Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
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 | |
Security 12b Title | Common stock par value of $0.0001 per share | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Trading Symbol | MAXR | |
Security Exchange Name | NYSE | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001121142 | |
Amendment Flag | false | |
Common Stock | ||
Entity Common Stock, Shares Outstanding | 61,074,718 | |
Series A Junior Participating Preferred Stock | ||
Entity Common Stock, Shares Outstanding | 0 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Total revenues | $ 436 | $ 413 | $ 1,256 | $ 1,256 |
Costs and expenses: | ||||
Selling, general and administrative | 90 | 81 | 237 | 232 |
Depreciation and amortization | 95 | 93 | 274 | 284 |
Impairment loss | 14 | |||
Satellite insurance recovery | 183 | |||
Reduction of gain on sale leaseback | 4 | 4 | ||
Operating income | 7 | 10 | 18 | 187 |
Interest expense, net | (36) | (50) | (133) | (148) |
Other (income) expense, net | (91) | (1) | (98) | 2 |
Income (loss) before taxes | 62 | (39) | (17) | 37 |
Income tax (benefit) expense | (22) | 1 | (22) | 3 |
Equity in loss (income) from joint ventures, net of tax | 1 | (1) | 4 | |
Income (loss) from continuing operations | 84 | (41) | 6 | 30 |
Income from operations of discontinued operations, net of tax | 16 | 32 | 36 | |
Gain on disposal of discontinued operations, net of tax | 1 | 305 | ||
Income from discontinued operations, net of tax | 1 | 16 | 337 | 36 |
Net income (loss) | $ 85 | $ (25) | $ 343 | $ 66 |
Basic net income (loss) per common share: | ||||
Basic income (loss) from continuing operations (in dollars per share) | $ 1.38 | $ (0.69) | $ 0.10 | $ 0.50 |
Basic income from discontinued operations, net of tax (in dollars per share) | 0.02 | 0.27 | 5.56 | 0.60 |
Basic net income (loss) per common share (in dollars per share) | 1.40 | (0.42) | 5.66 | 1.10 |
Diluted net income (loss) per common share: | ||||
Diluted net income (loss) from continued operations (in dollars per share) | 1.32 | (0.69) | 0.10 | 0.50 |
Diluted net income from discontinued operations, net of tax (in dollars per share) | 0.02 | 0.27 | 5.39 | 0.60 |
Diluted net income (loss) per common share (in dollars per share) | $ 1.34 | $ (0.42) | $ 5.49 | $ 1.10 |
Product | ||||
Revenues: | ||||
Total revenues | $ 161 | $ 129 | $ 425 | $ 439 |
Costs and expenses: | ||||
Product and service costs, excluding depreciation and amortization | 145 | 140 | 434 | 452 |
Service | ||||
Revenues: | ||||
Total revenues | 275 | 284 | 831 | 817 |
Costs and expenses: | ||||
Product and service costs, excluding depreciation and amortization | $ 95 | $ 89 | $ 275 | $ 284 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income | ||||
Net income (loss) | $ 85 | $ (25) | $ 343 | $ 66 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (8) | (49) | 2 | |
Reclassification of currency translation adjustment to gain on disposal of discontinued operations | (64) | |||
Unrealized loss on derivatives | 7 | (8) | (15) | |
Gain on pension and other postretirement benefit plans | 2 | 1 | 4 | |
Other comprehensive income (loss), net of tax | 7 | (6) | (120) | (9) |
Comprehensive income (loss), net of tax | $ 92 | $ (31) | $ 223 | $ 57 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 60 | $ 59 |
Trade and other receivables, net | 361 | 357 |
Inventory | 27 | 20 |
Advances to suppliers | 49 | 42 |
Prepaid and other current assets | 46 | 32 |
Current assets held for sale | 751 | |
Total current assets | 543 | 1,261 |
Non-current assets: | ||
Orbital receivables, net | 358 | 382 |
Property, plant and equipment, net | 844 | 758 |
Intangible assets, net | 926 | 991 |
Non-current operating lease assets | 170 | 176 |
Goodwill | 1,632 | 1,455 |
Other non-current assets | 92 | 134 |
Total assets | 4,565 | 5,157 |
Current liabilities: | ||
Accounts payable | 124 | 153 |
Accrued liabilities | 78 | 130 |
Accrued compensation and benefits | 87 | 93 |
Contract liabilities | 275 | 271 |
Current portion of long-term debt | 9 | 30 |
Current operating lease liabilities | 41 | 40 |
Other current liabilities | 59 | 49 |
Current liabilities held for sale | 230 | |
Total current liabilities | 673 | 996 |
Non-current liabilities: | ||
Pension and other postretirement benefits | 191 | 197 |
Contract liabilities | 2 | 4 |
Operating lease liabilities | 166 | 173 |
Long-term debt | 2,413 | 2,915 |
Other non-current liabilities | 122 | 110 |
Total liabilities | 3,567 | 4,395 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock ($0.0001 par value, 240 million common shares authorized; 61.0 million and 59.9 million outstanding at September 30, 2020 and December 31, 2019, respectively) | ||
Additional paid-in capital | 1,800 | 1,784 |
Accumulated deficit | (741) | (1,082) |
Accumulated other comprehensive (loss) income | (61) | 59 |
Total Maxar stockholders' equity | 998 | 761 |
Noncontrolling interest | 1 | |
Total stockholders' equity | 998 | 762 |
Total liabilities and stockholders' equity | $ 4,565 | $ 5,157 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Unaudited Condensed Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 240,000,000 | 240,000,000 |
Common stock, shares outstanding | 61,000,000 | 59,900,000 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows (used in) provided by Operating activities: | ||
Net income | $ 343 | $ 66 |
Income from operations of discontinued operations, net of tax | (32) | (36) |
Gain on disposal of discontinued operations, net of tax | (305) | |
Income (loss) from continuing operations | 6 | 30 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Impairment losses including inventory | 14 | 3 |
Depreciation and amortization | 274 | 284 |
Loss from extinguishment of debt | 7 | |
Gain from remeasurement of equity interest in acquiree | (85) | |
Amortization of debt issuance costs and other non-cash interest expense | 12 | 6 |
Deferred income tax benefit | (17) | |
Stock-based compensation expense | 24 | 9 |
Other | 3 | 11 |
Changes in operating assets and liabilities: | ||
Trade and other receivables | (3) | (26) |
Advances to suppliers | (7) | 35 |
Accounts payables and accrued liabilities | (41) | (80) |
Contract liabilities | 1 | (141) |
Other | (7) | 3 |
Cash provided by operating activities - continuing operations | 181 | 134 |
Cash (used in) provided by operating activities - discontinued operations | (49) | 12 |
Cash provided by operating activities | 132 | 146 |
Investing activities: | ||
Purchase of property, plant and equipment and development or purchase of software | (224) | (203) |
Acquisition, net of cash acquired | (118) | |
Return of capital from discontinued operations | 20 | |
Cash paid for acquisitions, net of tax | (118) | |
Cash used in investing activities - continuing operations | (322) | (203) |
Cash provided by (used in) investing activities - discontinued operations | 723 | (4) |
Cash provided by (used in) investing activities | 401 | (207) |
Financing activities: | ||
Net proceeds of revolving credit facility | 107 | |
Net proceeds from issuance of 2027 Notes | 147 | |
Repurchase of 2023 Notes, including premium | (169) | |
Repayments of long-term debt | (523) | (21) |
Settlement of securitization liability | (7) | (7) |
Payment of dividends | (2) | (2) |
Other | 4 | |
Cash (used in) provided by financing activities - continuing operations | (550) | 77 |
Cash used in financing activities - discontinued operations | (24) | (2) |
Cash (used in) provided by financing activities | (574) | 75 |
(Decrease) increase in cash, cash equivalents, and restricted cash | (41) | 14 |
Effect of foreign exchange on cash, cash equivalents, and restricted cash | (5) | |
Cash, cash equivalents, and restricted cash, beginning of year | 110 | 43 |
Cash, cash equivalents, and restricted cash, end of period | $ 64 | $ 57 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Sep. 30, 2019 |
Reconciliation of cash flow information: | ||
Cash and cash equivalents | $ 60 | $ 52 |
Restricted cash included in prepaid and other current assets | 4 | 1 |
Restricted cash included in other non-current assets | 4 | |
Total cash, cash equivalents, and restricted cash | $ 64 | $ 57 |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements of Change in Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Additional paid in capital | Retained earnings (Accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interest | Total |
Balance at the beginning of period at Dec. 31, 2018 | $ 1,713 | $ 59 | $ (1,188) | $ 82 | $ 1 | $ 667 |
Balance at the beginning of period (in shares) at Dec. 31, 2018 | 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) | 0.1 | |||||
Common stock issued upon vesting or exercise of stock-based compensation awards (in shares) | 0.1 | |||||
Equity classified stock-based compensation expense | 1 | 1 | ||||
Dividends ($0.01 per common share) | (1) | (1) | ||||
Comprehensive income (loss) | (57) | (6) | (63) | |||
Balance at the end of period at Mar. 31, 2019 | 1,774 | (1,246) | 76 | 1 | 605 | |
Balance at the end of period (in shares) at Mar. 31, 2019 | 59.6 | |||||
Balance at the beginning of period at Dec. 31, 2018 | $ 1,713 | 59 | (1,188) | 82 | 1 | 667 |
Balance at the beginning of period (in shares) at Dec. 31, 2018 | 59.4 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Comprehensive income (loss) | 57 | |||||
Balance at the end of period at Sep. 30, 2019 | 1,780 | (1,124) | 73 | 1 | 730 | |
Balance at the end of period (in shares) at Sep. 30, 2019 | 59.6 | |||||
Balance at the beginning of period at Mar. 31, 2019 | 1,774 | (1,246) | 76 | 1 | 605 | |
Balance at the beginning of period (in shares) at Mar. 31, 2019 | 59.6 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Equity classified stock-based compensation expense | 2 | 2 | ||||
Comprehensive income (loss) | 148 | 3 | 151 | |||
Balance at the end of period at Jun. 30, 2019 | 1,776 | (1,098) | 79 | 1 | 758 | |
Balance at the end of period (in shares) at Jun. 30, 2019 | 59.6 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Equity classified stock-based compensation expense | 4 | 4 | ||||
Dividends ($0.01 per common share) | (1) | (1) | ||||
Comprehensive income (loss) | (25) | (6) | (31) | |||
Balance at the end of period at Sep. 30, 2019 | 1,780 | (1,124) | 73 | 1 | 730 | |
Balance at the end of period (in shares) at Sep. 30, 2019 | 59.6 | |||||
Balance at the beginning of period at Dec. 31, 2019 | 1,784 | (1,082) | 59 | 1 | $ 762 | |
Balance at the beginning of period (in shares) at Dec. 31, 2019 | 59.9 | 59.9 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Common stock issued under employee stock purchase plan | 2 | $ 2 | ||||
Common stock issued under employee stock purchase plan (in shares) | 0.2 | |||||
Equity classified stock-based compensation expense | 4 | 4 | ||||
Comprehensive income (loss) | (48) | (63) | (111) | |||
Balance at the end of period at Mar. 31, 2020 | 1,790 | (1,130) | (4) | 1 | 657 | |
Balance at the end of period (in shares) at Mar. 31, 2020 | 60.1 | |||||
Balance at the beginning of period at Dec. 31, 2019 | 1,784 | (1,082) | 59 | 1 | $ 762 | |
Balance at the beginning of period (in shares) at Dec. 31, 2019 | 59.9 | 59.9 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Comprehensive income (loss) | $ 223 | |||||
Balance at the end of period at Sep. 30, 2020 | 1,800 | (741) | (61) | $ 998 | ||
Balance at the end of period (in shares) at Sep. 30, 2020 | 61 | 61 | ||||
Balance at the beginning of period at Mar. 31, 2020 | 1,790 | (1,130) | (4) | 1 | $ 657 | |
Balance at the beginning of period (in shares) at Mar. 31, 2020 | 60.1 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Reclassification of equity classified stock-based compensation awards to liability classified | (2) | (2) | ||||
Equity- settled stock- based compensation recovery from disposal of discontinued operations | (1) | (1) | ||||
Common stock issued under employee stock purchase plan | 1 | 1 | ||||
Common stock issued under employee stock purchase plan (in shares) | 0.2 | |||||
Equity classified stock-based compensation expense | 6 | 6 | ||||
Equity classified stock-based compensation expense (in shares) | 0.4 | |||||
Dividends ($0.01 per common share) | (1) | (1) | ||||
Comprehensive income (loss) | 306 | (64) | 242 | |||
Balance at the end of period at Jun. 30, 2020 | 1,794 | (825) | (68) | 1 | 902 | |
Balance at the end of period (in shares) at Jun. 30, 2020 | 60.7 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Common stock issued under employee stock purchase plan | 2 | 2 | ||||
Common stock issued under employee stock purchase plan (in shares) | 0.2 | |||||
Equity classified stock-based compensation expense | 4 | 4 | ||||
Equity classified stock-based compensation expense (in shares) | 0.1 | |||||
Dividends ($0.01 per common share) | (1) | (1) | ||||
Comprehensive income (loss) | 85 | 7 | 92 | |||
Other | $ (1) | (1) | ||||
Balance at the end of period at Sep. 30, 2020 | $ 1,800 | $ (741) | $ (61) | $ 998 | ||
Balance at the end of period (in shares) at Sep. 30, 2020 | 61 | 61 |
Unaudited Condensed Consolida_8
Unaudited Condensed Consolidated Statements of Change in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Unaudited Condensed Consolidated Statements of Change in Stockholders' Equity | ||||||
Dividends per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
General business description
General business description | 9 Months Ended |
Sep. 30, 2020 | |
General business description | |
