - 1.9 % Dividend yield 2.2 - 9.1 % 1.5 - 2.2 % Expected lives (in years) 3.0 - 7.0 0.4 - 7.0 Volatility 22 - 41 % 17 - 25 % 1 Valuation of PSUs and RSUs The fair value of PSUs not subject to a market condition and equity classified RSUs is determined based on the closing price of the Company’s common stock on the grant date. PSUs that are subject to the market condition are valued using a Monte Carlo simulation model, which requires certain assumptions, including the risk-free interest rate, expected volatility, and the expected term of the award. The risk-free interest rate used in the Monte Carlo simulation model is based on zero-coupon yields implied by U.S. Treasury issues with remaining terms similar to the performance period on the PSUs. The performance period of the PSUs represents the period of time between the PSU grant date and the end of the performance period. Expected volatility is based on historical data of the Company and peer companies over the most recent time period equal to the performance period. For PSU grants during the years ended December 31, 2019 the assumptions used in the Monte Carlo simulation are as follows: Year Ended December 31, 2019 Risk-free interest rate 2.2 - 2.3 % Dividend yield 0.5 - 0.9 % Expected lives (in years) 2.9 - 3.0 Volatility 63 - 67 % The risk-free interest rate for 2019 is based on the U.S. Treasury yield with the remaining term equal to the expected life assumed at the date of the grant and the risk-free interest rate for 2018 and 2017 is based upon Canadian bond rates with the remaining term equal to the expected life assumed at the date of grant. The dividend yield is based on the expected annual dividend yield at date of grant. The expected lives are based on the Company’s actual historical exercise experience. Volatility is calculated using a rate based upon the historical volatility of the Company’s common stock. Forfeitures are estimated at the time of grant based upon historical information. Forfeitures will be revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | |
Income taxes | 21. INCOME TAXES The amounts disclosed within the income tax footnote represent those attributable to continuing operations. The components of income (loss) before income taxes were: Year Ended December 31, 2019 2018 2017 U.S. $ 77 $ (806) $ (181) Non-U.S. — (117) (42) Income (loss) before taxes $ 77 $ (923) $ (223) Income tax expense (benefit) is comprised of the following: Year Ended December 31, 2019 2018 2017 Current tax expense U.S. $ 5 $ — $ 1 Non-U.S. — — — 5 — 1 Deferred tax benefit U.S. — (2) (145) Non-U.S. — (46) (24) — (48) (169) Income tax expense (benefit) $ 5 $ (48) $ (168) For the year ended December 31, 2018, the applicable statutory tax rate was the Canadian statutory income tax rate. Following the U.S. Domestication, the applicable statutory tax rate for the year ended December 31, 2019 is the U.S. federal income tax rate. A reconciliation of the U.S. federal tax rate to our effective income tax rate is as follows: Year Ended December 31, 2019 2018 2017 U.S. statutory income tax rate 21 % 21 % 35 % Expected income tax expense (benefit) at statutory rate $ 16 $ (194) $ (78) Impact of Tax Cuts and Jobs Act of 2017 — — 26 Change in statutory tax rates — — (1) Non-deductible expenses 15 6 9 Tax on international operations (1) (45) (24) Change in valuation allowance (108) 96 (93) Base Erosion and Anti-Abuse Tax 5 — — Outside basis difference in assets held for sale 78 — — Tax credits (1) (9) (8) Non-deductible goodwill impairment — 98 — Other 1 — 1 Income tax expense (benefit) $ 5 $ (48) $ (168) Effective income tax rate 6 % 5 % 75 % The Tax Cuts and Jobs Act ("2017 Tax Act") was enacted on December 22, 2017. The 2017 Tax Act includes a broad range of tax reform proposals affecting businesses, including a reduction in the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018, a one-time mandatory deemed repatriation tax on earnings of certain foreign subsidiaries that were previously tax deferred, limitations on interest expense deductions, a new base erosion focused minimum tax applicable to certain payments to foreign related parties and the creation of new taxes on earnings of non-U.S. subsidiaries. In the fourth quarter of 2017, the Company made a reasonable estimate of the impact of the 2017 Tax Act on the existing deferred tax balances and the one-time mandatory deemed repatriation tax. The re-measurement of the deferred tax assets and liabilities, net of valuation allowance, and the estimate of the one-time mandatory deemed repatriation tax was not material. Significant components of deferred tax assets and liabilities are as follows: Year Ended December 31, 2019 2018 2017 Tax benefit of losses carried forward $ 219 $ 222 $ 198 Research and development tax credits 82 91 72 Construction contract liabilities 89 77 67 Property and equipment — 15 3 Trade and other payables 41 38 25 Employee benefits 41 49 53 Unrealized foreign exchange gains and losses 6 6 5 Other 18 21 8 Deferred tax assets 496 519 431 Valuation allowance (231) (304) (134) Deferred tax assets, net of valuation allowance 265 215 297 Property and equipment (47) — — Goodwill and intangibles (124) (213) (301) Outside basis difference in assets held for sale (78) — — Other (10) (2) — Deferred tax liabilities (259) (215) (301) Deferred tax assets and (liabilities), net $ 6 $ — $ (4) The Company assesses the deferred tax assets for recoverability and based upon all available evidence establishes a valuation allowance to reduce the deferred tax assets to the amount that is more-likely-than-not realizable. The valuation allowance decreased $73 million from December 31, 2018 to December 31, 2019. This decrease was the result of a change in the Company’s assertion regarding the permanent reinvestment of its investment in MDA as well as the impact of current year operations. This decrease was offset by an adjustment to prior year deferred taxes, primarily related to goodwill, for which no income tax expense was recorded. During 2019, in connection with the MDA Transaction, the Company has re-evaluated its prior permanent reinvestment assertion and concluded that it can no longer assert that the basis difference related to its investment is permanently reinvested. Accordingly, the Company has established a deferred tax liability of approximately $78 million on the taxable temporary difference associated with its investment. The establishment of the deferred tax liability resulted in a corresponding release of valuation allowance, as mentioned above. Net operating losses carried forward as of December 31, 2019 were $1,665 million. Of these, $870 million relate to federal losses, set to expire between 2024 and 2039 and $795 million relate to state losses set to expire between 2022 and 2038. Of the federal losses, $264 million have no expiry and are subject to an annual limitation of 80% of taxable income. The U.S. Domestication does not impact the availability of the losses carried forward to future years. The Company also has U.S. federal and state tax credits carried forward of $74 million and $2 million as of December 31, 2019, relating to research and development expenditures set to expire between 2024 and 2039 and California research credits with no expiry. Additionally, the Company has U.S. foreign tax credits carried forward of $6 million set to expire between 2020 and 2026. The following table summarizes the changes in unrecognized tax benefits: Year Ended December 31, 2019 2018 2017 Balance, beginning of year $ — $ — $ — Gross increases related to prior period tax positions 6 — — Gross increases related to current period tax positions 1 — — Balance, end of year $ 7 $ — $ — As of December 31, 2019, there were $7 million of unrecognized tax benefits that, if recognized, would be offset by changes in the deferred tax assets. It is not anticipated that a reduction of unrecognized tax benefits will occur within the next twelve months. The Company and its subsidiaries file income tax returns in the United States, and various foreign jurisdictions. With some exceptions, the Company remains subject to income tax examination in the United States for years after 2004. The Company records interest and penalties accrued or recovered in relation to unrecognized tax benefits in income tax expense. The Company has not recognized any interest and penalties in the three year comparative period due to available attributes. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share | |
Earnings per share | 22. EARNINGS PER SHARE The following table includes the calculation of basic and diluted EPS: Year Ended December 31, 2019 2018 2017 Income (loss) from continuing operations $ 83 $ (873) $ (56) Income (loss) from discontinued operations, net of tax 26 (377) 116 Net income (loss) $ 109 $ (1,250) $ 60 Weighted average number of common shares outstanding-basic 59.6 58.1 41.2 Weighted dilutive effect of equity awards 0.6 — — Weighted average number of common shares outstanding-diluted 60.2 58.1 41.2 Basic net income (loss) per common share: Income (loss) from continuing operations $ 1.39 $ (15.03) $ (1.36) Income (loss) from discontinued operations, net of tax 0.44 (6.49) 2.82 Basic net income (loss) per common share $ 1.83 $ (21.52) $ 1.46 Diluted net income (loss) per common share: Income (loss) from continuing operations $ 1.38 $ (15.03) $ (1.36) Income (loss) from discontinued operations, net of tax 0.43 (6.49) 2.82 Diluted net income (loss) per common share $ 1.81 $ (21.52) $ 1.46 For the years ended December 31, 2019, 2018 and 2017 approximately 2 million, 3 million and 4 million awards, respectively, were excluded from the diluted weighted average number of ordinary common shares outstanding calculation because their effect would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 23. COMMITMENTS AND CONTINGENCIES Contingencies in the Normal Course of Business As discussed in Note 6, 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. With respect to the Company’s securitized liability for the orbital receivables, upon the occurrence of an event of default under the securitization facility agreement or upon the occurrence of limited events, the Company may be required to repurchase on demand any affected receivables at their then net present value. As discussed in Note 6, the Company repurchased $24 million of specifically identified orbital receivables during the year ended December 31, 2019. The orbital receivables were repurchased as a result of our customer transferring the obligation to another entity which did not meet the credit criteria of our lenders 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. Changes in estimates related to contracts accounted for using the cost-to-cost method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes. Unrecoverable costs on contracts that are expected to be incurred in future periods are recorded in program cost in the current period. 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 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. The matter was heard by the arbitration panel in December 2019, and post-hearing briefs were submitted in January 2020. The Company presented a vigorous defense to the petitioner’s claims. The Company expects the arbitration panel to issue its ruling sometime this year. The Company has accrued an amount that it believes is within the range of probable outcomes for resolving this matter. 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. On January 14, 2019, a Maxar stockholder filed a putative class action lawsuit captioned Oregon Laborers Employers Pension Trust Fund, et al. v. Maxar Technologies Inc., No. 1:19-cv-00124-WJM-SKC in the District Court of Colorado (the “Colorado Action”), naming Maxar and members of management as defendants alleging, among other things, that the Company’s public disclosures were deficient in violation of the federal securities laws and seeking monetary damages. On August 7, 2019, the Court appointed a lead plaintiff and lead counsel. On October 7, 2019, the lead plaintiff filed a consolidated amended complaint alleging violations of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 against the Company and members of management in connection with the Company’s public disclosures between March 26, 2018 and January 6, 2019. The consolidated complaint alleges that the Company’s statements regarding the AMOS-8 contract, accounting for its GEO communications assets, and WorldView-4 were allegedly false and/or misleading during the class period. On December 6, 2019, defendants moved to dismiss the Colorado Action, which motion is currently pending. Also in January 2019, a Maxar stockholder resident in Canada issued a putative class action lawsuit captioned Charles O’Brien v. Maxar Technologies Inc., No. CV-19-00613564-00CP in the Ontario Superior Court of Justice against Maxar and members of management claiming misrepresentations in Maxar’s public disclosures and seeking monetary damages. On November 15, 2019, Mr. O’Brien and another Maxar stockholder resident in Canada issued a new putative class action lawsuit captioned Charles O’Brien v. Maxar Technologies Inc., No. CV-19-00631107-00CP, naming Maxar and certain members of management and the board of directors as defendants as well as Maxar’s auditor, KPMG LLP. On February 7, 2020, the January 2019 claim was discontinued. The Statement of Claim alleges that the Company’s statements regarding the AMOS-8 contract, accounting for its GEO communications assets, and WorldView-4 were false and/or misleading during the class period, and claims damages of $700 million. The Company believes that these cases are without merit and intends to vigorously defend against them. On October 21, 2019, a Maxar stockholder filed a putative class action lawsuit captioned McCurdy v. Maxar Technologies Inc., et al. No. T19-074 in the Superior Court of the State of California, County of Santa Clara, naming Maxar, and certain members of management and the board of directors as defendants. The lawsuit alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 in connection with the Company’s June 2, 2017 Registration Statement and prospectus filed in anticipation of its October 17, 2017 merger with DigitalGlobe. The lawsuit is based upon many of the same underlying factual allegations as the Colorado Action. Specifically, the lawsuit alleges the Company’s statements regarding its accounting methods and risk factors, including those related to the GEO communications business, were false and/or misleading when made. The Company believes that this lawsuit is without merit and intends to vigorously defend against it. On November 14, 2019, a complaint was filed in a derivative action against Maxar and certain current and former members of management and the board of directors in federal court in the District of Delaware, captioned as Dorling, Derivatively on Behalf of Nominal Defendant Maxar Technologies Inc. v. Lance et al., No. 19-cv-02134-UNA. The complaint concerns the same factual allegations as asserted in the Colorado Action. On February 7, 2020, the court granted the parties’ stipulated motion to stay this case. The Company believes that this lawsuit is without merit and intends to vigorously defend against it. 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 | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental cash flow | |
Supplemental cash flow | 24. SUPPLEMENTAL CASH FLOW Selected cash payments and non-cash activities are as follows: Year ended December 31, 2019 2018 2017 Supplemental cash flow information: Cash paid for interest $ (193) $ (152) $ (41) Supplemental non-cash investing and financing activities: Accrued capital expenditures $ 19 $ 19 $ 15 Acquisition — — 1,197 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Data (Unaudited) | |
Selected Quarterly Financial Data (Unaudited) | 25. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Selected financial data (unaudited) for the periods presented is as follows: 2019 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total revenues $ 431 $ 412 $ 413 $ 410 $ 466 $ 487 $ 433 $ 418 (Loss) Income from continuing operations $ (68) $ 139 $ (41) $ 53 $ (27) $ (52) $ (309) $ (485) Income (loss) from discontinued operations, net of tax 11 9 16 (10) 41 15 23 (456) Net income (loss) $ (57) $ 148 $ (25) $ 43 $ 14 $ (37) $ (286) $ (941) Basic net income (loss) per common share: (Loss) Income from continuing operations $ (1.14) 2.33 (0.69) 0.89 (0.48) (0.91) (5.22) (8.18) Income (loss) from discontinued operations, net of tax 0.18 0.15 0.27 (0.17) 0.73 0.26 0.39 (7.69) Basic net (loss) income per common share $ (0.96) $ 2.48 $ (0.42) $ 0.72 $ 0.25 $ (0.65) $ (4.83) $ (15.87) Diluted net income (loss) per common share: (Loss) Income from continuing operations $ (1.14) 2.32 (0.69) 0.87 (0.48) (0.91) (5.22) (8.18) Income (loss) from discontinued operations, net of tax 0.18 0.15 0.27 (0.17) 0.73 0.26 0.39 (7.69) Diluted net (loss) income per common share $ (0.96) $ 2.47 $ (0.42) $ 0.70 $ 0.25 $ (0.65) $ (4.83) $ (15.87) |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent events | |
Subsequent events | 26. SUBSEQUENT EVENTS Deal Contingent Hedge On February 11, 2020, in connection with the MDA Agreement, the Company entered into deal-contingent foreign currency hedge arrangements, with no cash cost, to hedge 50% of the Canadian dollar denominated sales price at a spot rate of $1.338362 to C$1.00, if the closing date occurs on or before June 29, 2020. Fees associated with these arrangements are contingent and payable upon closing of the acquisition and will vary based on the closing date. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of significant accounting policies | |
Basis of preparation | Basis of preparation The Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all consolidated subsidiary entities. The Company’s Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and the rules and regulations of the U.S. Securities and Exchange Commission. All intercompany balances and transactions are eliminated on consolidation. The Company's Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. References to “C$” refer to Canadian currency. Unless otherwise indicated, amounts provided in the Notes pertain to continuing operations (See Note 4 for information on discontinued operations). |
Use of estimates, assumptions and judgments | Use of estimates, assumptions and judgments The preparation of the 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. |
