Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 17, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 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 | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Trading Symbol | MAXR | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 61,325,970 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001121142 | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 1,090 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Total revenues | $ 1,723 | $ 1,666 | $ 1,804 |
Costs and expenses: | |||
Selling, general and administrative | 332 | 325 | 446 |
Depreciation and amortization | 348 | 376 | 439 |
Impairment loss | 47 | 14 | 586 |
Satellite insurance recovery | (183) | ||
Loss (gain) on sale of assets | 1 | (136) | (33) |
Operating income (loss) | 2 | 295 | (722) |
Interest expense, net | (175) | (219) | (200) |
Other (income) expense, net | (104) | (1) | 1 |
(Loss) income before taxes | (69) | 77 | (923) |
Income tax (benefit) expense | (22) | 5 | (48) |
Equity in income from joint ventures, net of tax | (1) | (11) | (2) |
(Loss) income from continuing operations | (46) | 83 | (873) |
Income (loss) from operations of discontinued operations, net of tax | 32 | 26 | (377) |
Gain on disposal of discontinued operations, net of tax | 317 | ||
Income (loss) from discontinued operations, net of tax | 349 | 26 | (377) |
Net income (loss) | $ 303 | $ 109 | $ (1,250) |
Basic net income (loss) per common share: | |||
Basic (loss) income from continuing operations (in dollars per share) | $ (0.76) | $ 1.39 | $ (15.03) |
Basic income (loss) from discontinued operations, net of tax (in dollars per share) | 5.75 | 0.44 | (6.49) |
Basic net income (loss) per common share (in dollars per share) | 4.99 | 1.83 | (21.52) |
Diluted net income (loss) per common share: | |||
Diluted net (loss) income from continued operations (in dollars per share) | (0.76) | 1.38 | (15.03) |
Diluted net income (loss) from discontinued operations, net of tax (in dollars per share) | 5.75 | 0.43 | (6.49) |
Diluted net income (loss) per common share (in dollars per share) | $ 4.99 | $ 1.81 | $ (21.52) |
Product | |||
Revenues: | |||
Total revenues | $ 633 | $ 560 | $ 697 |
Costs and expenses: | |||
Product and service costs, excluding depreciation and amortization | 615 | 593 | 775 |
Service | |||
Revenues: | |||
Total revenues | 1,090 | 1,106 | 1,107 |
Costs and expenses: | |||
Product and service costs, excluding depreciation and amortization | $ 378 | $ 382 | $ 313 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Net income (loss) | $ 303 | $ 109 | $ (1,250) |
Other comprehensive loss, net of tax: | |||
Foreign currency translation adjustments | (47) | 15 | (19) |
Reclassification of accumulated other comprehensive loss to gain on disposal of discontinued operations | (68) | ||
Unrealized loss on derivatives | (3) | (12) | (7) |
Loss on pension and other postretirement benefit plans | (43) | (26) | (5) |
Other comprehensive loss, net of tax | (161) | (23) | (31) |
Comprehensive income (loss), net of tax | $ 142 | $ 86 | $ (1,281) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Net gain (loss) on hedge of net investment in foreign operations | $ 47 | $ 5 | $ (23) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 27 | $ 59 |
Trade and other receivables, net | 327 | 357 |
Inventory | 31 | 20 |
Advances to suppliers | 24 | 42 |
Prepaid and other current assets | 59 | 32 |
Current assets held for sale | 751 | |
Total current assets | 468 | 1,261 |
Non-current assets: | ||
Orbital receivables, net | 361 | 382 |
Property, plant and equipment, net | 883 | 758 |
Intangible assets, net | 895 | 991 |
Non-current operating lease assets | 163 | 176 |
Goodwill | 1,627 | 1,455 |
Other non-current assets | 86 | 134 |
Total assets | 4,483 | 5,157 |
Current liabilities: | ||
Accounts payable | 115 | 153 |
Accrued liabilities | 65 | 130 |
Accrued compensation and benefits | 105 | 93 |
Contract liabilities | 278 | 271 |
Current portion of long-term debt | 8 | 30 |
Current operating lease liabilities | 41 | 40 |
Other current liabilities | 51 | 49 |
Current liabilities held for sale | 230 | |
Total current liabilities | 663 | 996 |
Non-current liabilities: | ||
Pension and other postretirement benefits | 192 | 191 |
Contract liabilities | 1 | 4 |
Operating lease liabilities | 158 | 173 |
Long-term debt | 2,414 | 2,915 |
Other non-current liabilities | 119 | 116 |
Total liabilities | 3,547 | 4,395 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock ($0.0001 par value, 240 million common shares authorized; 61.2 million and 59.9 million outstanding at December 31, 2020 and 2019, respectively) | ||
Additional paid-in capital | 1,818 | 1,784 |
Accumulated deficit | (763) | (1,064) |
Accumulated other comprehensive (loss) income | (120) | 41 |
Total Maxar stockholders' equity | 935 | 761 |
Noncontrolling interest | 1 | 1 |
Total stockholders' equity | 936 | 762 |
Total liabilities and stockholders' equity | $ 4,483 | $ 5,157 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 240 | 240 |
Common stock, shares outstanding | 61.2 | 59.9 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows (used in) provided by Operating activities: | |||
Net income (loss) | $ 303 | $ 109 | $ (1,250) |
(Income) loss from operations of discontinued operations, net of tax | (32) | (26) | 377 |
Gain on disposal of discontinued operations, net of tax | (317) | ||
(Loss) income from continuing operations | (46) | 83 | (873) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Impairment losses including inventory | 47 | 17 | 651 |
Depreciation and amortization | 348 | 376 | 439 |
Gain from remeasurement of equity interest in acquiree | (85) | ||
Amortization of debt issuance costs and other non-cash interest expense | 16 | 11 | 9 |
Stock-based compensation expense | 43 | 20 | 20 |
Loss from early extinguishment of debt | 7 | 22 | |
Loss (gain) on sale of assets | 1 | (136) | (33) |
Deferred income tax benefit | (17) | (48) | |
Equity in (income) loss from joint ventures, net of tax | (1) | (11) | (2) |
Other | 2 | 7 | 28 |
Changes in operating assets and liabilities: | |||
Trade and other receivables | 33 | (20) | (19) |
Accounts payable and accrued liabilities | (84) | 17 | 86 |
Contract liabilities | 5 | (117) | (158) |
Other | (26) | (11) | 14 |
Cash provided by operating activities - continuing operations | 243 | 258 | 114 |
Cash (used in) provided by operating activities - discontinued operations | (54) | 59 | 25 |
Cash provided by operating activities | 189 | 317 | 139 |
Investing activities: | |||
Purchase of property, plant and equipment and development or purchase of software | (308) | (314) | (206) |
Acquisition, net of cash acquired | (120) | ||
Sale of assets | 280 | 68 | |
Return of capital from discontinued operations | 20 | 28 | |
Other | 2 | 9 | |
Cash used in investing activities - continuing operations | (406) | (6) | (129) |
Cash provided by (used in) investing activities - discontinued operations | 723 | (7) | (21) |
Cash provided by (used in) investing activities | 317 | (13) | (150) |
Financing activities: | |||
Net payment of revolving credit facility | (595) | ||
Net proceeds from issuance of 2023 Notes, 2027 Notes, and other long-term debt | 147 | 980 | 104 |
Repurchase of 2023 Notes, including premium | (169) | ||
Repayments of long-term debt | (525) | (523) | (24) |
Refinancing fees paid to creditors | (20) | ||
Repurchase of orbital receivables | 0 | (24) | |
Settlement of securitization liability | (11) | (20) | (15) |
Proceeds from securitization of orbital receivables | 18 | ||
Other | 3 | (6) | (68) |
Cash (used in) provided by financing activities - continuing operations | (555) | (208) | 15 |
Cash used in financing activities - discontinued operations | (24) | (30) | (2) |
Cash (used in) provided by financing activities | (579) | (238) | 13 |
(Decrease) increase in cash, cash equivalents, and restricted cash | (73) | 66 | 2 |
Effect of foreign exchange on cash, cash equivalents, and restricted cash | (5) | (1) | |
Cash, cash equivalents, and restricted cash, beginning of year | 109 | 43 | 42 |
Cash, cash equivalents, and restricted cash, end of period | $ 31 | $ 109 | $ 43 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Reconciliation of cash flow information: | |||
Cash and cash equivalents | $ 27 | $ 105 | $ 35 |
Restricted cash included in prepaid and other current assets | 4 | 1 | 7 |
Restricted cash included in other non-current assets | 3 | 1 | |
Total cash, cash equivalents, and restricted cash | $ 31 | $ 109 | $ 43 |
Consolidated Statements of Chan
Consolidated Statements of Change in Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Common StockDigitalGlobe | Common Stock | Additional paid in capital | Retained earnings (Accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interest | DigitalGlobe | Total |
Balance at the beginning of period at Dec. 31, 2017 | $ 1,550 | $ 51 | $ 145 | $ 95 | $ 1 | $ 1,842 | ||
Balance at the beginning of period (in shares) at Dec. 31, 2017 | 56.2 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Common stock issued to dissenting shareholders | $ 111 | $ 111 | ||||||
Common stock issued to dissenting shareholders (in shares) | 2.2 | |||||||
Common shares issued as part of acquisition | $ 25 | 25 | ||||||
Common shares issued as part of acquisition (in shares) | 0.5 | |||||||
Reclassification of equity classified stock-based compensation awards to liability classified | 1 | 1 | ||||||
Common stock issued under employee stock purchase plan | $ 3 | 3 | ||||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||||
Common stock issued upon vesting or exercise of stock-based compensation awards | $ 24 | (24) | ||||||
Common stock issued upon vesting or exercise of stock-based compensation awards (in shares) | 0.4 | |||||||
Equity classified stock-based compensation expense | 31 | 31 | ||||||
Dividends | (65) | (65) | ||||||
Comprehensive income (loss) | (1,250) | (31) | (1,281) | |||||
Balance at the end of period at Dec. 31, 2018 | $ 1,713 | 59 | (1,170) | 64 | 1 | 667 | ||
Balance at the end 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) | 0.2 | |||||||
Common stock issued upon vesting or exercise of stock-based compensation awards (in shares) | 0.3 | |||||||
Equity classified stock-based compensation expense | 11 | 11 | ||||||
Dividends | (3) | (3) | ||||||
Comprehensive income (loss) | 109 | (23) | 86 | |||||
Balance at the end of period at Dec. 31, 2019 | 1,784 | (1,064) | 41 | 1 | $ 762 | |||
Balance at the end of period (in shares) at Dec. 31, 2019 | 59.9 | 59.9 | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Reclassification of equity classified stock-based compensation awards to liability classified | 4 | $ 4 | ||||||
Common stock issued under employee stock purchase plan | 6 | 6 | ||||||
Common stock issued under employee stock purchase plan (in shares) | 0.6 | |||||||
Common stock issued upon vesting or exercise of stock-based compensation awards (in shares) | 0.7 | |||||||
Equity classified stock-based compensation expense | 24 | 24 | ||||||
Dividends | (2) | (2) | ||||||
Comprehensive income (loss) | 303 | (161) | 142 | |||||
Balance at the end of period at Dec. 31, 2020 | $ 1,818 | $ (763) | $ (120) | $ 1 | $ 936 | |||
Balance at the end of period (in shares) at Dec. 31, 2020 | 61.2 | 61.2 |
Consolidated Statements of Ch_2
Consolidated Statements of Change in Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Change in Stockholders' Equity | |||
Dividends per share (in dollars per share) | $ 0.04 | $ 0.04 | $ 1.14 |
General business description
General business description | 12 Months Ended |
Dec. 31, 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. On January 1, 2019, the Company completed a reorganization of its corporate structure pursuant to which the Company directly acquired all of the issued and outstanding shares of Maxar Technologies Ltd. (“Maxar Canada”), and the Company replaced Maxar Canada as the publicly-held parent company of the Maxar group (“U.S. Domestication”). Prior to U.S. Domestication, Maxar Canada reported to securities regulators in both Canada and the U.S., financial statements prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Upon completion of the U.S. Domestication, and including the report herein, the Company has prepared its financial statements in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). Completion of the sale of MDA On April 8, 2020, the Company completed the sale of the MDA Business, the Company’s former Canadian subsidiary, 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”) (“MDA Transaction”). This divestiture represents a strategic shift in the Company’s business and, in accordance with U.S. GAAP, qualifies as a discontinued operation. As a result, the operating results and cash flows related to the MDA Business have been reflected as discontinued operations in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows. The assets and liabilities sold met the requirements to be classified within the Consolidated Balance Sheets under a held for sale designation as of December 31, 2019. See Note 4 for details. Acquisition of Vricon On July 1, 2020, the Company closed the acquisition of Vricon, Inc. (“Vricon”) by purchasing the remaining 50% ownership interest in Vricon (“Vricon Acquisition”). See |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all consolidated subsidiary entities. The Company’s Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and the rules and regulations of the U.S. Securities and Exchange Commission. All intercompany balances and transactions are eliminated on consolidation. The Company's Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. References to “C$” refer to Canadian currency. Unless otherwise indicated, amounts provided in the Notes pertain to continuing operations (See Note 4 for information on discontinued operations). Use of estimates, assumptions and judgments The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. Revisions to accumulated other comprehensive income (loss) During the year ended December 31, 2020, the Company identified an immaterial error in the historical balances of Accumulated other comprehensive income (loss) related to Space Infrastructure postretirement benefits for periods beginning prior to 2016. In the accompanying Balance Sheets, the balances for Accumulated other comprehensive income (loss) and Accumulated deficit as of December 31, 2019, 2018 and 2017 have been revised to correct the immaterial error in prior periods. In the previously issued Consolidated Financial Statements, Accumulated other comprehensive income (loss) and Accumulated deficit were misstated by $18 million as of December Leases The Company has both operating and finance leases. The majority of the Company’s leases are operating leases related to buildings. The Company’s finance leases are primarily related to furniture and equipment. The Company determines if a contract is or contains a lease at inception based on whether it conveys the right to control the use of an identified asset. The Company recognizes lease liabilities and right-of-use assets based on the present value of the future minimum lease payments over the lease term at commencement date. Right-of-use assets are adjusted for any prepayments, lease incentives received, and initial direct costs incurred. If the rate implicit in the lease is not readily determinable, the Company’s incremental borrowing rate with a similar term to the lease term is used to determine the present value of future payments and appropriate lease classification. The lease term includes renewal options that are reasonably certain to be exercised. The Company elected the practical expedient not to separate lease and non-lease components. The Company also elected to include in minimum lease payments any executory costs that are part of the fixed lease payment. Some of the Company’s building lease agreements contain incentives for leasehold improvements. If the leasehold improvement has been determined to be owned by the lessee, the Company generally recognizes the incentive as a reduction to the right-of-use asset. The Company uses the date of initial possession as the commencement date, which is generally when the Company has been given rights to access the space. Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets and are recognized as lease expense on a straight-line basis in the Consolidated Statements of Operations. Certain leasing arrangements require variable payments, such as insurance and tax payments. Variable lease payments that do not depend on an index or rate are excluded from lease payments in the measurement of the right-of-use asset and lease liability and are recognized as expense in the period in which the payment occurs. The Company does not have any material restrictions or covenants in our lease agreements, sale leaseback transactions or residual value guarantees. The Company recognizes fixed lease expense for operating leases on a straight-line basis Business combinations and divestitures Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date. The excess of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results when the business is classified as held for sale. The results of discontinued operations are reported in Income (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. Assets and liabilities of a discontinued operation are reported separately in the Consolidated Balance Sheets as held for sale and classified as either current or non-current in the prior periods. If it is probable that the sale will occur and proceeds will be collected within one year of meeting the held for sale criteria both assets and liabilities classified as held for sale are reported in the current period Consolidated Balance Sheet as current. Foreign currency Assets and liabilities of non-U.S. subsidiaries that operate in local currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments, net of tax, recorded in Accumulated other comprehensive income (loss) within the Stockholders’ equity section of the Consolidated Balance Sheets. Income and expense accounts are translated at average monthly exchange rates during the year. Revenue recognition Revenue is recognized in accordance with the five-step model set forth by ASC 606, which involves identification of the contract(s), identification of performance obligations in the contract, determination of the transaction price, allocation of the transaction price to the previously identified performance obligations and recognition of revenue as the performance obligations are satisfied. Revenue is measured at the fair value of consideration received or receivable, net of discounts and after eliminating intercompany sales. When consideration received from customers includes advance payments that contain a financing element, the Company imputes interest on such advance payments and recognizes such amounts as a component of revenue. Contract costs generally include direct costs such as materials, labor, and subcontract costs. Costs are expensed as incurred except for incremental costs incurred to obtain or fulfill a contract, which are capitalized and amortized on a systematic basis consistent with the transfer of goods or services to the customer to which the capitalized costs relate. As of December 31, 2020 and 2019, current costs to obtain or fulfill a contract were $6 million, respectively, and are included in Prepaid and other current assets within the Consolidated Balance Sheets. As of December 31, 2020 and, 2019, non-current costs to obtain or fulfill a contract were $41 million and $37 million, respectively, and are included in Other non-current assets within the Consolidated Balance Sheets. Space Infrastructure Revenue in the Space Infrastructure segment is primarily generated from long-term construction contracts. Due to the long-term nature of these contracts, the Company generally recognizes revenue over time using the cost-to-cost method to measure progress. Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred to estimated total costs-at-completion ("EAC"). An EAC includes all direct costs and indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in determining the EAC. Changes to an EAC are recorded as a cumulative adjustment to revenue. During the year ended December 31, 2020, the Company incurred an estimated program loss of $42 million on a commercial satellite contract within the Space Infrastructure segment due to a change in the estimated cost to complete the contract. The scope of this contract included significant development efforts and was further delayed by COVID-19. The estimated COVID-19 impact on this program was $16 million for the year ended December 31, 2020 and is included in our total COVID-19 impact discussed below. During the year ended December 31, 2020, the Company incurred COVID-19 related EAC growth of $27 million. 