General business description | 1. GENERAL BUSINESS DESCRIPTION Maxar Technologies Inc. (the “Company” or “Maxar”) is a partner and innovator in Earth Intelligence and Space Infrastructure. Maxar helps government and commercial customers 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 deploy solutions and deliver insights with speed, scale and cost effectiveness. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2020 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The Unaudited Condensed Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and its consolidated subsidiaries. The Company’s Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). All intercompany balances and transactions are eliminated in consolidation. The Company’s Unaudited Condensed Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. References to “C$” refer to Canadian currency. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K filed with the SEC. Unless otherwise indicated, amounts provided in the Notes to the Unaudited Condensed Consolidated Financial Statements pertain to continuing operations (See Note 4 for information on discontinued operations). Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. In management’s opinion, all adjustments of a normal recurring nature that are necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included. Use of estimates, assumptions and judgments The preparation of the Unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. Recently Adopted Accounting Pronouncements 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, requires 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 adopted this standard and related amendments effective January 1, 2020, using the modified retrospective approach. The adoption of this standard resulted in additional disclosures related to the Company's orbital receivables. Refer to Note 5 for details. There were no impacts to the Unaudited Condensed Consolidated Financial Statements as a result of adoption. 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 early adopted this standard and related amendments effective January 1, 2020, in order to utilize the simplifying provision that removes the exception to the incremental approach for intraperiod tax allocation when a loss is incurred from continuing operations and income or a gain results from another item such as discontinued operations or other comprehensive income. The impact on the Unaudited Condensed Consolidated Financial Statements is to simplify the quarterly presentation related to the ordinary loss and the gain recorded in discontinued operations. There were no additional material impacts to the Unaudited Condensed Consolidated Financial Statements as a result of adoption. Recent Accounting Guidance Not Yet Adopted Reference Rate Reform In March 2020, FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The ASU is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate and other interbank offered rates to alternative reference rates. This guidance was effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company expects that it will elect to apply some of the expedients and exceptions in ASU 2020-04. However, the Company is still evaluating the guidance and the impact that adoption of ASU 2020-04 will have on the Company's financial statements. |
Business combinations
Business combinations | 9 Months Ended |
Sep. 30, 2020 | |
Business combinations | |
Business combinations | 3. BUSINESS COMBINATION On July 1, 2020, the Company closed the acquisition of Vricon, Inc. (“Vricon”) and purchased the remaining 50% ownership interest in Vricon (“Vricon Acquisition”) for $142 million, excluding Vricon cash on hand of $23 million, for $119 million, net of cash at closing, of which $1 million will be paid in the fourth quarter of 2020. Vricon is a global leader in satellite-derived 3D data for defense and intelligence markets, with software and products that enhance 3D mapping, Earth intelligence data, military simulation and training and precision-guided munitions. Vricon was formed as a joint venture between Maxar and Saab AB in 2015 to combine patented Saab AB Intellectual Property with our commercial satellite imagery to build highly accurate, immersive 3D products at scale. Prior to the closing of the acquisition, Vricon was the Company’s most significant joint venture. To fund the Vricon Acquisition, the Company issued $150 million in aggregate principal amount of new senior secured notes due 2027. See Note 9 for additional details on the issuance of the new senior secured notes. As part of the acquisition agreement, Vricon’s stock-based awards vested at the time of acquisition were settled in cash for $25 million. The unvested awards were forfeited. The Vricon Acquisition was achieved in stages, which required the Company to remeasure its previously held equity interest in Vricon at its acquisition date fair value. As no material control premium was determined to exist, the call option purchase price of $117 million paid in the Vricon Acquisition was used to estimate the fair value of the previously held equity interest. The Company performed a business enterprise valuation to corroborate the resulting total implied purchase consideration. This remeasurement resulted in a gain of approximately $85 million which is recorded in Other (income) expense within the Company’s Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020. The operating results of Vricon are included in the Company’s Unaudited Condensed Consolidated Statements of Operations beginning July 1, 2020. Vricon results are consolidated within the Earth Intelligence Segment. The following table presents unaudited pro forma financial information as if Vricon had been included in the Company’s financial results as of January 1, 2019, through the date of acquisition: Nine Months Ended September 30, 2020 2019 Revenues $ 1,267 $ 1,274 Net income $ 342 $ 68 Purchase Price Allocation 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 the intangible assets acquired has been determined using valuation techniques that require significant judgement, including the amount and timing of future net cash flows and discount rates. July 1, Call option purchase price $ 117 Fair value of existing equity interest 117 Cash settlement of equity awards and liabilities assumed 26 Purchase consideration $ 260 Assets Cash and cash equivalents $ 23 Trade and other receivables, net 9 Property, plant and equipment, net 3 Intangible assets, net 73 Other assets 2 Total assets $ 110 Liabilities Accounts payable $ 1 Accrued liabilities 3 Deferred income tax liability 17 Other current liabilities 6 Total liabilities 27 Fair value of net identifiable assets acquired 83 Goodwill $ 177 The following table summarizes the intangible assets acquired from the Vricon Acquisition by class and useful life: Carrying value Remaining useful life Finite-lived intangible assets: Backlog $ 21 2 years Trademarks 1 1 year Existing technology 49 9 years Existing software 2 2 - 3 years Total intangible assets $ 73 The goodwill of $177 million is attributable primarily to the synergies expected to be achieved from integrating Vricon with the Company’s existing capabilities. Due to the nature of the transaction, the Company will not receive a step-up in tax basis on the fixed assets, intangible assets or goodwill recorded in the purchase price allocation. |
Discontinued operations
Discontinued operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued operations | |
Discontinued Operations | 4. DISCONTINUED OPERATIONS On April 8, 2020, the Company completed the sale of the MDA Business to 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”), for an aggregate purchase price of $729 million (C$1.0 billion) (“MDA Transaction”). The Company recognized an after-tax gain on disposal of discontinued operations of $305 million, net of $24 million in taxes, on the MDA Transaction for the nine months ended September 30, 2020. The tax on the MDA Transaction is primarily due to the estimated U.S. federal Base Erosion and Anti-Abuse Tax and California state corporate income tax, the latter being attributable to recent legislation suspending the use of net operating loss (“NOL”) carryforwards. The gain on the MDA Transaction includes a reclassification of the related foreign currency translation adjustment balance of $64 million from Accumulated other comprehensive (loss) income. See Note 9 for details on the use of proceeds from the MDA Transaction. The operating results and cash flows related to the MDA Business are reflected as discontinued operations in the Unaudited Condensed Consolidated Statements of Operations and the Unaudited Condensed Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2020 and September 30, 2019, respectively. For the nine months ended September 30, 2020, the Company has reported the operating results and cash flows related to the MDA Business through April 7, 2020. In addition, the Company and the MDA Purchaser entered into a Transition Services Agreement pursuant to which the MDA Purchaser will receive certain services (“Services”). The Services are provided based on an agreed upon fee arrangement through April 8, 2021, with an option to extend to October 2021 for certain services. Income from discontinued operations, net of tax for MDA in the Unaudited Condensed Consolidated Statements of Operations consists of the following: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 1 2019 Revenues: Product $ — $ 45 $ 44 $ 155 Service — 39 42 122 Total revenues — 84 86 277 Costs and expenses: Product costs, excluding depreciation and amortization — 35 38 115 Service costs, excluding depreciation and amortization — 19 24 64 Selling, general and administrative — 11 13 42 Depreciation and amortization — 2 4 8 Impairment loss — — 12 12 Operating income (loss) — 17 (5) 36 Interest expense, net — — 1 — Other expense (income), net 2 — (1) (34) (1) Income before taxes — 18 28 37 Income tax expense (benefit) — 2 (4) 1 Income from operations of discontinued operations, net of tax — 16 32 36 Gain on disposal of discontinued operations, net of tax 3 1 — 305 — Income from discontinued operations, net of tax $ 1 $ 16 $ 337 $ 36 1 F or the nine months ended September 30, 2020, MDA results are presented through April 7, 2020. 2 Other (income) expense, net includes the $39 million recovery of the previously recorded liability in relation to the Company’s dispute with the Ukrainian Customer for the nine months ended September 30, 2020. 3 For the three months ended September 30, 2020, the $1 million Gain on disposal of discontinued operations, net of tax, is driven by a reduction of the income tax on the gain on disposal of the MDA Business. Prior to the sale, MDA held an investment in a privately held company in which it did not have significant influence and for which the fair value could not be reliably measured through external indicators. The investment was evaluated quarterly for impairment. During the nine months ended September 30, 2020, the Company recorded an impairment loss of $12 million, all of which was recorded during the three months ended March 31, 2020, as the privately held company filed for bankruptcy and as a result, the investment was fully impaired. During the nine months ended September 30, 2019, the Company recorded an impairment loss of $12 million due to an observable price change related to its investment. The carrying amounts of the major classes of assets and liabilities, which are classified as held for sale in the Unaudited Condensed Consolidated Balance Sheet as of December 31, 2019, are as follows: December 31, 2019 Assets Cash and cash equivalents $ 45 Trade and other receivables, net 168 Deferred tax assets 117 Property, plant and equipment 29 Intangible assets 27 Goodwill 310 Other assets 1 55 Current assets held for sale $ 751 Liabilities Accounts payable $ 88 Accrued liabilities 18 Accrued compensation and benefits 21 Contract liabilities 29 Pension and other postretirement benefit liabilities 21 Other liabilities 2 53 Current liabilities held for sale $ 230 1 Other assets include income tax receivables, operating lease assets, prepaid and other current assets. 2 Other liabilities include operating and finance lease liabilities, current income taxes payable and other current liabilities |
Trade and other receivables, ne
Trade and other receivables, net | 9 Months Ended |
Sep. 30, 2020 | |
Trade and other receivables, net | |