Leases | Leases The Company has both operating and finance leases. The majority of the Company’s leases are operating leases related to buildings. The Company’s finance leases are primarily related to furniture and equipment. The Company determines if a contract is or contains a lease at inception based on whether it conveys the right to control the use of an identified asset. The Company recognizes lease liabilities and right-of-use assets based on the present value of the future minimum lease payments over the lease term at commencement date. Right-of-use assets are adjusted for any prepayments, lease incentives received, and initial direct costs incurred. If the rate implicit in the lease is not readily determinable, the Company’s incremental borrowing rate with a similar term to the lease term is used to determine the present value of future payments and appropriate lease classification. The lease term includes renewal options that 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. Some of the Company’s building lease agreements contain incentives for leasehold improvements. If the leasehold improvement has been determined to be owned by the lessee, the Company generally records a deferred rent liability and amortizes the deferred rent over the term of the lease as a reduction to rent expense. The Company uses the date of initial possession as the commencement date, which is generally when the Company has been given rights to access the space. Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets and are recognized as lease expense on a straight-line basis in the Consolidated Statements of Operations. Certain leasing arrangements require variable payments, such as insurance and tax payments. Variable lease payments that do not depend on an index or rate are excluded from lease payments in the measurement of the right-of-use asset and lease liability and are recognized as expense in the period in which the payment occurs. The Company does not have any material restrictions or covenants in our lease agreements, sale leaseback transactions or residual value guarantees. The Company recognizes fixed lease expense for operating leases on a straight-line basis |
Business combinations and divestitures | Business combinations and divestitures Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date. The excess of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results when the business is classified as held for sale. The results of discontinued operations are reported in Income (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. Assets and liabilities of a discontinued operation are reported separately in the Consolidated Balance Sheets as held for sale and classified as either current or non-current in the prior periods. If it is probable that the sale will occur and proceeds will be collected within one year of meeting the held for sale criteria both assets and liabilities classified as held for sale are reported in the current period Consolidated Balance Sheet as current. |
Foreign currency | Foreign currency Assets and liabilities of non-U.S. subsidiaries that operate in local currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments, net of tax, recorded in Accumulated other comprehensive income (loss) within the Stockholders’ equity section of the Consolidated Balance Sheets. Income and expense accounts are translated at average monthly exchange rates during the year. |
Revenue recognition | Revenue recognition Revenue is recognized in accordance with the five-step model set forth by ASC 606, which involves identification of the contract(s), identification of performance obligations in the contract, determination of the transaction price, allocation of the transaction price to the previously identified performance obligations and recognition of revenue as the performance obligations are satisfied. Revenue is measured at the fair value of consideration received or receivable, net of discounts and after eliminating intercompany sales. When consideration received from customers includes advance payments that contain a financing element, the Company imputes interest on such advance payments and recognizes such amounts as a component of revenue. Contract costs generally include direct costs such as materials, labor, and subcontract costs. Costs are expensed as incurred except for incremental costs incurred to obtain or fulfill a contract, which are capitalized and amortized on a systematic basis consistent with the transfer of goods or services to the customer to which the capitalized costs relate. As of December 31, 2019 and December 31, 2018, current costs to obtain or fulfill a contract were $6 million and $3 million, respectively, and are included in Prepaid and other current assets within the Consolidated Balance Sheets. As of December 31, 2019 and December 31, 2018, non-current costs to obtain or fulfill a contract were $37 million and $30 million, respectively, and are included in Other non-current assets within the Consolidated Balance Sheets. Space Infrastructure Revenue in the Space Infrastructure segment is primarily generated from long-term construction contracts. Due to the long-term nature of these contracts, the Company generally recognizes revenue over time using the cost-to-cost method to measure progress. Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred to estimated total costs-at-completion ("EAC"). An EAC includes all direct costs and indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in determining the EAC. Changes to an EAC are recorded as a cumulative adjustment to revenue. During the year ended December 31, 2019, the Company incurred an estimated program loss of $49 million on a commercial satellite contract within the Space Infrastructure segment due to a change in the estimated cost to complete the contract. The scope of this contract included significant development effort which is nearing completion. Satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price is contingent upon in-orbit performance of the satellite. These performance incentives are structured in two forms. As a warranty payback, the customer pays the entire amount of the performance incentive during the period of the satellite construction and such incentives are subject to refund if satellite performance does not achieve certain predefined operating specifications. As an orbital receivable, the customer makes payment of performance incentives over the in-orbit life of the satellite. Performance incentives, whether warranty payback or orbital receivables, are included in revenue during the construction period based on amounts expected to be received. Orbital receivables are recorded at their fair value as of the launch date and adjustments to the amount receivable of the discount during the in-orbit period are recorded as orbital income. As of December 31, 2019 and 2018, long-term orbital receivables were $382 million and $407 million, respectively and are included in Non-current assets on the Consolidated Balance Sheets. In addition to the in-orbit performance incentives, satellite construction contracts may include liquidated damages clauses. Liquidated damages can be incurred 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 related to liquidated damages result in a reduction of revenue recognition. Construction contracts have termination and default clauses. If a contract is terminated for convenience by a customer or due to a customer’s default, the Company is typically entitled to costs incurred plus a reasonable profit. Earth Intelligence Revenue in the Earth Intelligence segment is generated from imagery and geospatial intelligence service contracts. Revenue from imagery service contracts is recognized based on satellite capacity made available to the customer in a particular period, when imagery is delivered to the customer, or ratably over the subscription period. Many of our imagery service contracts relate to the transfer of a series of distinct goods or services over time for which management has determined are a single performance obligation. EnhancedView Follow-On Contract – The EnhancedView Follow-On contract (the “EnhancedView Contract”) includes one performance obligation to deliver a certain amount of capacity to the U.S. government over the 10-year three Direct Access Program – Direct Access Program arrangements generally include construction of the direct access facility, access to the satellites to task and download imagery and facility maintenance services. The facility is generally delivered at the beginning of the contractual period of performance with access and maintenance services delivered over the duration of the contractual term. Under ASC 606, the Company has determined that two performance obligations exist; the access and the facility promised goods/services are included together as a combined performance obligation with maintenance services representing a standalone performance obligation. The access and the facility are considered a single performance obligation as the customer cannot benefit from the facility on its own or with other readily available resources. The transaction price allocated to the combined performance obligation is recognized as access minutes are consumed during the contractual period. The remaining transaction price allocated to the maintenance services is recognized ratably over the maintenance period. Other Imagery Arrangements – Revenue is recognized for imagery licenses when the imagery is delivered to the customer. Revenues related to online imagery subscriptions are generally recognized ratably over the subscription period. Other imagery arrangements transfer a series of distinct goods or services over time for which management has determined are a single performance obligation or include multiple performance obligations. Revenue from geospatial intelligence service contracts is recognized from the rendering of services that compensate the Company at a cost-plus-fixed-fee, firm fixed price, or on a time and materials basis. Revenue is typically recognized for these contracts over time based on the stage of services completed to date as a percentage of total services to be performed, or on the basis of time plus reimbursable costs incurred during the period. As the customer typically controls the related work-in-progress, an input measure is the most appropriate basis with which to measure progress. Finally, as cost of labor is the predominant measure by which these contracts are structured, the Company recognizes revenue using a cost-incurred approach. Contract liabilities Contract liabilities primarily consist of advance payments from customers and deferred revenue. Changes in contract liabilities are primarily due to the timing difference between the Company’s performance of services and payments from customers. To determine revenue recognized from contract liabilities during the reporting periods, the Company allocates revenue to individual contract liability balances and applies revenue recognized during the reporting periods first to the beginning balances of contract liabilities until the revenue exceeds the balances. |
Earnings per share | Earnings per share Earnings per common share is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding during the period. Diluted income per common share is computed by adjusting the basic income per common share calculation, as described above, for the effects of all potentially dilutive shares. The Company calculates the effects of all potentially dilutive shares using the treasury stock method unless they are anti-dilutive. |
Research and development | Research and development Research and development costs are expensed in the period incurred. For the years ended December 31, 2019, 2018 and 2017, the Company expensed research and development costs of $10 million, $88 million, and $62 million, respectively in Selling, general and administrative within the Consolidated Statements of Operations. |
Interest Expense | Interest expense Interest expense is comprised of borrowing cost on debt, interest expense on advance payments from customers and other liabilities, interest expense on the orbital securitization liability, losses incurred on the extinguishment of debt, and interest expense on dissenting stockholders liability. Interest expense is recognized within Interest expense, net in the Consolidated Statements of Operations. Debt issuance costs related to the Company’s revolving line of credit are recorded in Prepaid and other current assets and in Other non-current assets in the Consolidated Balance Sheets. Debt issuance costs and debt discount related to the Company’s term loan and senior secured notes are recorded as a direct deduction from the carrying amount of the related debt. |
Derivative financial instruments and hedging activities | Derivative financial instruments and hedging activities Derivative financial instruments used by the Company consist of foreign currency forward contracts and interest rate swap agreements. The Company uses foreign currency forward contracts to manage foreign exchange risk associated with the cash flows from long-term construction contracts where some portion of the cash flows are denominated in foreign currencies as part of the normal course of business. The Company uses interest rate swap agreements to manage interest rate risk associated with cash outflows from long-term debt. Derivative financial instruments are measured at fair value. When derivative financial instruments are designated in a qualifying hedging relationship and hedge accounting is applied, the effectiveness of the hedges is measured at the end of each reporting period and the effective portion of changes in fair value are deferred in accumulated other comprehensive income. Amounts deferred in accumulated other comprehensive income Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge accounting. At that time, if the forecasted transaction within a cash flow hedge remains probable, any cumulative gain or loss on the hedging instrument recognized in Other comprehensive income (loss) is retained in equity until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss previously recognized in other comprehensive income is transferred to income. As of January 1, 2019, the Company has discontinued hedge accounting on foreign exchange forward contracts related to its manufacturing and service programs, however the Company will continue to hedge its exposure for economic purposes. The Company does not offset the fair value amounts recognized with derivative instruments against the change in fair value of assets, liabilities or firm commitments executed with the same counterparty under a master netting agreement. |
Cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash Cash and cash equivalents is comprised of cash on hand, cash balances with banks and similar institutions and term deposits redeemable within three months or less from date of acquisition with banks and similar institutions. Restricted cash is excluded from cash and cash equivalents and is included in Prepaid and other current assets or Other non-current assets in the Consolidated Balance Sheets. |
Trade and other receivables | Trade and other receivables Trade and other receivables include amounts billed to customers, unbilled receivables in which the Company’s right to consideration is unconditional and current portion of orbital receivables (see Note 6). The Company bills customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries. The carrying amount of current trade receivables is stated at cost, net of allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments, which results in bad debt expense. The Company periodically determines the adequacy of this allowance by evaluating the comprehensive risk profiles of all individual customer receivable balances including, but not limited to, the customer’s financial condition, credit agency reports, financial statements, credit limit and overall current economic conditions. |
Investments | Investments Short-term investments consist of mutual funds and financial instruments purchased with a term to maturity at inception between three months and one year. Short-term investments are measured at fair value through net income. Short-term investments are included within Prepaid and other current assets in the Consolidated Balance Sheets. The Company has investments in joint ventures where it does not have a controlling financial interest but has the ability to exercise significant influence. These investments are accounted for under the equity method and are included within Other non-current assets in the Consolidated Balance Sheets. The Company’s share of the joint venture’s net income or loss is included within Equity in (income) loss from joint ventures, net of tax in the Consolidated Statements of Operations. The Company’s most significant joint venture is Vricon Inc. (“Vricon”), a joint venture with Saab AB, specializing in the production of 3D models using high resolution imagery. The Company has an ownership interest of approximately 50% in Vricon. The following tables present summarized financial information for Vricon as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017. Summarized Consolidated Balance Sheets December 31, December 31, 2019 2018 Current assets $ 49 $ 12 Non-current assets 5 6 Total assets $ 54 $ 18 Total liabilities 1 $ 10 $ 5 1 Summarized Consolidated Statements of Operations Year Ended December 31, 2019 2018 2017 Revenues $ 54 $ 21 $ 14 Gross profit $ 51 $ 19 $ 14 Income from operations $ 32 $ 2 $ 1 Net income $ 24 $ 1 $ 1 |
Inventory | Inventor Inventories are measured at the lower of cost or net realizable value and consist primarily of parts and sub-assemblies used in the manufacturing of satellites. The cost of inventories is determined on a first-in-first-out basis or weighted average cost basis, depending on the nature of the inventory. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. Inventory is impaired when it is probable inventory values exceed their net realizable value. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment is measured at cost less accumulated depreciation. Cost for satellite assets includes amounts related to design, construction, launch and commissioning. Cost for ground system assets include amounts related to construction and testing. Interest expense is capitalized on certain qualifying assets that take a substantial period of time to prepare for their intended use. When the costs of certain components of an item of property, plant and equipment are significant in relation to the total cost of the item and the components have different useful lives, they are accounted for and depreciated separately. Property, plant and equipment under construction are measured at cost less any impairment losses. Depreciation expense is recognized in income on a straight-line basis over the estimated useful life of the related asset to its residual value. Expected useful lives are reviewed at least annually. Land is not depreciated. The estimated useful lives are as follows: Estimated useful life Land improvements 20 years Buildings 7 - 45 years Leasehold improvements lesser of useful life or term of lease Equipment 2 - 40 years Satellites 1 11.5 - 14 years Furniture and fixtures 2 - 10 years Computer hardware 2 - 13 years 1 The estimated useful life over which the Company depreciates its satellites is determined once a satellite has been placed into orbit. The initial determination of a satellites useful life involves an analysis that considers design life, random part failure probabilities, expected component degradation and cycle life, predicted fuel consumption and experience with satellite parts, vendors and similar assets. |