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 EACs 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. Satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price is contingent upon in-orbit performance of the satellite. These performance incentives are structured in two forms. As a warranty payback, the customer pays the entire amount of the performance incentive during the period of the satellite construction and such incentives are subject to refund if satellite performance does not achieve certain predefined operating specifications. As an orbital receivable, the customer makes payment of performance incentives over the in-orbit life of the satellite. Performance incentives, whether warranty payback or orbital receivables, are included in revenue during the construction period to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In addition to the in-orbit performance incentives, satellite construction contracts may include liquidated damages clauses. Liquidated damages can be incurred on programs as a result of delays due to slippage or for programs which fail to meet all milestone requirements as outlined within the contractual arrangements with customers. Losses related to liquidated damages result in a reduction of revenue recognized and are recorded in the period in which, based on available facts and circumstances, management believes it is probable that liquidated damages will be incurred. Construction contracts have termination clauses. If a contract is terminated for convenience by a customer, the Company is typically entitled to costs incurred plus a reasonable profit. Earth Intelligence Revenue in the Earth Intelligence segment is generated from imagery and geospatial intelligence service contracts. Revenue from imagery service contracts is recognized based on satellite capacity made available to the customer in a particular period, when imagery is delivered to the customer, or ratably over the subscription period. Many of our imagery service contracts relate to the transfer of a series of distinct goods or services over time for which management has determined are a single performance obligation. EnhancedView Follow-On Contract – The EnhancedView Follow-On contract (the “EnhancedView Contract”) includes one performance obligation to deliver a certain amount of capacity to the U.S. government over the 10-year three Direct Access Program – Direct Access Program arrangements generally include construction of the direct access facility, access to the satellites to task and download imagery and facility maintenance services. The facility is generally delivered at the beginning of the contractual period of performance with access and maintenance services delivered over the duration of the contractual term. Under ASC 606, the Company has determined that two performance obligations exist; the access and the facility promised goods and services are included together as a combined performance obligation with maintenance services representing a standalone performance obligation. The access and the facility are considered a single performance obligation as the customer cannot benefit from the facility on its own or with other readily available resources. The transaction price allocated to the combined performance obligation is recognized as access minutes are consumed during the contractual period. The remaining transaction price allocated to the maintenance services is recognized ratably over the maintenance period. Other Imagery Arrangements – Revenue is recognized for imagery licenses when the imagery is delivered to the customer. Revenues related to online imagery subscriptions are generally recognized ratably over the subscription period. Other imagery arrangements transfer a series of distinct goods or services over time for which management has determined are a single performance obligation or include multiple performance obligations. Revenue from geospatial intelligence service contracts is recognized from the rendering of services that compensate the Company at a cost-plus-fixed-fee, firm fixed price, or on a time and materials basis. Revenue is typically recognized for these contracts over time based on the stage of services completed to date as a percentage of total services to be performed, or on the basis of time plus reimbursable costs incurred during the period. As the customer typically controls the related work-in-progress, an input measure is the most appropriate basis with which to measure progress. Finally, as cost of labor is the predominant measure by which these contracts are structured, the Company recognizes revenue using a cost-incurred approach. Contract liabilities Contract liabilities primarily consist of advance payments from customers and deferred revenue. Changes in contract liabilities are primarily due to the timing difference between the Company’s performance of services and payments from customers. To determine revenue recognized from contract liabilities during the reporting periods, the Company allocates revenue to individual contract liability balances and applies revenue recognized during the reporting periods first to the beginning balances of contract liabilities until the revenue exceeds the balances. Net income (loss) per common share Net income (loss) per common share is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding during the period. Diluted income per common share is computed by adjusting the basic income per common share calculation, as described above, for the effects of all potentially dilutive shares. The Company calculates the effects of all potentially dilutive shares using the treasury stock method unless they are anti-dilutive. Research and development Research and development costs are expensed in the period incurred. For the years ended December 31, 2020, 2019 and 2018, the Company expensed research and development costs of $15 million, $10 million, and $88 million, respectively in Selling, general and administrative expense within the Consolidated Statements of Operations. Interest expense, net Interest expense, net is comprised of borrowing cost on debt, interest expense on advance payments from customers and other liabilities, interest expense on the orbital securitization liability, losses incurred on the extinguishment of debt and interest expense on dissenting stockholders liability, net of capitalized interest. Interest expense is recognized within Interest expense, net in the Consolidated Statements of Operations. Debt issuance costs related to the Company’s revolving line of credit are recorded in Prepaid and other current assets and in Other non-current assets in the Consolidated Balance Sheets. Debt issuance costs and debt discount related to the Company’s term loan and senior secured notes are recorded as a direct deduction from the carrying amount of the related debt. Derivative financial instruments and hedging activities Derivative financial instruments used by the Company consist of foreign currency forward contracts and interest rate swap agreements. The Company uses foreign currency forward contracts to manage foreign exchange risk associated with the cash flows from long-term construction contracts where some portion of the cash flows are denominated in foreign currencies as part of the normal course of business. The Company uses interest rate swap agreements to manage interest rate risk associated with cash outflows from long-term debt. Derivative financial instruments are measured at fair value and are included as components of Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets. When derivative financial instruments are designated in a qualifying hedging relationship and hedge accounting is applied, the effectiveness of the hedges is measured at the end of each reporting period and the effective portion of changes in fair value are deferred in accumulated other comprehensive income. Amounts deferred in accumulated other comprehensive income Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge accounting. At that time, if the forecasted transaction within a cash flow hedge remains probable, any cumulative gain or loss on the hedging instrument recognized in Other comprehensive income (loss) is retained in equity until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss previously recognized in other comprehensive income is transferred to income. As of January 1, 2019, the Company has discontinued hedge accounting on foreign exchange forward contracts related to its manufacturing and service programs. The Company continued to hedge its exposure for economic purposes. The Company does not offset the fair value amounts recognized with derivative instruments against the change in fair value of assets, liabilities or firm commitments executed with the same counterparty under a master netting agreement. Cash, cash equivalents and restricted cash Cash and cash equivalents is comprised of cash on hand, cash balances with banks and similar institutions and term deposits redeemable within three months or less from date of acquisition with banks and similar institutions. Restricted cash is excluded from cash and cash equivalents and is included in Prepaid and other current assets or Other non-current assets in the Consolidated Balance Sheets. Trade and other receivables, net Trade and other receivables include amounts billed to customers, unbilled receivables in which the Company’s right to consideration is unconditional and current portion of orbital receivables, net of allowance for expected credit losses. The Company bills customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries. The Company maintains an allowance for expected credit losses for estimated losses resulting from the inability of its customers to make required payments, which results in bad debt expense. The Company periodically determines the adequacy of this allowance by evaluating the comprehensive risk profiles of all individual customer receivable balances including, but not limited to, the customer’s financial condition, credit agency reports, financial statements, credit limit and overall current economic conditions. Orbital Receivables Orbital receivables relate to performance incentives due under certain satellite construction contracts that are paid over the in-orbit life of the satellite. Orbital receivables are recognized as revenue when measuring progress under the cost-to-cost method during the construction period. The interest portion of the in-orbit payments is recognized as orbital revenue. Long-term orbital receivables are included in Non-current assets, net of allowances on the Consolidated Balance sheets. The Company has a revolving securitization facility agreement with two international financial institutions. Under the terms of the agreement, the Company may offer to sell eligible orbital receivables from time to time with terms of seven years or less, discounted to face value using prevailing market rates. The Company has sold certain orbital receivables in tranches that span multiple years and include longer-term maturities. The orbital receivables that have been securitized remain recognized on the 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. Securitization liabilities are presented in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets. The securitized orbital receivables and the securitization liabilities are being drawn down as payments are received from the customers and passed on to the purchaser of the tranche. The Company continues to recognize orbital revenue on the orbital receivables that are subject to the securitization transactions and recognizes interest expense to accrete the securitization liability. Investments Short-term investments consist of mutual funds and financial instruments purchased with a term to maturity at inception between three months and one year. Short-term investments are measured at fair value through net income. Short-term investments are included within Prepaid and other current assets in the Consolidated Balance Sheets. The Company has investments in joint ventures where it does not have a controlling financial interest but has the ability to exercise significant influence. These investments are accounted for under the equity method and are included within Other non-current assets in the Consolidated Balance Sheets. The Company’s share of the joint venture’s net income or loss is included within Equity in (income) loss from joint ventures, net of tax in the Consolidated Statements of Operations. The Company’s most significant joint venture was Vricon, a joint venture with Saab AB, specializing in the production of 3D models using high resolution imagery. On July 1, 2020, the Company closed the acquisition of Vricon by purchasing the remaining 50% ownership interest in Vricon. The operating results of Vricon are included in the Company’s Consolidated Statement of Operations beginning July 1, 2020. The following tables present summarized financial information for Vricon as of December 31, 2019, and for the years ended December 31, 2019 and 2018. Equity method investments are insignificant for the year ended December 31, 2020. Summarized Consolidated Balance Sheet December 31, 2019 Current assets $ 49 Non-current assets 5 Total assets $ 54 Total liabilities 1 $ 10 1 As of December 31, 2019, liabilities were classified as current. Summarized Consolidated Statement of Operations December 31, December 31, 2019 2018 Revenues $ 54 $ 21 Gross profit $ 51 $ 19 Income from operations $ 32 $ 2 Net income $ 24 $ 1 Inventor Inventories are measured at the lower of cost or net realizable value and consist primarily of parts and sub-assemblies used in the manufacturing of satellites. The cost of inventories is determined on a first-in-first-out basis or weighted average cost basis, depending on the nature of the inventory. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. Inventory is impaired when it is probable inventory values exceed their net realizable value. Property, plant and equipment Property, plant and equipment is measured at cost less accumulated depreciation. Cost for satellite assets includes amounts related to design, construction, launch and commissioning. Cost for ground system assets include amounts related to construction and testing. Interest expense is capitalized on certain qualifying assets that take a substantial period of time to prepare for their intended use. When the costs of certain components of an item of property, plant and equipment are significant in relation to the total cost of the item and the components have different useful lives, they are accounted for and depreciated separately. Property, plant and equipment under construction are measured at cost less any impairment losses. Depreciation expense is recognized in income on a straight-line basis over the estimated useful life of the related asset to its residual value. Expected useful lives are reviewed at least annually. Land is not depreciated. The estimated useful lives are as follows: Estimated useful life Land improvements 20 years Buildings 7 - 45 years Leasehold improvements lesser of useful life or term of lease Equipment 2 - 40 years Satellites 1 11.5 - 15 years Furniture and fixtures 2 - 10 years Computer hardware 2 - 13 years 1 The estimated useful life over which the Company depreciates its satellites is determined once a satellite has been placed into orbit. The initial determination of a satellites useful life involves an analysis that considers design life, random part failure probabilities, expected component degradation and cycle life, predicted fuel consumption and experience with satellite parts, vendors and similar assets. Intangible assets Intangible assets consist of customer relationships, backlog, acquired technologies and software, image library, trade names, licenses and non-compete agreements. Intangible assets are generally amortized on a straight-line basis over their estimated useful lives and are recorded at fair value at the time of acquisition, or in the case of internally developed software, at cost. Image library intangibles assets are amortized using the double declining balance method. Intangible assets are currently amortized over the following estimated useful lives: Estimated useful life Customer relationships 9 - 21 years Backlog 2 - 5 years Technologies 5 - 13 years Software 2 - 10 years Image library 5 years Trade names and other 1 - 20 years Non-compete agreements 2 years Impairment Intangible assets and property, plant and equipment and other long-lived assets Intangible assets, property, plant and equipment and other long-lived assets are tested for impairment at least annually on October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets and property, plant and equipment and other long-lived assets are reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) are less than the asset’s carrying value. Any required impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value and recorded as a reduction in the carrying value of the related asset . If an owned satellite were to fail during launch or while in-orbit, the resulting loss would be charged to expense in the period it is determined the satellite is not recoverable. The amount of loss would be reduced to the extent of insurance proceeds received. The timing of the loss and the insurance recovery will likely differ, as an insurance recovery generally cannot be recognized until final settlement with the insurance company is reached. In December 2018, the Company experienced a loss of the WorldView-4 satellite and in 2019, the Company received insurance recoveries of $183 million. The insurance proceeds are included in operating cash flows as they are considered business interruption insurance and represent the Company’s satellite’s loss of capacity to produce imagery for sale to the Company’s customers. Orbital Receivables The Company records an allowance on its orbital receivables when, based on current events and circumstances, it believes it is probable that the outstanding amounts will not be collected. The Company utilizes customer credit ratings, expected credit loss and other credit quality indicators, as well as contractual terms to evaluate the collectability of orbital receivables on a quarterly basis. When qualitative factors indicate that all or a portion of an outstanding orbital receivable is uncollectable, a fair value assessment is performed using a discounted cash flow model as an indicator to determine whether an increase in the allowance is necessary. Changes in the allowance against orbital receivables are typically included in Impairment losses within the Consolidated Statements of Operations. Goodwill Goodwill is tested for impairment at least annually on October 1, or whenever events or changes in circumstances indicate that its carrying amount may be less than its recoverable amount. Goodwill is tested for impairment at the reporting unit level. The Company may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment. Where a qualitative approach is used, an evaluation of events and circumstances impacting the reporting unit is performed to determine the likelihood of goodwill impairment. Based on that qualitative evaluation if it is determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise, a quantitative impairment test is performed. Where a quantitative approach is used, Management typically uses an income approach to estimate the fair value of a reporting unit, which requires the use of significant judgments and estimates, including future cash flows, terminal growth rates, and discount rates. Any changes to these inputs could have a material impact on the impairment calculation. An impairment loss is recognized to the extent that the carrying value of a reporting unit exceeds its fair value. Management assesses the reasonableness of the results by reconciling the sum of the estimated fair values of the reporting units, including the Company’s Corporate balance sheet, to the Company’s market capitalization and market value of invested capital as of the date of our annual impairment test. The Company used a qualitative approach for its goodwill impairment assessment as of October 1, 2020 and determined that no impairment existed. The Company used a quantitative approach for its goodwill impairment assessment as of October 1, 2019 and determined that no impairment existed. Warranty and after-sale service costs A liability for warranty and after-sale service costs is recognized when the underlying product or service is sold. Warranty and after-sale service provisions are based on management’s best estimate of the expected obligation using historical warranty data and experience. Warranty and after-sale service liabilities related to products and services delivered under construction contracts are included in the EAC for revenue recognition. Warranty and after-sale service liabilities are presented in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets. Warranty a |
New standards and interpretatio
New standards and interpretations not yet adopted | 12 Months Ended |
Dec. 31, 2020 | |
New standards and interpretations not yet adopted | |
New standards and interpretations not yet adopted | 3. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED Reference Rate Reform In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) which together with subsequent amendments 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. |
Discontinued operations
Discontinued operations | 12 Months Ended |