Trade and other receivables, net | 5. TRADE AND OTHER RECEIVABLES, NET September 30, December 31, 2020 2019 Billed $ 187 $ 211 Unbilled 129 100 Total trade receivables 316 311 Orbital receivables, current portion 44 43 Other 2 4 Allowance for doubtful accounts (1) (1) Trade and other receivables, net $ 361 $ 357 Orbital receivables relate to performance incentives due under certain satellite construction contracts that are paid over the in-orbit life of the satellite. As of September 30, 2020 and December 31, 2019, non-current orbital receivables, net of allowances were $358 million and $382 million, respectively, and are included in Non-current assets on the Unaudited Condensed Consolidated Balance Sheets. Orbital receivables are recognized as an asset on the balance sheet in conjunction with revenue recognition under the cost-to-cost method of accounting during the satellite construction period and are stated at their carrying value less allowances for expected credit losses. The Company utilizes customer credit ratings, expected credit loss and other credit quality indicators to evaluate the collectability of orbital receivables on a quarterly basis. Assessments for impairments of the orbital receivables are completed utilizing a discounted cash flow analysis based on discount rates which reflect the credit risk of customers and are included as an addition to the orbital receivable allowance. Income is recognized on orbital receivable balances based upon contractual rates. As of September 30, 2020, the Company had orbital receivables from 14 customers for which the largest customer’s value represents $40 million, or 10% of the stated balance sheet value. During the three and nine months ended September 30, 2020, the Company recognized no impairment and an impairment of $14 million, respectively, primarily due to an increase in credit risk associated with the Company’s largest orbital customer as of March 31, 2020. The changes in allowance for expected credit losses related to non-current orbital receivables for the nine months ended September 30, 2020, consist of the following: Orbital Receivables Allowance Allowance as of January 1, 2020 $ (35) Additions (14) Allowance as of September 30, 2020 $ (49) The Company has sold certain orbital receivables that are accounted for as securitized borrowings in the Unaudited Condensed Consolidated Balance Sheets as the Company does not meet the accounting criteria for surrendering control of the receivables. The net proceeds received on the orbital receivables have been recognized as securitization liabilities 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. 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 total amounts of securitization liabilities at September 30, 2020 and December 31, 2019 were $62 million and $65 million, respectively. Current securitization liabilities of $14 million and $17 million, are included in Other current liabilities on the Unaudited Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019, respectively. Non-current securitization liabilities of $48 million are included in Other non-current liabilities on the Unaudited Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019, respectively. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2020 | |
Inventory | |
Inventory | 6 . INVENTORY September 30, December 31, 2020 2019 Raw materials $ 16 $ 13 Work in process 11 7 Inventory $ 27 $ 20 |
Property, plant and equipment,
Property, plant and equipment, net | 9 Months Ended |
Sep. 30, 2020 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 7. PROPERTY, PLANT AND EQUIPMENT, NET September 30, December 31, 2020 2019 Satellites $ 397 $ 397 Equipment 204 196 Leasehold improvements 82 75 Computer hardware 75 67 Furniture and fixtures 16 15 Construction in process 1 520 388 Property, plant and equipment, at cost 1,294 1,138 Accumulated depreciation (450) (380) Property, plant and equipment, net $ 844 $ 758 1 Depreciation expense for property, plant and equipment was $24 million for the three months ended September 30, 2020 and September 30, 2019, and $71 million and $80 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. During the second quarter of 2019, the Company received insurance recoveries of $183 million related to the loss of the WorldView-4 satellite. The insurance proceeds are included in operating cash flows as they are considered business interruption insurance and represent the satellite’s loss of capacity to produce imagery for sale to the Company’s customers. |
Intangible assets and goodwill
Intangible assets and goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Intangible assets and goodwill | |
Intangible assets and goodwill | 8. INTANGIBLE ASSETS AND GOODWILL September 30, December 31, 2020 2019 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 615 $ (135) $ 480 $ 615 $ (102) $ 513 Backlog 351 (292) 59 330 (217) 113 Technologies 369 (194) 175 320 (144) 176 Software 278 (115) 163 213 (83) 130 Image library 80 (56) 24 80 (48) 32 Trade names and other 38 (13) 25 37 (10) 27 Intangible assets $ 1,731 $ (805) $ 926 $ 1,595 $ (604) $ 991 Amortization expense related to intangible assets was $71 million and $69 million, and $203 million and $204 million for the three and nine months ended September 30, 2020 and September 30, 2019, respectively. Changes in the carrying amount of goodwill for each reporting segment are as follows: Earth Intelligence Space Infrastructure Total Balance as of December 31, 2019 $ 1,455 $ — $ 1,455 Acquisition of Vricon 177 — 177 Balance as of September 30, 2020 $ 1,632 $ — $ 1,632 Accumulated goodwill impairment losses in the Earth Intelligence segment were $142 million as of September 30, 2020 and December 31, 2019. Accumulated goodwill impairment losses in the Space Infrastructure segment were $17 million as of September 30, 2020 and December 31, 2019. |
Long-term debt and interest exp
Long-term debt and interest expense, net | 9 Months Ended |
Sep. 30, 2020 | |
Long-term debt and interest expense, net | |
Long-term debt and interest expense, net | 9 . LONG-TERM DEBT AND INTEREST EXPENSE , NET September 30, December 31, 2020 2019 Syndicated Credit facility: Term Loan B $ 1,444 $ 1,960 2023 Notes 850 1,000 2027 Notes 150 — Deferred financing 33 33 Debt discount and issuance costs (60) (54) Obligations under finance leases and other 5 6 Total long-term debt 2,422 2,945 Current portion of long-term debt (9) (30) Non-current portion of long-term debt $ 2,413 $ 2,915 The Company’s senior secured syndicated credit facility (“Syndicated Credit Facility”) is composed of: (i) a senior secured first lien revolving credit facility in an aggregate capacity of up to $500 million maturing in December 2023 (“Revolving Credit Facility”) and (ii) a senior secured first lien term B facility in an original aggregate principal amount of $2.0 billion maturing in October 2024 (“Term Loan B”). The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued. As of September 30, 2020 and December 31, 2019, the Company had $32 million and $18 million of issued and undrawn letters of credit outstanding under the Revolving Credit Facility. Of the Company’s $500 million borrowing capacity on its Revolving Credit Facility, the Company has no outstanding borrowings as of September 30, 2020. During the three months ended June 30, 2020, the Company repaid $511 million of borrowings under Term Loan B using proceeds from the MDA Transaction. The Company expensed $7 million of unamortized debt issuance costs attributed to the partial pay down, which is included in Interest expense, net in the Unaudited Condensed Consolidated Statements of Operations. On June 25, 2020, the Company repurchased $150 million aggregate principal amount of its 9.75% Senior Secured Notes due 2023 (“2023 Notes”) using proceeds from the MDA Transaction. The 2023 Notes were repurchased (“2023 Notes Repurchase”) at approximately 112.45% of the principal amount thereof, subject to customary closing conditions. On June 25, 2020, the Company issued $150 million in principal amount of 7.54% Senior Secured Notes due 2027 (“2027 Notes”) in a private placement pursuant to Regulation S under the Securities Act of 1933, as amended. The 2027 Notes were issued at a price of 98.25% and bear interest at the rate of 7.54% per annum, payable semi-annually in cash in arrears, for which interest payments will commence in December 2020. The 2027 Notes are guaranteed on a senior secured basis by each of the Company’s existing and future subsidiaries that guarantee the Syndicated Credit Facility and the 2023 Notes. The Company accounted for the 2027 Notes and 2023 Notes Repurchase as debt modifications. As a result, the 12.45% premium paid on the repurchase of the $150 million of 2023 Notes is accounted for as an incremental discount that is amortized over the life of the 2027 Notes. Separately, the previously incurred unamortized debt discount and debt issuance costs are amortized over the remaining life of the outstanding 2023 Notes. The 2027 Notes are guaranteed (“2027 Guarantees”) on a senior secured basis by each of the Company’ existing and future subsidiaries that guarantees the 2023 Notes and the Syndicated Credit Facility (“Guarantors”). The 2027 Notes are secured, equally and ratably with the 2023 Notes, the Syndicated Credit Facility and any future first lien debt, by liens on the same assets that secure the Revolving Credit Facility and the Term Loan B. The 2027 Notes and the 2027 Guarantees are the Company’s general senior secured obligations and rank equally in right of payment with all of the Company’s and the Guarantors’ existing and future unsubordinated debt (including the 2023 Notes and the Syndicated Credit Facility). The 2027 Notes and the 2027 Guarantees are effectively senior to all of the Company’s and the Guarantors’ existing and future unsecured debt as well as to all of any permitted junior lien debt that may be incurred in the future, in each case to the extent of the value of the assets securing the 2027 Notes and the 2027 Guarantees. The 2027 Notes and the 2027 Guarantees are effectively subordinated to any obligations that are secured by liens on assets that do not constitute a part of the collateral securing the 2027 Notes or the 2027 Guarantees, are structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries that do not guarantee the 2027 Notes, and are senior in right of payment to all of the Company’s and the Guarantors’ existing and future subordinated indebtedness. The indenture governing the 2027 Notes limits, among other things, the Company’s and the Company’s restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce the Company’s satellite insurance; and consolidate or merge with, or sell substantially all of the Company’s assets to, another person. The 2027 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on June 25, 2024, at a redemption price of 105.655%, during the 12 months beginning on June 25, 2025, at a redemption price of 103.770%, and at any time on or after June 25, 2026, at a redemption price of 101.885%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date. The Company may also redeem the 2027 Notes, in whole or in part, at the Company’s option at any time prior to June 25, 2024, at a price equal to 100% of the principal amount of such 2027 Notes plus a “make-whole” premium, together with accrued but unpaid interest, if any, to, but excluding, the date of redemption. In addition, the Company may redeem up to 40% of the aggregate principal amount of the 2027 Notes at any time before June 25, 2024, with the net cash proceeds from certain equity offerings at a specified redemption price, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. In the event a change of control occurs (as defined in the indenture governing the 2027 Notes), each holder will have the right to require us to repurchase all or any part of such holder’s 2027 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2027 Notes repurchased, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date). Interest expense, net on long-term debt and other obligations is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest on long-term debt $ 44 $ 51 $ 153 $ 144 Interest expense on advance payments from customers — 3 3 12 Interest on orbital securitization liability 1 1 4 5 Imputed interest and other 2 — 2 — Capitalized interest (11) (5) (29) (13) Interest expense, net $ 36 $ 50 $ 133 $ 148 |
Financial instruments and fair
Financial instruments and fair value disclosures | 9 Months Ended |
Sep. 30, 2020 | |
Financial instruments and fair value disclosures | |
Financial instruments and fair value disclosures | 10. 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 September 30, 2020 Level 1 Level 2 Level 3 Total Assets Orbital receivables, net 1 $ — $ 402 $ — $ 402 Liabilities Interest rate swaps $ — $ 25 $ — $ 25 Long-term debt 2 — 2,269 — 2,269 $ — $ 2,294 $ — $ 2,294 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, net 1 — 425 — 425 $ 1 $ 425 $ — $ 426 Liabilities Interest rate swaps $ — $ 18 $ — $ 18 Long-term debt 2 — 3,004 — 3,004 $ — $ 3,022 $ — $ 3,022 1 The carrying value of Orbital receivables, net was $402 million and $425 million at September 30, 2020 and December 31, 2019, respectively. 2 Long-term debt excludes finance leases, deferred financing and other and is carried at amortized cost. The outstanding carrying value was $2,384 million and $2,906 million at September 30, 2020 and December 31, 2019, respectively. In April 2021 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 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; therefore, the carrying value of these items approximates their fair value. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' equity | |