Intangible assets | Intangible assets Intangible assets consist of customer relationships, backlog, acquired technologies and software, image library, trade names, licenses and non-compete agreements. Intangible assets are generally amortized on a straight-line basis over their estimated useful lives and are recorded at fair value at the time of acquisition, or in the case of internally developed software, at cost. Image library intangibles assets are amortized using the double declining balance method. Intangible assets are currently amortized over the following estimated useful lives: Estimated useful life Customer relationships 9 - 21 years Backlog 3 - 5 years Technologies 5 - 13 years Software 3 - 10 years Image library 5 years Trade names and other 5 - 20 years Non-compete agreements 2 years |
Impairment | Impairment Intangible assets and property, plant and equipment and other long-lived assets Intangible assets, property, plant and equipment and other long-lived assets are tested for impairment at least annually on October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets and property, plant and equipment and other long-lived assets are reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) are less than the asset’s carrying value. Any required impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value and recorded as a reduction in the carrying value of the related asset . If a satellite were to fail during launch or while in-orbit, the resulting loss would be charged to expense in the period it is determined the satellite is not recoverable. The amount of loss would be reduced to the extent of insurance proceeds received. The timing of the loss and the insurance recovery will likely differ, as an insurance recovery generally cannot be recognized until final settlement with the insurance company is reached. In December 2018, the Company experienced a loss of the Worldview-4 satellite and in 2019, the Company received insurance recoveries of $183 million. The insurance proceeds are included in operating cash flows as they are considered business interruption insurance and represent the Company’s satellite’s loss of capacity to produce imagery for sale to the Company’s customers. Orbital Receivables The Company considers an orbital receivable to be impaired when, based upon current information and events, it believes it is probable the carrying valuing of the amounts to be collected exceed the fair value of the receivables. Orbital receivables are reviewed for impairment at least annually during the fourth quarter or whenever changes in circumstances indicate that the Company will not collect all amounts due according to the contractual terms of the satellite construction agreement. Orbital impairments are typically included in Impairment losses within the Consolidated Statements of Operations. Goodwill Goodwill is tested for impairment at least annually on October 1, or whenever events or changes in circumstances indicate that its carrying amount may be less than its recoverable amount. Goodwill is tested for impairment at the reporting unit level. Management typically uses an income approach to estimate the fair value of a reporting unit. Management uses judgment to estimate the inputs to these assessments including cash flow projections, discount rates and tax rates, and any changes to these inputs could have a material impact on the impairment calculation. An impairment loss is recognized to the extent that the carrying value of a reporting unit exceeds its fair value. The Company evaluates the aggregate fair value of its reporting units against market data to support its fair value estimates. |
Warranty and after-sale service costs | Warranty and after-sale service costs A liability for warranty and after-sale service costs is recognized when the underlying product or service is sold. Warranty and after-sale service provisions are based on management’s best estimate of the expected obligation using historical warranty data and experience. Warranty and after-sale service liabilities related to products and services delivered under construction contracts are included in the EAC for revenue recognition. Warranty and after-sale service liabilities are presented in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets. Warranty and after-sale service costs are recognized within Product and Service costs, excluding depreciation and amortization in the Consolidated Statement of Operations. |
Restructuring costs | Restructuring costs A liability for restructuring costs is recognized when the Company has approved a detailed and formal restructuring plan and the restructuring either has commenced or has been announced publicly. |
Employee benefits | Employee benefits Defined benefit pension and other postretirement benefit plans The Company maintains defined benefit pension and other postretirement benefit plans for certain employees within its Space Infrastructure business. The Space Infrastructure pension plan benefits were frozen on December 31, 2013. The Company recognizes the funded status of each pension and other postretirement benefit plan in the Consolidated Balance Sheets. The calculation of pension and other postretirement benefit obligations is performed annually by qualified actuaries using the projected unit credit actuarial cost method. The projected benefit obligation is the sum of the actuarial present value of all pension benefits attributed to benefit service completed to the determination date. Pension and other postretirement plan liabilities are revalued annually, or when an event occurs that requires remeasurement, based on updated assumptions and information about the individuals covered by the plan. The Company’s net obligation in respect of the pension and other postretirement benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the prior periods, discounting that amount and deducting the fair value of associated plan assets. The Company elected to use the net asset value (“NAV”) practical expedient to measure the fair value of the plan’s commingled fund investments. The practical expedient is applied retrospectively for all periods presented. These commingled fund investments for which the fair value is measured using the NAV practical expedient are excluded from the fair value hierarchy. The Company recognizes the amortization of prior service costs as a component of Selling, general and administrative. All other costs are recognized outside of operating income within Other (income) expense, net. The Company recognizes administrative expenses related to frozen plans outside of Operating income (expense) within Other (income) expense, net. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in the net benefit liability that relates to past service or the gain or loss on curtailment is recognized immediately in Accumulated other comprehensive income. The Company recognizes gains or losses on the settlement of a defined benefit plan when settlement occurs. For the Company’s pension and other postretirement benefit plans, accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized on a straight-line basis from the date recognized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants. Defined contribution plans The Company also maintains defined contribution plans for some of its employees whereby the Company pays contributions based on a percentage of the employees’ annual salary. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in operating income as the services are provided. |
Share-based compensation plans | Stock-based compensation plans The Company maintains a number of stock-based compensation plans for certain employees and directors that may be settled with cash and/or equity. For certain stock-based compensation plans, the Company has the ability to mandate equity settlement by issuing reserved shares. Stock-based compensation plans are measured at fair value using either the Black-Scholes option pricing model or Monte Carlo simulation model and the fair value is expensed on a graded vesting schedule over the vesting period. Management uses judgment to determine the inputs to the models including the expected plan lives, underlying stock price volatility and forfeiture rates. Volatility is estimated by considering the Company’s historic stock price volatility over similar periods to the expected life of the awards under consideration. Changes in these assumptions will impact the calculation of fair value and the amount of compensation expense recognized within Selling, general and administrative expense in the Consolidated Statements of Operations. The fair value of liability classified awards is recognized as a liability within Accrued compensation and benefits and Pension and other postretirement benefit liabilities in the Consolidated Balance Sheets. The liability is re-measured and charged to income at each reporting date until the award is settled. The fair value of equity-settled plans is recognized in Additional paid-in capital in the Consolidated Balance Sheets. Equity-settled plans are measured based on the grant date fair value of the award including the impact of estimated forfeitures and are not re-measured. |
Income taxes | Income taxes The Company is subject to income taxes in the United States, Canada, and other foreign jurisdictions. The Company computes its provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured at the currently enacted tax rates that are expected to apply in years in which they are expected to be paid for or realized. All deferred income taxes are classified as non-current in the Company's Consolidated Balance Sheets. Significant judgments are required in order to determine the realizability of deferred tax assets. In assessing the need for a valuation allowance, the Company's management evaluates all significant available positive and negative evidence, including historical operating results, estimates of future sources of taxable income, carry-forward periods available, the existence of prudent and feasible tax planning strategies, and other relevant factors. The recognition of uncertain tax positions is evaluated based on whether it is considered more likely than not that the position taken, or expected to be taken, on a tax return will be sustained upon examination through litigation or appeal. For those positions that meet the recognition criteria, they are measured as the largest amount that is more than 50 percent likely to be realized upon ultimate settlement. The Company believes that the reserves for unrecognized tax benefits are adequate to cover all open tax years based on its assessment. If the expected outcome of the matter changes, the Company will adjust income tax expense accordingly in the period in which the expected outcome has changed. The Company classifies interest and penalties related to income taxes as income tax expense. The Company earns investment and other tax credits with respect to its research and development expenses. The benefit of these tax credits is recorded as a reduction of income tax expense. |
Reclassifications | Reclassifications Certain amounts in prior years have been reclassified to conform to the 2019 presentation. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncement s Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) which together with subsequent amendments is included in ASC 842 – Leases. This new standard required that all leases with an initial term greater than one year be recorded on the balance sheet as right-of-use assets and lease liabilities. Additional qualitative and quantitative disclosures are also required. The Company adopted the lease standard on January 1, 2019, using the modified retrospective transition approach on the effective date. The Company elected the package of practical expedients, which allows the Company not to reassess whether any expired or existing contracts as of the adoption date are or contain a lease, lease classification for any expired or existing leases as of the adoption date and initial direct costs for any existing leases as of the adoption date. The Company did not elect the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets. Upon adoption, the Company recognized operating lease right-of-use assets and lease liabilities of $133 million and $176 million, respectively in its Consolidated Balance Sheets. There were no material impacts to the Consolidated Statements of Operations or 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 to the Consolidated Financial Statements. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of significant accounting policies | |
Schedule of summarized financial information of equity method investments | Summarized Consolidated Balance Sheets December 31, December 31, 2019 2018 Current assets $ 49 $ 12 Non-current assets 5 6 Total assets $ 54 $ 18 Total liabilities 1 $ 10 $ 5 1 Summarized Consolidated Statements of Operations Year Ended December 31, 2019 2018 2017 Revenues $ 54 $ 21 $ 14 Gross profit $ 51 $ 19 $ 14 Income from operations $ 32 $ 2 $ 1 Net income $ 24 $ 1 $ 1 |
Schedule of estimated useful lives of property, plant and equipment | Estimated useful life Land improvements 20 years Buildings 7 - 45 years Leasehold improvements lesser of useful life or term of lease Equipment 2 - 40 years Satellites 1 11.5 - 14 years Furniture and fixtures 2 - 10 years Computer hardware 2 - 13 years 1 The estimated useful life over which the Company depreciates its satellites is determined once a satellite has been placed into orbit. The initial determination of a satellites useful life involves an analysis that considers design life, random part failure probabilities, expected component degradation and cycle life, predicted fuel consumption and experience with satellite parts, vendors and similar assets. |
Schedule of estimated useful lives of intangible assets with finite lives | Estimated useful life Customer relationships 9 - 21 years Backlog 3 - 5 years Technologies 5 - 13 years Software 3 - 10 years Image library 5 years Trade names and other 5 - 20 years Non-compete agreements 2 years |
Discontinued operations (Tables
Discontinued operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued operations | |
Schedule of results of discontinued operations and financial information of the discontinued operation that are included in the Consolidated Balance Sheet | Income (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations consist of the following: Year Ended December 31, 2019 2018 2017 Revenues: Product $ 206 $ 238 $ 275 Service 161 182 150 Total revenues $ 367 $ 420 $ 425 Costs and expenses: Product costs, excluding depreciation and amortization $ 149 $ 149 $ 158 Service costs, excluding depreciation and amortization 84 114 86 Selling, general and administrative 88 59 54 Depreciation and amortization 11 10 10 Impairment losses 12 477 — Operating income (loss) 23 (389) 117 Interest expense, net 1 1 1 Other expense (income), net 3 — (6) Income (loss) before taxes 19 (390) 122 Income tax (benefit) expense (7) (13) 6 Income (loss) from discontinued operations, net of tax $ 26 $ (377) $ 116 The carrying amounts of the major classes of assets and liabilities, which are classified as held for sale in the Consolidated Balance Sheets, are as follows: December 31, December 31, 2019 2018 Assets Cash and cash equivalents $ 45 $ 16 Trade and other receivables, net 168 156 Deferred tax assets 117 — Property, plant and equipment 29 — Intangible assets 27 — Goodwill 310 — Other assets 1 55 31 Current assets held for sale $ 751 $ 203 Deferred tax assets — 104 Property, plant and equipment — 28 Intangible assets — 28 Goodwill — 296 Other non-current assets — 26 Non-current assets held for sale $ — $ 482 Liabilities Accounts payable $ 88 $ 68 Accrued liabilities 18 21 Accrued compensation and benefits 21 20 Contract liabilities 29 24 Pension and other postretirement benefit liabilities 21 — Other liabilities 2 53 21 Current liabilities held for sale $ 230 $ 154 Pension and other postretirement benefit liabilities $ — $ 18 Other non-current liabilities — 40 Non-current liabilities held for sale $ — $ 58 1 Other assets include income tax receivables, operating lease assets, prepaid and other current assets. 2 |
Business combinations (Tables)
Business combinations (Tables) - DigitalGlobe | 12 Months Ended |
Dec. 31, 2019 | |
Business combination | |
Schedule of fair value of the consideration transferred and the preliminary estimated fair values of the major classes of assets acquired and liabilities assumed | October 5, 2017 Cash paid $ 1,131 Shares issued 1,063 Merger consideration to be settled 3 Liability to dissenting stockholders 115 Issuance of replacement equity-settled awards 16 Purchase consideration $ 2,328 Assets Cash and cash equivalents $ 171 Trade and other receivables, net 142 Property, plant and equipment, net 696 Intangible assets, net 1,440 Other assets 106 $ 2,555 Liabilities Accounts payable 83 Other current liabilities 4 Pension and other postretirement benefit liabilities 29 Long-term debt 1,276 Other non-current liabilities 504 $ 1,896 Fair value of net identifiable assets acquired 659 Goodwill $ 1,669 |
Summary of intangible assets acquired | Carrying value Weighted average useful life Finite-lived intangible assets: Customer relationships $ 608 14 years Backlog 331 4 years Technologies 318 5 years Software 46 3 years Image library 80 5 years Trade names and trademarks 37 10 years Other 20 2 years Total intangible assets $ 1,440 |
Trade and other receivables (Ta
Trade and other receivables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Trade and other receivables | |
Schedule of trade and other receivables, net | December 31, December 31, 2019 2018 U.S. government receivables: Billed $ 88 $ 96 Unbilled 46 60 134 156 Other governments and commercial receivables: Billed 123 99 Unbilled 54 59 177 158 Total trade receivables 311 314 Orbital receivables, current portion 43 34 Other 4 3 Allowance for doubtful accounts (1) (1) Trade and other receivables, net $ 357 $ 350 |
Schedule of total contractual cash flows for all launched and unlaunched satellites including principal and interest payments | 2020 2021 2022 2023 2024 Thereafter Total Contractual cash flows from satellites $ 65 $ 69 $ 73 $ 74 $ 72 $ 370 $ 723 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory | |
Schedule of inventory | December 31, December 31, 2019 2018 Raw materials $ 13 $ 20 Work in process 7 9 Inventory $ 20 $ 29 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment, net | December 31, December 31, 2019 2018 Satellites $ 397 $ 397 Equipment 196 199 Leasehold improvements 75 75 Computer hardware 67 62 Land and land improvements — 85 Buildings — 41 Furniture and fixtures 15 15 Construction in process 388 147 Property, plant and equipment, at cost 1,138 1,021 Accumulated depreciation (380) (296) Property, plant and equipment, net $ 758 $ 725 |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets and goodwill | |