Dec. 31, 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 $317 million, net of $12 million in taxes, on the MDA Transaction for the year ended December 31, 2020. The tax on the MDA Transaction is primarily due to the estimated U.S. federal Base Erosion and Anti-Abuse Tax (“BEAT”) and California legislation suspending the use of net operating loss (“NOL”) carryforwards. The gain on the MDA Transaction includes a reclassification primarily related to the foreign currency translation adjustment balance of $68 million from Accumulated other comprehensive (loss) income. See Note 12 for details on the use of proceeds from the MDA Transaction. 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 will be provided based on an agreed upon fee arrangement through April 8, 2021. The Company determined that as of December 29, 2019, the MDA Business met the criteria to be classified as held for sale. The MDA business was a separate reportable segment prior to the announcement of the MDA Transaction and constituted all the Company’s Canadian operations. As the MDA Transaction represented a strategic shift that had a major effect on the Company’s operations, the MDA Business results met the criteria to be reported as discontinued operations in accordance with ASC 205-20 – Discontinued Operations. The assets and liabilities of MDA are classified as held for sale in the Consolidated Balance Sheet for the year ended December 31, 2019 with results classified as discontinued operations in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows for all periods presented. For the year ended December 31, 2020, the Company has reported the operating results and cash flows related to the MDA Business through April 7, 2020. Income (loss) from discontinued operations, net of tax for the MDA Business in the Consolidated Statements of Operations consists of the following: Year Ended December 31, 2020 1 2019 2018 Revenues: Product $ 44 $ 206 $ 238 Service 42 161 182 Total revenues $ 86 $ 367 $ 420 Costs and expenses: Product costs, excluding depreciation and amortization $ 38 $ 149 $ 149 Service costs, excluding depreciation and amortization 24 84 114 Selling, general and administrative 13 88 59 Depreciation and amortization 4 11 10 Impairment loss 12 12 477 Operating (loss) income (5) 23 (389) Interest expense, net 1 1 1 Other (income) expense, net 2 (34) 3 — Income (loss) before taxes 28 19 (390) Income tax benefit (4) (7) (13) Income (loss) from operations of discontinued operations, net of tax 32 26 (377) Gain on disposal of discontinued operations, net of tax 317 — — Income (loss) from discontinued operations, net of tax $ 349 $ 26 $ (377) 1 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 year ended December 31, 2020. The Company performed its annual goodwill impairment analysis as of October 1, 2019. This analysis was updated upon announcement of the MDA Transaction for the year ended December 31, 2019. The Company concluded that there were no impairment indicators related to goodwill at either of the dates the impairment analyses were performed. For the year ended December 31, 2018, as a result of triggering events identified, which included a sustained decline in the Company’s stock price, the Company recorded a $477 million non-cash goodwill impairment charge. There were no goodwill impairment charges recognized for the year ended December 31, 2020. MDA holds an investment in a privately held company in which it does not have significant influence and the fair value of which cannot be reliably measured through external indicators. The investment is evaluated quarterly for impairment. In 2019, the Company noted an observable price change related to its investment and, as a result, recorded an impairment loss of $12 million. There were no investment impairment losses recognized for the years ended December 31, 2020 or 2018. The carrying amounts of the major classes of assets and liabilities, which are classified as held for sale in the Consolidated Balance Sheet, 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 |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2020 | |
Business combinations | |
Business combinations | 5. BUSINESS COMBINATION On July 1, 2020, the Company closed the acquisition of Vricon, Inc. (“Vricon”) by purchasing the remaining 50% ownership interest in Vricon (“Vricon Acquisition”) for $143 million, excluding Vricon cash on hand of $23 million, for $120 million, net of cash at closing. 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 12 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 $26 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 Consolidated Statements of Operations for the year ended December 31, 2020. The operating results of Vricon are included in the Company’s 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 year end: Year Ended December 31, 2020 2019 Revenues $ 1,734 $ 1,706 Net income $ 302 $ 119 Preliminary Purchase Price Allocation The following table summarizes the fair value of the consideration transferred and the preliminary estimated fair values of the major classes of assets acquired and liabilities assumed at the acquisition date. The fair value of 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, 2020 Call option purchase price $ 117 Fair value of existing equity interest 117 Cash settlement of equity awards 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 7 Total assets $ 115 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 88 Goodwill $ 172 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 Total intangible assets $ 73 The goodwill of $172 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. |
Trade and other receivables, ne
Trade and other receivables, net | 12 Months Ended |
Dec. 31, 2020 | |
Trade and other receivables, net | |
Trade and other receivables, net | 6. TRADE AND OTHER RECEIVABLES, NET December 31, December 31, 2020 2019 U.S. government receivables: Billed $ 84 $ 88 Unbilled 76 46 160 134 Other governments and commercial receivables: Billed 97 123 Unbilled 19 54 116 177 Total trade receivables 276 311 Orbital receivables, current portion 49 43 Other 3 4 Allowance for doubtful accounts (1) (1) Trade and other receivables, net $ 327 $ 357 As of December 31, 2020 and 2019, non-current orbital receivables, net of allowances were $361 million and $382 million, respectively. The Company has orbital receivables from 14 customers for which the largest customer’s value represents 19% and 27% of the stated balance sheet value for the years ended December 31, 2020 and 2019, respectively. The changes in allowance for expected credit losses related to non-current orbital receivables for the years ended December 31, 2020 and 2019, consist of the following: Orbital Receivables Allowance Allowance as of December 31, 2018 $ (21) Additions (14) Allowance as of December 31, 2019 (35) Additions (14) Allowance as of December 30, 2020 $ (49) The expected timing of total contractual cash flows, including principal and interest payments for orbital receivables is as follows: 2021 2022 2023 2024 2025 Thereafter Total Contractual cash flows from orbital receivables $ 69 $ 70 $ 77 $ 76 $ 69 $ 340 $ 701 During the year ended December 31, 2020, the Company did not sell Securitization liabilities as of December 31, 2020 and 2019, are as follows: December 31, December 31, 2020 2019 Current portion $ 14 $ 17 Non-current portion 47 48 Total securitization liabilities $ 61 $ 65 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory | |
Inventory | 7. INVENTORY December 31, December 31, 2020 2019 Raw materials $ 22 $ 13 Work in process 9 7 Inventory $ 31 $ 20 |
Property, plant and equipment,
Property, plant and equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 8. PROPERTY, PLANT AND EQUIPMENT, NET December 31, December 31, 2020 2019 Satellites $ 397 $ 397 Equipment 207 196 Leasehold improvements 81 75 Computer hardware 78 67 Furniture and fixtures 15 15 Construction in process 1 572 388 Property, plant and equipment, at cost 1,350 1,138 Accumulated depreciation (467) (380) Property, plant and equipment, net $ 883 $ 758 1 Construction in process is primarily related to the construction of the Company’s WorldView Legion satellite constellation. Depreciation expense for property, plant and equipment was $93 million, $107 million and $150 million for the years ended December 31, 2020, 2019 and 2018, respectively. Sale leaseback During the fourth quarter of 2019, the Company completed the sale and subsequent leaseback of Company owned properties in Palo Alto, California for net proceeds of $280 million. The Company recognized a gain on the sale of the properties of $136 million, which was adjusted for off-market leaseback terms, and is included in Gain on sale of assets in the Company’s Consolidated Statement of Operations. During 2020, the Company recognized a $4 million reduction in the gain due to the extension of the lease term on one of the properties, which is included in Gain on sale of assets in the Company’s Consolidated Statement of Operations. Sale of building During the fourth quarter of 2018, the Company completed the sale of one of its buildings in Palo Alto, California for net proceeds of $68 million. The sale resulted in a gain of $33 million from the sale, which is included in Gain on sale of assets in the Company’s Consolidated Statements of Operations. |
Intangible assets and goodwill
Intangible assets and goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Intangible assets and goodwill | |
Intangible assets and goodwill | 9. INTANGIBLE ASSETS AND GOODWILL December 31, December 31, 2020 2019 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 615 $ (146) $ 469 $ 615 $ (102) $ 513 Backlog 129 (79) 50 330 (217) 113 Technologies 369 (211) 158 320 (144) 176 Software 298 (125) 173 213 (83) 130 Image library 80 (58) 22 80 (48) 32 Trade names and other 38 (15) 23 37 (10) 27 Intangible assets $ 1,529 $ (634) $ 895 $ 1,595 $ (604) $ 991 During the year ended December 31, 2020, the gross carrying value and accumulated amortization balances for fully amortized backlog were removed. Amortization expense related to intangible assets was $255 million, $269 million and $289 million for the years ended December 31, 2020, 2019 and 2018, respectively. The estimated annual amortization expense related to finite-lived intangible assets as of December 31, 2020, is as follows: Year Ended December 31, 2021 2022 2023 2024 2025 2026 and thereafter Amortization expense $ 190 $ 176 $ 80 $ 65 $ 54 $ 330 Goodwill balances for each reporting segment are as follows: Earth Intelligence Space Infrastructure Total Balance as of December 31, 2018 Goodwill $ 1,597 $ 17 $ 1,614 Accumulated impairment losses (142) (17) (159) 1,455 — 1,455 Balance as of December 31, 2019 Goodwill 1,597 17 1,614 Accumulated impairment losses (142) (17) (159) 1,455 — 1,455 Acquisition of Vricon 172 — 172 Balance as of December 31, 2020 Goodwill 1,769 17 1,786 Accumulated impairment losses (142) (17) (159) $ 1,627 $ — $ 1,627 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 10. LEASES The Company’s leases have remaining lease terms which options six months Sale Leaseback During the fourth quarter of 2019, the Company completed the sale and subsequent leaseback of Company owned properties in Palo Alto, California. The Company determined the leaseback of both properties to be operating leases, as the criteria to be classified as financing leases were not met. The Company recorded operating lease assets and liabilities two The Company recorded the current portions of the operating lease liabilities and the deferred financing liability in Current lease liabilities and Current portion of long-term debt, respectively, in the Consolidated Balance Sheet. The non-current portions of the operating lease assets, the operating lease liabilities and the deferred financing liability have been recorded in Non-current operating lease assets, Non-current operating lease liabilities and Long-term debt, respectively, in the Consolidated Balance Sheet. Interest expense on the financial liability has been recorded in Interest expense, net in the Consolidated Statement of Operations. Finance lease expense, variable lease expense, short-term lease expense and sublease income are not material. The components of operating lease expense are as follows: Year ended December 31, Classification 2020 2019 Operating lease expense Selling, general, and administrative expense, Product costs, and Service costs 1 $ 47 $ 27 1 Excluding depreciation and amortization Operating lease expense for the year ended December 31, 2018 was $26 million. Supplemental lease balance sheet information consists of the following: December 31, December 31, Classification 2020 2019 Assets: Operating Non-current operating lease assets $ 163 $ 176 Finance Property, plant, and equipment, net 4 5 Total lease assets $ 167 $ 181 Liabilities: Current Operating Current operating lease liabilities $ 41 $ 40 Finance Current portion long-term debt 2 2 Non-current Operating Operating lease liabilities 158 173 Finance Long-term debt 1 1 Total lease liabilities $ 202 $ 216 Supplemental lease cash flow information is as follows: Year ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 43 $ 30 Loss (gain) on sale of assets 1 (136) Right-of-use assets obtained in exchange for lease obligations: Operating leases 16 72 Other supplemental lease information consists of the following: December 31, December 31, 2020 2019 Weighted average remaining lease term (in years) Operating leases 8 9 Finance leases 2 3 Weighted average discount rate Operating leases 6.5% 6.4% Finance leases 4.1% 3.5% Maturities of lease liabilities are as follows: 2021 2022 2023 2024 2025 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 43 $ 41 $ 30 $ 26 $ 24 $ 92 $ (57) $ 199 Finance leases 1 1 1 — — — — 3 |
Warranty and restructuring cost
Warranty and restructuring costs | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring | |
Warranty and restructuring | 11. WARRANTY AND RESTRUCTURING COSTS In response to changes in the geostationary communications satellite market, in 2018 the Company enacted a restructuring plan to reduce headcount at its Palo Alto manufacturing facility and to implement enterprise improvement initiatives aimed at reducing overhead costs, reducing general and administrative costs, increasing supply chain value and increasing efficiency of production processes. In February 2019, the Company announced another restructuring plan to implement cost-saving measures, including a reduction in the Company’s workforce. The reduction in the Company’s workforce was substantially completed in the first half of 2019, with cash payments occurring throughout 2019. Changes to warranty and restructuring liabilities during the years ended December 31, 2020 and 2019, are as follows: Warranty and after-sale service Restructuring Balance as of December 31, 2018 $ 40 $ 3 Obligations incurred 3 18 Payments/uses (2) (19) Balance as of December 31, 2019 $ 41 $ 2 Obligations incurred 1 — Payments/uses (4) (2) Balance as of December 31, 2020 $ 38 $ — |
Long-term debt and interest exp
Long-term debt and interest expense, net | 12 Months Ended |
Dec. 31, 2020 | |
Long-term debt and interest expense, net | |
Long-term debt and interest expense, net | 12. LONG-TERM DEBT AND INTEREST EXPENSE, NET December 31, December 31, 2020 2019 Syndicated Credit facility: Term Loan B $ 1,444 $ 1,960 2023 Notes 850 1,000 2027 Notes 150 — Deferred financing 32 33 Debt discount and issuance costs (57) (54) Obligations under finance leases and other 3 6 Total long-term debt 2,422 2,945 Current portion of long-term debt (8) (30) Non-current portion of long-term debt $ 2,414 $ 2,915 Syndicated Credit Facility As of December 31, 2020, the Company’s senior secured syndicated credit facility (“Original Syndicated Credit Facility”, as amended prior to December 31, 2019, including as described below, “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”). In October 2017, in connection with the acquisition of DigitalGlobe, the Company entered into the Original Syndicated Credit Facility in the aggregate principal amount of $3.75 billion, which was comprised of: (i) a four-year senior secured first lien revolving credit facility, (ii) a four-year senior secured first lien operating facility, (iii) a senior secured first lien term A facility (“Term Loan A”) and (iv) the Term Loan B. The net proceeds of the Original Syndicated Credit Facility were used, along with cash on hand, to consummate the acquisition of DigitalGlobe, to refinance all amounts outstanding under the Company’s existing syndicated credit facility and senior term loans, to repay DigitalGlobe’s outstanding indebtedness, to pay transaction fees and expenses, to fund working capital and for general corporate purposes. In December 2018, the Company amended the Original Syndicated Credit Facility (“Second Amending Agreement”). The Second Amending Agreement provided that, so long as certain conditions were satisfied (the period during which such conditions are satisfied, the “Covenant Relief Period”) the maximum consolidated debt leverage ratios permitted under the Original Syndicated Credit Facility were increased and the interest rate incurred by the Company thereunder at certain consolidated debt leverage ratios were increased. The Second Amending Agreement also adjusted the definition of EBITDA for the purpose of calculating the financial ratios under U.S. GAAP. In addition to the above, during the Covenant Relief Period, the Second Amending Agreement restricted the use of certain asset sale proceeds, limited the type of new debt issuances and limited certain restricted payments and permitted acquisitions under the Syndicated Credit Facility. In November 2019, the Company further amended the Original Syndicated Credit Facility (“Third Amending Agreement”), certain portions of which became effective immediately and certain portions of which became effective in December 2019 upon the issuance of the 2023 Notes. The Third Amending Agreement, during the Covenant Relief Period, (i) modified the priority of the application of certain voluntary prepayments resulting from certain asset sales (but which did not affect the prepayments owed to the Term Loan B), and (ii) restricted use of proceeds of future borrowings. In addition, the Third Amending Agreement increased the maximum consolidated debt leverage ratios permitted under the Original Syndicated Credit Facility to 7.25x at the end of the fiscal quarter ended December 31, 2019, 7.50x at the end of the fiscal quarter ending March 31, 2020, 7.75x at the end of each fiscal quarter thereafter until the fiscal quarter ending September 30, 2021, 7.50x at the end of each fiscal quarter thereafter until the quarter ending September 30, 2022, 6.50x at the end of each fiscal quarter thereafter until the fiscal quarter ending March 31, 2023, and 5.75x for each fiscal quarter thereafter (subject to a 0.25x reduction in each maximum level upon a disposition of a business line for greater than $500 million). The Third Amending Agreement also extended the maturity of the Revolving Credit Facility by two years to December 2023, updated the Interest Coverage Ratio to be less than 2.0x at the end of each fiscal quarter, restricted investment capacity in certain permitted investments, restricted future increases in quarterly dividend payment levels and modified certain margin and standby fee terms. In addition, the Company canceled the operating credit facility and reduced committed borrowing capacity under the Revolving Credit Facility from $1.25 billion to $500 The Syndicated Credit Facility is guaranteed by the Company and certain designated subsidiaries (“Subsidiary Guarantors”) of the Company. The security for the Syndicated Credit Facility, subject to customary exceptions, includes substantially all the tangible and intangible assets of the Company and its Subsidiary Guarantors. The Company is required to make mandatory prepayments of the outstanding principal and accrued interest of the Syndicated Credit Facility (i) upon the occurrence of certain events and (ii) to the extent of a specified percentage of annual excess cash flow that is not reinvested or used for other specified purposes. The Syndicated Credit Facility is subject to customary affirmative and negative covenants, default provisions, representations and warranties and other terms and conditions. Term Loan A The Company used the proceeds from the 2023 Notes and the previously announced closing of its Palo Alto real estate sale leaseback transaction to repay the Original Syndicated Credit Facility borrowings under Term Loan A that were outstanding as of September 30, 2019. This resulted in a loss on debt extinguishment of $22 million for the year ended December 31, 2019, which is included as part of Interest expense, net within the Consolidated Statements of Operations. Term Loan B The Term Loan B bears interest at the Company’s option, either (i) U.S. dollar LIBOR plus 275 basis points per annum or (ii) adjusted base rate, plus a margin of 175 basis points per annum. The Company must make equal quarterly installment payments in aggregate annual amounts equal to 1% of the original principal amount of the Term Loan B, with the final balance payable at maturity on October 5, 2024. The Term Loan B may be repaid by the Company, in whole or in part, together with accrued interest, without premium or penalty. During the year ended December 31, 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 Consolidated Statements of Operations. Revolving Credit Facility The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued. As of December 31, 2020 and December 31, 2019, the Company had $31 million and $18 million of issued and undrawn letters of credit outstanding under the Revolving Credit Facility. As of December 31, 2020, the Company had no outstanding borrowings under its Revolving Credit Facility. Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (i) U.S. dollar LIBOR, plus a margin of 120 - 425 basis points per annum, based on the Company’s total leverage ratio, or (ii) adjusted base rate, plus a margin of 20 - 325 basis points per annum, based on the Company’s total leverage ratio. The Revolving Credit Facility is payable at maturity on December 10, 2023. The Revolving Credit Facility may be repaid by the Company, in whole or in part, together with accrued interest, without premium or penalty. Senior Secured Notes due 2023 In December 2019, the Company issued $1.0 billion in principal amount of 9.75% Senior Secured Notes due 2023 (“2023 Notes”). The 2023 Notes were offered and sold to qualified institutional buyers in the U.S. pursuant to Rule 144A and outside the U.S. pursuant to Regulation S under the Securities Act of 1933, as amended. The 2023 Notes were issued at a price of 98% and are recorded as long-term debt in the consolidated financial statements. The 2023 Notes bear interest at the rate of 9.75% per year, payable semi-annually in cash in arrears, which interest payments commenced in June 2020. On June 25, 2020, the Company repurchased $150 million aggregate principal amount of its 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. The 2023 Notes are guaranteed (“Guarantees”) on a senior secured basis by each of the Company’s existing and future subsidiaries that guarantees the Syndicated Credit Facility (“2023 Guarantors”). The 2023 Notes are secured, equally and ratably with 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 2023 Notes and the Guarantees are the Company’s general senior secured obligations and rank equally in right of payment with all of the Company’s and the 2023 Guarantors’ existing and future unsubordinated debt (including the Syndicated Credit Facility). The 2023 Notes and the Guarantees are effectively senior to all of the Company’s and the 2023 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 2023 Notes and the Guarantees. The 2023 Notes and the 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 2023 Notes or the Guarantees, are structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries that do not guarantee the 2023 Notes, and are senior in right of payment to all of the Company’s and the 2023 Guarantors’ existing and future subordinated indebtedness. The indenture governing the 2023 Notes limits, among other things, the Company 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 2023 Notes are also subject to compliance with a financial maintenance covenant in respect of the Company’s Consolidated Total Debt Ratio which was 7.25x at the end of the fiscal quarter ended December 31, 2019, 7.50x at the end of the fiscal quarter ending March 31, 2020, 7.75x at the end of each fiscal quarter thereafter until the fiscal quarter ending September 30, 2021, 7.50x at the end of each fiscal quarter thereafter until the quarter ending September 30, 2022, 6.50x at the end of each fiscal quarter thereafter until the fiscal quarter ending March 31, 2023, and 5.75x for each fiscal quarter thereafter (subject to a 0.25x reduction in each maximum level upon a disposition of a business line for greater than $500 million). The 2023 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on December 15, 2021 at a redemption price of 107.313%, during the 12 months beginning on December 15, 2022 at a redemption price of 103.656%, and at any time on or after December 15, 2023 at a redemption price of 100%, in each case plus accrued and unpaid interest, if any, thereon to the redemption date. The Company may also redeem the 2023 Notes, in whole or in part, at the Company’s option at any time prior to December 15, 2021 at a price equal to 100% of the principal amount of such 2023 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 2023 Notes at any time before December 15, 2021 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 2023 Notes), each holder will have the right to require us to repurchase all or any part of such holder’s 2023 Notes at a purchase price in cash equal to 101% of the aggregate principal amount of the 2023 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). Senior Secured Notes due 2027 On June 25, 2020, the Company issued $150 million in principal amount of 7.54% Senior Secured Notes due 2027 (“2027 Notes”). The 2027 Notes were offered and sold to qualified institutional buyers in the U.S. pursuant to Rule 144A and outside the U.S. 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 commenced 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 issuance of 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’s existing and future subsidiaries that guarantees the 2023 Notes and the Syndicated Credit Facility (“2027 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 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 2027 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 2027 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). Leaseback Deferred Financing In December 2019, the Company completed the sale and subsequent leaseback of company owned properties in Palo Alto, California for proceeds of $291 million. The Company determined that the leaseback terms were off-market. In accordance with ASC 842 – Leases, the Company accounted for the excess of the leaseback payments over the present value of market rental payments as additional financing, separate from the lease liability. This resulted in recognition of a deferred financing liability of $33 million, which is repayable over the 10 year leaseback term. This liability was calculated using a weighted average discount rate of 4.62% . The deferred financing liability is recorded as part of Current portion of long-term debt and Long-term debt within the Consolidated Balance Sheets. Refer to Note 8 and 10 for additional information. Interest expense, net on long-term debt and other obligations are as follows: Year Ended December 31, 2020 2019 2018 Interest on long-term debt $ 191 $ 194 $ 171 Interest on orbital securitization liability 5 7 7 Interest expense on advance payments from customers 3 15 26 Imputed interest and other 2 — — Loss on debt extinguishment 7 22 — Interest expense on dissenting stockholder liability — — 3 Capitalized interest (33) (19) (7) Interest expense, net $ 175 $ 219 $ 200 Scheduled minimum debt repayments are as follows for the year ending December 31, 2020 are as follows: 2021 2022 2023 2024 2025 Thereafter Total Syndicated Credit Facility $ — $ 10 $ 20 $ 1,414 $ — $ — $ 1,444 2023 Notes — — 850 — — — 850 2027 Notes — — — — — 150 150 Deferred financing 6 7 2 2 2 13 32 Finance leases and other 2 1 — — — — 3 Debt discount and issuance costs (12) (13) (14) (7) (3) (8) (57) $ (4) $ 5 $ 858 $ 1,409 $ (1) $ 155 $ 2,422 |
Financial instruments and fair
Financial instruments and fair value disclosures | 12 Months Ended |
Dec. 31, 2020 | |
Financial instruments and fair value disclosures | |
Financial instruments and fair value disclosures | 13. FINANCIAL INSTRUMENTS AND FAIR VALUE DISCLOSURES Factors used in determining the fair value of financial assets and liabilities are summarized into three categories in accordance with ASC 820 - Fair Value Measurements: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) Level 3: Inputs for the asset or liability that are based on unobservable inputs The following tables present assets and liabilities that are measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company had no assets measured at fair value as of December 31, 2020. Recurring Fair Value Measurements of as of December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Interest rate swaps $ — $ 20 $ — $ 20 Long-term debt 1 — 2,556 — 2,556 $ — $ 2,576 $ — $ 2,576 Recurring Fair Value Measurements of as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 1 $ — $ — $ 1 $ 1 $ — $ — $ 1 Liabilities Interest rate swaps $ — $ 18 $ — $ 18 Long-term debt 1 — 3,004 — 3,004 $ — $ 3,022 $ — $ 3,022 1 Long-term debt excludes finance leases, deferred financing and other and is carried at amortized cost. The outstanding carrying value was $2,387 million and $2,906 million at December 31, 2020 and 2019, respectively. 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 had no foreign exchange forward contracts at December 31, 2020. The fair value of foreign exchange forward contracts at December 31, 2019 was not material. The Company determines fair value of long-term debt that is actively traded in the secondary market using external pricing data, including any available quoted market prices and other observable inputs from available market information. For debt that is not actively traded in the secondary market, the fair value is based on the Company’s indicative borrowing cost derived from dealer quotes or discounted cash flows. 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. There were no transfers into or out of each of the levels of the fair value hierarchy during the years ended December 31, 2020 or December 31, 2019. |
Derivatives and hedging
Derivatives and hedging | 12 Months Ended |
Dec. 31, 2020 | |
Derivatives and Hedging | |
Derivatives and Hedging | 14. DERIVATIVES AND HEDGING Cash Flow Hedges The Company is exposed to fluctuations in interest rates under the Syndicated Credit Facility. On April 5, 2018, the Company entered into several interest rate swap agreements in order to fix the base interest rate to be paid over an aggregate amount of the Company’s variable rate long-term debt, at an average rate of 2.56% (excluding the margin specified in the Syndicated Credit Facility). The Company is also exposed to foreign exchange risks on certain sales and purchase contracts. The Company enters into foreign exchange forward contracts to hedge the exposure arising from expected foreign currency denominated cash flows on these sales and purchase contracts. As of January 1, 2019, the Company discontinued hedge accounting related to these sales and purchase contracts. The Company continued to hedge foreign exchange exposure on sales and purchase contracts for economic purposes. As of December 31, 2020 Notional amount Maximum Contract term Derivatives designated as hedging instruments Interest rate swaps 1 $ 1,000 1.3 years As of December 31, 2019 Notional amount Maximum Contract term Derivatives designated as hedging instruments Interest rate swaps 1 $ 1,000 2.3 years Derivatives not designated as hedging instruments Foreign exchange forward contracts Sales contracts settled in U.S. dollars Euro 10 0.1 years 1 In April 2021 and 2022, the Company will have interest rate swap maturities of $500 million, respectively. The effective portion of losses included in Other comprehensive loss, net of tax related to the Company’s interest rate swaps was $3 million, $13 million and $5 million for the years ended December 31, 2020, 2019 and 2018, respectively. The gain (loss) from foreign exchange forward contracts was not material for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, the estimated loss included in Accumulated other comprehensive income (loss) expected to be recognized in Net income (loss) in the next twelve months is $16 million. In implementing all its derivative financial instruments, the Company deals with counterparties and is therefore exposed to credit related losses in the event of non-performance by these counterparties. However, the Company deals with counterparties that are major financial institutions and does not expect any of the counterparties to fail to meet their obligations. Net Investment Hedge At December 31, 2018, the Company had designated $271 million of its Term Loan B as a hedge of its investment in certain U.S. subsidiaries. Foreign exchange gains and losses arising from the translation of the designated portion of the Term Loan B were recognized in Other comprehensive income (loss), net of tax to the extent that the hedges were effective and are recognized in the Consolidated Statements of Operations to the extent that the hedges were ineffective. The fair value of the designated portion of Term Loan B was $256 million as of December 31, 2018. As a result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent company to a U.S. parent company, the Company’s Syndicated Credit Facility is now in a USD functional currency entity. Due to this change, the net investment hedge was no longer necessary from the domestication date onwards. |
Accumulated other comprehensive
Accumulated other comprehensive income | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated other comprehensive income | |
Accumulated other comprehensive income (loss) | 15. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in the components of Accumulated other comprehensive income (loss) are as follows: Foreign Currency Translation Adjustments 1 Unrecognized (Loss) Gain on Derivatives 2 Loss on Pension and Other Postretirement Plans Total Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2017 $ 130 $ 7 $ (42) $ 95 Other comprehensive loss (19) (10) (4) (33) Tax benefit (expense) — 3 (1) 2 Balance as of December 31, 2018 $ 111 $ — $ (47) $ 64 Other comprehensive income (loss) 14 (12) (26) (24) Tax expense 1 — — 1 Balance as of December 31, 2019 $ 126 $ (12) $ (73) $ 41 Other comprehensive loss (47) (3) (43) (93) Reclassification to gain on disposal of discontinued operations 3 (78) (5) 15 (68) Tax benefit (expense) — — — — Balance as of December 31, 2020 $ 1 $ (20) $ (101) $ (120) 1 As a result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent company to a U.S. parent company, the Company’s net investment hedge was no longer necessary from the domestication date onwards. As of December 31, 2018, there was a $51 million net loss on hedge investments in foreign operations which is included in Foreign Currency Translation Adjustments. 2 As of January 1, 2019, the Company discontinued hedge accounting related to the Company’s foreign exchange contracts. The Company still applies hedge accounting to the interest rate swaps related to long-term debt. As of December 31, 2020, the balance consisted of unrecognized loss on the Company’s interest rate swaps. 3 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue | |
Revenue | 16. REVENUE As of December 31, 2020, the Company had $1.9 billion of remaining performance obligations, which represents the transaction price of firm orders less inception to date revenue recognized. Remaining performance obligations generally exclude unexercised contract options and indefinite delivery/indefinite quantity contracts. The Company expects to recognize revenue relating to existing performance obligations of approximately $1.1 billion , $0.5 billion , and $0.3 billion in the fiscal years 2021, 2022 and thereafter, respectively. Contract liabilities by segment are as follows: As of December 31, 2020 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 45 $ 234 $ 279 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 December 31, 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 year ended December 31, 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 within the Earth Intelligence segment. The Company’s primary sources of revenue are as follows: Year Ended December 31, 2020 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 633 $ — $ 633 Service revenues 1,081 9 — 1,090 Intersegment — 79 (79) — $ 1,081 $ 721 $ (79) $ 1,723 Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 560 $ — $ 560 Service revenues 1,085 21 — 1,106 Intersegment — 125 (125) — $ 1,085 $ 706 $ (125) $ 1,666 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 697 $ — $ 697 Service revenues 1,058 49 — 1,107 Intersegment 1 77 (78) — $ 1,059 $ 823 $ (78) $ 1,804 Certain of the Company’s contracts with customers in the Space Infrastructure segment include a significant financing component as payments are received from the customer more than one year after delivery of the promised goods or services. The Company recognized orbital revenue related to these contracts of $30 million, $31 million and $32 million for the years ended December 31, 2020, 2019 and 2018, respectively, 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 estimated COVID-19 related EAC growth of $27 million for the year ended December 31, 2020. 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 year ended December 31, 2020, the Company recorded an additional $42 million estimated loss on a commercial satellite program which includes significant development efforts further delayed by COVID-19. The estimated COVID-19 impact on this program was $16 million for the year ended December 31, 2020 and is included in our total COVID-19 impact discussed above. The approximate revenue based on geographic location of customers is as follows: Year Ended December 31, 2020 2019 2018 United States $ 1,406 $ 1,240 $ 1,238 Asia 96 161 213 Europe 84 69 54 Middle East 54 57 90 Australia 37 22 17 South America 25 97 133 Canada 10 10 49 Other 11 10 10 Total revenues $ 1,723 $ 1,666 $ 1,804 Revenues from significant customers is as follows: Year Ended December 31, 2020 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 774 $ 288 $ — $ 1,062 Commercial and other 307 433 (79) 661 Total revenues $ 1,081 $ 721 $ (79) $ 1,723 Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 790 $ 151 $ (1) $ 940 Commercial and other 295 555 (124) 726 Total revenues $ 1,085 $ 706 $ (125) $ 1,666 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 712 $ 105 $ (1) $ 816 Commercial and other 347 718 (77) 988 Total revenues $ 1,059 $ 823 $ (78) $ 1,804 The Company had revenues from a commercial customer in the Space Infrastructure segment that represented 11% of total revenues for the year ended December 31, 2020. The revenues from this commercial customer in the Space Infrastructure segment were less than 10%of the Company’s total revenues for the years ended December 31, 2019 and 2018, respectively. |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2020 | |
Segment information | |
Segment information | 17. 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 (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations. All prior-period amounts have been adjusted to reflect the reportable segment change. The Earth Intelligence reportable segment is a supplier of high resolution space-based optical and radar imagery products and analytics. The Space Infrastructure reportable segment is a provider of Space Infrastructure that designs, builds, integrates and tests solutions for space-based communication satellites, on-orbit servicing, robotic assembly and space exploration. The Company’s CODM measures the performance of each segment based on revenue and Adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization (“EBITDA”) adjusted for certain items affecting comparability as specified in the calculation. Certain items affecting comparability include restructuring, impairments, satellite insurance recovery, gain (loss) 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: Year Ended December 31, 2020 2019 2018 Revenues: Earth Intelligence $ 1,081 $ 1,085 $ 1,059 Space Infrastructure 721 706 823 Intersegment eliminations (79) (125) (78) Total revenues $ 1,723 $ 1,666 $ 1,804 Adjusted EBITDA: Earth Intelligence $ 513 $ 548 $ 516 Space Infrastructure (3) (17) (75) Intersegment eliminations (27) (29) (9) Corporate and other expenses (61) (86) (49) Restructuring — (18) (13) Transaction and integration related expense (7) (16) (33) Impairment losses, including inventory (47) (17) (652) Satellite insurance recovery — 183 — (Loss) gain on sale of assets (1) 136 33 CEO severance — (3) — Gain on remeasurement of Vricon equity interest 1 85 — — Depreciation and amortization (348) (376) (439) Interest expense, net (175) (219) (200) Interest income 2 3 2 — Equity in income from joint ventures, net of tax (1) (11) (2) (Loss) income from continuing operations before taxes $ (69) $ 77 $ (923) 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 Consolidated Statements of Operations. 2 The Company’s capital expenditures are as follows: Year Ended December 31, 2020 Earth Intelligence Space Infrastructure Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 147 $ 21 $ 53 $ 221 Intangible assets 79 1 7 87 $ 226 $ 22 $ 60 $ 308 Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 237 $ 16 $ 4 $ 257 Intangible assets 56 3 (2) 57 $ 293 $ 19 $ 2 $ 314 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 158 $ 22 $ (30) $ 150 Intangible assets 55 1 — 56 $ 213 $ 23 $ (30) $ 206 Substantially all of the Company’s long-lived tangible assets were in the United States as of December 31, 2020, 2019 and 2018, respectively. |
Impairment losses
Impairment losses | 12 Months Ended |
Dec. 31, 2020 | |
Impairment Losses | |