Stockholders' Equity | 1 1. STOCKHOLDERS’ EQUITY As a result of the Company’s U.S. Domestication on January 1, 2019, a reclassification between Common stock and Additional paid-in capital was necessary to reflect the Company’s new par value of $0.0001. The reclassification between Common Stock Tax Benefit Preservation Plan On May 12, 2019, the Company implemented a Tax Benefit Preservation Plan (“Tax Plan”), with the intent to preserve the value of certain deferred tax benefits (“Tax Benefits”). The Tax Plan expired on October 5, 2020, the three-year anniversary of the acquisition of DigitalGlobe. The Tax Plan was intended to act as a deterrent to any person or entity acquiring shares of the Company equal to or exceeding 4.9%. For each common stock outstanding as of May 28, 2019, a dividend of one preferred stock purchase right is granted. The Tax Plan gave current shareholders the right to purchase one one-hundredth As of September 30, 2020 and December 31, 2019, the Company had 2,400,000 shares authorized and no shares outstanding of the Series A Preferred stock. Changes in the components of Accumulated other comprehensive (loss) income are as follows: Foreign Currency Translation Adjustments Unrecognized (Loss) Gain on Interest Rate Swaps Loss on Pension and Other Postretirement Plans Total Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2019 $ 126 $ (12) $ (55) $ 59 Other comprehensive (loss) income (49) (15) 1 (63) Balance as of March 31, 2020 $ 77 $ (27) $ (54) $ (4) Other comprehensive income — 1 — 1 Tax expense — (1) — (1) Reclassification of currency translation adjustment to gain on disposal of discontinued operations 1 (78) (5) 19 (64) Balance as of June 30, 2020 $ (1) $ (32) $ (35) $ (68) Other comprehensive (loss) income — 7 — 7 Tax benefit (expense) — — — — Balance as of September 30, 2020 $ (1) $ (25) $ (35) $ (61) 1 Relates to the reclassification of foreign currency translation from Accumulated other comprehensive (loss) income to the Gain on disposal of discontinued operations due to the completion of the MDA Transaction. See Note 4 for details. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue | |
Revenue | 12. REVENUE On September 30, 2020, the Company had $2.2 billion of remaining performance obligations, which represents the transaction price of firm orders less inception-to-date revenues recognized. Remaining performance obligations generally exclude unexercised contract options and indefinite delivery/indefinite quantity contracts. The Company expects to recognize revenues relating to existing performance obligations of approximately $0.5 billion , $1.2 billion and $0.5 billion for the remaining three months ended December 31, 2020, the year ending December 31, 202 Contract liabilities by segment are as follows: As of September 30, 2020 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 38 $ 239 $ 277 As of December 31, 2019 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 130 $ 145 $ 275 1 There was no remaining contract liability balance associated with the Company’s EnhancedView Contract as of September 30, 2020 as the remaining revenue was fully recognized as of August 31, 2020. The contract liability associated with the Company’s EnhancedView Contract was $78 million as of December 31, 2019. During the nine months ended September 30, 2020, imputed interest on advanced payments increased the contract liability balance by $3 million, and $81 million in revenue was recognized, decreasing the contract liability balance. The increase in contract liabilities is primarily due to cash received on a commercial contract in the Space Infrastructure segment in advance of services performed. The increase is partially offset by revenues recognized based upon the satisfaction of performance obligations. The Company’s primary sources of revenues are as follows: Three Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 161 $ — $ 161 Service revenues 274 1 — 275 Intersegment — 19 (19) — $ 274 $ 181 $ (19) $ 436 Three Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 129 $ — $ 129 Service revenues 282 2 — 284 Intersegment — 31 (31) — $ 282 $ 162 $ (31) $ 413 Nine Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 425 $ — $ 425 Service revenues 823 8 — 831 Intersegment — 64 (64) — $ 823 $ 497 $ (64) $ 1,256 Nine Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 439 $ — $ 439 Service revenues 799 18 — 817 Intersegment — 96 (96) — $ 799 $ 553 $ (96) $ 1,256 Certain of the Company’s contracts with customers in the Space Infrastructure segment include a significant financing component since payments are received from the customer more than one year after delivery of the promised goods or services. The Company recognized orbital interest revenue of $8 million and $22 million for the three and nine months ended September 30, 2020, respectively, as compared to $8 million and $23 million for the three and nine months ended September 30, 2019, respectively, related to these contracts, which is included in product revenues. 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 of accounting to measure progress. Under the cost-to-cost method of accounting, 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. The Company incurred COVID-19 related EAC growth of $3 million and $27 million for the three and nine months ended September 30, 2020, respectively. The changes in the EACs are due to increases in estimated program costs associated with the COVID-19 operating posture and the estimated impact of certain items such as supplier delays and increased labor hours. These costs are considered incremental and separable from normal operations. The Company’s current estimates at completion on the Company’s satellite manufacturing contracts assume, among other things, that The Company remains in a COVID-19 operating posture in the factories through the spring of 2021. During the three and nine months ended September 30, 2020, the Company recorded an additional $6 million and $42 million estimated loss on a commercial satellite program which includes significant development efforts further delayed by COVID-19. The COVID-19 impact on this program was $2 million and $16 million for the three and nine months ended September 30, 2020, respectively, and is included in our total COVID-19 impact discussed above. The revenues based on geographic location of customers are as follows: Three Months Ended September 30, 2020 2019 United States $ 358 $ 301 Asia 25 37 Europe 25 24 Middle East 12 22 Australia 9 4 South America 4 18 Other 3 7 Total revenues $ 436 $ 413 Nine Months Ended September 30, 2020 2019 United States $ 1,016 $ 929 Asia 75 128 Europe 67 48 Middle East 38 41 Australia 26 13 South America 19 82 Other 15 15 Total revenues $ 1,256 $ 1,256 Revenues from significant customers are as follows: Three Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 198 $ 69 $ — $ 267 Commercial and other 76 112 (19) 169 Total revenues $ 274 $ 181 $ (19) $ 436 Three Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 186 $ 42 $ — $ 228 Commercial and other 96 120 (31) 185 Total revenues $ 282 $ 162 $ (31) $ 413 Nine Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 600 $ 208 $ — $ 808 Commercial and other 223 289 (64) 448 Total revenues $ 823 $ 497 $ (64) $ 1,256 Nine Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 587 $ 98 $ — $ 685 Commercial and other 212 455 (96) 571 Total revenues $ 799 $ 553 $ (96) $ 1,256 |
Segment information
Segment information | 9 Months Ended |
Sep. 30, 2020 | |
Segment information | |
Segment information | 13. SEGMENT INFORMATION The Company’s business is organized into two reportable segments: Earth Intelligence and Space Infrastructure. With the Company’s closing of the MDA Transaction on April 8, 2020, MDA is no longer considered a reportable segment and has been classified within Income from discontinued operations, net of tax in the Unaudited Condensed 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. Corporate and other expenses include 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: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues: Earth Intelligence $ 274 $ 282 $ 823 $ 799 Space Infrastructure 181 162 497 553 Intersegment eliminations (19) (31) (64) (96) Total revenues $ 436 $ 413 $ 1,256 $ 1,256 Adjusted EBITDA: Earth Intelligence $ 128 $ 145 $ 407 $ 394 Space Infrastructure 12 (3) (16) 2 Intersegment eliminations (7) (12) (21) (20) Corporate and other expenses (21) (21) (43) (60) Restructuring — 1 — (14) Transaction and integration related expense (2) (7) (6) (14) Impairment loss, including inventory — — (14) (3) Satellite insurance recovery — — — 183 Reduction of gain on sale leaseback (4) — (4) — CEO severance — — — (3) Gain on remeasurement of Vricon equity interest 1 85 — 85 — Depreciation and amortization (95) (93) (274) (284) Interest expense, net (36) (50) (133) (148) Interest income 2 2 — 3 — Equity in (income) loss from joint ventures, net of tax — 1 (1) 4 (Loss) income from continuing operations before taxes $ 62 $ (39) $ (17) $ 37 1 As a result of the Vricon Acquisition, the Company was required to remeasure its previously held equity interest in Vricon at its acquisition date fair value which resulted in a gain of $85 million. The gain is included in Other (income) expense, net on the Unaudited Condensed Consolidated Statements of Operations. 2 Included in Other (income) expense, net on the Unaudited Condensed Consolidated Statements of Operations. The Company’s capital expenditures are as follows: Three Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Corporate and Eliminations Total Capital expenditures: Property, plant and equipment $ 53 $ 6 $ 11 $ 70 Intangible assets 23 — 3 26 $ 76 $ 6 $ 14 $ 96 Three Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Corporate and Eliminations Total Capital expenditures: Property, plant and equipment $ 51 $ 5 $ 8 $ 64 Intangible assets 15 1 (1) 15 $ 66 $ 6 $ 7 $ 79 Nine Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Corporate and Eliminations Total Capital expenditures: Property, plant and equipment $ 115 $ 14 $ 29 $ 158 Intangible assets 59 — 7 66 $ 174 $ 14 $ 36 $ 224 Nine Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Corporate and Eliminations Total Capital expenditures: Property, plant and equipment $ 152 $ 13 $ (4) $ 161 Intangible assets 41 2 (1) 42 $ 193 $ 15 $ (5) $ 203 Substantially all of the Company’s long-lived tangible assets were in the United States as of September 30, 2020 and December 31, 2019. |
Employee benefit plans
Employee benefit plans | 9 Months Ended |
Sep. 30, 2020 | |
Employee benefit plans | |
Employee benefit plans | 14. EMPLOYEE BENEFIT PLANS The following table summarizes the components of net periodic benefit cost for the Company’s pension plans: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Interest cost $ 4 $ 6 $ 13 $ 16 Expected return on plan assets (7) (7) (20) (19) Amortization of net gain — — 1 — Expenses incurred 1 1 2 2 Net periodic benefit cost $ (2) $ — $ (4) $ (1) Contributions The funding policy for the Company’s pension plans is to contribute at least the minimum required by applicable laws and regulations or to directly make benefit payments where appropriate. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States. Under the CARES Act, all single-employer funding obligations due during calendar year 2020 can be delayed until January 1, 2021, with accrued interest added to the delayed payments. The Company contributed $3 million to its pension plan as of September 30, 2020 and has the ability to defer the remaining $15 million in payments for 2020 until January 1, 2021. |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income taxes | |
Income taxes | 15. INCOME TAXES For the three months ended September 30, 2020 and September 30, 2019, the effective tax rate on pre-tax continuing operations was (35.5)% and (2.6)%, respectively. For the nine months ended September 30, 2020 and September 30, 2019, the effective tax rate on pre-tax continuing operations was 129.4% and 8.1%, respectively. The effective tax rates for the three and nine months ended September 30, 2020 and September 30, 2019 differ from the statutory U.S. federal income tax rate of 21.0% primarily due to the estimated Base Erosion and Anti-Abuse Tax, state income taxes, estimated permanent differences and changes in valuation allowance. The Company does not anticipate a significant change to the Company’s gross unrecognized tax benefits within the next 12 months. The Company assesses the deferred tax assets for recoverability on a quarterly basis. Based upon all available positive and negative evidence, the Company has established a valuation allowance to reduce the net deferred tax asset to the amount that is more-likely-than-not realizable. The Company computes an estimated annual effective tax rate (“AETR”) each quarter based on the current and forecasted continuing operating results. The income tax expense or benefit associated with the interim period is computed using the most recent estimated AETR applied to the year-to-date ordinary income or loss, plus the tax effect of any significant or infrequently occurring items recorded during the interim period. Due to the early adoption of ASU 2019-12, Maxar is able to determine the tax effect of the loss from continuing operations without incorporating the gain on disposal of discontinued operations. The computation of the estimated AETR at each interim period requires certain estimates and significant judgments including, but not limited to, the expected operating income (loss) for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent differences and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, and additional information becomes known or as the tax environment changes. |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings per share | |