Schedule of intangible assets | December 31, 2019 December 31, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 615 $ (102) $ 513 $ 615 $ (58) $ 557 Backlog 330 (217) 113 330 (120) 210 Technologies 320 (144) 176 323 (83) 240 Software 213 (83) 130 159 (50) 109 Image library 80 (48) 32 80 (32) 48 Trade names and other 37 (10) 27 37 (5) 32 Non-compete agreements — — — 20 (12) 8 Intangible assets $ 1,595 $ (604) $ 991 $ 1,564 $ (360) $ 1,204 |
Schedule of estimated annual amortization expense related to finite-lived intangible assets | Year Ended December 31, 2020 2021 2022 2023 2024 2025 and thereafter Amortization expense $ 246 $ 181 $ 140 $ 56 $ 49 $ 319 |
Schedule of goodwill | Goodwill is as follows: Earth Intelligence Space Infrastructure Total Balance as of December 31, 2017 Goodwill $ 1,600 $ 17 $ 1,617 Accumulated impairment losses — — — 1,600 17 1,617 Impairment losses (142) (17) (159) Disposal of immaterial subsidiary (3) — (3) Balance as of December 31, 2018 Goodwill 1,597 17 1,614 Accumulated impairment losses (142) (17) (159) 1,455 — 1,455 Balance as of December 31, 2019 Goodwill 1,597 17 1,614 Accumulated impairment losses (142) (17) (159) $ 1,455 $ — $ 1,455 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of components of lease expense | Year ended December 31, Classification 2019 Operating lease expense Selling, general, and administrative expense, Product costs, and Service costs 1 $ 27 1 |
Supplemental lease balance sheet information | December 31, Classification 2019 Assets: Operating Non-current operating lease assets $ 176 Finance Property, plant, and equipment, net 5 Total lease assets $ 181 Liabilities: Current Operating Current operating lease liabilities $ 40 Finance Current portion long-term debt 2 Non-current Operating Operating lease liabilities 173 Finance Long-term debt 1 Total lease liabilities $ 216 |
Schedule of supplemental lease cash flow information | Year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 30 Gain on sale leaseback (136) Right-of-use assets obtained in exchange for lease obligations: Operating leases 72 |
Schedule of other supplemental lease information | December 31, 2019 Weighted average remaining lease term Operating leases 9 years Finance leases 3 years Weighted average discount rate Operating leases 6.4% Finance leases 3.5% |
Schedule of maturities of finance lease liabilities | Maturities of lease liabilities are as follows: 2020 2021 2022 2023 2024 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 42 $ 40 $ 30 $ 27 $ 25 $ 117 $ (68) $ 213 Finance leases 2 1 1 — — — (1) 3 |
Schedule of maturities of operating liabilities | 2020 2021 2022 2023 2024 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 42 $ 40 $ 30 $ 27 $ 25 $ 117 $ (68) $ 213 Finance leases 2 1 1 — — — (1) 3 |
Warrant and restructuring (Tabl
Warrant and restructuring (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Changes to warranty and after sale service liabilities | |
Schedule of Changes to warranty and restructuring liabilities | Warranty and after-sale service Restructuring Balance as of December 31, 2017 $ 39 $ 1 Obligations incurred 5 13 Payments/uses (4) (11) Balance as of December 31, 2018 $ 40 $ 3 Obligations incurred 3 18 Payments/uses (2) (19) Balance as of December 31, 2019 $ 41 $ 2 |
Long term debt and interest exp
Long term debt and interest expense (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-term debt and interest expense | |
Summary of long term debt | December 31, December 31, 2019 2018 Syndicated Credit facility: Revolving credit facility $ — $ 595 Term Loan A — 500 Term Loan B 1,960 1,980 2023 Notes 1,000 — Deferred financing 33 — Debt discount and issuance costs (54) (41) Obligations under finance leases and other 6 9 Total long-term debt 2,945 3,043 Current portion of long-term debt (30) (16) Non-current portion of long-term debt $ 2,915 $ 3,027 |
Schedule of interest expense on long term debt and other obligations | Year Ended December 31, 2019 2018 2017 Interest on long-term debt $ 194 $ 171 $ 57 Interest expense on advance payments from customers 15 26 8 Interest on orbital securitization liability 7 7 8 Imputed interest and other — — 1 Capitalized interest (19) (7) — Loss on debt extinguishment 22 — 23 Interest expense on dissenting stockholder liability — 3 — Interest expense, net $ 219 $ 200 $ 97 |
Summary of annual contractual principal repayments on long-term debt, net of financing fees | 2020 2021 2022 2023 2024 Thereafter Total Syndicated credit facility $ 20 $ 20 $ 20 $ 20 $ 1,880 $ — $ 1,960 2023 Notes — — — 1,000 — — 1,000 Deferred financing 6 6 2 2 2 15 33 Finance leases 2 1 — — — — 3 Debt discount and issuance costs (11) (12) (13) (13) (5) (54) $ 17 $ 15 $ 9 $ 1,009 $ 1,877 $ 15 $ 2,942 |
Financial instruments and fai_2
Financial instruments and fair value disclosures (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 1 $ — $ — $ 1 Orbital receivables 1 — 425 — 425 $ 1 $ 425 $ — $ 426 Liabilities Interest rate swaps $ — $ 18 $ — $ 18 Long-term debt 2 — 3,004 — 3,004 $ — $ 3,022 $ — $ 3,022 Recurring Fair Value Measurements of as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Long-term investments $ 1 $ — $ — $ 1 Orbital receivables 1 — 441 — 441 $ 1 $ 441 $ — $ 442 Liabilities Interest rate swaps $ — $ 4 $ — $ 4 Long-term debt 2 — 2,925 — 2,925 $ — $ 2,929 $ — $ 2,929 1 2 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivatives and Hedging | |
Schedule of foreign exchange forward contracts to hedge exposure arising from expected foreign currency denominated cash flows | As of December 31, 2019 Notional amount Maximum Contract term Derivatives designated as hedging instruments Interest rate swaps 1,000 2.3 years Derivatives not designated as hedging instruments Foreign exchange forward contracts Sales contracts settled in U.S. dollars Euro 10 0.1 years As of December 31, 2018 Notional amount Maximum Contract term Derivatives designated as hedging instruments Interest rate swaps 1,000 3.3 years Foreign exchange forward contracts Purchase contracts settled in U.S. dollars Euro 9 0.3 years Japanese Yen 177 0.2 years Sales contracts settled in U.S. dollars Euro 20 0.5 years Japanese Yen 177 0.2 years |
Accumulated other comprehensi_2
Accumulated other comprehensive income (loss) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated other comprehensive income (loss) | |
Schedule of changes in the components of accumulated other comprehensive income (loss) | Foreign Currency Translation Adjustments 1 Unrecognized (Loss) Gain on Derivatives 2 Loss on Pension and Other Postretirement Plans Total Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2016 $ 123 10 (10) 123 Other comprehensive income (loss) 7 (3) (8) (4) Tax benefit (expense) — — (6) (6) Balance as of December 31, 2017 130 7 (24) 113 Other comprehensive loss (19) (10) (4) (33) Tax benefit (expense) — 3 (1) 2 Balance as of December 31, 2018 $ 111 $ — $ (29) $ 82 Other comprehensive (loss) income 14 (12) (26) (24) Tax benefit (expense) 1 — — 1 Balance as of December 31, 2019 $ 126 $ (12) $ (55) $ 59 1 2 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue | |
Summary of contract assets and contract liabilities by segment | As of December 31, 2019 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 130 $ 145 $ 275 As of December 31, 2018 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 243 $ 149 $ 392 1 The contract liability balance associated with the Company’s EnhancedView Contract was $78 million and $184 million as of December 31, 2019 and 2018, respectively. During the year ended December 31, 2019, imputed interest on advanced payments increased the contract liability balance by $15 million, and $120 million in revenue was recognized, decreasing the contract liability balance. The contract liability balance associated with the Company’s EnhancedView Contract is expected to be recognized as revenue through August 31, 2020. |
Summary of revenue by primary sources | Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 560 $ — $ 560 Service revenues 1,085 21 — 1,106 Intersegment — 125 (125) — $ 1,085 $ 706 $ (125) $ 1,666 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 697 $ — $ 697 Service revenues 1,058 49 — 1,107 Intersegment 1 77 (78) — $ 1,059 $ 823 $ (78) $ 1,804 Year Ended December 31, 2017 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 877 $ — $ 877 Service revenues 331 49 — 380 Intersegment — 6 (6) — $ 331 $ 932 $ (6) $ 1,257 |
Summary of revenue by geographic location | Year Ended December 31, 2019 2018 2017 United States $ 1,240 $ 1,238 $ 698 Asia 161 213 228 South America 97 133 16 Europe 69 54 127 Middle East 57 90 41 Australia 22 17 22 Canada 10 49 123 Other 10 10 2 Total revenues $ 1,666 $ 1,804 $ 1,257 |
Schedule of revenue from significant customers | Year Ended December 31, 2019 2018 2017 U.S. Federal Government and agencies $ 940 $ 816 $ 276 Commercial and other 726 988 981 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment information | |
Summary of operating performance of the reporting segments | Year Ended December 31, 2019 2018 2017 Revenues: Earth Intelligence $ 1,085 $ 1,059 $ 331 Space Infrastructure 706 823 932 Intersegment eliminations (125) (78) (6) Total revenues $ 1,666 $ 1,804 $ 1,257 Adjusted EBITDA: Earth Intelligence $ 548 $ 516 $ 152 Space Infrastructure (17) (75) (59) Intersegment eliminations (29) (9) — Corporate and other expenses (86) (49) (8) Restructuring (18) (13) — Transaction and integration related expense (16) (33) (60) Impairment losses, including inventory (17) (652) — Satellite insurance recovery 183 — — Gain on sale of assets 136 33 — CEO severance (3) — — Depreciation and amortization (376) (439) (152) Interest expense, net (219) (200) (97) Interest income 1 2 — — Equity in (income) loss from joint ventures, net of tax (11) (2) 1 Income (loss) from continuing operations before taxes $ 77 $ (923) $ (223) 1 |
Schedule of capital expenditures by segment | Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Corporate and eliminations Total Property, plant and equipment $ 237 $ 16 $ 4 $ 257 Intangible assets 56 3 (2) 57 $ 293 $ 19 $ 2 $ 314 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Corporate and eliminations Total Property, plant and equipment $ 158 $ 22 $ (30) $ 150 Intangible assets 55 1 — 56 $ 213 $ 23 $ (30) $ 206 Year Ended December 31, 2017 Earth Intelligence Space Infrastructure Corporate and eliminations Total Property, plant and equipment $ 16 $ 37 $ (10) $ 43 Intangible assets 12 4 — 16 $ 28 $ 41 $ (10) $ 59 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Employee benefit plans | |
Summary of changes in the benefit obligations, the plan assets and funded status | Pension Other Postretirement 2019 2018 2019 2018 Change in benefit obligation: Benefit obligation at beginning of year $ 519 $ 568 $ 13 $ 16 Service cost 2 2 — — Interest cost 21 19 1 1 Actuarial losses (gains) 71 (37) — (2) Benefits paid (30) (33) — (2) Benefit obligation at end of year $ 583 $ 519 $ 14 $ 13 Change in fair value of plan assets: Fair value of plan assets at beginning of year $ 352 $ 391 $ — $ — Actuarial return (loss) on plan assets 70 (19) — — Employer contributions 12 13 — 2 Benefits paid (28) (31) — (2) Expenses paid (2) (2) — — Fair value of plan assets at end of year 404 352 — — Unfunded status at end of year $ (179) $ (167) $ (14) $ (13) Assets and (liabilities) recognized in the Consolidated Balance Sheets: Accrued compensation and benefits $ (1) $ (1) $ (1) $ (1) Pension and other postretirement benefits (178) (166) (13) (12) $ (179) $ (167) $ (14) $ (13) |
Summary of the accumulated other comprehensive income | Pension Other Postretirement 2019 2018 2019 2018 Net (loss) gain $ (70) $ (45) $ 10 $ 12 |
Schedule of weighted average assumptions used to determine the benefit obligations | Pension Other Postretirement 2019 2018 2019 2018 Discount rate 3.0 % 4.1 % 3.0 % 4.1 % |
Summary of the components of net periodic benefit (credits) cost | Pension Other Postretirement 2019 2018 2017 2019 2018 2017 Interest cost $ 21 $ 19 $ 21 $ 1 $ 1 $ 2 Expected return on plan assets (24) (27) (24) — — — Amortization of prior service credit — — — — — (2) Amortization of net gain — — — (1) (1) (1) Curtailment gain 1 — — — — — (26) Expenses paid 2 2 2 — — — Net periodic benefit cost $ (1) $ (6) $ (1) $ — $ — $ (27) |
Summary of other changes in plan assets and benefit obligations recognized in other comprehensive income | Pension Other Postretirement 2019 2018 2017 2019 2018 2017 Net loss (gain) $ 25 $ 9 $ 5 $ — $ (2) $ (1) Amortization of prior service credit — — — — — 2 Amortization of net gain — — — 1 1 1 Curtailment loss — — — — — 1 Total recognized in other comprehensive loss (income) $ 25 $ 9 $ 5 $ 1 $ (1) $ 3 Total recognized in net periodic benefit cost (credit) and other comprehensive loss (income) $ 24 $ 3 $ 4 $ 1 $ (1) $ (24) |
Schedule of weighted average assumptions used to determine the net periodic benefit cost | Pension Other Postretirement 2019 2018 2017 2019 2018 2017 Discount rate 4.1 % 3.4 % 3.9 % 4.1 % 3.4 % 3.9 % Expected long-term return on plan assets 7.0 % 7.0 % 7.0 % N/A N/A N/A % |
Schedule of pension plan asset allocation | Asset Allocation Target Actual Cash and cash equivalents 0 % 1 % U.S. equity securities 26 % 26 % Global equity securities 36 % 35 % Fixed income 34 % 34 % Other 4 % 4 % 100 % |
Schedule of fair value of pension plan assets by asset category segregated by level within the fair value hierarchy | December 31, 2019 December 31, 2018 Asset Category Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 5 $ — $ — $ 5 $ 2 $ — $ — $ 2 Global equity securities — — 1 1 — — 1 1 Commingled Funds 1 398 349 Total assets at fair value $ 5 $ — $ 1 $ 404 $ 2 $ — $ 1 $ 352 1 Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not required to be classified in the fair value hierarchy table. The total fair value of these amounts are presented in this table to permit reconciliation of the fair value hierarchy to the amounts presented for total defined benefit pension plan assets |
Schedule of expected benefit payments to be paid | 2020 2021 2022 2023 2024 2025 through 2029 Pension $ 31 $ 31 $ 31 $ 32 $ 32 $ 159 Other Postretirement 1 1 1 1 1 5 $ 32 $ 32 $ 32 $ 33 $ 33 $ 164 |
Share-based payment plans (Tabl
Share-based payment plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based payment plans | |
Summary of share-based compensation expense (benefit) | Year ended December 31, Classification 2019 2018 2017 Stock-based compensation expense Selling, general, and administrative expense, Product costs, and Service costs $ 20 $ 20 $ 48 |
SARs Liability Classified Awards | |
Share-based payment plans | |
Summary of share based payment activity | Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value SARs outstanding at December 31, 2018 774,430 $ 63.86 Exercised — — Cancelled or expired (195,110) 63.30 SARs outstanding at December 31, 2019 579,320 63.12 1.56 $ — SARs vested and expected to vest at December 31, 2019 579,320 63.12 1.56 $ — SARs exercisable at December 31, 2019 566,340 $ 63.46 1.43 $ — |
Summary of valuation share based compensation awards | Year Ended December 31, 2019 2018 2017 Risk-free interest rate 1.7 - 1.9 % 1.7 - 1.9 % 1.7 - 1.9 % Dividend yield 0.5 % 1.8 % 1.8 % Expected lives (in years) 0.2 - 4.6 0.3 - 5.4 1.0 - 6.5 Volatility 57 - 130 % 14 - 23 % 14 - 25 % |
SARs Accounted for as Equity Classified Awards | |
Share-based payment plans | |
Summary of share based payment activity | Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value SARs outstanding at December 31, 2018 1,219,028 $ 51.05 Granted — — Exercised — — Cancelled or expired (293,437) 50.66 SARs outstanding at December 31, 2019 925,591 51.18 6.71 $ — SARs vested and expected to vest at December 31, 2019 925,591 51.18 6.71 $ — SARs exercisable at December 31, 2019 588,076 $ 50.75 6.57 $ — |
Restricted Share Units | Omnibus and DigitalGlobe Equity Incentive Plan | |
Share-based payment plans | |
Summary of share based payment activity | Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Awards 1 Fair Value 1 Awards 2 Fair Value 2 Awards 3 Fair Value 3 Nonvested RSUs at December 31, 2018 - $ - 419,512 $ 51.99 273,861 $ 54.57 Granted 1,086,004 7.90 77,259 4.75 — - Vested (16,934) 6.59 (150,337) 52.88 (117,346) 54.57 Cancelled or expired (82,335) 8.03 (98,936) 52.74 (55,844) 54.57 Nonvested RSUs at December 31, 2019 986,735 $ 7.91 247,498 $ 36.42 100,671 $ 54.57 1 2 3 |
RSUs Liability Classified Awards | |
Share-based payment plans | |
Summary of share based payment activity | Weighted Average Number of Grant Date Awards 1 Fair Value 1 Nonvested RSUs at December 31, 2018 - $ - Granted 1,054,658 6.93 Vested — - Cancelled or expired (108,377) 6.92 Nonvested RSUs at December 31, 2019 946,281 $ 6.93 1 |
Performance Share Unit | |
Share-based payment plans | |
Summary of share based payment activity | Weighted Average Number of Grant Date Awards Fair Value Nonvested PSUs at December 31, 2018 - $ - Granted 1,060,253 6.81 Vested — - Cancelled or expired (96,851) 6.62 Nonvested PSUs at December 31, 2019 963,402 $ 6.83 |
Summary of valuation share based compensation awards | Year Ended December 31, 2019 Risk-free interest rate 2.2 - 2.3 % Dividend yield 0.5 - 0.9 % Expected lives (in years) 2.9 - 3.0 Volatility 63 - 67 % |
Deferred Share Units (DSU) | |
Share-based payment plans | |
Summary of share based payment activity | Number of Awards Weighted Average Issuance Price DSUs outstanding at December 31, 2018 107,603 C$ 51.52 Issued — — Redeemed (41,993) 49.96 DSUs outstanding at December 31, 2019 65,610 C$ 52.76 |
Equity-settled SARs, RSUs and DSUs | |
Share-based payment plans | |
Summary of valuation share based compensation awards | Year Ended December 31, 2019 1 2018 2017 Risk-free interest rate 1.9 - 2.3 % 0.6 - 1.9 % Dividend yield 2.2 - 9.1 % 1.5 - 2.2 % Expected lives (in years) 3.0 - 7.0 0.4 - 7.0 Volatility 22 - 41 % 17 - 25 % |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | |
Schedule of components of earnings before income taxes | Year Ended December 31, 2019 2018 2017 U.S. $ 77 $ (806) $ (181) Non-U.S. — (117) (42) Income (loss) before taxes $ 77 $ (923) $ (223) |
Schedule of Income tax expense / (benefit) | Year Ended December 31, 2019 2018 2017 Current tax expense U.S. $ 5 $ — $ 1 Non-U.S. — — — 5 — 1 Deferred tax benefit U.S. — (2) (145) Non-U.S. — (46) (24) — (48) (169) Income tax expense (benefit) $ 5 $ (48) $ (168) |
Schedule of reconciliation of the US statutory income tax rate to our effective income tax rate | Year Ended December 31, 2019 2018 2017 U.S. statutory income tax rate 21 % 21 % 35 % Expected income tax expense (benefit) at statutory rate $ 16 $ (194) $ (78) Impact of Tax Cuts and Jobs Act of 2017 — — 26 Change in statutory tax rates — — (1) Non-deductible expenses 15 6 9 Tax on international operations (1) (45) (24) Change in valuation allowance (108) 96 (93) Base Erosion and Anti-Abuse Tax 5 — — Outside basis difference in assets held for sale 78 — — Tax credits (1) (9) (8) Non-deductible goodwill impairment — 98 — Other 1 — 1 Income tax expense (benefit) $ 5 $ (48) $ (168) Effective income tax rate 6 % 5 % 75 % |