Impairment Losses | 18. IMPAIRMENT LOSSES Property, plant and equipment impairment There were no property, plant and equipment impairment losses recognized for the years ended December 31, 2020 or 2019. For the year ended December 31, 2018, the Company recognized impairment losses of $271 million on its property, plant and equipment. In December 2018, WorldView-4 experienced a failure in its control moment gyros, preventing the satellite from collecting imagery. As a result, the Company recognized an impairment loss of $150 million for the remaining book value of the satellite in the Earth Intelligence segment. In 2018, due to degradation of the GeoComm business, the Company recognized impairment losses of $121 million related to obsolescence and reduced future use of equipment and buildings. The 2018 impairment loss in the Space Infrastructure segment was based on fair value less cost of disposal for those assets in an orderly liquidation. Fair value was based on observable inputs where possible (Level 2), in which market data could be applied. However, due to the specialized nature of the majority of these assets, inputs for the valuation were unobservable (Level 3). Goodwill impairment There were no goodwill impairment losses recognized for the years ended December 31, 2020 or 2019. For the year ended December 31, 2018, the Company recorded a non-cash goodwill impairment loss of $142 million and $17 million related to its previously reported Imagery and SSL GeoComm reporting units, respectively. In conjunction with the Company’s revision of its reportable segments in the fourth quarter of 2019, these reporting units were revised and renamed to the Earth Intelligence and Space Infrastructure reporting units, respectively. Subsequent to October 1, 2018 and before the Company completed its annual goodwill impairment test, the Company experienced triggering events suggesting that the fair value of the Company had decreased substantially since October 1, 2018. These triggering events required an additional goodwill impairment test, which was completed as of December 31, 2018. The triggering events included a sustained decline in the Company’s stock price, further declines in the SSL GeoComm business, and the loss of the WorldView-4 satellite. Intangible asset impairment There were no intangible asset impairment losses recognized for the years ended December 31, 2020 or 2019. For the year ended December 31, 2018, the Company recognized impairment losses of $124 million. The Company identified triggering events for impairment during the second half of 2018 related to intangible assets of its GeoComm business, a reporting unit in the former Space Systems segment. Due to the decline in the GeoComm market, and the uncertainty surrounding the future of the Company’s GeoComm business, a $122 million impairment loss was recognized, primarily due to future cash flows associated with the intangible assets not being sufficient to cover the total book value of those assets. The Company also recognized an additional $2 million of impairment losses related to software intangible assets associated with the WorldView-4 satellite. Inventory impairment There were no inventory impairment losses recognized for the year ended December 31, 2020. For the years ended December 31, 2019 and 2018, the Company recognized inventory impairment losses of $3 million and $66 million, respectively, which are included in Product costs, excluding depreciation and amortization on the Consolidated Statements of Operations. In the third quarter of 2018, the Company re-evaluated the carrying value of its inventory that was previously pegged to forecasted usage. All GeoComm inventory subject to future use based on forecasts was assessed for possible obsolescence. The result of the reassessment of future usage of the on-hand inventory was inventory impairment of $66 million for the year ended December 31, 2018. Other impairment For the year ended December 31, 2020, the Company recognized an impairment loss of $33 million within the Earth Intelligence segment related to the write-off of a prepaid asset with a commercial provider of ground station services under a contract which was above current market value. In December 2020, the Company executed a new multi-year contract with the provider for services at reduced cost. As a result of the prior contract being terminated and the new contract being at market value, the Company concluded the remaining prepaid asset from the prior contract with the provider had no continuing value. For the years ended December 31, 2020, 2019 and 2018, the Company recognized orbital receivable impairment losses of $14 million, $14 million and $22 million, respectively, within the Space Infrastructure segment primarily due to a decrease in customer credit ratings. For the year ended December 31, 2018, the Company recognized impairment losses of $10 million related to future premium payments and other assets related to the WorldView-4 satellite. |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee benefit plans | |
Employee benefit plans | 19. EMPLOYEE BENEFIT PLANS Defined contribution plan The Company maintains a defined contribution plan for some of its employees in the U.S., whereby the Company pays contributions based on a percentage of the employees’ annual salary. For the years ended December 31, 2020, 2019 and 2018, the Company recorded expense of $16 million, respectively, related to the plan. Pension and other postretirement benefit plans The Company maintains a defined benefit pension plan covering a portion of its employees within the Space Infrastructure segment. The pension and other postretirement plan benefits were frozen on December 31, 2013. The defined benefit plan provides pension benefits based on various factors including prior earnings and length of service. The defined benefit plan is funded and the Company’s funding requirements are based on the plans’ actuarial measurement framework as established by the plan agreements or applicable laws. The funded plans’ assets are legally separated from the Company and are held by an independent trustee. The trustee is responsible for ensuring that the funds are protected as per applicable laws. The Company also provides for other postretirement benefits, comprised of life insurance covering a portion of its employees within the Space Infrastructure segment. The cost of these benefits is primarily funded out of Operating income (loss). The table below summarizes changes in the benefit obligation, the fair value of plan assets and funded status for the Company’s pension and other postretirement benefit plans, as well as the aggregate balance sheet impact. Pension Other Postretirement 2020 2019 2020 2019 Change in benefit obligation: Benefit obligation at beginning of year $ 583 $ 519 $ 14 $ 13 Service cost 2 2 — — Interest cost 17 21 — 1 Actuarial losses 55 71 — — Benefits paid (33) (30) — — Benefit obligation at end of year $ 624 $ 583 $ 14 $ 14 Change in fair value of plan assets: Fair value of plan assets at beginning of year $ 404 $ 352 $ — $ — Actuarial return on plan assets 40 70 — — Employer contributions 34 12 — — Benefits paid (31) (28) — — Expenses paid (3) (2) — — Fair value of plan assets at end of year 444 404 — — Unfunded status at end of year $ (180) $ (179) $ (14) $ (14) Liabilities recognized in the Consolidated Balance Sheets: Accrued compensation and benefits $ (1) $ (1) $ (1) $ (1) Pension and other postretirement benefits (179) (178) (13) (13) $ (180) $ (179) $ (14) $ (14) The $41 million increase in the pension benefit obligation from 2019 to 2020 was primarily due to the decrease in the discount rate. The $40 million increase in the fair value of plan assets from 2019 to 2020 was primarily due to the return on assets. The accumulated benefit obligation for the defined pension benefit plans was $624 million and $583 million at December 31, 2020 and 2019, respectively. Amounts recognized in Accumulated other comprehensive (loss) income consist of the following: Pension Other Postretirement 2020 2019 2020 2019 Net (loss) gain $ (110) $ (70) $ 9 $ 12 The following table summarizes the weighted average assumptions used to determine the benefit obligations for the Company’s pension and other postretirement plans at December 31: Pension Other Postretirement 2020 2019 2020 2019 Discount rate 2.2 % 3.0 % 2.2 % 3.0 % The following table summarizes the components of net periodic benefit cost for the Company’s pension and other postretirement benefit plans for the years ended December 31: Pension Other Postretirement 2020 2019 2018 2020 2019 2018 Interest cost $ 17 $ 21 $ 19 $ — $ 1 $ 1 Expected return on plan assets (24) (24) (27) — — — Amortization of net loss (gain) 1 — — — (1) (1) Settlement gain — — — (4) — — Expenses paid 2 2 2 — — — Net periodic benefit cost $ (4) $ (1) $ (6) $ (4) $ — $ — The following table summarizes the components recognized in Other comprehensive loss (income) for the Company’s pension and other postretirement benefit plans for the years ended December 31: Pension Other Postretirement 2020 2019 2018 2020 2019 2018 Net loss (gain) $ 40 $ 25 $ 9 $ 4 $ — $ (2) Amortization of net (loss) gain (1) — — — 1 1 Total recognized in other comprehensive loss (income) $ 39 $ 25 $ 9 $ 4 $ 1 $ (1) Total recognized in net periodic benefit cost (credit) and other comprehensive loss (income) $ 35 $ 24 $ 3 $ — $ 1 $ (1) The following table summarizes the weighted average assumptions used to determine the net periodic benefit (credit) cost for the Company’s pension and other postretirement benefit plans for the years ended December 31: Pension Other Postretirement 2020 2019 2018 2020 2019 2018 Discount rate 3.0 % 4.1 % 3.4 % 3.0 % 4.1 % 3.4 % Expected long-term return on plan assets 6.5 % 7.0 % 7.0 % N/A N/A N/A The expected long-term return on plan assets assumption represents the average rate that the Company expects to earn over the long-term on the assets of the Company’s benefit plans, including those from dividends, interest income and capital appreciation. The Company utilizes a third-party consultant to assist in the development of the expected long- term return on plan assets, which is based on expectations regarding future long-term rates of return for the plans’ investment portfolio, with consideration given to the allocation of investments by asset class and historical rates of return for each individual asset class. Plan Assets. The Committee has established a target allocation that the plan assets may be invested in for each major asset category and has established guidelines regarding diversification within asset categories to limit risk and exposure to a single or limited number of securities. The investment manager is required to rebalance the portfolio within two percentage points for any individual asset or combination of assets defined within policy targets. Asset allocation targets are re-balanced quarterly and re-assessed annually for the upcoming year. The investments of the plan include a diversified portfolio of both equity and fixed income investments. Equity investments are further diversified across U.S. and international stocks, small to large capitalization stocks, and growth and value stocks. Fixed income assets are diversified across U.S. and international issuers, corporate and governmental issuers and credit quality. The following table presents a summary of target asset allocations for each major category of the plan assets as well as the actual asset allocations at December 31, 2020: Asset Allocation Target Actual Cash and cash equivalents 1 % 1 % U.S. and global equity securities 71 % 71 % Fixed income 28 % 28 % 100 % 100 % Cash and cash equivalents consist of cash and short-term investments. U.S. and global equity securities, fixed income and other investment assets are primarily commingled fund investments. The pension plans’ commingled fund investments are managed by several fund managers and are valued at the net asset value per share for each fund. Although the majority of the underlying assets in the funds consist of actively traded equity securities and bonds, the unit of account is considered to be at the fund level . These funds are traded daily and settled the following day at the net asset value per share. The Committee regularly monitors the investment of plan assets to ensure that the actual asset allocation remains in proximity to the target. The Committee also regularly measures and monitors investment risk through ongoing performance reporting and investment manager reviews. The following table presents the fair value of the Company’s pension plan assets by asset category segregated by level within the fair value hierarchy, as described below: December 31, 2020 December 31, 2019 Asset Category Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3 $ — $ — $ 3 $ 5 $ — $ — $ 5 International equity securities — — — — — — 1 1 Commingled funds 1 441 398 Total assets at fair value $ 3 $ — $ — $ 444 $ 5 $ — $ 1 $ 404 1 Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not required to be classified in the fair value hierarchy table. The total fair value of these amounts are presented in this table to permit reconciliation of the fair value hierarchy to the amounts presented for total defined benefit pension plan assets. Contributions. 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 in the first quarter of 2020 and deferred the remaining $15 million in payments for 2020 until the fourth quarter of 2020 when payment was made in full. In December 2020, the Company prefunded approximately $16 million to its qualified pension plan. Due to the December 2020 prefunding, there are no further required cont ributions for the Company’s qualified pension plan for the year ended December 31, 2021. Estimated Future Benefit Payments. 2021 2022 2023 2024 2025 2025 through 2029 Pension $ 31 $ 32 $ 32 $ 32 $ 32 $ 159 Other postretirement 1 1 1 1 1 5 $ 32 $ 33 $ 33 $ 33 $ 33 $ 164 |
Stock-based compensation plans
Stock-based compensation plans | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based compensation plans | |
Stock-based compensation plans | 20. STOCK-BASED COMPENSATION PLANS The Company’s stock-based compensation plans were established to attract and retain key personnel by providing them the opportunity to acquire an equity interest in the Company or other incentive compensation measured by reference to the value of shares or other performance objectives and align the interests of key personnel with those of stockholders. Long-Term Incentive Plans Omnibus Equity Incentive Plan – incentive units, restricted stock units (“RSUs”), SARs and performance stock units (“PSUs”) in order to provide a long-term incentive compensation to such persons. No awards will be made under the Omnibus Plan to non-employee directors. 1,100,000 shares were reserved for issuance under the Omnibus Plan. The Omnibus Plan has a term of ten years and shares may be issued by the Company from treasury. As of December 31, 2019, no further awards shall be granted under the Omnibus Plan. 2019 Incentive Award Plan – Deferred Stock Unit Plan – Legacy Employee Stock Purchase Plan – Maxar Technologies Inc. Employee Stock Purchase Plan – DigitalGlobe Equity Plan – Stock Appreciation Rights Certain awards issued under the Pre-2017 Plans, the 2017 Plan and Omnibus Plan remain outstanding as of December 31, 2020. The SARs issued under the Pre-2017 Plans vest over a period of three years, in the amount of one issued 2017 one from SARs Accounted for as Liability Classified Awards A summary of the SARs accounted for as liability classified awards for the year ended December 31, 2020 is presented below: Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value SARs outstanding at December 31, 2019 579,320 $ 63.12 Exercised — — Cancelled or expired (197,100) 67.92 SARs outstanding at December 31, 2020 382,220 60.65 1.09 $ — SARs vested and expected to vest at December 31, 2020 382,220 60.65 1.09 $ — SARs exercisable at December 31, 2020 381,470 $ 60.68 1.08 $ — No SARs accounted for as liability classified awards were granted during the years ended December 31, 2020 or 2019. No SARs were exercised during the years ended December 31, 2020 or 2019, respectively. The total intrinsic value of SARs exercised during the year ended December 31, 2018 was not significant. For the year ended December 31, 2020, total unrecognized compensation expense related to nonvested SARs accounted for as liability classified awards was not significant. SARs Accounted for as Equity Classified Awards A summary of the SARs accounted for as equity classified awards for the year ended December 31, 2020 is presented below: Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value SARs outstanding at December 31, 2019 925,591 $ 51.18 Granted — — Exercised — — Cancelled or expired (115,064) 50.67 SARs outstanding at December 31, 2020 810,527 51.25 6.32 $ — SARs vested and expected to vest at December 31, 2020 810,527 51.25 6.32 $ — SARs exercisable at December 31, 2020 713,859 $ 50.95 6.25 $ — The weighted average grant-date estimated fair value of SARs accounted for as equity classified awards granted during the year ended December 31, 2018 was C$10.37. No SARs accounted for as equity classified awards were granted during the years ended December 31, 2020 or 2019. No SARs were exercised during the years ended December 31, 2020 or 2019, respectively. The total intrinsic value of SARs exercised during the year ended December 31, 2018 was not significant. As of December 31, 2020, total unrecognized compensation expense related to nonvested SARs accounted for as equity classified awards was not significant. Restricted Share Units The Company issues RSUs to certain employees under the Omnibus Plan and 2019 Plan. The RSUs vest over a period of three years, in the amount of one RSUs Accounted for as Liability Classified Awards A summary of the RSUs accounted for as liability classified awards for the year ended December 31, 2020 is presented below: Weighted Average Number of Grant Date Awards 1 Fair Value 1 Nonvested RSUs at December 31, 2019 946,281 $ 6.93 Granted — — Vested (291,989) 6.93 Modified 2 (532,365) 6.93 Cancelled or expired (121,927) 6.92 Nonvested RSUs at December 31, 2020 — $ — 1 RSUs under the 2019 Plan 2 Liability classified RSUs modified to be equity settled During the fourth quarter of 2020, the Company modified its outstanding 532,365 RSUs accounted for as liability classified awards to be equity settled on the vesting date. This modification resulted in an incremental expense of $3 million on the modification date and affected 37 employees. As a result of the modification, there were no remaining outstanding nonvested RSU liability settled awards as of December 31, 2020. For the year ended December 31, 2020, the Company paid out $4 million for the vesting of RSUs accounted for as liability classified awards. There was no vesting of liability classified RSU awards for the years ended December 31, 2019 or 2018, respectively. RSUs Accounted for as Equity Classified Awards As part of the acquisition of DigitalGlobe, the Company provided replacement RSUs for a certain portion of the unvested RSU’s previously granted to DigitalGlobe employees under the DigitalGlobe Equity Plan. The remaining replacement RSUs will fully vest in 2021. A summary of the status of the Company’s nonvested RSU awards under the 2019, Omnibus Plan and the DigitalGlobe Equity Plan as of December 31, 2020 and changes for the year ended December 31, 2020 is presented below: Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Awards 1 Fair Value 1 Awards 2 Fair Value 2 Awards 3 Fair Value 3 Nonvested RSUs at December 31, 2019 986,735 $ 7.91 247,498 $ 36.42 100,671 $ 54.57 Granted 2,083,425 13.57 — — — — Vested (409,551) 7.75 (159,679) 45.69 (71,427) 54.57 Modified 4 532,365 28.74 — — — — Cancelled or expired (243,005) 12.22 (17,446) 48.45 (2,928) 54.57 Nonvested RSUs at December 31, 2020 2,949,969 $ 15.33 70,373 $ 12.41 26,316 $ 54.57 1 RSUs under the 2019 Plan 2 RSUs under the Omnibus Plan 3 RSUs under the DigitalGlobe Equity Plan 4 Liability classified RSUs modified to be equity settled During the years ended December 31, 2020, 2019, and 2018, the total fair value of RSUs that vested was $14 million, $14 million and $19 million, respectively. During the year ended December 31, 2020, there were 640,657 RSU awards that vested. As of December 31, 2020, total unrecognized compensation expense related to nonvested RSUs was $19 million and is expected to be recognized over a weighted average remaining period of 1.1 years. Performance Share Units The Company issues PSUs to certain employees under the Omnibus Plan and 2019 Plan. The PSUs vest over a period of three years from the beginning date of a pre-determined performance period to the extent the Company has met its adjusted cash leverage (ACL) performance criteria during the performance period. Each unit has the ability to earn up to two common shares and the total number of shares earned is based upon both the ACL and total shareholder return (TSR), which compares the Company's relative TSR performance against the total shareholder return of the Russell 2000 index over the term of the award. Performance related to both the ACL and TSR can be 0-200%. The total payout is the average of the ACL and TSR and the maximum payout percentage for all PSUs granted by the Company is 200%. For PSUs granted in 2019, the payout for performance up to 100% will be in equity and any performance greater than 100% will be paid out in cash. For PSUs granted in 2020, the payout for performance is settled completely in equity. A summary of the PSU awards for the year ended December 31, 2020 is presented below: Weighted Average Number of Grant Date Awards Fair Value Nonvested PSUs at December 31, 2019 963,402 $ 6.83 Granted 371,470 20.72 Performance adjustment 240,837 6.54 Vested (481,674) 6.54 Cancelled or expired (53,355) 8.80 Nonvested PSUs at December 31, 2020 1,040,680 $ 11.76 For the year ended December 31, 2020, the Company paid out $3 million for the vesting of PSUs. There was no vesting of PSU awards for the year ended December 31, 2019. There were no active PSU awards for the year ended December 31, 2018. As of December 31, 2020, total unrecognized compensation expense related to nonvested PSUs was $10 million and