Earnings per share | 16. EARNINGS PER SHARE The following table includes the calculation of basic and diluted net income per common share: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Income (loss) from continuing operations $ 84 $ (41) $ 6 $ 30 Income from discontinued operations, net of tax 1 16 337 36 Net income (loss) $ 85 $ (25) $ 343 $ 66 Weighted average number of common shares outstanding-basic 61.0 59.6 60.6 59.6 Weighted dilutive effect of equity awards 2.4 — 1.9 0.4 Weighted average number of common shares outstanding-diluted 63.4 59.6 62.5 60.0 Basic net income (loss) per common share: Income (loss) from continuing operations $ 1.38 $ (0.69) $ 0.10 $ 0.50 Income from discontinued operations, net of tax 0.02 0.27 5.56 0.60 Basic net income (loss) per common share $ 1.40 $ (0.42) $ 5.66 $ 1.10 Diluted net income (loss) per common share: Income (loss) from continuing operations $ 1.32 $ (0.69) $ 0.10 $ 0.50 Income from discontinued operations, net of tax 0.02 0.27 5.39 0.60 Diluted net income (loss) per common share $ 1.34 $ (0.42) $ 5.49 $ 1.10 Approximately 1 million and 0 million awards for the three months ended September 30, 2020 and September 30, 2019, respectively, were excluded from the diluted weighted average number of ordinary common shares outstanding calculation because their effect would have been anti-dilutive. Approximately 1 million awards were excluded for the nine months ended September 30, 2020 and September 30, 2019. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and contingencies | |
Commitments and contingencies | 17. COMMITMENTS AND CONTINGENCIES Contingencies in the Normal Course of Business As discussed in Note 5, 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 effected receivables at their then net present value. 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 Unaudited Condensed Consolidated Financial Statements. The Company has entered into industrial cooperation agreements, sometimes referred to as offset agreements, as a condition to entering into contracts for its products and services from certain customers in foreign countries. These agreements are designed to return economic value to the foreign country and may be satisfied through activities that do not require a direct cash payment, including transferring technology and 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. Risks and uncertainties related to COVID-19 The near and long-term impacts of the current pandemic on the cost and schedule of the numerous programs in the Company’s existing backlog and the timing of new awards remain uncertain. The Company is observing stress in its supplier base inside and outside the U.S. and will continue to monitor and assess the actual and potential COVID-19 impacts on employees, customers, suppliers and the productivity of the work being done, all of which to some extent will affect revenues, estimated costs to complete projects, earnings and cash flow. The Company’s current estimates at completion on the Company’s satellite manufacturing contracts assume, among other things, that the Company remains in a COVID-19 operating posture in the Company’s factories through the spring of 2021. COVID-19 represents a force majeure event and as such, the Company has notified certain customers that the Company will be exercising the Maxar’s contractual legal rights given the uncertain nature of the current pandemic and its near and long-term impacts on the cost and schedule of the numerous programs in the existing backlog. The CARES Act was enacted on March 27, 2020 in the United States. Under the CARES Act, all single-employer funding obligations due during calendar year 2020 can be delayed until January 1, 2021, with accrued interest added to the delayed payments. See Note 14 for additional details on the CARES Act. 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 and subsequently terminated the agreement. 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, and seeking recovery from Maxar in the amount of approximately $227 million. On March 31, 2020, following a hearing on the merits, the arbitral tribunal issued a final decision in favor of the Company, dismissing the customer’s claims in their entirety and awarding the Company its costs and attorney’s fees. 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. Charles O’Brien v. Maxar Technologies Inc. Charles O’Brien v. Maxar Technologies Inc. On October 21, 2019, a Maxar stockholder filed a putative class action lawsuit captioned McCurdy v. Maxar Technologies Inc., et al. 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 United States District Court for the District of Delaware, captioned as Dorling, Derivatively on Behalf of Nominal Defendant Maxar Technologies Inc. v. Lance, et al. 02134-UNA. On September 18, 2020, another purported derivative action was filed in the same court against Maxar and certain current and former members of management and the board of directors, captioned as Golub, Derivatively on Behalf of Maxar Technologies Inc. v. Lance, et al. 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 | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental cash flow | |
Supplemental cash flow | 18. SUPPLEMENTAL CASH FLOW Selected cash payments and non-cash activities are as follows: Nine Months Ended September 30, 2020 2019 Supplemental cash flow information: Cash paid for interest $ 127 $ 174 Supplemental non-cash investing and financing activities: Accrued capital expenditures 13 19 |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent events | |
Subsequent events | 19. SUBSEQUENT EVENTS Tax Plan Expiration The Company’s Tax Plan expired on October 5, 2020. There is no impact to the financial statements as a result of the expiration of the Tax Plan. See Note 11 for details. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of presentation The Unaudited Condensed Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and its consolidated subsidiaries. The Company’s Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). All intercompany balances and transactions are eliminated in consolidation. The Company’s Unaudited Condensed Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. References to “C$” refer to Canadian currency. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K filed with the SEC. Unless otherwise indicated, amounts provided in the Notes to the Unaudited Condensed Consolidated Financial Statements pertain to continuing operations (See Note 4 for information on discontinued operations). Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. In management’s opinion, all adjustments of a normal recurring nature that are necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included. |
Use of estimates, assumptions and judgments | Use of estimates, assumptions and judgments The preparation of the Unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements 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, requires 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 adopted this standard and related amendments effective January 1, 2020, using the modified retrospective approach. The adoption of this standard resulted in additional disclosures related to the Company's orbital receivables. Refer to Note 5 for details. There were no impacts to the Unaudited Condensed Consolidated Financial Statements as a result of adoption. 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 early adopted this standard and related amendments effective January 1, 2020, in order to utilize the simplifying provision that removes the exception to the incremental approach for intraperiod tax allocation when a loss is incurred from continuing operations and income or a gain results from another item such as discontinued operations or other comprehensive income. The impact on the Unaudited Condensed Consolidated Financial Statements is to simplify the quarterly presentation related to the ordinary loss and the gain recorded in discontinued operations. There were no additional material impacts to the Unaudited Condensed Consolidated Financial Statements as a result of adoption. |
Recent Accounting Guidance Not Yet Adopted | Recent Accounting Guidance Not Yet Adopted Reference Rate Reform In March 2020, FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The ASU is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate and other interbank offered rates to alternative reference rates. This guidance was effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company expects that it will elect to apply some of the expedients and exceptions in ASU 2020-04. However, the Company is still evaluating the guidance and the impact that adoption of ASU 2020-04 will have on the Company's financial statements. |
Business combinations (Tables)
Business combinations (Tables) - Vricon Inc | 9 Months Ended |
Sep. 30, 2020 | |
Business combination | |
Schedule of unaudited pro forma financial information | Nine Months Ended September 30, 2020 2019 Revenues $ 1,267 $ 1,274 Net income $ 342 $ 68 |
Schedule of fair value of the consideration transferred and the preliminary estimated fair values of the major classes of assets acquired and liabilities assumed | July 1, Call option purchase price $ 117 Fair value of existing equity interest 117 Cash settlement of equity awards and liabilities assumed 26 Purchase consideration $ 260 Assets Cash and cash equivalents $ 23 Trade and other receivables, net 9 Property, plant and equipment, net 3 Intangible assets, net 73 Other assets 2 Total assets $ 110 Liabilities Accounts payable $ 1 Accrued liabilities 3 Deferred income tax liability 17 Other current liabilities 6 Total liabilities 27 Fair value of net identifiable assets acquired 83 Goodwill $ 177 |
Summary of intangible assets acquired | Carrying value Remaining useful life Finite-lived intangible assets: Backlog $ 21 2 years Trademarks 1 1 year Existing technology 49 9 years Existing software 2 2 - 3 years Total intangible assets $ 73 |
Discontinued operations (Tables
Discontinued operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued operations | |
Schedule of results of discontinued operations and financial information of the discontinued operation that are included in the Unaudited Condensed Consolidated Statements of Operations and Unaudited Consolidated Balance Sheets | Income from discontinued operations, net of tax for MDA in the Unaudited Condensed Consolidated Statements of Operations consists of the following: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 1 2019 Revenues: Product $ — $ 45 $ 44 $ 155 Service — 39 42 122 Total revenues — 84 86 277 Costs and expenses: Product costs, excluding depreciation and amortization — 35 38 115 Service costs, excluding depreciation and amortization — 19 24 64 Selling, general and administrative — 11 13 42 Depreciation and amortization — 2 4 8 Impairment loss — — 12 12 Operating income (loss) — 17 (5) 36 Interest expense, net — — 1 — Other expense (income), net 2 — (1) (34) (1) Income before taxes — 18 28 37 Income tax expense (benefit) — 2 (4) 1 Income from operations of discontinued operations, net of tax — 16 32 36 Gain on disposal of discontinued operations, net of tax 3 1 — 305 — Income from discontinued operations, net of tax $ 1 $ 16 $ 337 $ 36 1 F or the nine months ended September 30, 2020, MDA results are presented through April 7, 2020. 2 Other (income) expense, net includes the $39 million recovery of the previously recorded liability in relation to the Company’s dispute with the Ukrainian Customer for the nine months ended September 30, 2020. 3 For the three months ended September 30, 2020, the $1 million Gain on disposal of discontinued operations, net of tax, is driven by a reduction of the income tax on the gain on disposal of the MDA Business. December 31, 2019 Assets Cash and cash equivalents $ 45 Trade and other receivables, net 168 Deferred tax assets 117 Property, plant and equipment 29 Intangible assets 27 Goodwill 310 Other assets 1 55 Current assets held for sale $ 751 Liabilities Accounts payable $ 88 Accrued liabilities 18 Accrued compensation and benefits 21 Contract liabilities 29 Pension and other postretirement benefit liabilities 21 Other liabilities 2 53 Current liabilities held for sale $ 230 1 Other assets include income tax receivables, operating lease assets, prepaid and other current assets. 2 Other liabilities include operating and finance lease liabilities, current income taxes payable and other current liabilities |
Trade and other receivables, _2
Trade and other receivables, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Trade and other receivables, net | |
Schedule of trade and other receivables, net | September 30, December 31, 2020 2019 Billed $ 187 $ 211 Unbilled 129 100 Total trade receivables 316 311 Orbital receivables, current portion 44 43 Other 2 4 Allowance for doubtful accounts (1) (1) Trade and other receivables, net $ 361 $ 357 |
Schedule of changes in allowance for expected credit losses related to non-current orbital receivables | Orbital Receivables Allowance Allowance as of January 1, 2020 $ (35) Additions (14) Allowance as of September 30, 2020 $ (49) |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory | |
Schedule of inventory | September 30, December 31, 2020 2019 Raw materials $ 16 $ 13 Work in process 11 7 Inventory $ 27 $ 20 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment, net | September 30, December 31, 2020 2019 Satellites $ 397 $ 397 Equipment 204 196 Leasehold improvements 82 75 Computer hardware 75 67 Furniture and fixtures 16 15 Construction in process 1 520 388 Property, plant and equipment, at cost 1,294 1,138 Accumulated depreciation (450) (380) Property, plant and equipment, net $ 844 $ 758 1 |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Intangible assets and goodwill | |