Schedule of significant components of deferred tax assets and liabilities | Year Ended December 31, 2019 2018 2017 Tax benefit of losses carried forward $ 219 $ 222 $ 198 Research and development tax credits 82 91 72 Construction contract liabilities 89 77 67 Property and equipment — 15 3 Trade and other payables 41 38 25 Employee benefits 41 49 53 Unrealized foreign exchange gains and losses 6 6 5 Other 18 21 8 Deferred tax assets 496 519 431 Valuation allowance (231) (304) (134) Deferred tax assets, net of valuation allowance 265 215 297 Property and equipment (47) — — Goodwill and intangibles (124) (213) (301) Outside basis difference in assets held for sale (78) — — Other (10) (2) — Deferred tax liabilities (259) (215) (301) Deferred tax assets and (liabilities), net $ 6 $ — $ (4) |
Schedule of changes in unrecognized tax benefits | Year Ended December 31, 2019 2018 2017 Balance, beginning of year $ — $ — $ — Gross increases related to prior period tax positions 6 — — Gross increases related to current period tax positions 1 — — Balance, end of year $ 7 $ — $ — |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share | |
Summary of calculation of basic and diluted EPS | Year Ended December 31, 2019 2018 2017 Income (loss) from continuing operations $ 83 $ (873) $ (56) Income (loss) from discontinued operations, net of tax 26 (377) 116 Net income (loss) $ 109 $ (1,250) $ 60 Weighted average number of common shares outstanding-basic 59.6 58.1 41.2 Weighted dilutive effect of equity awards 0.6 — — Weighted average number of common shares outstanding-diluted 60.2 58.1 41.2 Basic net income (loss) per common share: Income (loss) from continuing operations $ 1.39 $ (15.03) $ (1.36) Income (loss) from discontinued operations, net of tax 0.44 (6.49) 2.82 Basic net income (loss) per common share $ 1.83 $ (21.52) $ 1.46 Diluted net income (loss) per common share: Income (loss) from continuing operations $ 1.38 $ (15.03) $ (1.36) Income (loss) from discontinued operations, net of tax 0.43 (6.49) 2.82 Diluted net income (loss) per common share $ 1.81 $ (21.52) $ 1.46 |
Supplemental cash flow (Tables)
Supplemental cash flow (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental cash flow | |
Schedule of supplemental cash flow | Year ended December 31, 2019 2018 2017 Supplemental cash flow information: Cash paid for interest $ (193) $ (152) $ (41) Supplemental non-cash investing and financing activities: Accrued capital expenditures $ 19 $ 19 $ 15 Acquisition — — 1,197 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Data (Unaudited) | |
Schedule of selected quarterly financial data (unaudited) | 2019 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total revenues $ 431 $ 412 $ 413 $ 410 $ 466 $ 487 $ 433 $ 418 (Loss) Income from continuing operations $ (68) $ 139 $ (41) $ 53 $ (27) $ (52) $ (309) $ (485) Income (loss) from discontinued operations, net of tax 11 9 16 (10) 41 15 23 (456) Net income (loss) $ (57) $ 148 $ (25) $ 43 $ 14 $ (37) $ (286) $ (941) Basic net income (loss) per common share: (Loss) Income from continuing operations $ (1.14) 2.33 (0.69) 0.89 (0.48) (0.91) (5.22) (8.18) Income (loss) from discontinued operations, net of tax 0.18 0.15 0.27 (0.17) 0.73 0.26 0.39 (7.69) Basic net (loss) income per common share $ (0.96) $ 2.48 $ (0.42) $ 0.72 $ 0.25 $ (0.65) $ (4.83) $ (15.87) Diluted net income (loss) per common share: (Loss) Income from continuing operations $ (1.14) 2.32 (0.69) 0.87 (0.48) (0.91) (5.22) (8.18) Income (loss) from discontinued operations, net of tax 0.18 0.15 0.27 (0.17) 0.73 0.26 0.39 (7.69) Diluted net (loss) income per common share $ (0.96) $ 2.47 $ (0.42) $ 0.70 $ 0.25 $ (0.65) $ (4.83) $ (15.87) |
General business description (D
General business description (Details) $ in Billions | Dec. 30, 2019CAD ($)segment |
General Business Description | |
Number of reportable segments | segment | 2 |
Discontinued operations | MDA business | |
General Business Description | |
Aggregate purchase price | $ | $ 1 |
Summary of significant accoun_4
Summary of significant accounting policies - Narratives (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Interest expense | |||
Interest expense | $ 219 | $ 200 | $ 97 |
Selling, general and administrative | |||
Research and development | |||
Research and development costs | 10 | 88 | $ 62 |
Prepaid and other current assets | |||
Significant accounting policies | |||
Current deferred contract costs | 6 | 3 | |
Other non-current assets | |||
Significant accounting policies | |||
Non-current deferred contract costs | $ 37 | $ 30 | |
EnhancedView contract | |||
Significant accounting policies | |||
Number of performance obligations | item | 1 | ||
Contractual term | 10 years | ||
Period of option | 3 years | ||
Direct Access Program | |||
Significant accounting policies | |||
Number of performance obligations | item | 2 | ||
Space Infrastructure | Other non-current assets | |||
Significant accounting policies | |||
Long term orbital receivables | $ 382 | $ 407 | |
Space Infrastructure | Commercial Satellite Contract | |||
Significant accounting policies | |||
Estimated Loss | $ 49 |
Summary of significant accoun_5
Summary of significant accounting policies - Investments (Details) - Vricon - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity method investments | |||
Ownership interest | 50.00% | ||
Summarized Consolidated Balance Sheets | |||
Current assets | $ 49 | $ 12 | |
Non-current assets | 5 | 6 | |
Total assets | 54 | 18 | |
Total liabilities | 10 | 5 | |
Summarized Consolidated Statements of Operations | |||
Revenues | 54 | 21 | $ 14 |
Gross profit | 51 | 19 | 14 |
Income from operations | 32 | 2 | 1 |
Net income | $ 24 | $ 1 | $ 1 |
Summary of significant accoun_6
Summary of significant accounting policies - Property, plant and equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Land improvements | |
Significant accounting policies | |
Estimated useful life | 20 years |
Buildings | Minimum | |
Significant accounting policies | |
Estimated useful life | 7 years |
Buildings | Maximum | |
Significant accounting policies | |
Estimated useful life | 45 years |
Equipment | Minimum | |
Significant accounting policies | |
Estimated useful life | 2 years |
Equipment | Maximum | |
Significant accounting policies | |
Estimated useful life | 40 years |
Satellites | Minimum | |
Significant accounting policies | |
Estimated useful life | 11 years 6 months |
Satellites | Maximum | |
Significant accounting policies | |
Estimated useful life | 14 years |
Furniture and fixtures | Minimum | |
Significant accounting policies | |
Estimated useful life | 2 years |
Furniture and fixtures | Maximum | |
Significant accounting policies | |
Estimated useful life | 10 years |
Computer hardware | Minimum | |
Significant accounting policies | |
Estimated useful life | 2 years |
Computer hardware | Maximum | |
Significant accounting policies | |
Estimated useful life | 13 years |
Summary of significant accoun_7
Summary of significant accounting policies - Intangible assets and goodwill (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Significant accounting policies | |
Insurance recoveries received | $ 183 |
Customer relationships | Minimum | |
Significant accounting policies | |
Estimated useful life | 9 years |
Customer relationships | Maximum | |
Significant accounting policies | |
Estimated useful life | 21 years |
Backlog | Minimum | |
Significant accounting policies | |
Estimated useful life | 3 years |
Backlog | Maximum | |
Significant accounting policies | |
Estimated useful life | 5 years |
Technologies | Minimum | |
Significant accounting policies | |
Estimated useful life | 5 years |
Technologies | Maximum | |
Significant accounting policies | |
Estimated useful life | 13 years |
Software | Minimum | |
Significant accounting policies | |
Estimated useful life | 3 years |
Software | Maximum | |
Significant accounting policies | |
Estimated useful life | 10 years |
Image library | |
Significant accounting policies | |
Estimated useful life | 5 years |
Trade name and other | Minimum | |
Significant accounting policies | |
Estimated useful life | 5 years |
Trade name and other | Maximum | |
Significant accounting policies | |
Estimated useful life | 20 years |
Non-compete agreements | |
Significant accounting policies | |
Estimated useful life | 2 years |
Summary of significant accoun_8
Summary of significant accounting policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Dec. 31, 2019 | Dec. 10, 2019 |
Recently Adopted Accounting Pronouncements | |||
Operating lease right-of-use assets | $ 176 | $ 63 | |
Operating lease liability | $ 213 | ||
ASU 2016-02 | |||
Recently Adopted Accounting Pronouncements | |||
Package practical expedients | true | ||
Hindsight practical expedient | false | ||
Operating lease right-of-use assets | $ 133 | ||
Operating lease liability | $ 176 |
Discontinued operations - Narra
Discontinued operations - Narratives (Details) - MDA business - Discontinued operations $ in Millions, $ in Millions | Dec. 29, 2019CAD ($) | Dec. 31, 2019USD ($) |
Discontinued Operations | ||
Aggregate purchase price | $ 1,000 | |
Purchase price adjustment | 65 | |
Reverse termination fee | $ 55 | |
Transition Services, Period | 12 months | |
Transition Services extension period | 6 months | |
Accrued Liabilities | ||
Discontinued Operations | ||
Reserves for legal proceedings liabilities | $ 60 |
Discontinued operations - Finan
Discontinued operations - Financial information Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||||||||||
Total revenues | $ 367 | $ 420 | $ 425 | ||||||||
Costs and expenses: | |||||||||||
Selling, general and administrative | 88 | 59 | 54 | ||||||||
Depreciation and amortization | 11 | 10 | 10 | ||||||||
Impairment losses | 12 | 477 | 0 | ||||||||
Operating income (loss) | 23 | (389) | 117 | ||||||||
Interest expense, net | 1 | 1 | 1 | ||||||||
Other (income) expense, net | 3 | (6) | |||||||||
Income (loss) before taxes | 19 | (390) | 122 | ||||||||
Income tax expense (benefit) | (7) | (13) | 6 | ||||||||
Income (loss) from discontinued operations, net of tax | $ (10) | $ 16 | $ 9 | $ 11 | $ (456) | $ 23 | $ 15 | $ 41 | 26 | (377) | 116 |
Product | |||||||||||
Revenues: | |||||||||||
Total revenues | 206 | 238 | 275 | ||||||||
Costs and expenses: | |||||||||||
Costs, excluding depreciation and amortization | 149 | 149 | 158 | ||||||||
Service | |||||||||||
Revenues: | |||||||||||
Total revenues | 161 | 182 | 150 | ||||||||
Costs and expenses: | |||||||||||
Costs, excluding depreciation and amortization | $ 84 | $ 114 | $ 86 |
Discontinued operations - Fin_2
Discontinued operations - Financial Information Balance sheet (Details) - USD ($) $ in Millions | Jul. 16, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||||
Cash and cash equivalents | $ 45 | $ 16 | ||
Trade and other receivables, net | 168 | 156 | ||
Deferred tax assets | 117 | |||
Property, plant and equipment | 29 | |||
Intangible assets | 27 | |||
Goodwill | 310 | |||
Other assets | 55 | 31 | ||
Current assets held for sale | 751 | 203 | ||
Deferred tax assets | 104 | |||
Property, plant and equipment | 28 | |||
Intangible assets | 28 | |||
Goodwill | 296 | |||
Other assets | 26 | |||
Non-current assets held for sale | 482 | |||
Liabilities | ||||
Accounts payable | 88 | 68 | ||
Accrued liabilities | 18 | 21 | ||
Accrued compensation and benefits | 21 | 20 | ||
Contract liabilities | 29 | 24 | ||
Pension and other postretirement benefit liabilities | 21 | |||
Other liabilities | 53 | 21 | ||
Current liabilities held for sale | 230 | 154 | ||
Pension and other postretirement benefit liabilities | 18 | |||
Other liabilities | 40 | |||
Non-current liabilities held for sale | 58 | |||
Goodwill | $ 1,455 | $ 1,455 | $ 1,617 | |
Neptec Design Group Ltd | ||||
Liabilities | ||||
Equity and cash consideration | $ 30 | |||
Cash paid | 6 | |||
Goodwill | 21 | |||
Intangible assets, net | 11 | |||
Fair value of net identifiable assets acquired | $ 2 |
Business combinations - Digital
Business combinations - DigitalGlobe (Details) - USD ($) | Jun. 15, 2018 | Oct. 05, 2017 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | Oct. 04, 2017 |
Business combination | ||||||||||||||||
Debt issuance costs | $ 4,000,000 | $ 3,000,000 | ||||||||||||||
Accelerated share-based awards relating to post-acquisition services | $ 33,000,000 | |||||||||||||||
Revenues | $ 410,000,000 | $ 413,000,000 | $ 412,000,000 | $ 431,000,000 | $ 418,000,000 | $ 433,000,000 | $ 487,000,000 | $ 466,000,000 | 1,666,000,000 | 1,804,000,000 | 1,257,000,000 | |||||
Income before income taxes | 77,000,000 | (923,000,000) | (223,000,000) | |||||||||||||
Liabilities | ||||||||||||||||
Goodwill | $ 1,455,000,000 | $ 1,455,000,000 | $ 1,617,000,000 | 1,455,000,000 | 1,455,000,000 | 1,617,000,000 | ||||||||||
Acquisition related costs | $ 16,000,000 | $ 33,000,000 | 60,000,000 | |||||||||||||
DigitalGlobe | ||||||||||||||||
Business combination | ||||||||||||||||
Common share exchanged for cash | $ 17.50 | |||||||||||||||
Common share exchange ratio (in shares) | 0.3132 | |||||||||||||||
Closing price of share (in dollars per share) | $ 54.57 | |||||||||||||||
Share issuance costs | $ 3,000,000 | |||||||||||||||
Fair value of replacement awards attributable to pre-acquisition | 16,000,000 | |||||||||||||||
Fair value of replacement awards attributable to post-acquisition | $ 14,000,000 | |||||||||||||||
Number of shares owned by dissenting shareholders | 80,000 | |||||||||||||||
Number of dissenting common shareholders | 352,225 | |||||||||||||||
Shares issued in acquisition | 2,206,464 | |||||||||||||||
Revenues | 222,000,000 | |||||||||||||||
Income before income taxes | $ 8,000,000 | |||||||||||||||
Proforma information | ||||||||||||||||
Revenue | 2,300,000,000 | |||||||||||||||
Summary of fair value of consideration and preliminary estimated fair value of assets acquired and liabilities assumed | ||||||||||||||||
Cash paid | $ 1,131,000,000 | |||||||||||||||
Shares issued | 1,063,000,000 | |||||||||||||||
Merger consideration to be settled | 3,000,000 | |||||||||||||||
Liability to dissenting shareholders | 115,000,000 | |||||||||||||||
Issuance of replacement equity-settled awards | 16,000,000 | |||||||||||||||
Purchase consideration | 2,328,000,000 | |||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 171,000,000 | |||||||||||||||
Trade and other receivables | 142,000,000 | |||||||||||||||
Property, plant and equipment | 696,000,000 | |||||||||||||||
Intangible assets, net | 1,440,000,000 | |||||||||||||||
Other assets | 106,000,000 | |||||||||||||||
Total Assets | 2,555,000,000 | |||||||||||||||
Liabilities | ||||||||||||||||
Accounts payable | 83,000,000 | |||||||||||||||
Other current liabilities | 4,000,000 | |||||||||||||||
Pension and other postretirement benefit liabilities | 29,000,000 | |||||||||||||||
Long-term debt | 1,276,000,000 | |||||||||||||||
Other liabilities | 504,000,000 | |||||||||||||||
Total Liabilities | 1,896,000,000 | |||||||||||||||
Fair value of net identifiable assets acquired | 659,000,000 | |||||||||||||||
Goodwill | 1,669,000,000 | |||||||||||||||
Goodwill is deductible for income tax purposes | 0 | |||||||||||||||
Acquisition related costs | $ 60,000,000 | |||||||||||||||
DigitalGlobe | Syndicated Credit Facility | ||||||||||||||||
Business combination | ||||||||||||||||
Aggregate principal amount | 3,800,000,000 | $ 3,750,000,000 | ||||||||||||||
Initial draw of debt | 3,100,000,000 | |||||||||||||||
Debt issuance costs | 63,000,000 | |||||||||||||||
Equity award-holders pay-out | 1,200,000,000 | |||||||||||||||
Refinance debt of acquiree | 1,300,000,000 | |||||||||||||||
Refinance debt | $ 742,000,000 |
Business combination - Intangib
Business combination - Intangible assets of DigitalGlobe (Details) - DigitalGlobe $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Intangible assets | |
Carrying Value | $ 1,440 |
Customer relationships | |
Intangible assets | |
Carrying Value | $ 608 |
Weighted average useful life (in years) | 14 years |
Backlog | |
Intangible assets | |
Carrying Value | $ 331 |
Weighted average useful life (in years) | 4 years |
Technologies | |
Intangible assets | |
Carrying Value | $ 318 |
Weighted average useful life (in years) | 5 years |
Software | |
Intangible assets | |
Carrying Value | $ 46 |
Weighted average useful life (in years) | 3 years |
Image library | |
Intangible assets | |
Carrying Value | $ 80 |
Weighted average useful life (in years) | 5 years |
Trade names and other | |
Intangible assets | |
Carrying Value | $ 37 |
Weighted average useful life (in years) | 10 years |
Other | |
Intangible assets | |
Carrying Value | $ 20 |
Weighted average useful life (in years) | 2 years |
Trade and other receivables, ne
Trade and other receivables, net (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Trade and other receivables | ||
Total trade receivables | $ 311 | $ 314 |
Orbital receivables, current portion | 43 | 34 |
Other | 4 | 3 |
Allowance for doubtful accounts | (1) | (1) |
Total trade and other receivables, net | 357 | 350 |
U.S government receivables | ||
Trade and other receivables | ||
Billed | 88 | 96 |
Unbilled | 46 | 60 |
Total trade receivables | 134 | 156 |
Other governments and commercial receivables | ||
Trade and other receivables | ||
Billed | 123 | 99 |
Unbilled | 54 | 59 |
Total trade receivables | $ 177 | $ 158 |
Trade and other receivables, _2
Trade and other receivables, net - Orbital receivables (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)customer | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Trade and other receivables | |||
Orbital receivables | $ 382 | $ 407 | |
Impairment to long-term orbital receivables | $ 14 | $ 22 | $ 0 |
Accounts Receivable | Credit Concentration Risk | |||
Trade and other receivables | |||
Number of customers | customer | 14 | ||
Accounts Receivable | Credit Concentration Risk | Largest Customer | |||
Trade and other receivables | |||
Concentration risk, percentage | 27.00% | ||
Minimum | |||
Trade and other receivables | |||
Discount rate for recognition of revenue on percentage completion basis | 6.00% | 6.00% | |
Maximum | |||
Trade and other receivables | |||
Discount rate for recognition of revenue on percentage completion basis | 10.00% | 10.00% |
Trade and other receivables - E
Trade and other receivables - Expected timing of total contractual cash flows (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Contract receivable | ||
2020 | $ 65 | |
2021 | 69 | |
2022 | 73 | |
2023 | 74 | |
2024 | 72 | |
Thereafter | 370 | |
Contract receivable | 723 | |
Orbital receivables | ||
Proceeds from sale of orbital receivables | $ 18 | |
Orbital receivables repurchased | 24 | |
Securitization liabilities | 65 | 109 |
Other current liabilities | ||
Orbital receivables | ||
Securitization liabilities | 17 | 15 |
Other non-current liabilities | ||
Orbital receivables | ||
Securitization liabilities | $ 48 | $ 94 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory | ||