is expected to be recognized over a weighted average remaining period of 1.2 years. Deferred Share Units A summary of the DSU awards for the year ended December 31, 2020 is presented below: Number of Awards Weighted Average Issuance Price DSUs outstanding at December 31, 2019 65,610 C$ 52.76 Issued — — Redeemed (32,715) 49.50 DSUs outstanding at December 31, 2020 32,895 C$ 56.01 During the years ended December 31, 2020 and 2019, the total intrinsic value of redeemed DSUs was not material. There were 32,715 DSUs and 41,993 DSUs redeemed for the years ended December 31, 2020 and December 31, 2019, respectively. No DSUs were redeemed during the year ended December 31, 2018. Expense related to DSUs is recognized fully as stock-based compensation expense at the time they are issued. There were no DSUs issued for the years ended December 31, 2020 or 2019. Stock-based compensation expense The following table presents stock-based compensation expense (benefit) from continuing operations included in the Company’s Consolidated Statements of Operations: Year ended December 31, Classification 2020 2019 2018 Stock-based compensation expense Selling, general, and administrative expense, Product costs, and Service costs $ 43 $ 20 $ 20 Valuation of stock-based compensation awards Valuation of Liability Classified SARs The fair value of the SARs were estimated at each reporting period using the Black-Scholes option pricing model with the following weighted average assumptions: Year Ended December 31, 2020 1 2019 2018 2 Risk-free interest rate — % 1.7 - 1.9 % 1.7 - 1.9 % Dividend yield — % 0.5 % 1.8 % Volatility — % 57 - 130 % 14 - 23 % Expected lives (in years) — 0.2 - 4.6 0.3 - 5.4 1 2 Valuation of Equity Classified SARs and DSUs The fair value of equity classified SARs and DSUs were estimated on the date of the grant or the date of accounting reclassification using the Black-Scholes option pricing model with the following weighted average assumptions: Year Ended December 31, 2020 1 2019 1 2018 2 Risk-free interest rate 1.9 - 2.3 % Dividend yield 2.2 - 9.1 % Volatility 22 - 41 % Expected lives (in years) 3.0 - 7.0 1 2 Valuation of PSUs and RSUs The fair value of PSUs not subject to a market condition (ACL) and equity classified RSUs is determined based on the closing price of the Company’s common stock on the grant date. PSUs that are subject to the market condition (TSR) are valued using a Monte Carlo simulation model, which requires certain assumptions, including the risk-free interest rate, expected volatility, and the expected term of the award. The risk-free interest rate used in the Monte Carlo simulation model is based on zero-coupon yields implied by U.S. Treasury issues with remaining terms similar to the performance period on the PSUs. The performance period of the PSUs represents the period of time between the PSU grant date and the end of the performance period. Expected volatility is based on historical data of the Company and peer companies over the most recent time period equal to the performance period. For PSU grants during the years ended December 31, 2020 and 2019 the assumptions used in the Monte Carlo simulation are as follows: Year Ended December 31, 2020 2019 Risk-free interest rate 0.9 % 2.2 - 2.3 % Dividend yield 0.3 % 0.5 - 0.9 % Volatility 79 % 63 - 67 % Expected lives (in years) 2.8 2.9 - 3.0 The risk-free interest rate for 2020 and 2019 is based on the U.S. Treasury yield with the remaining term equal to the expected life assumed at the date of the grant. The dividend yield is based on the expected annual dividend yield at date of grant. The expected lives are based on the Company’s actual historical exercise experience. Volatility is calculated using a rate based upon the historical volatility of the Company’s common stock. Forfeitures are estimated at the time of grant based upon historical information. Forfeitures will be revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Income taxes | 21. INCOME TAXES The amounts disclosed within the income tax footnote represent those attributable to continuing operations. The components of (loss) income before income taxes were: Year Ended December 31, 2020 2019 2018 U.S. $ (69) $ 77 $ (806) Non-U.S. — — (117) (Loss) income before taxes $ (69) $ 77 $ (923) Income tax (benefit) expense is comprised of the following: Year Ended December 31, 2020 2019 2018 Current tax (benefit) expense U.S. $ (5) $ 5 $ — Non-U.S. — — — (5) 5 — Deferred tax benefit U.S. (17) — (2) Non-U.S. — — (46) (17) — (48) Income tax (benefit) expense $ (22) $ 5 $ (48) A reconciliation of the U.S. federal tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2020 2019 2018 U.S. statutory income tax rate 21 % 21 % 21 % Expected income tax (benefit) expense at statutory rate $ (14) $ 16 $ (194) Non-deductible expenses 8 15 6 Tax on international operations — (1) (45) Change in valuation allowance 49 (108) 96 Base Erosion and Anti-Abuse Tax (5) 5 — Outside basis difference in assets held for sale (39) 78 — Tax credits (3) (1) (9) Non-deductible goodwill impairment — — 98 Remeasurement of previously held equity interest (18) — — Other — 1 — Income tax (benefit) expense $ (22) $ 5 $ (48) Effective income tax rate 32 % 6 % 5 % Significant components of deferred tax assets and liabilities are as follows: Year Ended December 31, 2020 2019 2018 Tax benefit of losses carried forward $ 209 $ 219 $ 222 Tax credits 93 82 91 Construction contract liabilities — 89 77 Property and equipment — — 15 Trade and other payables 35 41 38 Employee benefits 52 41 49 Unrealized gains and losses 20 6 6 Other 1 18 21 Deferred tax assets 410 496 519 Valuation allowance (228) (231) (304) Deferred tax assets, net of valuation allowance 182 265 215 Construction contract liabilities (10) — — Property and equipment (55) (47) — Goodwill and intangibles (106) (124) (213) Outside basis difference in assets held for sale — (78) — Other — (10) (2) Deferred tax liabilities (171) (259) (215) Deferred tax assets, net $ 11 $ 6 $ — The Company assesses the deferred tax assets for recoverability and, based upon all available evidence, establishes a valuation allowance to reduce the deferred tax assets to the amount that is more-likely-than-not realizable. The valuation allowance decreased $3 million from December 31, 2019 to December 31, 2020. This decrease was primarily due to the impact of current year operations, offset by the taxable gain recognized on the sale of MDA and adjustments to prior year deferred taxes. During 2019, in connection with the MDA Transaction, the Company re-evaluated its prior permanent reinvestment assertion and concluded that it could no longer assert that the basis difference related to its investment was permanently reinvested. Accordingly, the Company established a deferred tax liability of approximately $78 million on the taxable temporary difference associated with its investment. In connection with the completion of the MDA Transaction, taxable gain was recognized in 2020 resulting in a release of the taxable temporary difference associated with its investment. As of December 31, 2020, the Company has approximately $791 million, $822 million, and $16 million of federal, state, and non-U.S. net operating loss (“NOL”) carryforwards. The U.S. Domestication does not impact the availability of the losses carried forward to future years. We have recorded a $2 million income tax receivable as a result of an anticipated NOL carryback resulting from the Vricon Acquisition. The following table summarizes the NOL carryforwards by jurisdiction: Expiration Period December 31, 2020 Federal 2035 - 2037 $ 512 None 279 State 2022 - 2038 756 None 66 Non-U.S. None 16 The Company also has U.S. federal and state tax credits carried forward of $77 million and $11 million as of December 31, 2020, relating to research and development expenditures set to expire between 2021 and 2040 and state research credits with no expiry. Additionally, the Company has U.S. foreign tax credits carried forward of $5 million set to expire between 2021 and 2030. The following table summarizes the changes in unrecognized tax benefits: Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 7 $ — $ — Gross increases related to prior period tax positions 2 6 — Gross increases related to current period tax positions 1 1 — Gross decreases related to prior period tax positions (1) — — Balance, end of year $ 9 $ 7 $ — As of December 31, 2020, there were $9 million of unrecognized tax benefits that, if recognized, would be offset by changes in the deferred tax assets. It is not anticipated that a material reduction of unrecognized tax benefits will occur within the next twelve months. The Company and its subsidiaries file income tax returns in the United States and various foreign jurisdictions. With some exceptions, the Company remains subject to income tax examination in the United States for years after 2002. The Company records interest and penalties accrued or recovered in relation to unrecognized tax benefits in income tax expense. The Company has not recognized any interest and penalties in the three-year comparative period due to available attributes. |
Net income (loss) per common sh
Net income (loss) per common share | 12 Months Ended |
Dec. 31, 2020 | |
Net income (loss) per common share | |
Earnings per share | 22. NET INCOME (LOSS) PER COMMON SHARE The following table includes the calculation of basic and diluted net income (loss) per common share: Year Ended December 31, 2020 2019 2018 (Loss) income from continuing operations $ (46) $ 83 $ (873) Income (loss) from discontinued operations, net of tax 349 26 (377) Net income (loss) $ 303 $ 109 $ (1,250) Weighted average number of common shares outstanding-basic 60.7 59.6 58.1 Weighted dilutive effect of equity awards — 0.6 — Weighted average number of common shares outstanding-diluted 60.7 60.2 58.1 Basic net income (loss) per common share: (Loss) income from continuing operations $ (0.76) $ 1.39 $ (15.03) Income (loss) from discontinued operations, net of tax 5.75 0.44 (6.49) Basic net income (loss) per common share $ 4.99 $ 1.83 $ (21.52) Diluted net income (loss) per common share: (Loss) income from continuing operations $ (0.76) $ 1.38 $ (15.03) Income (loss) from discontinued operations, net of tax 5.75 0.43 (6.49) Diluted net income (loss) per common share $ 4.99 $ 1.81 $ (21.52) For the years ended December 31, 2020, 2019, and 2018 approximately 4 million, 2 million and 3 million awards, respectively, were excluded from the diluted weighted average number of ordinary common shares outstanding calculation because their effect would have been anti-dilutive. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and contingencies | |
Commitments and contingencies | 23. COMMITMENTS AND CONTINGENCIES Contingencies in the Normal Course of Business As discussed in Note 6, satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price of the satellite is contingent upon in-orbit performance of the satellite. The Company’s ultimate receipt of orbital performance incentives is subject to the continued performance of its satellites generally over the contractually stipulated life of the satellites. A complete or partial loss of a satellite’s functionality can result in loss of orbital receivable payments or repayment of amounts received by the Company under a warranty payback arrangement. The Company generally receives the present value of the orbital receivables if there is a launch failure or a failure caused by a customer error, but will forfeit some or all of the orbital receivables if the loss is caused by satellite failure or as a result of Company error. The Company recognizes orbital performance incentives in the financial statements based on the amounts that are expected to be received and believes that it will not incur a material loss relating to the incentives recognized. With respect to the Company’s securitized liability for the orbital receivables, upon the occurrence of an event of default under the securitization facility agreement or upon the occurrence of limited events, the Company may be required to repurchase on demand any effected receivables at their then net present value. As discussed in Note 6, during the year ended December 31, 2020, the Company did not sell any eligible orbital receivables or repurchase any orbital receivables. During the year ended December 31, 2019, the Company did not sell any eligible orbital receivables and repurchased $24 million of specifically identified orbital receivables. The orbital receivables were repurchased as a result of our customer transferring the obligation to another entity which did not meet the credit criteria of our lenders. The Company may incur liquidated damages on programs as a result of delays due to slippage, or for programs which fail to meet all milestone requirements as outlined within the contractual arrangements with customers. Losses on programs related to liquidated damages result in a reduction of revenue. Changes in estimates related to contracts accounted for using the cost-to-cost method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes. Unrecoverable costs on contracts that are expected to be incurred in future periods are recorded in program cost in the current period. Additionally, construction contracts may have termination for default clauses which if triggered could result in potential losses and legal disputes. The Company enters into agreements in the ordinary course of business with resellers and others. Most of these agreements require the Company to indemnify the other party against third-party claims alleging that one of its products infringes or misappropriates a patent, copyright, trademark, trade secret or other intellectual property right. Certain of these agreements require the Company to indemnify the other party against claims relating to property damage, personal injury or acts or omissions by the Company, its employees, agents or representatives. From time to time, the Company has made guarantees regarding the performance of its systems to its customers. Some of these agreements do not limit the maximum potential future payments the Company could be obligated to make. The Company evaluates and estimates potential losses from such indemnification based on the likelihood that the future event will occur. The Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such indemnification and guarantees in the Consolidated Financial Statements. The Company has entered into industrial cooperation agreements, sometimes referred to as offset agreements, as a condition to entering into contracts for its products and services from certain customers in foreign countries. These agreements are designed to return economic value to the foreign country and may be satisfied through activities that do not require a direct cash payment, including transferring technology, providing manufacturing, training and other consulting support to in-country projects. These agreements may provide for penalties in the event the Company fails to perform in accordance with offset requirements. The Company has historically not been required to pay any such penalties. 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 19 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., No. 1:19-cv-00124-WJM-SKC in the United States District Court for the District of Colorado (the “Colorado Action”), naming Maxar and members of management as defendants alleging, among other things, that the Company’s public disclosures were deficient in violation of the federal securities laws and seeking monetary damages. On October 7, 2019, the lead plaintiff filed a consolidated amended complaint alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against the Company and members of management in connection with the Company’s public disclosures between March 26, 2018 and January 6, 2019. The consolidated complaint alleges that the Company’s statements regarding the AMOS-8 contract, accounting for its GEO communications assets, and WorldView-4 were allegedly false and/or misleading during the class period. On September 11, 2020, the court granted in part, and denied in part, defendants’ motion to dismiss. Also, in January 2019, a Maxar stockholder resident in Canada issued a putative class action lawsuit captioned Charles O’Brien v. Maxar Technologies Inc., No. CV-19-00613564-00CP in the Ontario Superior Court of Justice against Maxar and members of management claiming misrepresentations in Maxar’s public disclosures and seeking monetary damages. On November 15, 2019, Mr. O’Brien and another Maxar stockholder resident in Canada issued a new putative class action lawsuit captioned Charles O’Brien v. Maxar Technologies Inc., No. CV-19-00631107-00CP, naming Maxar and certain members of management and the board of directors as defendants as well as Maxar’s auditor, KPMG LLP. On February 7, 2020, the January 2019 lawsuit was discontinued. The Statement of Claim alleges that the Company’s statements regarding the AMOS-8 contract, accounting for its GEO communications assets, and WorldView-4 were false and/or misleading during the class period and claims damages of $700 million. On April 24, 2020, the plaintiffs served their motion record for leave under the Securities Act (Ontario) and to certify the action as a class proceeding, which motion is currently pending. The Company believes that these cases are without merit and intends to vigorously defend against them. On October 21, 2019, a Maxar stockholder filed a putative class action lawsuit captioned McCurdy v. Maxar Technologies Inc., et al., No. I9CV35070 in the Superior Court of the State of California, County of Santa Clara, naming Maxar, and certain members of management and the board of directors as defendants. The lawsuit alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 in connection with the Company’s June 2, 2017 Registration Statement and prospectus filed in anticipation of its October 5, 2017 merger with DigitalGlobe. On April 30, 2020, the plaintiff filed an amended complaint alleging the same causes of action against the same set of defendants as set forth in his original complaint. The lawsuit is based upon many of the same underlying factual allegations as the Colorado Action. Specifically, the lawsuit alleges the Company’s statements regarding its accounting methods and risk factors, including those related to the GEO communications business, were false and/or misleading when made. On January 24, 2021, the court granted in part, and denied in part, defendants’ motion to dismiss. The Company believes that this lawsuit is without merit and intends to vigorously defend against it. On November 14, 2019, a derivative action was filed 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., 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. The Company expenses legal fees related to contingencies as incurred. |
Supplemental cash flow
Supplemental cash flow | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental cash flow | |
Supplemental cash flow | 24. SUPPLEMENTAL CASH FLOW Selected cash payments and non-cash activities are as follows: Year Ended December 31, 2020 2019 2018 Supplemental cash flow information: Cash paid for interest $ (205) $ (193) $ (152) Supplemental non-cash investing and financing activities: Accrued capital expenditures $ 13 $ 19 $ 19 |
Subsequent event
Subsequent event | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent event | |
Subsequent event | 25. SUBSEQUENT EVENT SXM-7 satellite On January 27, 2021, Sirius XM Holdings Inc. (“Sirius XM”) announced in its public filings with the U.S. Securities and Exchange Commission that there is an evaluation underway to determine the extent of damage to its SXM-7 satellite caused by certain events on January 16, 2021. The SXM-7 satellite was constructed by the Company and launched by Sirius XM on December 13, 2020. As of December 31, 2020, the satellite was functioning as intended. As of February 11, 2021, although there can be no assurance of full recovery of the operations of the SXM-7 satellite, the Company was continuing the process of troubleshooting and diagnosing the situation. However, on that date, Sirius XM asserted to the Company that the SXM-7 satellite is a “total loss”. As previously disclosed, the Company’s contractual arrangements with Sirius XM for the construction of the SXM-7 satellite include industry-standard provisions regarding, among other things, transfer of risk of loss upon launch. As of December 31, 2020, the Company had $15 million in unbilled receivables that are collectible from Sirius XM upon in-orbit acceptance of the SXM-7 satellite (the “Acceptance Receivables”) and $14 million in orbital receivables that are collectible over the satellite’s expected in-orbit life of 15 years (the “Orbital Receivables” and, collectively with the Acceptance Receivables, the “Receivables”), for which the entire amount of the Receivables were considered collectible. If the SXM-7 satellite is validly declared a “total loss” pursuant to the Company’s contractual arrangements, the collectability of the entire $29 million of Receivables would be at risk. In addition to the risk associated with the outstanding receivables, the Company may be exposed to liquidated damages not previously accrued at December 31, 2020 of up to $9 million. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of preparation The Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all consolidated subsidiary entities. The Company’s Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and the rules and regulations of the U.S. Securities and Exchange Commission. All intercompany balances and transactions are eliminated on consolidation. The Company's Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. References to “C$” refer to Canadian currency. Unless otherwise indicated, amounts provided in the Notes pertain to continuing operations (See Note 4 for information on discontinued operations). |