Schedule of intangible assets | September 30, December 31, 2020 2019 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 615 $ (135) $ 480 $ 615 $ (102) $ 513 Backlog 351 (292) 59 330 (217) 113 Technologies 369 (194) 175 320 (144) 176 Software 278 (115) 163 213 (83) 130 Image library 80 (56) 24 80 (48) 32 Trade names and other 38 (13) 25 37 (10) 27 Intangible assets $ 1,731 $ (805) $ 926 $ 1,595 $ (604) $ 991 |
Schedule of goodwill | Earth Intelligence Space Infrastructure Total Balance as of December 31, 2019 $ 1,455 $ — $ 1,455 Acquisition of Vricon 177 — 177 Balance as of September 30, 2020 $ 1,632 $ — $ 1,632 |
Long-term debt and interest e_2
Long-term debt and interest expense, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Long-term debt and interest expense, net | |
Summary of long term debt | September 30, December 31, 2020 2019 Syndicated Credit facility: Term Loan B $ 1,444 $ 1,960 2023 Notes 850 1,000 2027 Notes 150 — Deferred financing 33 33 Debt discount and issuance costs (60) (54) Obligations under finance leases and other 5 6 Total long-term debt 2,422 2,945 Current portion of long-term debt (9) (30) Non-current portion of long-term debt $ 2,413 $ 2,915 |
Schedule of interest expense on long term debt and other obligations | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest on long-term debt $ 44 $ 51 $ 153 $ 144 Interest expense on advance payments from customers — 3 3 12 Interest on orbital securitization liability 1 1 4 5 Imputed interest and other 2 — 2 — Capitalized interest (11) (5) (29) (13) Interest expense, net $ 36 $ 50 $ 133 $ 148 |
Financial instruments and fai_2
Financial instruments and fair value disclosures (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Financial instruments and fair value disclosures | |
Summary of financial instruments measured at fair value | Recurring Fair Value Measurements of as of September 30, 2020 Level 1 Level 2 Level 3 Total Assets Orbital receivables, net 1 $ — $ 402 $ — $ 402 Liabilities Interest rate swaps $ — $ 25 $ — $ 25 Long-term debt 2 — 2,269 — 2,269 $ — $ 2,294 $ — $ 2,294 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, net 1 — 425 — 425 $ 1 $ 425 $ — $ 426 Liabilities Interest rate swaps $ — $ 18 $ — $ 18 Long-term debt 2 — 3,004 — 3,004 $ — $ 3,022 $ — $ 3,022 1 The carrying value of Orbital receivables, net was $402 million and $425 million at September 30, 2020 and December 31, 2019, respectively. 2 Long-term debt excludes finance leases, deferred financing and other and is carried at amortized cost. The outstanding carrying value was $2,384 million and $2,906 million at September 30, 2020 and December 31, 2019, respectively. |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' equity | |
Schedule of changes in the components of accumulated other comprehensive income (loss) | Foreign Currency Translation Adjustments Unrecognized (Loss) Gain on Interest Rate Swaps Loss on Pension and Other Postretirement Plans Total Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2019 $ 126 $ (12) $ (55) $ 59 Other comprehensive (loss) income (49) (15) 1 (63) Balance as of March 31, 2020 $ 77 $ (27) $ (54) $ (4) Other comprehensive income — 1 — 1 Tax expense — (1) — (1) Reclassification of currency translation adjustment to gain on disposal of discontinued operations 1 (78) (5) 19 (64) Balance as of June 30, 2020 $ (1) $ (32) $ (35) $ (68) Other comprehensive (loss) income — 7 — 7 Tax benefit (expense) — — — — Balance as of September 30, 2020 $ (1) $ (25) $ (35) $ (61) 1 Relates to the reclassification of foreign currency translation from Accumulated other comprehensive (loss) income to the Gain on disposal of discontinued operations due to the completion of the MDA Transaction. See Note 4 for details. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue | |
Summary of contract assets and contract liabilities by segment | As of September 30, 2020 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 38 $ 239 $ 277 As of December 31, 2019 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 130 $ 145 $ 275 1 There was no remaining contract liability balance associated with the Company’s EnhancedView Contract as of September 30, 2020 as the remaining revenue was fully recognized as of August 31, 2020. The contract liability associated with the Company’s EnhancedView Contract was $78 million as of December 31, 2019. During the nine months ended September 30, 2020, imputed interest on advanced payments increased the contract liability balance by $3 million, and $81 million in revenue was recognized, decreasing the contract liability balance. |
Summary of revenue by primary sources | Three Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 161 $ — $ 161 Service revenues 274 1 — 275 Intersegment — 19 (19) — $ 274 $ 181 $ (19) $ 436 Three Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 129 $ — $ 129 Service revenues 282 2 — 284 Intersegment — 31 (31) — $ 282 $ 162 $ (31) $ 413 Nine Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 425 $ — $ 425 Service revenues 823 8 — 831 Intersegment — 64 (64) — $ 823 $ 497 $ (64) $ 1,256 Nine Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 439 $ — $ 439 Service revenues 799 18 — 817 Intersegment — 96 (96) — $ 799 $ 553 $ (96) $ 1,256 |
Summary of revenue by geographic location | Three Months Ended September 30, 2020 2019 United States $ 358 $ 301 Asia 25 37 Europe 25 24 Middle East 12 22 Australia 9 4 South America 4 18 Other 3 7 Total revenues $ 436 $ 413 Nine Months Ended September 30, 2020 2019 United States $ 1,016 $ 929 Asia 75 128 Europe 67 48 Middle East 38 41 Australia 26 13 South America 19 82 Other 15 15 Total revenues $ 1,256 $ 1,256 |
Schedule of revenue from significant customers | Three Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 198 $ 69 $ — $ 267 Commercial and other 76 112 (19) 169 Total revenues $ 274 $ 181 $ (19) $ 436 Three Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 186 $ 42 $ — $ 228 Commercial and other 96 120 (31) 185 Total revenues $ 282 $ 162 $ (31) $ 413 Nine Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 600 $ 208 $ — $ 808 Commercial and other 223 289 (64) 448 Total revenues $ 823 $ 497 $ (64) $ 1,256 Nine Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 587 $ 98 $ — $ 685 Commercial and other 212 455 (96) 571 Total revenues $ 799 $ 553 $ (96) $ 1,256 |
Segment information (Tables)
Segment information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment information | |
Summary of operating performance of the reporting segments | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues: Earth Intelligence $ 274 $ 282 $ 823 $ 799 Space Infrastructure 181 162 497 553 Intersegment eliminations (19) (31) (64) (96) Total revenues $ 436 $ 413 $ 1,256 $ 1,256 Adjusted EBITDA: Earth Intelligence $ 128 $ 145 $ 407 $ 394 Space Infrastructure 12 (3) (16) 2 Intersegment eliminations (7) (12) (21) (20) Corporate and other expenses (21) (21) (43) (60) Restructuring — 1 — (14) Transaction and integration related expense (2) (7) (6) (14) Impairment loss, including inventory — — (14) (3) Satellite insurance recovery — — — 183 Reduction of gain on sale leaseback (4) — (4) — CEO severance — — — (3) Gain on remeasurement of Vricon equity interest 1 85 — 85 — Depreciation and amortization (95) (93) (274) (284) Interest expense, net (36) (50) (133) (148) Interest income 2 2 — 3 — Equity in (income) loss from joint ventures, net of tax — 1 (1) 4 (Loss) income from continuing operations before taxes $ 62 $ (39) $ (17) $ 37 1 As a result of the Vricon Acquisition, the Company was required to remeasure its previously held equity interest in Vricon at its acquisition date fair value which resulted in a gain of $85 million. The gain is included in Other (income) expense, net on the Unaudited Condensed Consolidated Statements of Operations. 2 Included in Other (income) expense, net on the Unaudited Condensed Consolidated Statements of Operations. |
Schedule of capital expenditures by segment | Three Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Corporate and Eliminations Total Capital expenditures: Property, plant and equipment $ 53 $ 6 $ 11 $ 70 Intangible assets 23 — 3 26 $ 76 $ 6 $ 14 $ 96 Three Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Corporate and Eliminations Total Capital expenditures: Property, plant and equipment $ 51 $ 5 $ 8 $ 64 Intangible assets 15 1 (1) 15 $ 66 $ 6 $ 7 $ 79 Nine Months Ended September 30, 2020 Earth Intelligence Space Infrastructure Corporate and Eliminations Total Capital expenditures: Property, plant and equipment $ 115 $ 14 $ 29 $ 158 Intangible assets 59 — 7 66 $ 174 $ 14 $ 36 $ 224 Nine Months Ended September 30, 2019 Earth Intelligence Space Infrastructure Corporate and Eliminations Total Capital expenditures: Property, plant and equipment $ 152 $ 13 $ (4) $ 161 Intangible assets 41 2 (1) 42 $ 193 $ 15 $ (5) $ 203 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Employee benefit plans | |
Summary of the components of net periodic benefit cost | Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Interest cost $ 4 $ 6 $ 13 $ 16 Expected return on plan assets (7) (7) (20) (19) Amortization of net gain — — 1 — Expenses incurred 1 1 2 2 Net periodic benefit cost $ (2) $ — $ (4) $ (1) |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings per share | |
Summary of calculation of basic and diluted EPS | Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Income (loss) from continuing operations $ 84 $ (41) $ 6 $ 30 Income from discontinued operations, net of tax 1 16 337 36 Net income (loss) $ 85 $ (25) $ 343 $ 66 Weighted average number of common shares outstanding-basic 61.0 59.6 60.6 59.6 Weighted dilutive effect of equity awards 2.4 — 1.9 0.4 Weighted average number of common shares outstanding-diluted 63.4 59.6 62.5 60.0 Basic net income (loss) per common share: Income (loss) from continuing operations $ 1.38 $ (0.69) $ 0.10 $ 0.50 Income from discontinued operations, net of tax 0.02 0.27 5.56 0.60 Basic net income (loss) per common share $ 1.40 $ (0.42) $ 5.66 $ 1.10 Diluted net income (loss) per common share: Income (loss) from continuing operations $ 1.32 $ (0.69) $ 0.10 $ 0.50 Income from discontinued operations, net of tax 0.02 0.27 5.39 0.60 Diluted net income (loss) per common share $ 1.34 $ (0.42) $ 5.49 $ 1.10 |
Supplemental cash flow (Tables)
Supplemental cash flow (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental cash flow | |
Schedule of supplemental cash flow | Nine Months Ended September 30, 2020 2019 Supplemental cash flow information: Cash paid for interest $ 127 $ 174 Supplemental non-cash investing and financing activities: Accrued capital expenditures 13 19 |
Business combination - Narrativ
Business combination - Narratives (Details) - USD ($) $ in Millions | Jul. 01, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Business combination | |||||
Purchase consideration net of estimated cash at closing | $ 118 | ||||
Remeasurement gain on acquisition | $ 85 | 85 | |||
Goodwill | 1,632 | 1,632 | $ 1,455 | ||
Other (income) expense | |||||
Business combination | |||||
Remeasurement gain on acquisition | 85 | ||||
2027 Notes | |||||
Business combination | |||||
Long-term Debt, Gross | 150 | 150 | |||
Vricon Inc | |||||
Business combination | |||||
Remaining ownership interest acquired | 50.00% | ||||
Purchase consideration | $ 142 | ||||
Cash on hand | 23 | ||||
Purchase consideration net of estimated cash at closing | 119 | ||||
Stock-based vested awards settled in cash | 25 | ||||
Cash paid for acquisition | 117 | ||||
Goodwill | $ 177 | 177 | 177 | ||
Vricon Inc | Forecast | |||||
Business combination | |||||
Purchase consideration net of estimated cash at closing | $ 1 | ||||
Vricon Inc | Other (income) expense | |||||
Business combination | |||||
Remeasurement gain on acquisition | $ 85 | $ 85 |
Business combination - Unaudite
Business combination - Unaudited pro forma financial information (Details) - Vricon Inc - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Proforma information | ||
Revenue | $ 1,267 | $ 1,274 |
Net income | $ 342 | $ 68 |
Business combination - Purchase
Business combination - Purchase Price Allocation (Details) - USD ($) $ in Millions | Jul. 01, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Liabilities | |||
Goodwill | $ 1,632 | $ 1,455 | |
Vricon Inc | |||
Summary of fair value of consideration and preliminary estimated fair value of assets acquired and liabilities assumed | |||
Call option purchase price | $ 117 | ||
Fair value of existing equity interest | 117 | ||
Cash settlement of equity awards and liabilities assumed | 26 | ||
Purchase consideration | 260 | ||
Assets | |||
Cash and cash equivalents | 23 | ||
Trade and other receivables | 9 | ||
Property, plant and equipment | 3 | ||
Intangible assets, net | 73 | ||
Other assets | 2 | ||
Total Assets | 110 | ||
Liabilities | |||
Accounts payable | 1 | ||
Accrued liabilities | 3 | ||
Deferred income tax liability | 17 | ||
Other current liabilities | 6 | ||
Total Liabilities | 27 | ||
Fair value of net identifiable assets acquired | 83 | ||
Goodwill | $ 177 | $ 177 |
Business combination - Intangib
Business combination - Intangible assets of Vricon (Details) - Vricon Inc $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Intangible assets | |
Carrying Value | $ 73 |
Backlog | |
Intangible assets | |
Carrying Value | $ 21 |
Weighted average useful life (in years) | 2 years |
Trademarks | |
Intangible assets | |
Carrying Value | $ 1 |
Weighted average useful life (in years) | 1 year |
Technologies | |
Intangible assets | |
Carrying Value | $ 49 |
Weighted average useful life (in years) | 9 years |