Raw materials | $ 13 | $ 20 |
Work in process | 7 | 9 |
Total inventory | $ 20 | $ 29 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, plant and equipment | |||
Property, plant and equipment, at cost | $ 1,138 | $ 1,021 | |
Accumulated depreciation | (380) | (296) | |
Property, plant and equipment, net | 758 | 725 | |
Depreciation | 107 | 150 | $ 55 |
Satellites | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 397 | 397 | |
Equipment | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 196 | 199 | |
Leasehold improvements | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 75 | 75 | |
Computer hardware | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 67 | 62 | |
Land and Land improvements | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 85 | ||
Buildings | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 41 | ||
Furniture and fixtures | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 15 | 15 | |
Construction in process | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | $ 388 | $ 147 |
Property, plant and equipment -
Property, plant and equipment - Narrative (Details) $ in Millions | Dec. 10, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Property, plant and equipment | ||||
Gain on sale-leaseback | $ 136 | $ 33 | ||
Operating lease right-of-use assets | $ 63 | 176 | ||
Operating lease liabilities | 213 | |||
Building Sale | $ 68 | |||
Gain on sale of assets | $ 33 | $ 136 | $ 33 | |
Number of buildings | 1 | |||
Properties in Palo Alto, California | ||||
Property, plant and equipment | ||||
Net proceeds | 280 | |||
Gain on sale-leaseback | $ 136 |
Intangible assets and goodwil_2
Intangible assets and goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-lived intangible assets: | |||
Gross carrying value | $ 1,595 | $ 1,564 | |
Accumulated amortization | (604) | (360) | |
Net carrying value | 991 | 1,204 | |
Amortization of intangible assets | 269 | 289 | $ 97 |
Customer relationships | |||
Finite-lived intangible assets: | |||
Gross carrying value | 615 | 615 | |
Accumulated amortization | (102) | (58) | |
Net carrying value | 513 | 557 | |
Backlog | |||
Finite-lived intangible assets: | |||
Gross carrying value | 330 | 330 | |
Accumulated amortization | (217) | (120) | |
Net carrying value | 113 | 210 | |
Technologies | |||
Finite-lived intangible assets: | |||
Gross carrying value | 320 | 323 | |
Accumulated amortization | (144) | (83) | |
Net carrying value | 176 | 240 | |
Software | |||
Finite-lived intangible assets: | |||
Gross carrying value | 213 | 159 | |
Accumulated amortization | (83) | (50) | |
Net carrying value | 130 | 109 | |
Image library | |||
Finite-lived intangible assets: | |||
Gross carrying value | 80 | 80 | |
Accumulated amortization | (48) | (32) | |
Net carrying value | 32 | 48 | |
Trade names and other | |||
Finite-lived intangible assets: | |||
Gross carrying value | 37 | 37 | |
Accumulated amortization | (10) | (5) | |
Net carrying value | $ 27 | 32 | |
Non-compete agreements | |||
Finite-lived intangible assets: | |||
Gross carrying value | 20 | ||
Accumulated amortization | (12) | ||
Net carrying value | $ 8 |
Intangible assets and goodwil_3
Intangible assets and goodwill - Estimated annual amortization expense (Details) $ in Millions | Dec. 31, 2019USD ($) |
Amortization expense | |
2020 | $ 246 |
2021 | 181 |
2022 | 140 |
2023 | 56 |
2024 | 49 |
2025 and thereafter | $ 319 |
Intangible assets and goodwil_4
Intangible assets and goodwill - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill | |||
Goodwill | $ 1,614 | $ 1,614 | $ 1,617 |
Accumulated impairment losses | (159) | (159) | |
Goodwill, net | 1,455 | 1,455 | 1,617 |
Impairment losses | 0 | (159) | 0 |
Disposal of immaterial subsidiary | (3) | ||
Earth intelligence | |||
Goodwill | |||
Goodwill | 1,597 | 1,597 | 1,600 |
Accumulated impairment losses | (142) | (142) | |
Goodwill, net | 1,455 | 1,455 | 1,600 |
Impairment losses | (142) | ||
Disposal of immaterial subsidiary | (3) | ||
Space Infrastructure | |||
Goodwill | |||
Goodwill | 17 | 17 | 17 |
Accumulated impairment losses | $ (17) | (17) | |
Goodwill, net | $ 17 | ||
Impairment losses | $ (17) |
Leases (Details)
Leases (Details) | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2005 |
Minimum | |||
Leases | |||
Remaining lease term - Finance | 1 year | ||
Option to extend - Operating | 1 year | ||
Maximum | |||
Leases | |||
Remaining lease term - Operating | 15 years | ||
Remaining lease term - Finance | 15 years | ||
Option to extend - Operating | 10 years | ||
Properties in Palo Alto, California | Minimum | |||
Leases | |||
Sale Leaseback Transaction, Lease Terms | P2Y | ||
Properties in Palo Alto, California | Maximum | |||
Leases | |||
Sale Leaseback Transaction, Lease Terms | P10Y |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Leases | ||
Rent expense | $ 26 | $ 31 |
Selling, general, and administrative expense, Product costs, and Service costs | ||
Leases | ||
Operating lease cost | $ 27 |
Leases - Supplemental lease bal
Leases - Supplemental lease balance sheet information (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 10, 2019 |
Leases | ||
Non-current operating lease assets | $ 176 | $ 63 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Non-current operating lease assets | |
Finance | $ 5 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net. | |
Total leased assets | $ 181 | |
Current operating lease liabilities | $ 40 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current operating lease liabilities | |
Operating lease liability, non current | $ 173 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liability, non current | |
Finance lease liability, current | $ 2 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | |
Finance lease liability, non current | $ 1 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | |
Total leased Liabilities | $ 216 |
Leases - Supplemental lease cas
Leases - Supplemental lease cash flow information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 30 | |
Gain on sale-leaseback | (136) | $ (33) |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 72 |
Leases - Other Supplemental lea
Leases - Other Supplemental lease information (Details) | Dec. 31, 2019 |
Leases | |
Operating leases - Weighted average remaining lease term | 9 years |
Finance leases - Weighted average remaining lease term | 3 years |
Operating leases - Weighted average discount rate | 6.40% |
Finance leases - Weighted average discount rate | 3.50% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Operating leases | |
2020 | $ 42 |
2021 | 40 |
2022 | 30 |
2023 | 27 |
2024 | 25 |
Thereafter | 117 |
Less: imputed interest | (68) |
Total minimum lease payments | 213 |
Finance leases | |
2020 | 2 |
2021 | 1 |
2022 | 1 |
Less: imputed interest | (1) |
Total minimum lease payments | $ 3 |
Warranty and restructuring (Det
Warranty and restructuring (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Changes to warranty and after sale service liabilities | ||
Balance at beginning of period | $ 3 | $ 1 |
Obligations incurred | 18 | 13 |
Payments | (19) | (11) |
Balance at end of period | 2 | 3 |
Changes to restructuring liabilities | ||
Balance at beginning of period | 40 | 39 |
Obligations incurred | 3 | 5 |
Payments/uses | (2) | (4) |
Balance at end of period | $ 41 | $ 40 |
Long term debt and interest e_2
Long term debt and interest expense (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term debt and interest expenses | ||
Debt issuance costs | $ (54) | $ (41) |
Obligations under finance leases and other | 9 | |
Obligations under finance leases and other | 6 | |
Total long-term debt | 2,945 | 3,043 |
Current portion of long-term debt | (30) | (16) |
Non-current portion of long-term debt | 2,915 | 3,027 |
Revolving loan payable | ||
Long-term debt and interest expenses | ||
Long-term debt | 595 | |
Term Loan A | ||
Long-term debt and interest expenses | ||
Long-term debt | 500 | |
Term Loan B | ||
Long-term debt and interest expenses | ||
Long-term debt | 1,960 | $ 1,980 |
2023 Notes | ||
Long-term debt and interest expenses | ||
Long-term debt | 1,000 | |
Deferred financing | ||
Long-term debt and interest expenses | ||
Long-term debt | $ 33 |
Long term debt and interest e_3
Long term debt and interest expense - Syndicated credit facility (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Nov. 30, 2019USD ($) | Oct. 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 31, 2019USD ($) | Oct. 05, 2017USD ($) | |
Long-term debt and interest expenses | |||||||
Loss from early extinguishment of debt | $ (22) | $ (23) | |||||
Amortization of capitalized financing fees | 11 | $ 9 | $ 3 | ||||
At the end of each fiscal quarter | |||||||
Long-term debt and interest expenses | |||||||
Interest coverage ratio | 2 | ||||||
Syndicated Credit Facility | At the end of the current fiscal year | |||||||
Long-term debt and interest expenses | |||||||
Maximum debt to EBITDA | 7.25 | ||||||
Syndicated Credit Facility | At the end of the next fiscal quarter | |||||||
Long-term debt and interest expenses | |||||||
Maximum debt to EBITDA | 7.50 | ||||||
Syndicated Credit Facility | At the end of each fiscal quarter for the next 18 months | |||||||
Long-term debt and interest expenses | |||||||
Maximum debt to EBITDA | 7.75 | ||||||
Syndicated Credit Facility | At the end of each fiscal quarter for the next twelve months | |||||||
Long-term debt and interest expenses | |||||||
Maximum debt to EBITDA | 7.50 | ||||||
Syndicated Credit Facility | At the end of each fiscal quarter for the next six months | |||||||
Long-term debt and interest expenses | |||||||
Maximum debt to EBITDA | 6.50 | ||||||
Syndicated Credit Facility | For each fiscal quarter thereafter | |||||||
Long-term debt and interest expenses | |||||||
Maximum debt to EBITDA | 5.75 | ||||||
Syndicated Credit Facility | Upon a disposition of a business line for greater than $500 million | |||||||
Long-term debt and interest expenses | |||||||
Reduction in each maximum level of Debt to EBITDA | 0.25 | ||||||
Revolving Credit Facility | |||||||
Long-term debt and interest expenses | |||||||
Extended term of debt | 2 years | ||||||
Maximum borrowing capacity | $ 500 | $ 1,250 | |||||
Letter of credit outstanding | $ 18 | $ 18 | |||||
Revolving Credit Facility | Upon a disposition of a business line for greater than $500 million | |||||||
Long-term debt and interest expenses | |||||||
Minimum amount of disposition of business line to trigger a reduction in each maximum level of consolidated debt to EBITDA | $ 500 | ||||||
Revolving Credit Facility | U.S. Libor | Minimum | |||||||
Long-term debt and interest expenses | |||||||
Spread on variable rate | 1.20% | ||||||
Revolving Credit Facility | U.S. Libor | Maximum | |||||||
Long-term debt and interest expenses | |||||||
Spread on variable rate | 4.25% | ||||||
Revolving Credit Facility | Adjusted Base Rate | Minimum | |||||||
Long-term debt and interest expenses | |||||||
Spread on variable rate | 0.20% | ||||||
Revolving Credit Facility | Adjusted Base Rate | Maximum | |||||||
Long-term debt and interest expenses | |||||||
Spread on variable rate | 3.25% | ||||||
Letter of credit | |||||||
Long-term debt and interest expenses | |||||||
Maximum borrowing capacity | $ 200 | ||||||
Term Loan A | |||||||
Long-term debt and interest expenses | |||||||
Loss from early extinguishment of debt | $ 22 | ||||||
Term Loan A | Adjusted Base Rate | |||||||
Long-term debt and interest expenses | |||||||
Spread on variable rate | 1.75% | ||||||
Term Loan B | |||||||
Long-term debt and interest expenses | |||||||
Installment payments as a percentage of original principal amount | 1.00% | ||||||
Term Loan B | U.S. Libor | |||||||
Long-term debt and interest expenses | |||||||
Spread on variable rate | 2.75% | ||||||
DigitalGlobe | Syndicated Credit Facility | |||||||
Long-term debt and interest expenses | |||||||
Aggregate principal amount | $ 3,750 | $ 3,800 | |||||
Loss from early extinguishment of debt | $ 23 | ||||||
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 | Syndicated Credit Facility and 2024 Term Notes | |||||||
Long-term debt and interest expenses | |||||||
Make-whole premium for termination | $ 20 | ||||||
Amortization of capitalized financing fees | $ 3 |
Long term debt and interest e_4
Long term debt and interest expense - Senior Secured 2023 Notes (Details) - 2023 Notes $ in Billions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Long-term debt and interest expenses | |
Aggregate principal amount | $ 1 |
Debt interest rate | 9.75% |
Notes issue price percentage | 98.00% |
Long term debt and interest e_5
Long term debt and interest expense - Deferred Financing (Details) - Deferred financing $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Long-term debt and interest expenses | |
Long-term debt | $ 33 |
Properties in Palo Alto, California | |
Long-term debt and interest expenses | |
Net proceeds | 291 |
Long-term debt | $ 33 |
Lease term | P10Y |
Weighted average discount rate | 4.62% |
Long term debt and interest e_6
Long term debt and interest expense - Interest expense on long term debts and other obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest expenses | |||
Interest on long-term debt | $ 194 | $ 171 | $ 57 |
Interest expense on advance payments from customers | 15 | 26 | 8 |
Interest on orbital securitization liability | 7 | 7 | 8 |
Imputed interest and other | 1 | ||
Capitalized interest | (19) | (7) | |
Loss on debt extinguishment | 22 | 23 | |
Interest expense on dissenting stockholder liability | 3 | ||
Total interest expense | $ 219 | $ 200 | $ 97 |
Long term debt and interest e_7
Long term debt and interest expense - Annual contractual principal repayments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Finance leases | ||
2020 | $ 2 | |
2021 | 1 | |
2022 | 1 | |
Total minimum lease payments | 3 | |
Debt discount and issuance costs | ||
2020 | (11) | |
2021 | (12) | |
2022 | (13) | |
2023 | (13) | |
2024 | (5) | |
Total | (54) | $ (41) |
Total | ||
2020 | 17 | |
2021 | 15 | |
2022 | 9 | |
2023 | 1,009 | |
2024 | 1,877 | |
Thereafter | 15 | |
Total long-term debt | 2,942 | |
Syndicated Credit Facility | ||
Long-term debt | ||
2020 | 20 | |
2021 | 20 | |
2022 | 20 | |
2023 | 20 | |
2024 | 1,880 | |
Total | 1,960 | |
2023 Notes | ||
Long-term debt | ||
2023 | 1,000 | |
Total | 1,000 | |
Deferred financing | ||
Long-term debt | ||
2020 | 6 | |
2021 | 6 | |
2022 | 2 | |
2023 | 2 | |
2024 | 2 | |
Thereafter | 15 | |
Total | $ 33 |
Financial instruments and fai_3
Financial instruments and fair value disclosures - Financial instruments measured at fair value (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Orbital receivables | $ 382 | $ 407 |
Recurring | ||
Assets | ||
Short-term investments | 1 | |
Orbital receivables | 425 | 441 |
Long-term investments | 1 | |
Assets fair value | 426 | 442 |
Liabilities | ||
Long-term Debt, Fair Value | 3,004 | 2,925 |
Liabilities fair value | 3,022 | 2,929 |
Recurring | Interest rate swaps | ||
Liabilities | ||
Derivative financial instruments | 18 | 4 |
Recurring | Level 1 | ||
Assets | ||
Short-term investments | 1 | |
Long-term investments | 1 | |
Assets fair value | 1 | 1 |
Recurring | Level 2 | ||
Assets | ||
Orbital receivables | 425 | 441 |
Assets fair value | 425 | 441 |
Liabilities | ||
Long-term Debt, Fair Value | 3,004 | 2,925 |
Liabilities fair value | 3,022 | 2,929 |
Recurring | Level 2 | Interest rate swaps | ||
Liabilities | ||
Derivative financial instruments | $ 18 | $ 4 |
Financial instruments and fai_4
Financial instruments and fair value disclosures - Financial instruments recorded at carrying value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 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 |
Carrying value | ||
Financial instruments and fair value disclosures | ||
Long-term debt, excluding finance leases and other | 2,906 | 3,034 |
Orbital receivable | $ 425 | $ 441 |
Derivatives and Hedging - Cash
Derivatives and Hedging - Cash flow hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Apr. 05, 2018 | |
Derivatives and Hedging | |||
Average interest rate | 2.56% | ||
Interest rate swaps | Maximum | |||
Derivatives and Hedging | |||
Contract term | 2 years 3 months 18 days | ||
Derivatives designated as hedging instruments | Interest rate swaps | |||
Derivatives and Hedging | |||
Notional amount | $ 1,000 | $ 1,000 | |
Derivatives designated as hedging instruments | Interest rate swaps | Maximum | |||
Derivatives and Hedging | |||
Contract term | 3 years 3 months 18 days | ||
Derivatives designated as hedging instruments | Purchase contracts settled in US dollars | EURO | |||
Derivatives and Hedging | |||
Notional amount | $ 9 | ||
Derivatives designated as hedging instruments | Purchase contracts settled in US dollars | EURO | Maximum | |||
Derivatives and Hedging | |||
Contract term | 3 months 18 days | ||
Derivatives designated as hedging instruments | Purchase contracts settled in US dollars | Japanese Yen | |||
Derivatives and Hedging | |||
Notional amount | $ 177 | ||
Derivatives designated as hedging instruments | Purchase contracts settled in US dollars | Japanese Yen | Maximum | |||
Derivatives and Hedging | |||
Contract term | 2 months 12 days | ||
Derivatives designated as hedging instruments | Sales contracts settled in United States dollars | EURO | |||
Derivatives and Hedging | |||
Notional amount | $ 20 | ||
Derivatives designated as hedging instruments | Sales contracts settled in United States dollars | EURO | Maximum | |||
Derivatives and Hedging | |||
Contract term | 6 months | ||
Derivatives designated as hedging instruments | Sales contracts settled in United States dollars | Japanese Yen | |||
Derivatives and Hedging | |||
Notional amount | $ 177 | ||
Derivatives designated as hedging instruments | Sales contracts settled in United States dollars | Japanese Yen | Maximum | |||
Derivatives and Hedging | |||
Contract term | 2 months 12 days | ||
Derivatives not designated as hedging instruments | Sales contracts settled in United States dollars | EURO | |||
Derivatives and Hedging | |||
Notional amount | $ 10 | ||
Derivatives not designated as hedging instruments | Sales contracts settled in United States dollars | EURO | Maximum | |||
Derivatives and Hedging | |||
Contract term | 1 month 6 days |
Derivatives and Hedging - Earni
Derivatives and Hedging - Earnings and other comprehensive income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative instruments | |||
Effective portion of gains and losses included in other comprehensive income | $ (12) | $ (7) | $ (3) |
Derivatives designated as hedging instruments | Interest rate swaps | |||
Derivative instruments | |||
Effective portion of gains and losses included in other comprehensive income | $ 18 | $ 4 | $ 0 |
Derivatives and Hedging - Net i
Derivatives and Hedging - Net investment hedge (Details) - Term Loan B - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives and Hedging | ||
Long-term debt | $ 1,960 | $ 1,980 |
Net investment hedge | ||
Derivatives and Hedging | ||
Long-term debt | $ 271 | 271 |