Use of estimates, assumptions and judgments | Use of estimates, assumptions and judgments The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. |
Revisions to accumulated other comprehensive income (loss) | Revisions to accumulated other comprehensive income (loss) During the year ended December 31, 2020, the Company identified an immaterial error in the historical balances of Accumulated other comprehensive income (loss) related to Space Infrastructure postretirement benefits for periods beginning prior to 2016. In the accompanying Balance Sheets, the balances for Accumulated other comprehensive income (loss) and Accumulated deficit as of December 31, 2019, 2018 and 2017 have been revised to correct the immaterial error in prior periods. In the previously issued Consolidated Financial Statements, Accumulated other comprehensive income (loss) and Accumulated deficit were misstated by $18 million as of December |
Leases | Leases The Company has both operating and finance leases. The majority of the Company’s leases are operating leases related to buildings. The Company’s finance leases are primarily related to furniture and equipment. The Company determines if a contract is or contains a lease at inception based on whether it conveys the right to control the use of an identified asset. The Company recognizes lease liabilities and right-of-use assets based on the present value of the future minimum lease payments over the lease term at commencement date. Right-of-use assets are adjusted for any prepayments, lease incentives received, and initial direct costs incurred. If the rate implicit in the lease is not readily determinable, the Company’s incremental borrowing rate with a similar term to the lease term is used to determine the present value of future payments and appropriate lease classification. The lease term includes renewal options that are reasonably certain to be exercised. The Company elected the practical expedient not to separate lease and non-lease components. The Company also elected to include in minimum lease payments any executory costs that are part of the fixed lease payment. Some of the Company’s building lease agreements contain incentives for leasehold improvements. If the leasehold improvement has been determined to be owned by the lessee, the Company generally recognizes the incentive as a reduction to the right-of-use asset. The Company uses the date of initial possession as the commencement date, which is generally when the Company has been given rights to access the space. Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets and are recognized as lease expense on a straight-line basis in the Consolidated Statements of Operations. Certain leasing arrangements require variable payments, such as insurance and tax payments. Variable lease payments that do not depend on an index or rate are excluded from lease payments in the measurement of the right-of-use asset and lease liability and are recognized as expense in the period in which the payment occurs. The Company does not have any material restrictions or covenants in our lease agreements, sale leaseback transactions or residual value guarantees. The Company recognizes fixed lease expense for operating leases on a straight-line basis |
Business combinations and divestitures | Business combinations and divestitures Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date. The excess of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results when the business is classified as held for sale. The results of discontinued operations are reported in Income (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. Assets and liabilities of a discontinued operation are reported separately in the Consolidated Balance Sheets as held for sale and classified as either current or non-current in the prior periods. If it is probable that the sale will occur and proceeds will be collected within one year of meeting the held for sale criteria both assets and liabilities classified as held for sale are reported in the current period Consolidated Balance Sheet as current. |
Foreign currency | Foreign currency Assets and liabilities of non-U.S. subsidiaries that operate in local currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments, net of tax, recorded in Accumulated other comprehensive income (loss) within the Stockholders’ equity section of the Consolidated Balance Sheets. Income and expense accounts are translated at average monthly exchange rates during the year. |
Revenue recognition | Revenue recognition Revenue is recognized in accordance with the five-step model set forth by ASC 606, which involves identification of the contract(s), identification of performance obligations in the contract, determination of the transaction price, allocation of the transaction price to the previously identified performance obligations and recognition of revenue as the performance obligations are satisfied. Revenue is measured at the fair value of consideration received or receivable, net of discounts and after eliminating intercompany sales. When consideration received from customers includes advance payments that contain a financing element, the Company imputes interest on such advance payments and recognizes such amounts as a component of revenue. Contract costs generally include direct costs such as materials, labor, and subcontract costs. Costs are expensed as incurred except for incremental costs incurred to obtain or fulfill a contract, which are capitalized and amortized on a systematic basis consistent with the transfer of goods or services to the customer to which the capitalized costs relate. As of December 31, 2020 and 2019, current costs to obtain or fulfill a contract were $6 million, respectively, and are included in Prepaid and other current assets within the Consolidated Balance Sheets. As of December 31, 2020 and, 2019, non-current costs to obtain or fulfill a contract were $41 million and $37 million, respectively, and are included in Other non-current assets within the Consolidated Balance Sheets. Space Infrastructure Revenue in the Space Infrastructure segment is primarily generated from long-term construction contracts. Due to the long-term nature of these contracts, the Company generally recognizes revenue over time using the cost-to-cost method to measure progress. Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred to estimated total costs-at-completion ("EAC"). An EAC includes all direct costs and indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in determining the EAC. Changes to an EAC are recorded as a cumulative adjustment to revenue. During the year ended December 31, 2020, the Company incurred an estimated program loss of $42 million on a commercial satellite contract within the Space Infrastructure segment due to a change in the estimated cost to complete the contract. The scope of this contract included significant development efforts and was further delayed by COVID-19. The estimated COVID-19 impact on this program was $16 million for the year ended December 31, 2020 and is included in our total COVID-19 impact discussed below. During the year ended December 31, 2020, the Company incurred COVID-19 related EAC growth of $27 million. 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 EACs 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. Satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price is contingent upon in-orbit performance of the satellite. These performance incentives are structured in two forms. As a warranty payback, the customer pays the entire amount of the performance incentive during the period of the satellite construction and such incentives are subject to refund if satellite performance does not achieve certain predefined operating specifications. As an orbital receivable, the customer makes payment of performance incentives over the in-orbit life of the satellite. Performance incentives, whether warranty payback or orbital receivables, are included in revenue during the construction period to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In addition to the in-orbit performance incentives, satellite construction contracts may include liquidated damages clauses. Liquidated damages can be incurred on programs as a result of delays due to slippage or for programs which fail to meet all milestone requirements as outlined within the contractual arrangements with customers. Losses related to liquidated damages result in a reduction of revenue recognized and are recorded in the period in which, based on available facts and circumstances, management believes it is probable that liquidated damages will be incurred. Construction contracts have termination clauses. If a contract is terminated for convenience by a customer, the Company is typically entitled to costs incurred plus a reasonable profit. Earth Intelligence Revenue in the Earth Intelligence segment is generated from imagery and geospatial intelligence service contracts. Revenue from imagery service contracts is recognized based on satellite capacity made available to the customer in a particular period, when imagery is delivered to the customer, or ratably over the subscription period. Many of our imagery service contracts relate to the transfer of a series of distinct goods or services over time for which management has determined are a single performance obligation. EnhancedView Follow-On Contract – The EnhancedView Follow-On contract (the “EnhancedView Contract”) includes one performance obligation to deliver a certain amount of capacity to the U.S. government over the 10-year three Direct Access Program – Direct Access Program arrangements generally include construction of the direct access facility, access to the satellites to task and download imagery and facility maintenance services. The facility is generally delivered at the beginning of the contractual period of performance with access and maintenance services delivered over the duration of the contractual term. Under ASC 606, the Company has determined that two performance obligations exist; the access and the facility promised goods and services are included together as a combined performance obligation with maintenance services representing a standalone performance obligation. The access and the facility are considered a single performance obligation as the customer cannot benefit from the facility on its own or with other readily available resources. The transaction price allocated to the combined performance obligation is recognized as access minutes are consumed during the contractual period. The remaining transaction price allocated to the maintenance services is recognized ratably over the maintenance period. Other Imagery Arrangements – Revenue is recognized for imagery licenses when the imagery is delivered to the customer. Revenues related to online imagery subscriptions are generally recognized ratably over the subscription period. Other imagery arrangements transfer a series of distinct goods or services over time for which management has determined are a single performance obligation or include multiple performance obligations. Revenue from geospatial intelligence service contracts is recognized from the rendering of services that compensate the Company at a cost-plus-fixed-fee, firm fixed price, or on a time and materials basis. Revenue is typically recognized for these contracts over time based on the stage of services completed to date as a percentage of total services to be performed, or on the basis of time plus reimbursable costs incurred during the period. As the customer typically controls the related work-in-progress, an input measure is the most appropriate basis with which to measure progress. Finally, as cost of labor is the predominant measure by which these contracts are structured, the Company recognizes revenue using a cost-incurred approach. Contract liabilities Contract liabilities primarily consist of advance payments from customers and deferred revenue. Changes in contract liabilities are primarily due to the timing difference between the Company’s performance of services and payments from customers. To determine revenue recognized from contract liabilities during the reporting periods, the Company allocates revenue to individual contract liability balances and applies revenue recognized during the reporting periods first to the beginning balances of contract liabilities until the revenue exceeds the balances. |
Net income (loss) per common share | Net income (loss) per common share Net income (loss) per common share is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding during the period. Diluted income per common share is computed by adjusting the basic income per common share calculation, as described above, for the effects of all potentially dilutive shares. The Company calculates the effects of all potentially dilutive shares using the treasury stock method unless they are anti-dilutive. |
Research and development | Research and development Research and development costs are expensed in the period incurred. For the years ended December 31, 2020, 2019 and 2018, the Company expensed research and development costs of $15 million, $10 million, and $88 million, respectively in Selling, general and administrative expense within the Consolidated Statements of Operations. |
Interest expense, net | Interest expense, net Interest expense, net is comprised of borrowing cost on debt, interest expense on advance payments from customers and other liabilities, interest expense on the orbital securitization liability, losses incurred on the extinguishment of debt and interest expense on dissenting stockholders liability, net of capitalized interest. Interest expense is recognized within Interest expense, net in the Consolidated Statements of Operations. Debt issuance costs related to the Company’s revolving line of credit are recorded in Prepaid and other current assets and in Other non-current assets in the Consolidated Balance Sheets. Debt issuance costs and debt discount related to the Company’s term loan and senior secured notes are recorded as a direct deduction from the carrying amount of the related debt. |
Derivative financial instruments and hedging activities | Derivative financial instruments and hedging activities Derivative financial instruments used by the Company consist of foreign currency forward contracts and interest rate swap agreements. The Company uses foreign currency forward contracts to manage foreign exchange risk associated with the cash flows from long-term construction contracts where some portion of the cash flows are denominated in foreign currencies as part of the normal course of business. The Company uses interest rate swap agreements to manage interest rate risk associated with cash outflows from long-term debt. Derivative financial instruments are measured at fair value and are included as components of Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets. When derivative financial instruments are designated in a qualifying hedging relationship and hedge accounting is applied, the effectiveness of the hedges is measured at the end of each reporting period and the effective portion of changes in fair value are deferred in accumulated other comprehensive income. Amounts deferred in accumulated other comprehensive income Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge accounting. At that time, if the forecasted transaction within a cash flow hedge remains probable, any cumulative gain or loss on the hedging instrument recognized in Other comprehensive income (loss) is retained in equity until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss previously recognized in other comprehensive income is transferred to income. As of January 1, 2019, the Company has discontinued hedge accounting on foreign exchange forward contracts related to its manufacturing and service programs. The Company continued to hedge its exposure for economic purposes. The Company does not offset the fair value amounts recognized with derivative instruments against the change in fair value of assets, liabilities or firm commitments executed with the same counterparty under a master netting agreement. |
Cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash Cash and cash equivalents is comprised of cash on hand, cash balances with banks and similar institutions and term deposits redeemable within three months or less from date of acquisition with banks and similar institutions. Restricted cash is excluded from cash and cash equivalents and is included in Prepaid and other current assets or Other non-current assets in the Consolidated Balance Sheets. |
Trade and other receivables, net | Trade and other receivables, net Trade and other receivables include amounts billed to customers, unbilled receivables in which the Company’s right to consideration is unconditional and current portion of orbital receivables, net of allowance for expected credit losses. The Company bills customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries. The Company maintains an allowance for expected credit losses for estimated losses resulting from the inability of its customers to make required payments, which results in bad debt expense. The Company periodically determines the adequacy of this allowance by evaluating the comprehensive risk profiles of all individual customer receivable balances including, but not limited to, the customer’s financial condition, credit agency reports, financial statements, credit limit and overall current economic conditions. Orbital Receivables Orbital receivables relate to performance incentives due under certain satellite construction contracts that are paid over the in-orbit life of the satellite. Orbital receivables are recognized as revenue when measuring progress under the cost-to-cost method during the construction period. The interest portion of the in-orbit payments is recognized as orbital revenue. Long-term orbital receivables are included in Non-current assets, net of allowances on the Consolidated Balance sheets. The Company has a revolving securitization facility agreement with two international financial institutions. Under the terms of the agreement, the Company may offer to sell eligible orbital receivables from time to time with terms of seven years or less, discounted to face value using prevailing market rates. The Company has sold certain orbital receivables in tranches that span multiple years and include longer-term maturities. The orbital receivables that have been securitized remain recognized on the 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. Securitization liabilities are presented in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets. The securitized orbital receivables and the securitization liabilities are being drawn down as payments are received from the customers and passed on to the purchaser of the tranche. The Company continues to recognize orbital revenue on the orbital receivables that are subject to the securitization transactions and recognizes interest expense to accrete the securitization liability. |
Investments | Investments Short-term investments consist of mutual funds and financial instruments purchased with a term to maturity at inception between three months and one year. Short-term investments are measured at fair value through net income. Short-term investments are included within Prepaid and other current assets in the Consolidated Balance Sheets. The Company has investments in joint ventures where it does not have a controlling financial interest but has the ability to exercise significant influence. These investments are accounted for under the equity method and are included within Other non-current assets in the Consolidated Balance Sheets. The Company’s share of the joint venture’s net income or loss is included within Equity in (income) loss from joint ventures, net of tax in the Consolidated Statements of Operations. The Company’s most significant joint venture was Vricon, a joint venture with Saab AB, specializing in the production of 3D models using high resolution imagery. On July 1, 2020, the Company closed the acquisition of Vricon by purchasing the remaining 50% ownership interest in Vricon. The operating results of Vricon are included in the Company’s Consolidated Statement of Operations beginning July 1, 2020. The following tables present summarized financial information for Vricon as of December 31, 2019, and for the years ended December 31, 2019 and 2018. Equity method investments are insignificant for the year ended December 31, 2020. Summarized Consolidated Balance Sheet December 31, 2019 Current assets $ 49 Non-current assets 5 Total assets $ 54 Total liabilities 1 $ 10 1 As of December 31, 2019, liabilities were classified as current. Summarized Consolidated Statement of Operations December 31, December 31, 2019 2018 Revenues $ 54 $ 21 Gross profit $ 51 $ 19 Income from operations $ 32 $ 2 Net income $ 24 $ 1 |