Software | |
Intangible assets | |
Carrying Value | $ 2 |
Software | Minimum | |
Intangible assets | |
Weighted average useful life (in years) | 2 years |
Software | Maximum | |
Intangible assets | |
Weighted average useful life (in years) | 3 years |
Discontinued operations - Narra
Discontinued operations - Narratives (Details) $ in Millions, $ in Billions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Apr. 08, 2020USD ($) | Apr. 08, 2020CAD ($) | |
Discontinued Operations | ||||
Gain on disposal of discontinued operations, net of tax | $ 1 | $ 305 | ||
Reclassification of currency translation adjustment to gain on disposal of discontinued operations | (64) | |||
MDA business | Discontinued operations | ||||
Discontinued Operations | ||||
Aggregate purchase price | $ 729 | $ 1 | ||
Gain on disposal of discontinued operations, net of tax | 1 | 305 | ||
Tax on gain on disposal of discontinued operations | 24 | |||
Reclassification of currency translation adjustment to gain on disposal of discontinued operations | $ 64 | |||
MDA business | Discontinued operations | Accrued Liabilities | ||||
Discontinued Operations | ||||
Recovery of previously recorded liability from dispute | $ 39 |
Discontinued operations - Finan
Discontinued operations - Financial information Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Costs and expenses: | ||||
Income from operations of discontinued operations, net of tax | $ 16 | $ 32 | $ 36 | |
Gain on disposal of discontinued operations, net of tax | $ 1 | 305 | ||
Income from discontinued operations, net of tax | 1 | 16 | 337 | 36 |
MDA business | Discontinued operations | ||||
Revenues: | ||||
Total revenues | 84 | 86 | 277 | |
Costs and expenses: | ||||
Selling, general and administrative | 11 | 13 | 42 | |
Depreciation and amortization | 2 | 4 | 8 | |
Impairment loss | 12 | 12 | ||
Operating (loss) income | 17 | (5) | 36 | |
Interest expense, net | 1 | |||
Other (income) expense, net | (1) | (34) | (1) | |
Income before taxes | 18 | 28 | 37 | |
Income tax expense (benefit) | 2 | (4) | 1 | |
Income from operations of discontinued operations, net of tax | 16 | 32 | 36 | |
Gain on disposal of discontinued operations, net of tax | 1 | 305 | ||
Income from discontinued operations, net of tax | $ 1 | 16 | 337 | 36 |
MDA business | Discontinued operations | Product | ||||
Revenues: | ||||
Total revenues | 45 | 44 | 155 | |
Costs and expenses: | ||||
Costs, excluding depreciation and amortization | 35 | 38 | 115 | |
MDA business | Discontinued operations | Service | ||||
Revenues: | ||||
Total revenues | 39 | 42 | 122 | |
Costs and expenses: | ||||
Costs, excluding depreciation and amortization | $ 19 | $ 24 | $ 64 |
Discontinued operations - Fin_2
Discontinued operations - Financial Information Balance sheet (Details) $ in Millions | Dec. 31, 2019USD ($) |
Assets | |
Current assets held for sale | $ 751 |
Liabilities | |
Current liabilities held for sale | 230 |
MDA business | Discontinued operations | |
Assets | |
Cash and cash equivalents | 45 |
Trade and other receivables, net | 168 |
Deferred tax assets | 117 |
Property, plant and equipment | 29 |
Intangible assets | 27 |
Goodwill | 310 |
Other assets | 55 |
Current assets held for sale | 751 |
Liabilities | |
Accounts payable | 88 |
Accrued liabilities | 18 |
Accrued compensation and benefits | 21 |
Contract liabilities | 29 |
Pension and other postretirement benefit liabilities | 21 |
Other liabilities | 53 |
Current liabilities held for sale | $ 230 |
Trade and other receivables, _3
Trade and other receivables, net (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Trade and other receivables, net | ||
Billed | $ 187 | $ 211 |
Unbilled | 129 | 100 |
Total trade receivables | 316 | 311 |
Orbital receivables, current portion | 44 | 43 |
Other | 2 | 4 |
Allowance for doubtful accounts | (1) | (1) |
Total trade and other receivables, net | $ 361 | $ 357 |
Trade and other receivables, _4
Trade and other receivables, net - Orbital receivables (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($)customer | Dec. 31, 2019USD ($) | |
Trade and other receivables | |||
Orbital receivables, net | $ 358 | $ 358 | $ 382 |
Number of customers | customer | 14 | ||
Impairment to long-term orbital receivables | 0 | $ 14 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance at the beginning of the period | (35) | ||
Additions | (14) | ||
Allowance at the end of the period | (49) | (49) | |
Accounts Receivable | Credit Concentration Risk | Largest Customer | |||
Trade and other receivables | |||
Orbital receivables, net | $ 40 | $ 40 | |
Concentration risk, percentage | 10.00% |
Trade and other receivables, _5
Trade and other receivables, net - Expected timing of total contractual cash flows (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Orbital receivables | ||
Securitization liabilities | $ 62 | $ 65 |
Other current liabilities | ||
Orbital receivables | ||
Securitization liabilities | 14 | $ 17 |
Other non-current liabilities | ||
Orbital receivables | ||
Securitization liabilities | $ 48 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory | ||
Raw materials | $ 16 | $ 13 |
Work in process | 11 | 7 |
Total inventory | $ 27 | $ 20 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, plant and equipment | |||||
Property, plant and equipment, at cost | $ 1,294 | $ 1,138 | |||
Accumulated depreciation | (450) | (380) | |||
Property, plant and equipment, net | 844 | 758 | |||
Depreciation | $ 24 | 71 | $ 80 | ||
Satellite insurance recovery | $ 183 | ||||
Satellites | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 397 | 397 | |||
Satellite insurance recovery | $ 183 | ||||
Equipment | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 204 | 196 | |||
Leasehold improvements | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 82 | 75 | |||
Computer hardware | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 75 | 67 | |||
Furniture and fixtures | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | 16 | 15 | |||
Construction in process | |||||
Property, plant and equipment | |||||
Property, plant and equipment, at cost | $ 520 | $ 388 |
Intangible assets and goodwil_2
Intangible assets and goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Finite-lived intangible assets: | |||||
Gross carrying value | $ 1,731 | $ 1,731 | $ 1,595 | ||
Accumulated amortization | (805) | (805) | (604) | ||
Net carrying value | 926 | 926 | 991 | ||
Amortization of intangible assets | 71 | $ 69 | 203 | $ 204 | |
Customer relationships | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 615 | 615 | 615 | ||
Accumulated amortization | (135) | (135) | (102) | ||
Net carrying value | 480 | 480 | 513 | ||
Backlog | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 351 | 351 | 330 | ||
Accumulated amortization | (292) | (292) | (217) | ||
Net carrying value | 59 | 59 | 113 | ||
Technologies | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 369 | 369 | 320 | ||
Accumulated amortization | (194) | (194) | (144) | ||
Net carrying value | 175 | 175 | 176 | ||
Software | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 278 | 278 | 213 | ||
Accumulated amortization | (115) | (115) | (83) | ||
Net carrying value | 163 | 163 | 130 | ||
Image library | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 80 | 80 | 80 | ||
Accumulated amortization | (56) | (56) | (48) | ||
Net carrying value | 24 | 24 | 32 | ||
Trade names and other | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 38 | 38 | 37 | ||
Accumulated amortization | (13) | (13) | (10) | ||
Net carrying value | $ 25 | $ 25 | $ 27 |
Intangible assets and goodwil_3
Intangible assets and goodwill - Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Goodwill | ||
Balance at beginning of period | $ 1,455 | |
Balance at end of period | 1,632 | |
Vricon Inc | ||
Goodwill | ||
Acquisition of Vricon | 177 | |
Balance at end of period | 177 | |
Earth intelligence | ||
Goodwill | ||
Balance at beginning of period | 1,455 | |
Balance at end of period | 1,632 | |
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||
Accumulated impairment losses | 142 | $ 142 |
Earth intelligence | Vricon Inc | ||
Goodwill | ||
Acquisition of Vricon | 177 | |
Space Infrastructure | ||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | ||
Accumulated impairment losses | $ 17 | $ 17 |
Long-term debt and interest e_3
Long-term debt and interest expense, net (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Long-term debt and interest expenses | ||
Debt discount and issuance costs | $ (60) | $ (54) |
Obligations under finance leases and other | 5 | 6 |
Total long-term debt | 2,422 | 2,945 |
Current portion of long-term debt | (9) | (30) |
Non-current portion of long-term debt | 2,413 | 2,915 |
Revolving credit facility | ||
Long-term debt and interest expenses | ||
Long-term debt | 0 | |
Term Loan B | ||
Long-term debt and interest expenses | ||
Long-term debt | 1,444 | 1,960 |
2023 Notes | ||
Long-term debt and interest expenses | ||
Long-term debt | 850 | 1,000 |
2027 Notes | ||
Long-term debt and interest expenses | ||
Long-term debt | 150 | |
Deferred financing | ||
Long-term debt and interest expenses | ||
Long-term debt | $ 33 | $ 33 |
Long-term debt and interest e_4
Long-term debt and interest expense, net - Syndicated credit facility (Details) - USD ($) $ in Millions | Jun. 25, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Long-term debt and interest expenses | ||||||
Loss from early extinguishment of debt | $ (7) | |||||
Unamortized debt issuance cost expensed | $ 7 | 12 | $ 6 | |||
2023 Notes | ||||||
Long-term debt and interest expenses | ||||||
Aggregate principal amount repurchased | $ 150 | 150 | $ 150 | |||
Interest rate (as a percent) | 9.75% | |||||
Percentage of principal amount of repurchased debt | 112.45% | |||||
Percentage of premium paid on repurchase of notes | 12.45% | |||||
2027 Notes | ||||||
Long-term debt and interest expenses | ||||||
Aggregate principal amount | $ 150 | |||||
Interest rate (as a percent) | 7.54% | |||||
Issue Price (as a percent) | 98.25% | |||||
2027 Notes | Redemption in period of 12 months beginning on June 25, 2024 | ||||||
Long-term debt and interest expenses | ||||||
Debt instrument redemption price percentage | 105.655% | |||||
2027 Notes | Redemption in period of 12 months beginning on June 25, 2025 | ||||||
Long-term debt and interest expenses | ||||||
Debt instrument redemption price percentage | 103.77% | |||||
2027 Notes | Redemption after June 25, 2026 | ||||||
Long-term debt and interest expenses | ||||||
Debt instrument redemption price percentage | 101.885% | |||||
2027 Notes | Redemption before June 25, 2024 | ||||||
Long-term debt and interest expenses | ||||||
Debt instrument redemption price percentage | 100.00% | |||||
Percentage of principle amount of debt redeemed | 40.00% | |||||
2027 Notes | Change of control occurs | ||||||
Long-term debt and interest expenses | ||||||
Debt instrument redemption price percentage | 101.00% | |||||
Revolving Credit Facility | ||||||
Long-term debt and interest expenses | ||||||
Maximum borrowing capacity | 500 | $ 500 | ||||
Revolving Credit Facility | Maturing in December 2023 | ||||||
Long-term debt and interest expenses | ||||||
Maximum borrowing capacity | 500 | 500 | ||||
Letter of credit | ||||||
Long-term debt and interest expenses | ||||||
Maximum borrowing capacity | 200 | 200 | ||||
Letter of credit outstanding | 32 | 32 | $ 18 | |||
Term Loan B | ||||||
Long-term debt and interest expenses | ||||||
Debt Repaid | $ 511 | |||||
Term Loan B | Maturing in October 2024 | ||||||
Long-term debt and interest expenses | ||||||
Aggregate principal amount | $ 2,000 | $ 2,000 |
Long-term debt and interest e_5
Long-term debt and interest expense, net - Interest expense on long term debts and other obligations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Interest expenses | ||||
Interest on long-term debt | $ 44 | $ 51 | $ 153 | $ 144 |
Interest expense on advance payments from customers | 3 | 3 | 12 | |
Interest on orbital securitization liability | 1 | 1 | 4 | 5 |
Imputed interest and other | 2 | 2 | ||
Capitalized interest | (11) | (5) | (29) | (13) |
Loss from extinguishment of debt | 7 | |||
Interest expense, net | $ 36 | $ 50 | $ 133 | $ 148 |
Financial instruments and fai_3
Financial instruments and fair value disclosures - Financial instruments measured at fair value (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Orbital receivables, net | $ 358 | $ 382 |
Recurring | ||
Assets | ||
Short-term investments | 1 | |
Orbital receivables, net | 402 | 425 |
Assets fair value | 426 | |
Liabilities | ||
Long-term debt | 2,269 | 3,004 |
Liabilities fair value | 2,294 | 3,022 |
Recurring | Interest rate swaps | ||
Liabilities | ||
Derivative financial instruments | 25 | 18 |
Recurring | Level 1 | ||
Assets | ||
Short-term investments | 1 | |
Assets fair value | 1 | |
Recurring | Level 2 | ||
Assets | ||
Orbital receivables, net | 402 | 425 |
Assets fair value | 425 | |
Liabilities | ||
Long-term debt | 2,269 | 3,004 |
Liabilities fair value | 2,294 | 3,022 |
Recurring | Level 2 | Interest rate swaps | ||
Liabilities | ||
Derivative financial instruments | $ 25 | $ 18 |
Financial instruments and fai_4
Financial instruments and fair value disclosures - Financial instruments recorded at carrying value (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Apr. 30, 2022 | Apr. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | |
Carrying value | ||||
Financial instruments and fair value disclosures | ||||