Long-term debt, excluding capital leases | $ 256 |
Accumulated other comprehensi_3
Accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | $ 666 | ||
Balance at the end of period | 761 | $ 666 | |
Accumulated other comprehensive income (loss) | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 82 | 113 | $ 123 |
Other comprehensive (loss) income | (24) | (33) | (4) |
Tax expense | 1 | 2 | (6) |
Balance at the end of period | 59 | 82 | 113 |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 111 | 130 | 123 |
Other comprehensive (loss) income | 14 | (19) | 7 |
Tax expense | 1 | ||
Balance at the end of period | 126 | 111 | 130 |
Net (Loss) Income Hedge Investments in Foreign Operations | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 51 | ||
Balance at the end of period | 51 | ||
Unrecognized (Loss) Gain on Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 7 | 10 | |
Other comprehensive (loss) income | (12) | (10) | (3) |
Tax expense | 3 | ||
Balance at the end of period | (12) | 7 | |
Pension Adjustments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | (29) | (24) | (10) |
Other comprehensive (loss) income | (26) | (4) | (8) |
Tax expense | (1) | (6) | |
Balance at the end of period | $ (55) | $ (29) | $ (24) |
Revenue - Remaining performance
Revenue - Remaining performance obligations (Details) $ in Billions | Dec. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue | |
Expected timing of satisfaction | 1 year |
Remaining performance obligation | $ 1.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue | |
Expected timing of satisfaction | 1 year |
Remaining performance obligation | $ 1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue | |
Expected timing of satisfaction | 1 year |
Remaining performance obligation | $ 0.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue | |
Expected timing of satisfaction | |
Remaining performance obligation | $ 0.2 |
Revenue - Contract assets and l
Revenue - Contract assets and liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Contract assets and contract liabilities | ||
Contract Liabilities | $ 275 | $ 392 |
Imagery | EnhancedView contract | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 78 | 184 |
Increase in contract liability due to imputed interest on advance payments | 15 | |
Revenue recognized | 120 | |
Earth intelligence | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 130 | 243 |
Space Infrastructure | ||
Contract assets and contract liabilities | ||
Contract Liabilities | $ 145 | $ 149 |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue by source (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||||||||||
Revenues | $ 410 | $ 413 | $ 412 | $ 431 | $ 418 | $ 433 | $ 487 | $ 466 | $ 1,666 | $ 1,804 | $ 1,257 |
Product | |||||||||||
Revenue | |||||||||||
Revenues | 560 | 697 | 877 | ||||||||
Service | |||||||||||
Revenue | |||||||||||
Revenues | 1,106 | 1,107 | 380 | ||||||||
Space Systems | |||||||||||
Revenue | |||||||||||
Orbital interest revenue | 31 | 32 | 35 | ||||||||
Operating Segments | |||||||||||
Revenue | |||||||||||
Revenues | (125) | (78) | (6) | ||||||||
Operating Segments | Earth intelligence | |||||||||||
Revenue | |||||||||||
Revenues | 1,085 | 1,059 | 331 | ||||||||
Operating Segments | Earth intelligence | Service | |||||||||||
Revenue | |||||||||||
Revenues | 1,085 | 1,058 | 331 | ||||||||
Operating Segments | Space Infrastructure | |||||||||||
Revenue | |||||||||||
Revenues | 706 | 823 | 932 | ||||||||
Operating Segments | Space Infrastructure | Product | |||||||||||
Revenue | |||||||||||
Revenues | 560 | 697 | 877 | ||||||||
Operating Segments | Space Infrastructure | Service | |||||||||||
Revenue | |||||||||||
Revenues | 21 | 49 | 49 | ||||||||
Intersegment eliminations | |||||||||||
Revenue | |||||||||||
Revenues | (125) | (78) | (6) | ||||||||
Intersegment eliminations | Earth intelligence | |||||||||||
Revenue | |||||||||||
Revenues | 1 | ||||||||||
Intersegment eliminations | Space Infrastructure | |||||||||||
Revenue | |||||||||||
Revenues | $ 125 | $ 77 | $ 6 |
Revenue - Disaggregation of r_2
Revenue - Disaggregation of revenue on geographic location of customers (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||||||||||
Revenues | $ 410 | $ 413 | $ 412 | $ 431 | $ 418 | $ 433 | $ 487 | $ 466 | $ 1,666 | $ 1,804 | $ 1,257 |
U.S. | |||||||||||
Revenue | |||||||||||
Revenues | 1,240 | 1,238 | 698 | ||||||||
Asia | |||||||||||
Revenue | |||||||||||
Revenues | 161 | 213 | 228 | ||||||||
South America | |||||||||||
Revenue | |||||||||||
Revenues | 97 | 133 | 16 | ||||||||
Europe | |||||||||||
Revenue | |||||||||||
Revenues | 69 | 54 | 127 | ||||||||
Middle East | |||||||||||
Revenue | |||||||||||
Revenues | 57 | 90 | 41 | ||||||||
Australia | |||||||||||
Revenue | |||||||||||
Revenues | 22 | 17 | 22 | ||||||||
Canada | |||||||||||
Revenue | |||||||||||
Revenues | 10 | 49 | 123 | ||||||||
Other | |||||||||||
Revenue | |||||||||||
Revenues | $ 10 | $ 10 | $ 2 |
Revenue - Disaggregation of r_3
Revenue - Disaggregation of revenue from significant customers (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||||||||||
Revenues | $ 410 | $ 413 | $ 412 | $ 431 | $ 418 | $ 433 | $ 487 | $ 466 | $ 1,666 | $ 1,804 | $ 1,257 |
U.S. Federal Government and agencies | |||||||||||
Revenue | |||||||||||
Revenues | 940 | 816 | 276 | ||||||||
Commercial and other | |||||||||||
Revenue | |||||||||||
Revenues | $ 726 | $ 988 | $ 981 |
Segment information - Operating
Segment information - Operating performance (Details) $ in Millions | Dec. 30, 2019segment | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Segment information | ||||||||||||
Number of reportable segments | segment | 2 | |||||||||||
Total revenues | $ 410 | $ 413 | $ 412 | $ 431 | $ 418 | $ 433 | $ 487 | $ 466 | $ 1,666 | $ 1,804 | $ 1,257 | |
Corporate and other expense | 86 | 49 | 8 | |||||||||
Restructuring | 18 | 13 | ||||||||||
Transaction and integration related expense | (16) | (33) | (60) | |||||||||
Impairment losses and inventory obsolescence | (17) | (652) | ||||||||||
Satellite insurance recovery | 183 | |||||||||||
Gain on sale of assets | $ 33 | 136 | 33 | |||||||||
CEO severance | (3) | |||||||||||
Depreciation and amortization | (376) | (439) | (152) | |||||||||
Interest expense, net | (219) | (200) | (97) | |||||||||
Interest income | 2 | |||||||||||
Equity loss (income) from joint ventures, net of tax | (11) | (2) | 1 | |||||||||
Income (loss) before taxes | 77 | (923) | (223) | |||||||||
Operating Segments | ||||||||||||
Segment information | ||||||||||||
Total revenues | (125) | (78) | (6) | |||||||||
Operating Segments | Earth Intelligence | ||||||||||||
Segment information | ||||||||||||
Total revenues | 1,085 | 1,059 | 331 | |||||||||
Adjusted EBITDA | 548 | 516 | 152 | |||||||||
Operating Segments | Space Infrastructure | ||||||||||||
Segment information | ||||||||||||
Total revenues | 706 | 823 | 932 | |||||||||
Adjusted EBITDA | (17) | (75) | (59) | |||||||||
Intersegment eliminations | ||||||||||||
Segment information | ||||||||||||
Total revenues | (125) | (78) | $ (6) | |||||||||
Adjusted EBITDA | $ (29) | $ (9) |
Segment information - Capital e
Segment information - Capital expenditures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment information | |||
Capital expenditures, property, plant and equipment | $ 257 | $ 150 | $ 43 |
Capital expenditures, intangible assets | 57 | 56 | 16 |
Capital expenditures | 314 | 206 | 59 |
Intersegment eliminations | |||
Segment information | |||
Capital expenditures, property, plant and equipment | 4 | (30) | (10) |
Capital expenditures, intangible assets | (2) | ||
Capital expenditures | 2 | (30) | (10) |
Earth Intelligence | Operating Segments | |||
Segment information | |||
Capital expenditures, property, plant and equipment | 237 | 158 | 16 |
Capital expenditures, intangible assets | 56 | 55 | 12 |
Capital expenditures | 293 | 213 | 28 |
Space Infrastructure | Operating Segments | |||
Segment information | |||
Capital expenditures, property, plant and equipment | 16 | 22 | 37 |
Capital expenditures, intangible assets | 3 | 1 | 4 |
Capital expenditures | $ 19 | $ 23 | $ 41 |
Impairment Losses (Details)
Impairment Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, plant and equipment | |||||
Impairment losses | $ 0 | $ 271 | $ 0 | ||
Intangible asset impairment losses | 0 | 124 | 0 | ||
Impairment losses including inventory | 3 | 66 | 0 | ||
Goodwill impairment | 0 | 159 | 0 | ||
Orbital receivables impairment | $ 14 | $ 14 | 22 | $ 0 | |
Future premium payments and other assets impairment | 10 | ||||
Software | |||||
Property, plant and equipment | |||||
Intangible asset impairment losses | 2 | ||||
Earth Intelligence | |||||
Property, plant and equipment | |||||
Goodwill impairment | 142 | ||||
Earth Intelligence | Satellites | |||||
Property, plant and equipment | |||||
Impairment losses | 150 | ||||
Space Infrastructure | |||||
Property, plant and equipment | |||||
Goodwill impairment | 17 | ||||
Space Infrastructure | GeoComn business | |||||
Property, plant and equipment | |||||
Intangible asset impairment losses | $ 122 | ||||
Impairment losses including inventory | $ 66 | ||||
Space Infrastructure | Equipment And Building | GeoComn business | |||||
Property, plant and equipment | |||||
Impairment losses | $ 121 |
Employee benefit plans - Change
Employee benefit plans - Changes in benefit obligations, plan assets and funded status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets and (liabilities) recognized in the Consolidated Balance Sheets: | |||
Pension and other postretirement benefits | $ (197) | $ (178) | |
Decrease in pension benefit obligation | 64 | ||
Decrease in fair value of plan assets | 52 | ||
Aggregate accumulated benefit obligation | 583 | 519 | |
Pension | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 519 | 568 | |
Service cost | 2 | 2 | |
Interest cost | 21 | 19 | $ 21 |
Actuarial (gains) losses | 71 | (37) | |
Benefits paid | (30) | (33) | |
Benefit obligation at end of year | 583 | 519 | 568 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 352 | 391 | |
Actuarial gains (losses) on plan assets | 70 | (19) | |
Employer contributions | 12 | 13 | |
Benefits paid | (28) | (31) | |
Expenses paid | (2) | (2) | (2) |
Expenses paid | (2) | (2) | |
Fair value of plan assets at end of year | 404 | 352 | 391 |
Funded status at end of year | (179) | (167) | |
Assets and (liabilities) recognized in the Consolidated Balance Sheets: | |||
Accrued compensation and benefits | (1) | (1) | |
Pension and other postretirement benefits | (178) | (166) | |
Total | (179) | (167) | |
Other Postretirement | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 13 | 16 | |
Interest cost | 1 | 1 | 2 |
Actuarial (gains) losses | (2) | ||
Benefits paid | (2) | ||
Benefit obligation at end of year | 14 | 13 | $ 16 |
Change in plan assets | |||
Employer contributions | 2 | ||
Benefits paid | (2) | ||
Funded status at end of year | (14) | (13) | |
Assets and (liabilities) recognized in the Consolidated Balance Sheets: | |||
Accrued compensation and benefits | (1) | (1) | |
Pension and other postretirement benefits | (13) | (12) | |
Total | $ (14) | $ (13) |
Employee benefit plans - Net lo
Employee benefit plans - Net loss and prior service credit balances (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Pension | ||
Employee benefit plans | ||
Net (loss) gain | $ (70) | $ (45) |
Other Postretirement | ||
Employee benefit plans | ||
Net (loss) gain | $ 10 | $ 12 |
Employee benefit plans - Weight
Employee benefit plans - Weighted average assumptions to determine benefit obligations (Details) | Dec. 31, 2019 | Dec. 31, 2018 |
Pension | ||
Employee benefit plans | ||
Discount rate | 3.00% | 4.10% |
Other Postretirement | ||
Employee benefit plans | ||
Discount rate | 3.00% | 4.10% |
Employee benefit plans - Compon
Employee benefit plans - Components of net periodic benefit (credits) cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension | |||
Employee benefit plans | |||
Interest cost | $ 21 | $ 19 | $ 21 |
Expected return on plan assets | (24) | (27) | (24) |
Actual return on plan assets | 70 | (19) | |
Expenses paid | 2 | 2 | 2 |
Net periodic benefit (credit) cost | (1) | (6) | (1) |
Other Postretirement | |||
Employee benefit plans | |||
Interest cost | 1 | 1 | 2 |
Amortization of prior service credit | (2) | ||
Amortization of net loss (gain) | $ (1) | $ (1) | (1) |
Curtailment gain | (26) | ||
Net periodic benefit (credit) cost | $ (27) |
Employee benefit plans - Summar
Employee benefit plans - Summarizes the other changes in plan assets and benefit obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension | |||
Employee benefit plans | |||
Net loss (gain) | $ 25 | $ 9 | $ 5 |
Total recognized in other comprehensive loss (income) | 25 | 9 | 5 |
Total recognized in net periodic benefit cost (credit) and other comprehensive loss (income) | 24 | 3 | 4 |
Other Postretirement | |||
Employee benefit plans | |||
Net loss (gain) | (2) | (1) | |
Amortization of prior service (cost) credit | 2 | ||
Amortization of net (loss) gain | 1 | 1 | 1 |
Curtailment loss | 1 | ||
Total recognized in other comprehensive loss (income) | 1 | (1) | 3 |
Total recognized in net periodic benefit cost (credit) and other comprehensive loss (income) | $ 1 | $ (1) | $ (24) |
Employee benefit plans - Weig_2
Employee benefit plans - Weighted average assumptions used to determine net periodic benefit cost (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Pension | |||
Employee benefit plans | |||
Discount rate | 4.10% | 3.40% | 3.90% |
Expected long-term return on plan assets | 7.00% | 7.00% | 7.00% |
Other Postretirement | |||
Employee benefit plans | |||
Discount rate | 4.10% | 3.40% | 3.90% |
Employee benefit plans - Plan a
Employee benefit plans - Plan assets by asset category segregated by level (Details) - Pension - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Employee benefit plans | |||
Total assets at fair value | $ 404 | $ 352 | $ 391 |
Level 1 | |||
Employee benefit plans | |||
Total assets at fair value | 5 | 2 | |
Level 3 | |||
Employee benefit plans | |||
Total assets at fair value | 1 | 1 | |
Cash and cash equivalents | |||
Employee benefit plans | |||
Total assets at fair value | 5 | 2 | |
Cash and cash equivalents | Level 1 | |||
Employee benefit plans | |||
Total assets at fair value | 5 | 2 | |
International equity securities | |||
Employee benefit plans | |||
Total assets at fair value | 1 | 1 | |
International equity securities | Level 3 | |||
Employee benefit plans | |||
Total assets at fair value | 1 | 1 | |
Other | |||
Employee benefit plans | |||
Total assets at fair value | $ 398 | $ 349 |
Employee benefit plans - Target
Employee benefit plans - Target Asset Allocations (Details) | Dec. 31, 2019 |
Target asset allocations for each major category of the plan assets | |
Actual | 100.00% |
Percentage points to rebalance the portfolio within | 2.00% |
Cash and cash equivalents | |
Target asset allocations for each major category of the plan assets | |
Target | 0.00% |
Actual | 1.00% |
U.S. equity securities | |
Target asset allocations for each major category of the plan assets | |
Target | 26.00% |
Actual | 26.00% |
Global equity securities | |
Target asset allocations for each major category of the plan assets | |
Target | 36.00% |
Actual | 35.00% |
Fixed income | |
Target asset allocations for each major category of the plan assets | |
Target | 34.00% |
Actual | 34.00% |
Other | |
Target asset allocations for each major category of the plan assets | |
Target | 4.00% |
Actual | 4.00% |
Employee benefit plans - Estima
Employee benefit plans - Estimated Future Benefit Payments (Details) $ in Millions | Dec. 31, 2019USD ($) |
Estimated Future Benefit Payments | |
2020 | $ 32 |
2021 | 32 |
2022 | 32 |
2023 | 33 |
2024 | 33 |
Years 2025 - 2029 | 164 |
Pension | |
Estimated Future Benefit Payments | |
2020 | 31 |
2021 | 31 |
2022 | 31 |
2023 | 32 |
2024 | 32 |
Years 2025 - 2029 | 159 |
Other Postretirement | |
Estimated Future Benefit Payments | |
2020 | 1 |
2021 | 1 |
2022 | 1 |
2023 | 1 |
2024 | 1 |
Years 2025 - 2029 | $ 5 |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee benefit plans | |||
Expense recorded | $ 12 | $ 12 | $ 11 |
Aggregate accumulated benefit obligation | 583 | $ 519 | |
Pension | |||
Employee benefit plans | |||
Expected future contribution by the employer | 20 | ||
Other Postretirement | |||
Employee benefit plans | |||
Expected future contribution by the employer | $ 1 |
Share-based payment plans (Deta
Share-based payment plans (Details) | Mar. 27, 2019CAD ($)shares | Oct. 01, 2001CAD ($)shares | Jul. 31, 2017shares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Share Appreciation Rights | Non-employee Director | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 0 | ||||||
Restricted Share Units | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 1,086,004 | 1,086,004 | |||||
Granted (per share) | $ / shares | $ 7.90 | ||||||
LTIP Plans | Share Appreciation Rights | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 0 | 0 | |||||
Pre 2017 LTIP | Share Appreciation Rights | |||||||
Share-based payment plans | |||||||
Shares authorized | 6,820,000 | ||||||
Term of award | 5 years | 5 years | |||||
2017 LTIP | Share Appreciation Rights | |||||||
Share-based payment plans | |||||||
Shares authorized | 1,900,000 | ||||||
Term of award | 10 years | 10 years | |||||
Omnibus Plan | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 0 | 0 | |||||
Shares reserved for issuance | 1,100,000 | ||||||
Term of award | 10 years | ||||||
Omnibus Plan | Non-employee Director | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 0 | ||||||
Omnibus Plan | Share Appreciation Rights | |||||||
Share-based payment plans | |||||||
Term of award | 10 years | 10 years | |||||
Omnibus Plan | Restricted Share Units | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 77,259 | 77,259 | |||||
Granted (per share) | $ / shares | $ 4.75 | ||||||
2019 Incentive Award Plan | |||||||
Share-based payment plans | |||||||
Shares reserved for issuance | 2,525,000 | 2,525,000 | |||||
Deferred Share Unit Plan | |||||||
Share-based payment plans | |||||||
Shares reserved for issuance | 100,000 | 100,000 | |||||
Legacy Employee Stock Purchase Plan | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 1,500,000 | 22,541 | 22,541 | 41,288 | 38,169 | ||
Maximum shares that can be issued in one year under the plan | 300,000 | ||||||
Percentage of market value of shares that employees can purchase | 85.00% | ||||||
Maximum employee contribution of base salary | 10.00% | ||||||
Maximum employee contribution of base salary per annum | $ | $ 20,000 | ||||||
Granted (per share) | $ / shares | $ 6.20 | $ 42.20 | $ 59.55 | ||||
Employee Share Purchase Plan | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 5,000,000 | 89,398 | 89,398 | 38,169 | |||
Percentage of market value of shares that employees can purchase | 85.00% | ||||||
Maximum employee contribution of base salary | 10.00% | ||||||
Maximum employee contribution of base salary per annum | $ | $ 25,000 | ||||||