Long-term debt excludes finance leases, deferred financing and other | $ 2,384 | $ 2,906 | ||
Orbital receivable | $ 402 | $ 425 | ||
Interest rate swaps | ||||
Financial instruments and fair value disclosures | ||||
Maturities of interest rate swaps | $ 500 | |||
Interest rate swaps | Forecast | ||||
Financial instruments and fair value disclosures | ||||
Maturities of interest rate swaps | $ 500 |
Stockholders' equity (Details)
Stockholders' equity (Details) $ / shares in Units, $ in Millions | May 28, 2019item$ / sharesshares | May 12, 2019 | Mar. 31, 2019USD ($) | Sep. 30, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | Jan. 01, 2019$ / shares |
Stockholders' equity | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Series A Junior Participating Preferred Stock | ||||||
Stockholders' equity | ||||||
Preferred stock, authorized shares | 2,400,000 | 2,400,000 | ||||
Preferred stock, shares outstanding | 0 | 0 | ||||
Rights offering | ||||||
Stockholders' equity | ||||||
Percentage of shares acquired by entity under tax plan | 4.90% | |||||
Number of preferred stock purchase right granted as dividend | item | 1 | |||||
Number of additional shares of common stock upon exercise | item | 1 | |||||
Percentage of discount on additional shares of common stock upon exercise | 50.00% | |||||
Rights offering | Series A Junior Participating Preferred Stock | ||||||
Stockholders' equity | ||||||
Number of shares the Tax Plan gave current shareholders the right to purchase. | 0.01 | |||||
Share price | $ / shares | $ 30.92 | |||||
Common Stock | ||||||
Stockholders' equity | ||||||
Reclassification of APIC due to U.S. Domestication | $ | $ (1,713) | |||||
Additional paid in capital | ||||||
Stockholders' equity | ||||||
Reclassification of APIC due to U.S. Domestication | $ | $ 1,713 |
Stockholders' equity - Componen
Stockholders' equity - Components of accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | $ 761 | $ 761 | ||
Reclassification of currency translation adjustment to gain on disposal of discontinued | (64) | |||
Balance at the end of period | $ 998 | 998 | ||
Accumulated other comprehensive income (loss) | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | (68) | $ (4) | 59 | 59 |
Other comprehensive (loss) income | 7 | 1 | (63) | |
Tax benefit (expense) | (1) | |||
Reclassification of currency translation adjustment to gain on disposal of discontinued | (64) | |||
Balance at the end of period | (61) | (68) | (4) | (61) |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | (1) | 77 | 126 | 126 |
Other comprehensive (loss) income | (49) | |||
Reclassification of currency translation adjustment to gain on disposal of discontinued | (78) | |||
Balance at the end of period | (1) | (1) | 77 | (1) |
Unrecognized (Loss) Gain on Derivative Instruments | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | (32) | (27) | (12) | (12) |
Other comprehensive (loss) income | 7 | 1 | (15) | |
Tax benefit (expense) | (1) | |||
Reclassification of currency translation adjustment to gain on disposal of discontinued | (5) | |||
Balance at the end of period | (25) | (32) | (27) | (25) |
Pension Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | (35) | (54) | (55) | (55) |
Other comprehensive (loss) income | 1 | |||
Reclassification of currency translation adjustment to gain on disposal of discontinued | 19 | |||
Balance at the end of period | $ (35) | $ (35) | $ (54) | $ (35) |
Revenue - Remaining performance
Revenue - Remaining performance obligations (Details) $ in Billions | Sep. 30, 2020USD ($) |
Revenue | |
Remaining performance obligation | $ 2.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue | |
Remaining performance obligation | $ 0.5 |
Expected timing of satisfaction | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue | |
Remaining performance obligation | $ 1.2 |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue | |
Remaining performance obligation | $ 0.5 |
Expected timing of satisfaction |
Revenue - Contract assets and l
Revenue - Contract assets and liabilities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Contract assets and contract liabilities | ||
Contract Liabilities | $ 277 | $ 275 |
Earth intelligence | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 38 | 130 |
Increase in contract liability due to imputed interest on advance payments | 3 | |
Revenue recognized | 81 | |
Earth intelligence | Enhanced View contract | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 0 | 78 |
Space Infrastructure | ||
Contract assets and contract liabilities | ||
Contract Liabilities | $ 239 | $ 145 |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue by source (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Revenues | $ 436 | $ 413 | $ 1,256 | $ 1,256 |
Commercial Satellite Contract | ||||
Revenue | ||||
Estimated loss | 6 | 42 | ||
COVID-19 | Commercial Satellite Contract | ||||
Revenue | ||||
Estimated loss | 2 | 16 | ||
Product | ||||
Revenue | ||||
Revenues | 161 | 129 | 425 | 439 |
Service | ||||
Revenue | ||||
Revenues | 275 | 284 | 831 | 817 |
Space Infrastructure | ||||
Revenue | ||||
Orbital interest revenue | 8 | 8 | 22 | 23 |
Space Infrastructure | COVID-19 | ||||
Revenue | ||||
Growth in estimated total cost-at-completion ("EAC") | 3 | 27 | ||
Operating Segments | ||||
Revenue | ||||
Revenues | (19) | (31) | (64) | (96) |
Operating Segments | Earth intelligence | ||||
Revenue | ||||
Revenues | 274 | 282 | 823 | 799 |
Operating Segments | Earth intelligence | Service | ||||
Revenue | ||||
Revenues | 274 | 282 | 823 | 799 |
Operating Segments | Space Infrastructure | ||||
Revenue | ||||
Revenues | 181 | 162 | 497 | 553 |
Operating Segments | Space Infrastructure | Product | ||||
Revenue | ||||
Revenues | 161 | 129 | 425 | 439 |
Operating Segments | Space Infrastructure | Service | ||||
Revenue | ||||
Revenues | 1 | 2 | 8 | 18 |
Intersegment eliminations | ||||
Revenue | ||||
Revenues | (19) | (31) | (64) | (96) |
Intersegment eliminations | Space Infrastructure | ||||
Revenue | ||||
Revenues | $ 19 | $ 31 | $ 64 | $ 96 |
Revenue - Disaggregation of r_2
Revenue - Disaggregation of revenue on geographic location of customers (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Revenues | $ 436 | $ 413 | $ 1,256 | $ 1,256 |
U.S. | ||||
Revenue | ||||
Revenues | 358 | 301 | 1,016 | 929 |
Asia | ||||
Revenue | ||||
Revenues | 25 | 37 | 75 | 128 |
Europe | ||||
Revenue | ||||
Revenues | 25 | 24 | 67 | 48 |
Middle East | ||||
Revenue | ||||
Revenues | 12 | 22 | 38 | 41 |
Australia | ||||
Revenue | ||||
Revenues | 9 | 4 | 26 | 13 |
South America | ||||
Revenue | ||||
Revenues | 4 | 18 | 19 | 82 |
Other | ||||
Revenue | ||||
Revenues | $ 3 | $ 7 | $ 15 | $ 15 |
Revenue - Disaggregation of r_3
Revenue - Disaggregation of revenue from significant customers (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Revenues | $ 436 | $ 413 | $ 1,256 | $ 1,256 |
U.S. Federal Government and agencies | ||||
Revenue | ||||
Revenues | 267 | 228 | 808 | 685 |
Commercial and other | ||||
Revenue | ||||
Revenues | 169 | 185 | 448 | 571 |
Operating Segments | ||||
Revenue | ||||
Revenues | (19) | (31) | (64) | (96) |
Intersegment eliminations | ||||
Revenue | ||||
Revenues | (19) | (31) | (64) | (96) |
Intersegment eliminations | Commercial and other | ||||
Revenue | ||||
Revenues | (19) | (31) | (64) | (96) |
Earth intelligence | Operating Segments | ||||
Revenue | ||||
Revenues | 274 | 282 | 823 | 799 |
Earth intelligence | Operating Segments | U.S. Federal Government and agencies | ||||
Revenue | ||||
Revenues | 198 | 186 | 600 | 587 |
Earth intelligence | Operating Segments | Commercial and other | ||||
Revenue | ||||
Revenues | 76 | 96 | 223 | 212 |
Space Infrastructure | Operating Segments | ||||
Revenue | ||||
Revenues | 181 | 162 | 497 | 553 |
Space Infrastructure | Operating Segments | U.S. Federal Government and agencies | ||||
Revenue | ||||
Revenues | 69 | 42 | 208 | 98 |
Space Infrastructure | Operating Segments | Commercial and other | ||||
Revenue | ||||
Revenues | 112 | 120 | 289 | 455 |
Space Infrastructure | Intersegment eliminations | ||||
Revenue | ||||
Revenues | $ 19 | $ 31 | $ 64 | $ 96 |
Segment information - Operating
Segment information - Operating performance (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
Segment information | ||||
Number of reportable segments | segment | 2 | |||
Total revenues | $ 436 | $ 413 | $ 1,256 | $ 1,256 |
Corporate and other expense | (21) | (21) | (43) | (60) |
Restructuring | 1 | (14) | ||
Transaction and integration related expense | (2) | (7) | (6) | (14) |
Inventory impairment | (14) | (3) | ||
Satellite insurance recoveries | 183 | |||
Reduction of gain on sale leaseback | (4) | (4) | ||
CEO severance | (3) | |||
Gain on remeasurement of Vricon equity interest | 85 | 85 | ||
Depreciation and amortization | (95) | (93) | (274) | (284) |
Interest expense, net | (36) | (50) | (133) | (148) |
Interest income | 2 | 3 | ||
Equity loss (income) from joint ventures, net of tax | 1 | (1) | 4 | |
Income (loss) before taxes | 62 | (39) | (17) | 37 |
Other (income) expense | ||||
Segment information | ||||
Gain on remeasurement of Vricon equity interest | 85 | |||
Operating Segments | ||||
Segment information | ||||
Total revenues | (19) | (31) | (64) | (96) |
Operating Segments | Earth Intelligence | ||||
Segment information | ||||
Total revenues | 274 | 282 | 823 | 799 |
Adjusted EBITDA | 128 | 145 | 407 | 394 |
Operating Segments | Space Infrastructure | ||||
Segment information | ||||
Total revenues | 181 | 162 | 497 | 553 |
Adjusted EBITDA | 12 | (3) | (16) | 2 |
Intersegment eliminations | ||||
Segment information | ||||
Total revenues | (19) | (31) | (64) | (96) |
Adjusted EBITDA | $ (7) | $ (12) | $ (21) | $ (20) |
Segment information - Capital e
Segment information - Capital expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment information | ||||
Capital expenditures, property, plant and equipment | $ 70 | $ 64 | $ 158 | $ 161 |
Capital expenditures, intangible assets | 26 | 15 | 66 | 42 |
Capital expenditures | 96 | 79 | 224 | 203 |
Intersegment eliminations | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 11 | 8 | 29 | (4) |
Capital expenditures, intangible assets | 3 | (1) | 7 | (1) |
Capital expenditures | 14 | 7 | 36 | (5) |
Earth Intelligence | Operating Segments | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 53 | 51 | 115 | 152 |
Capital expenditures, intangible assets | 23 | 15 | 59 | 41 |
Capital expenditures | 76 | 66 | 174 | 193 |
Space Infrastructure | Operating Segments | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 6 | 5 | 14 | 13 |
Capital expenditures, intangible assets | 1 | 2 | ||
Capital expenditures | $ 6 | $ 6 | $ 14 | $ 15 |
Employee benefit plans - Compon
Employee benefit plans - Components of net periodic benefit cost (Details) - Pension - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee benefit plans | ||||
Interest cost | $ 4 | $ 6 | $ 13 | $ 16 |
Expected return on plan assets | (7) | (7) | (20) | (19) |
Amortization of net loss (gain) | 1 | |||
Expenses paid | 1 | $ 1 | 2 | 2 |
Net periodic benefit cost | $ (2) | $ (4) | $ (1) |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) - Pension $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Employee benefit plans | |
Employer contributions | $ 3 |
Expected future contribution by the employer | $ 15 |
Income taxes - Income tax rate
Income taxes - Income tax rate (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income taxes | ||||
Effective income tax rate | (35.50%) | (2.60%) | 129.40% | 8.10% |
Statutory U.S. Federal income tax rate | 21.00% | 21.00% | 21.00% | 21.00% |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings per share | ||||
Income from continuing operations | $ 84 | $ (41) | $ 6 | $ 30 |
Income from discontinued operations, net of tax | 1 | 16 | 337 | 36 |
Net income (loss) | $ 85 | $ (25) | $ 343 | $ 66 |
Weighted average number of common shares outstanding - basic (in shares) | 61 | 59.6 | 60.6 | 59.6 |
Weighted dilutive effect of equity awards (in shares) | 2.4 | 1.9 | 0.4 | |
Weighted average number of common shares outstanding-diluted | 63.4 | 59.6 | 62.5 | 60 |
Basic net income per common share: | ||||
Income from continuing operations (in dollars per share) | $ 1.38 | $ (0.69) | $ 0.10 | $ 0.50 |
Income from discontinued operations, net of tax (in dollars per share) | 0.02 | 0.27 | 5.56 | 0.60 |
Basic net income (loss) per common share (in dollars per share) | 1.40 | (0.42) | 5.66 | 1.10 |
Diluted net income per common share: | ||||
Loss from continuing operations (in dollars per share) | 1.32 | (0.69) | 0.10 | 0.50 |
Income from discontinued operations, net of tax (in dollars per share) | 0.02 | 0.27 | 5.39 | 0.60 |
Diluted net income (loss) per common share (in dollars per share) | $ 1.34 | $ (0.42) | $ 5.49 | $ 1.10 |
Commitments and contingencies (
Commitments and contingencies (Details) - Pending Litigation - USD ($) $ in Millions | Feb. 07, 2020 | Jul. 31, 2018 |
Ukranian customer | ||
Commitments and Contingencies | ||
Recovery amount sought | $ 227 | |
Stockholder class action | ||
Commitments and Contingencies | ||
Recovery amount sought | $ 700 |
Supplemental cash flow - (Detai
Supplemental cash flow - (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Supplemental cash flow information: | ||
Cash paid for interest | $ 127 | $ 174 |
Supplemental non-cash investing and financing activities: | ||
Accrued capital expenditures | $ 13 | $ 19 |