Granted (per share) | $ / shares | $ 6.09 | ||||||
DigitalGlobe Equity Plan | Restricted Share Units | |||||||
Share-based payment plans | |||||||
Granted (in shares) | 0 |
Share-based payment plans - Sha
Share-based payment plans - Share Appreciation Rights (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018$ / shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2017$ / shares | Dec. 31, 2019$ / shares | |
Omnibus Plan | |||||||
Number of Awards | |||||||
Granted (in shares) | 0 | ||||||
Share Appreciation Rights | Pre 2017 LTIP | |||||||
Additional disclosures | |||||||
Vesting period | 3 years | ||||||
Vesting percentage | 33.33% | ||||||
Share Appreciation Rights | 2017 LTIP | |||||||
Additional disclosures | |||||||
Vesting period | 4 years | ||||||
Vesting percentage | 25.00% | ||||||
Share Appreciation Rights | Omnibus Plan | |||||||
Additional disclosures | |||||||
Vesting period | 4 years | ||||||
Vesting percentage | 25.00% | ||||||
SARs Liability Classified Awards | |||||||
Number of Awards | |||||||
Outstanding at the beginning of the period (in shares) | 774,430 | ||||||
Granted (in shares) | 0 | 0 | |||||
Exercised (in shares) | 0 | ||||||
Cancelled or expired (in shares) | (195,110) | ||||||
Outstanding at the end of the period (in shares) | 579,320 | 774,430 | |||||
Vested and expected to vest at the end of the period | 579,320 | ||||||
Exercisable at the end of the period | 566,340 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding at the beginning of the period (per share) | $ / shares | $ 63.86 | ||||||
Cancelled or expired (per share) | $ / shares | $ 63.30 | ||||||
Outstanding at the end of the period (per share) | $ / shares | 63.12 | $ 63.86 | |||||
Vested and expected to vest at the end of the period | $ / shares | 63.12 | ||||||
Exercisable at the end of the period | $ / shares | 63.46 | ||||||
Contractual Term (in years) | |||||||
Outstanding at the end of the period | 1 year 6 months 21 days | ||||||
Vested and expected to vest at the end of the period | 1 year 6 months 21 days | ||||||
Exercisable at the end of the period | 1 year 5 months 4 days | ||||||
Aggregate Intrinsic Value | |||||||
Total intrinsic value of exercised shares | $ | $ 0 | $ 1 | |||||
Weighted Average Grant Date Fair Value | |||||||
Granted (per share) | $ / shares | $ 68.84 | ||||||
SARs Accounted for as Equity Classified Awards | |||||||
Number of Awards | |||||||
Outstanding at the beginning of the period (in shares) | 1,219,028 | ||||||
Granted (in shares) | 0 | ||||||
Exercised (in shares) | 0 | ||||||
Cancelled or expired (in shares) | (293,437) | ||||||
Outstanding at the end of the period (in shares) | 925,591 | 1,219,028 | |||||
Vested and expected to vest at the end of the period | 925,591 | ||||||
Exercisable at the end of the period | 588,076 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding at the beginning of the period (per share) | $ / shares | 51.05 | ||||||
Cancelled or expired (per share) | $ / shares | 50.66 | ||||||
Outstanding at the end of the period (per share) | $ / shares | $ 51.18 | 51.05 | |||||
Vested and expected to vest at the end of the period | $ / shares | 51.18 | ||||||
Exercisable at the end of the period | $ / shares | $ 50.75 | ||||||
Contractual Term (in years) | |||||||
Outstanding at the end of the period | 6 years 8 months 15 days | ||||||
Vested and expected to vest at the end of the period | 6 years 8 months 15 days | ||||||
Exercisable at the end of the period | 6 years 6 months 25 days | ||||||
Aggregate Intrinsic Value | |||||||
Total intrinsic value of exercised shares | $ | $ 0 | 0 | |||||
Weighted Average Grant Date Fair Value | |||||||
Granted (per share) | $ / shares | $ 10.37 | $ 75.09 | |||||
Restricted Share Units | |||||||
Number of Awards | |||||||
Granted (in shares) | 1,086,004 | ||||||
Vested (in shares) | (16,934) | ||||||
Cancelled or expired (in shares) | (82,335) | ||||||
Outstanding at the end of the period (in shares) | 986,735 | ||||||
Weighted Average Grant Date Fair Value | |||||||
Granted (per share) | $ / shares | $ 7.90 | ||||||
Vested (per share) | $ / shares | 6.59 | ||||||
Cancelled or expired (per share) | $ / shares | 8.03 | ||||||
Outstanding at the end of the period (per share) | $ / shares | $ 7.91 | ||||||
Additional disclosures | |||||||
Vesting period | 3 years | ||||||
Restricted Share Units | Omnibus and DigitalGlobe Equity Incentive Plan | |||||||
Weighted Average Grant Date Fair Value | |||||||
Total fair value of vested awards | $ | $ 14 | $ 19 | $ 5 | ||||
Additional disclosures | |||||||
Total unrecognized compensation expense | $ | $ 7 | $ 7 | |||||
Weighted average remaining period (in years) | 1 year 2 months 12 days | ||||||
Restricted Share Units | Omnibus Plan | |||||||
Number of Awards | |||||||
Outstanding at the beginning of the period (in shares) | 419,512 | ||||||
Granted (in shares) | 77,259 | ||||||
Vested (in shares) | (150,337) | ||||||
Cancelled or expired (in shares) | (98,936) | ||||||
Outstanding at the end of the period (in shares) | 247,498 | 419,512 | |||||
Weighted Average Grant Date Fair Value | |||||||
Outstanding at the beginning of the period (per share) | $ / shares | $ 51.99 | ||||||
Granted (per share) | $ / shares | 4.75 | ||||||
Vested (per share) | $ / shares | 52.88 | ||||||
Cancelled or expired (per share) | $ / shares | 52.74 | ||||||
Outstanding at the end of the period (per share) | $ / shares | $ 36.42 | $ 51.99 | |||||
Additional disclosures | |||||||
Vesting percentage | 33.33% | ||||||
Restricted Share Units | DigitalGlobe Equity Plan | |||||||
Number of Awards | |||||||
Outstanding at the beginning of the period (in shares) | 273,861 | ||||||
Granted (in shares) | 0 | ||||||
Vested (in shares) | (117,346) | ||||||
Cancelled or expired (in shares) | (55,844) | ||||||
Outstanding at the end of the period (in shares) | 100,671 | 273,861 | |||||
Weighted Average Grant Date Fair Value | |||||||
Outstanding at the beginning of the period (per share) | $ / shares | $ 54.57 | ||||||
Vested (per share) | $ / shares | 54.57 | ||||||
Cancelled or expired (per share) | $ / shares | 54.57 | ||||||
Outstanding at the end of the period (per share) | $ / shares | $ 54.57 | $ 54.57 | |||||
RSUs Liability Classified Awards | |||||||
Number of Awards | |||||||
Granted (in shares) | 1,054,658 | ||||||
Cancelled or expired (in shares) | (108,377) | ||||||
Outstanding at the end of the period (in shares) | 946,281 | ||||||
Weighted Average Grant Date Fair Value | |||||||
Granted (per share) | $ / shares | $ 6.93 | ||||||
Cancelled or expired (per share) | $ / shares | 6.92 | ||||||
Outstanding at the end of the period (per share) | $ / shares | $ 6.93 | ||||||
RSUs Liability Classified Awards | Omnibus Plan | |||||||
Additional disclosures | |||||||
Total unrecognized compensation expense | $ | $ 8 | $ 8 | |||||
Weighted average remaining period (in years) | 1 year 4 months 24 days |
Share-based payment plans - Per
Share-based payment plans - Performance Shares Units (Details) - Performance Share Unit $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Number of common stock | 2 |
Payout percentage | 200.00% |
Payout percentage in equity | 100.00% |
Payout percentage in cash | 100.00% |
Summary of awards | |
Granted (in shares) | shares | 1,060,253 |
Cancelled or expired (in shares) | shares | (96,851) |
Outstanding at the end of the period (in shares) | shares | 963,402 |
Weighted Average Grant Date Fair Value | |
Granted (per share) | $ / shares | $ 6.81 |
Cancelled or expired (per share) | $ / shares | 6.62 |
Outstanding at the end of the period (per share) | $ / shares | $ 6.83 |
Additional disclosures | |
Total unrecognized compensation expense | $ | $ 7 |
Weighted average remaining period (in years) | 1 year 6 months |
Valuation of Share-Based Compensation Awards | |
Risk-free interest rate, minimum | 2.20% |
Risk-free interest rate, maximum | 2.30% |
Volatility, minimum | 63.00% |
Volatility, maximum | 67.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance percentage | 0.00% |
Valuation of Share-Based Compensation Awards | |
Dividend yield | 0.50% |
Expected lives (in years) | 2 years 10 months 24 days |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance percentage | 200.00% |
Valuation of Share-Based Compensation Awards | |
Dividend yield | 0.90% |
Expected lives (in years) | 3 years |
Share-based payment plans - Def
Share-based payment plans - Deferred Share Units (Details) - Deferred Share Units (DSU) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Awards | ||
Outstanding at the beginning of the period (in shares) | 107,603 | |
Redeemed (in shares) | (41,993) | 0 |
Outstanding at the end of the period (in shares) | 65,610 | 107,603 |
Weighted Average Issuance Price | ||
Outstanding at the beginning of the period (per share) | $ 51.52 | |
Redeemed (per share) | 49.96 | |
Outstanding at the end of the period (per share) | $ 52.76 | $ 51.52 |
Share-based payment plans - S_2
Share-based payment plans - Share-based compensation expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Selling, general, and administrative expense, Product costs, and Service costs | |||
Share-based payment plans | |||
Share-based compensation expense before taxes | $ 20 | $ 20 | $ 48 |
Share-based payment plans - Val
Share-based payment plans - Valuation of Share-Based Compensation Awards (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SARs Liability Classified Awards | |||
Valuation of Share-Based Compensation Awards | |||
Risk-free interest rate, minimum | 1.70% | 1.70% | 1.70% |
Risk-free interest rate, maximum | 1.90% | 1.90% | 1.90% |
Dividend yield | 0.50% | 1.80% | 1.80% |
Granted (in shares) | 0 | 0 | |
SARs Liability Classified Awards | Minimum | |||
Valuation of Share-Based Compensation Awards | |||
Expected lives (in years) | 2 months 12 days | 3 months 18 days | 1 year |
Volatility, minimum | 57.00% | 14.00% | 14.00% |
SARs Liability Classified Awards | Maximum | |||
Valuation of Share-Based Compensation Awards | |||
Expected lives (in years) | 4 years 7 months 6 days | 5 years 4 months 24 days | 6 years 6 months |
Volatility, maximum | 130.00% | 23.00% | 25.00% |
Equity-settled SARs, RSUs and DSUs | |||
Valuation of Share-Based Compensation Awards | |||
Risk-free interest rate, minimum | 1.90% | 0.60% | |
Risk-free interest rate, maximum | 2.30% | 1.90% | |
Volatility, minimum | 22.00% | 17.00% | |
Volatility, maximum | 41.00% | 25.00% | |
Granted (in shares) | 0 | ||
Equity-settled SARs, RSUs and DSUs | Minimum | |||
Valuation of Share-Based Compensation Awards | |||
Dividend yield | 2.20% | 1.50% | |
Expected lives (in years) | 3 years | 4 months 24 days | |
Equity-settled SARs, RSUs and DSUs | Maximum | |||
Valuation of Share-Based Compensation Awards | |||
Dividend yield | 9.10% | 2.20% | |
Expected lives (in years) | 7 years | 7 years |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income taxes | |||
Canadian | $ 77 | $ (806) | $ (181) |
Non-Canadian | (117) | (42) | |
Income (loss) before taxes | 77 | (923) | (223) |
Current tax (benefit) expense: | |||
Canadian | 5 | 1 | |
Total | 5 | 1 | |
Deferred tax benefit: | |||
Canadian | (2) | (145) | |
Non-Canadian | (46) | (24) | |
Total | (48) | (169) | |
Income tax benefit | $ 5 | $ (48) | $ (168) |
Income taxes - Income tax rate
Income taxes - Income tax rate (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income taxes | ||||
Statutory Federal and Provincial tax rate in Canada | 21.00% | 21.00% | 35.00% | |
Expected income tax expense (benefit) at statutory rate | $ 16 | $ (194) | $ (78) | |
Impact of US Tax Cuts and Jobs Act of 2017 | 26 | |||
Change in statutory tax rates | (1) | |||
Non-deductible expenses | 15 | 6 | 9 | |
Tax on international operations | (1) | (45) | (24) | |
Change in valuation allowance | (108) | 96 | (93) | |
Base Erosion and Anti-Abuse Tax | 5 | |||
Outside basis difference in assets held for sale | 78 | |||
Tax credits | (1) | (9) | (8) | |
Non-deductible goodwill impairment | 98 | |||
Other | 1 | 1 | ||
Income tax expense (benefit) | $ 5 | $ (48) | $ (168) | |
Effective income tax rate | 6.00% | 5.00% | 75.00% | |
US federal corporate tax rate | 21.00% | 35.00% |
Income taxes - Components of de
Income taxes - Components of deferred tax assets and liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components of deferred tax assets and liabilities: | |||
Tax benefit of losses carried forward | $ 219 | $ 222 | $ 198 |
Research and development tax credits | 82 | 91 | 72 |
Construction contract assets and liabilities | 89 | 77 | 67 |
Property and equipment | 15 | 3 | |
Trade and other payables | 41 | 38 | 25 |
Employee benefits | 41 | 49 | 53 |
Unrealized foreign exchange gains and losses | 6 | 6 | 5 |
Other | 18 | 21 | 8 |
Deferred tax assets | 496 | 519 | 431 |
Valuation allowance | (231) | (304) | (134) |
Deferred tax assets, net of valuation allowance | 265 | 215 | 297 |
Property and equipment | (47) | ||
Goodwill and intangibles | (124) | (213) | (301) |
Outside basis difference in assets held for sale | (78) | ||
Other | (10) | (2) | |
Deferred tax liabilities | (259) | $ (215) | (301) |
Deferred tax assets and (liabilities), net | $ (4) | ||
Deferred tax assets and (liabilities), net | 6 | ||
Decrease in valuation allowance | 73 | ||
Deferred tax liability on investments | $ 78 |
Income taxes - Tax credit carry
Income taxes - Tax credit carryforward (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Income taxes | |
Net operating losses carried forward subject to expiration | $ 1,665 |
Federal | |
Income taxes | |
Net operating losses carried forward subject to expiration | 870 |
Tax credits carried forward research and development | 74 |
U.S. | |
Income taxes | |
Net operating losses carried forward not subject to expiration | $ 264 |
Net operating loss carryforward annual limitation as a percent of taxable income | 80.00% |
Tax credits carried forward research and development | $ 6 |
State | |
Income taxes | |
Net operating losses carried forward subject to expiration | 795 |
Tax credits carried forward research and development | $ 2 |
Income taxes - Changes in unrec
Income taxes - Changes in unrecognized tax benefits (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Changes in unrecognized tax benefits | |
Gross increases related to prior period tax positions | $ 6 |
Gross increases related to current period tax positions | 1 |
Balance, end of year | 7 |
Unrecognized tax benefits | $ 7 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share | |||||||||||
Income (loss) from continuing operations | $ 53 | $ (41) | $ 139 | $ (68) | $ (485) | $ (309) | $ (52) | $ (27) | $ 83 | $ (873) | $ (56) |
Net (income) loss from discontinued operations | (10) | 16 | 9 | 11 | (456) | 23 | 15 | 41 | 26 | (377) | 116 |
Net income (loss) | $ 43 | $ (25) | $ 148 | $ (57) | $ (941) | $ (286) | $ (37) | $ 14 | $ 109 | $ (1,250) | $ 60 |
Weighted average number of common shares outstanding - basic (in shares) | 59.6 | 58.1 | 41.2 | ||||||||
Weighted dilutive effect of equity awards (in shares) | 0.6 | ||||||||||
Weighted average number of common shares outstanding-diluted | 60.2 | 58.1 | 41.2 | ||||||||
Basic income (loss) per common share: | |||||||||||
Basic Income (loss) from continuing operations (in dollars per share) | $ 0.89 | $ (0.69) | $ 2.33 | $ (1.14) | $ (8.18) | $ (5.22) | $ (0.91) | $ (0.48) | $ 1.39 | $ (15.03) | $ (1.36) |
Basic income (loss) from discontinued operations, net of tax (in dollars per share) | (0.17) | 0.27 | 0.15 | 0.18 | (7.69) | 0.39 | 0.26 | 0.73 | 0.44 | (6.49) | 2.82 |
Basic income (loss) per common share (in dollars per share) | 0.72 | (0.42) | 2.48 | (0.96) | (15.87) | (4.83) | (0.65) | 0.25 | 1.83 | (21.52) | 1.46 |
Diluted income (loss) per common share: | |||||||||||
Diluted Income (loss) from continuing operations (in dollars per share) | 0.87 | (0.69) | 2.32 | (1.14) | (8.18) | (5.22) | (0.91) | (0.48) | 1.38 | (15.03) | (1.36) |
Diluted income (loss)from discontinued operations, net of tax (in dollars per share) | (0.17) | 0.27 | 0.15 | 0.18 | (7.69) | 0.39 | 0.26 | 0.73 | 0.43 | (6.49) | 2.82 |
Diluted income (loss) per common share (in dollars per share) | $ 0.70 | $ (0.42) | $ 2.47 | $ (0.96) | $ (15.87) | $ (4.83) | $ (0.65) | $ 0.25 | $ 1.81 | $ (21.52) | $ 1.46 |
Earnings per share - Anti-dilut
Earnings per share - Anti-dilutive securities (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2 | 3 | 4 |
Contingencies and commitments -
Contingencies and commitments - Legal proceedings (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Jul. 31, 2018 | Dec. 31, 2019 | |
Commitments and Contingencies | |||
Orbital receivables repurchased | $ 24 | ||
Pending Litigation | Ukranian customer | |||
Commitments and Contingencies | |||
Recovery amount sought | $ 227 | ||
Pending Litigation | Stockholder class action | |||
Commitments and Contingencies | |||
Recovery amount sought | $ 700 |
Supplemental cash flow - (Detai
Supplemental cash flow - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental cash flow information: | |||
Cash paid for interest | $ (193) | $ (152) | $ (41) |
Supplemental non-cash investing and financing activities: | |||
Accrued capital expenditures | $ 19 | $ 19 | 15 |
Acquisitions | $ 1,197 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Total revenues | $ 410 | $ 413 | $ 412 | $ 431 | $ 418 | $ 433 | $ 487 | $ 466 | $ 1,666 | $ 1,804 | $ 1,257 |
Income (loss) from continuing operations | 53 | (41) | 139 | (68) | (485) | (309) | (52) | (27) | 83 | (873) | (56) |
Net (income) loss from discontinued operations | (10) | 16 | 9 | 11 | (456) | 23 | 15 | 41 | 26 | (377) | 116 |
Net income (loss) | $ 43 | $ (25) | $ 148 | $ (57) | $ (941) | $ (286) | $ (37) | $ 14 | $ 109 | $ (1,250) | $ 60 |
Basic income (loss) per common share: | |||||||||||
Basic Income (loss) from continuing operations (in dollars per share) | $ 0.89 | $ (0.69) | $ 2.33 | $ (1.14) | $ (8.18) | $ (5.22) | $ (0.91) | $ (0.48) | $ 1.39 | $ (15.03) | $ (1.36) |
Basic income (loss) from discontinued operations, net of tax (in dollars per share) | (0.17) | 0.27 | 0.15 | 0.18 | (7.69) | 0.39 | 0.26 | 0.73 | 0.44 | (6.49) | 2.82 |
Basic income (loss) per common share (in dollars per share) | 0.72 | (0.42) | 2.48 | (0.96) | (15.87) | (4.83) | (0.65) | 0.25 | 1.83 | (21.52) | 1.46 |
Diluted income (loss) per common share: | |||||||||||
Diluted Income (loss) from continuing operations (in dollars per share) | 0.87 | (0.69) | 2.32 | (1.14) | (8.18) | (5.22) | (0.91) | (0.48) | 1.38 | (15.03) | (1.36) |
Diluted income (loss)from discontinued operations, net of tax (in dollars per share) | (0.17) | 0.27 | 0.15 | 0.18 | (7.69) | 0.39 | 0.26 | 0.73 | 0.43 | (6.49) | 2.82 |
Diluted income (loss) per common share (in dollars per share) | $ 0.70 | $ (0.42) | $ 2.47 | $ (0.96) | $ (15.87) | $ (4.83) | $ (0.65) | $ 0.25 | $ 1.81 | $ (21.52) | $ 1.46 |
Subsequent Events (Details)
Subsequent Events (Details) - MDA business - Subsequent event - Foreign exchange contract | Feb. 11, 2020USD ($) |
Subsequent events | |
Derivative hedge percentage | 50 |
Spot rate | $ 1.338362 |