Inventory | Inventor Inventories are measured at the lower of cost or net realizable value and consist primarily of parts and sub-assemblies used in the manufacturing of satellites. The cost of inventories is determined on a first-in-first-out basis or weighted average cost basis, depending on the nature of the inventory. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. Inventory is impaired when it is probable inventory values exceed their net realizable value. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment is measured at cost less accumulated depreciation. Cost for satellite assets includes amounts related to design, construction, launch and commissioning. Cost for ground system assets include amounts related to construction and testing. Interest expense is capitalized on certain qualifying assets that take a substantial period of time to prepare for their intended use. When the costs of certain components of an item of property, plant and equipment are significant in relation to the total cost of the item and the components have different useful lives, they are accounted for and depreciated separately. Property, plant and equipment under construction are measured at cost less any impairment losses. Depreciation expense is recognized in income on a straight-line basis over the estimated useful life of the related asset to its residual value. Expected useful lives are reviewed at least annually. Land is not depreciated. The estimated useful lives are as follows: Estimated useful life Land improvements 20 years Buildings 7 - 45 years Leasehold improvements lesser of useful life or term of lease Equipment 2 - 40 years Satellites 1 11.5 - 15 years Furniture and fixtures 2 - 10 years Computer hardware 2 - 13 years 1 The estimated useful life over which the Company depreciates its satellites is determined once a satellite has been placed into orbit. The initial determination of a satellites useful life involves an analysis that considers design life, random part failure probabilities, expected component degradation and cycle life, predicted fuel consumption and experience with satellite parts, vendors and similar assets. |
Intangible assets | Intangible assets Intangible assets consist of customer relationships, backlog, acquired technologies and software, image library, trade names, licenses and non-compete agreements. Intangible assets are generally amortized on a straight-line basis over their estimated useful lives and are recorded at fair value at the time of acquisition, or in the case of internally developed software, at cost. Image library intangibles assets are amortized using the double declining balance method. Intangible assets are currently amortized over the following estimated useful lives: Estimated useful life Customer relationships 9 - 21 years Backlog 2 - 5 years Technologies 5 - 13 years Software 2 - 10 years Image library 5 years Trade names and other 1 - 20 years Non-compete agreements 2 years |
Impairment | Impairment Intangible assets and property, plant and equipment and other long-lived assets Intangible assets, property, plant and equipment and other long-lived assets are tested for impairment at least annually on October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets and property, plant and equipment and other long-lived assets are reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) are less than the asset’s carrying value. Any required impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value and recorded as a reduction in the carrying value of the related asset . If an owned satellite were to fail during launch or while in-orbit, the resulting loss would be charged to expense in the period it is determined the satellite is not recoverable. The amount of loss would be reduced to the extent of insurance proceeds received. The timing of the loss and the insurance recovery will likely differ, as an insurance recovery generally cannot be recognized until final settlement with the insurance company is reached. In December 2018, the Company experienced a loss of the WorldView-4 satellite and in 2019, the Company received insurance recoveries of $183 million. The insurance proceeds are included in operating cash flows as they are considered business interruption insurance and represent the Company’s satellite’s loss of capacity to produce imagery for sale to the Company’s customers. Orbital Receivables The Company records an allowance on its orbital receivables when, based on current events and circumstances, it believes it is probable that the outstanding amounts will not be collected. The Company utilizes customer credit ratings, expected credit loss and other credit quality indicators, as well as contractual terms to evaluate the collectability of orbital receivables on a quarterly basis. When qualitative factors indicate that all or a portion of an outstanding orbital receivable is uncollectable, a fair value assessment is performed using a discounted cash flow model as an indicator to determine whether an increase in the allowance is necessary. Changes in the allowance against orbital receivables are typically included in Impairment losses within the Consolidated Statements of Operations. Goodwill Goodwill is tested for impairment at least annually on October 1, or whenever events or changes in circumstances indicate that its carrying amount may be less than its recoverable amount. Goodwill is tested for impairment at the reporting unit level. The Company may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment. Where a qualitative approach is used, an evaluation of events and circumstances impacting the reporting unit is performed to determine the likelihood of goodwill impairment. Based on that qualitative evaluation if it is determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise, a quantitative impairment test is performed. Where a quantitative approach is used, Management typically uses an income approach to estimate the fair value of a reporting unit, which requires the use of significant judgments and estimates, including future cash flows, terminal growth rates, and discount rates. Any changes to these inputs could have a material impact on the impairment calculation. An impairment loss is recognized to the extent that the carrying value of a reporting unit exceeds its fair value. Management assesses the reasonableness of the results by reconciling the sum of the estimated fair values of the reporting units, including the Company’s Corporate balance sheet, to the Company’s market capitalization and market value of invested capital as of the date of our annual impairment test. The Company used a qualitative approach for its goodwill impairment assessment as of October 1, 2020 and determined that no impairment existed. The Company used a quantitative approach for its goodwill impairment assessment as of October 1, 2019 and determined that no impairment existed. |
Warranty and after-sale service costs | Warranty and after-sale service costs A liability for warranty and after-sale service costs is recognized when the underlying product or service is sold. Warranty and after-sale service provisions are based on management’s best estimate of the expected obligation using historical warranty data and experience. Warranty and after-sale service liabilities related to products and services delivered under construction contracts are included in the EAC for revenue recognition. Warranty and after-sale service liabilities are presented in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets. Warranty and after-sale service costs are recognized within Product and Service costs, excluding depreciation and amortization in the Consolidated Statement of Operations. |
Restructuring costs | Restructuring costs A liability for restructuring costs is recognized when the Company has approved a detailed and formal restructuring plan and the restructuring either has commenced or has been announced publicly. |
Employee benefits | Employee benefits Defined benefit pension and other postretirement benefit plans The Company maintains defined benefit pension and other postretirement benefit plans for certain employees within its Space Infrastructure segment. The pension and other postretirement plan benefits were frozen on December 31, 2013. The Company recognizes the funded status of each pension and other postretirement benefit plan in the Consolidated Balance Sheets. The calculation of pension and other postretirement benefit obligations is performed annually by qualified actuaries using the projected unit credit actuarial cost method. The projected benefit obligation is the sum of the actuarial present value of all pension benefits attributed to benefit service completed to the determination date. Pension and other postretirement plan liabilities are revalued annually, or when an event occurs that requires remeasurement, based on updated assumptions and information about the individuals covered by the plan. The Company’s net obligation in respect of the pension and other postretirement benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the prior periods, discounting that amount and deducting the fair value of associated plan assets. The Company uses the net asset value (“NAV”) practical expedient to measure the fair value of the plan’s commingled fund investments. These commingled fund investments for which the fair value is measured using the NAV practical expedient are excluded from the fair value hierarchy. The Company recognizes the amortization of prior service costs as a component of Selling, general and administrative expense. All other costs are recognized outside of operating income within Other (income) expense, net. The Company recognizes administrative expenses related to frozen plans outside of Operating income (loss) within Other (income) expense, net. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in the net benefit liability that relates to past service or the gain or loss on curtailment is recognized immediately in Accumulated other comprehensive income. The Company recognizes gains or losses on the settlement of a defined benefit plan when settlement occurs. For the Company’s pension and other postretirement benefit plans, accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized on a straight-line basis from the date recognized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants. Defined contribution plans The Company also maintains defined contribution plans for some of its employees whereby the Company pays contributions based on a percentage of the employees’ annual salary. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in Operating income (loss) as the services are provided. |
Share-based compensation plans | Stock-based compensation plans The Company maintains a number of stock-based compensation plans for certain employees and directors that may be settled with cash and/or equity. For certain stock-based compensation plans, the Company has the ability to mandate equity settlement by issuing reserved shares. Stock-based compensation plans are measured at fair value using either the Black-Scholes option pricing model or Monte Carlo simulation model and the fair value is expensed on a graded vesting schedule over the vesting period. Management uses judgment to determine the inputs to the models including the expected plan lives, underlying stock price volatility and forfeiture rates. Volatility is estimated by considering the Company’s historic stock price volatility over similar periods to the expected life of the awards under consideration. Changes in these assumptions will impact the calculation of fair value and the amount of compensation expense recognized within Selling, general and administrative expense in the Consolidated Statements of Operations. The fair value of liability classified awards is recognized as a liability within Accrued compensation and benefits and Pension and other postretirement benefit liabilities in the Consolidated Balance Sheets. The Company classifies stock-based compensation awards as liability when the expectation is the awards will be settled in cash. The liability is re-measured and charged to income at each reporting date until the award is settled. The fair value of equity-settled plans is recognized in Additional paid-in capital in the Consolidated Balance Sheets. Equity-settled plans are measured based on the grant date fair value of the award including the impact of estimated forfeitures and are not re-measured. The Company classifies stock-based compensation awards as equity when the expectation is the awards will be settled in equity. |
Income taxes | Income taxes The Company is subject to income taxes in the United States, Sweden, and other foreign jurisdictions. The Company computes its provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured at the currently enacted tax rates that are expected to apply in years in which they are expected to be paid for or realized. All deferred income taxes are classified as non-current in the Company's Consolidated Balance Sheets. Significant judgments are required in order to determine the realizability of deferred tax assets. In assessing the need for a valuation allowance, the Company's management evaluates all significant available positive and negative evidence, including historical operating results, estimates of future sources of taxable income, carry-forward periods available, the existence of prudent and feasible tax planning strategies, and other relevant factors. The recognition of uncertain tax positions is evaluated based on whether it is considered more likely than not that the position taken, or expected to be taken, on a tax return will be sustained upon examination through litigation or appeal. For those positions that meet the recognition criteria, they are measured as the largest amount that is more than 50 percent likely to be realized upon ultimate settlement. The Company believes that the reserves for unrecognized tax benefits are adequate to cover all open tax years based on its assessment. If the expected outcome of the matter changes, the Company will adjust income tax expense (benefit) accordingly in the period in which the expected outcome has changed. The Company classifies interest and penalties related to income taxes as income tax expense. The Company earns investment and other tax credits with respect to its research and development expenses. The benefit of these tax credits is recorded as an adjustment of income tax expense (benefit). |
Reclassifications | Reclassifications Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncement s Financial Instruments In June 2016, the Financial Accounting Standards Board (“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 were 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 6 for details. There were no impacts to the 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 on a prospective basis, 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. There were no additional material impacts to the Consolidated Financial Statements as a result of adoption. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) which together with subsequent amendments is included in ASC 842 – Leases. This new standard required that all leases with an initial term greater than one year be recorded on the balance sheet as right-of-use assets and lease liabilities. Additional qualitative and quantitative disclosures are also required. The Company adopted the lease standard on January 1, 2019, using the modified retrospective transition approach on the effective date. The Company elected the package of practical expedients, which allows the Company not to reassess whether any expired or existing contracts as of the adoption date are or contain a lease, lease classification for any expired or existing leases as of the adoption date and initial direct costs for any existing leases as of the adoption date. The Company did not elect the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets. Upon adoption, the Company recognized operating lease right-of-use assets and lease liabilities of $133 million and $176 million, respectively in its Consolidated Balance Sheets. There were no material impacts to the Consolidated Statements of Operations or Consolidated Statements of Cash Flows. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of significant accounting policies | |
Schedule of summarized financial information of equity method investments | Summarized Consolidated Balance Sheet December 31, 2019 Current assets $ 49 Non-current assets 5 Total assets $ 54 Total liabilities 1 $ 10 1 As of December 31, 2019, liabilities were classified as current. Summarized Consolidated Statement of Operations December 31, December 31, 2019 2018 Revenues $ 54 $ 21 Gross profit $ 51 $ 19 Income from operations $ 32 $ 2 Net income $ 24 $ 1 |
Schedule of estimated useful lives of property, plant and equipment | Estimated useful life Land improvements 20 years Buildings 7 - 45 years Leasehold improvements lesser of useful life or term of lease Equipment 2 - 40 years Satellites 1 11.5 - 15 years Furniture and fixtures 2 - 10 years Computer hardware 2 - 13 years 1 The estimated useful life over which the Company depreciates its satellites is determined once a satellite has been placed into orbit. The initial determination of a satellites useful life involves an analysis that considers design life, random part failure probabilities, expected component degradation and cycle life, predicted fuel consumption and experience with satellite parts, vendors and similar assets. |
Schedule of estimated useful lives of intangible assets with finite lives | Estimated useful life Customer relationships 9 - 21 years Backlog 2 - 5 years Technologies 5 - 13 years Software 2 - 10 years Image library 5 years Trade names and other 1 - 20 years Non-compete agreements 2 years |
Discontinued operations (Tables
Discontinued operations (Tables) | 12 Months Ended |
Dec. 31, 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 (loss) from discontinued operations, net of tax for the MDA Business in the Consolidated Statements of Operations consists of the following: Year Ended December 31, 2020 1 2019 2018 Revenues: Product $ 44 $ 206 $ 238 Service 42 161 182 Total revenues $ 86 $ 367 $ 420 Costs and expenses: Product costs, excluding depreciation and amortization $ 38 $ 149 $ 149 Service costs, excluding depreciation and amortization 24 84 114 Selling, general and administrative 13 88 59 Depreciation and amortization 4 11 10 Impairment loss 12 12 477 Operating (loss) income (5) 23 (389) Interest expense, net 1 1 1 Other (income) expense, net 2 (34) 3 — Income (loss) before taxes 28 19 (390) Income tax benefit (4) (7) (13) Income (loss) from operations of discontinued operations, net of tax 32 26 (377) Gain on disposal of discontinued operations, net of tax 317 — — Income (loss) from discontinued operations, net of tax $ 349 $ 26 $ (377) 1 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 year ended December 31, 2020. The carrying amounts of the major classes of assets and liabilities, which are classified as held for sale in the Consolidated Balance Sheet, 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 |
Business combinations (Tables)
Business combinations (Tables) - Vricon | 12 Months Ended |
Dec. 31, 2020 | |
Business combination | |
Schedule of unaudited pro forma financial information | Year Ended December 31, 2020 2019 Revenues $ 1,734 $ 1,706 Net income $ 302 $ 119 |
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, 2020 Call option purchase price $ 117 Fair value of existing equity interest 117 Cash settlement of equity awards 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 7 Total assets $ 115 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 88 Goodwill $ 172 |
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 Total intangible assets $ 73 |
Trade and other receivables, _2
Trade and other receivables, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Trade and other receivables, net | |
Schedule of trade and other receivables, net | December 31, December 31, 2020 2019 U.S. government receivables: Billed $ 84 $ 88 Unbilled 76 46 160 134 Other governments and commercial receivables: Billed 97 123 Unbilled 19 54 116 177 Total trade receivables 276 311 Orbital receivables, current portion 49 43 Other 3 4 Allowance for doubtful accounts (1) (1) Trade and other receivables, net $ 327 $ 357 |
Schedule of changes in allowance for expected credit losses related to non-current orbital receivables | Orbital Receivables Allowance Allowance as of December 31, 2018 $ (21) Additions (14) Allowance as of December 31, 2019 (35) Additions (14) Allowance as of December 30, 2020 $ (49) |
Schedule of total contractual cash flows for all launched and unlaunched satellites including principal and interest payments | 2021 2022 2023 2024 2025 Thereafter Total Contractual cash flows from orbital receivables $ 69 $ 70 $ 77 $ 76 $ 69 $ 340 $ 701 |
Schedule of securitization liabilities | December 31, December 31, 2020 2019 Current portion $ 14 $ 17 Non-current portion 47 48 Total securitization liabilities $ 61 $ 65 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory | |
Schedule of inventory | December 31, December 31, 2020 2019 Raw materials $ 22 $ 13 Work in process 9 7 Inventory $ 31 $ 20 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment, net | December 31, December 31, 2020 2019 Satellites $ 397 $ 397 Equipment 207 196 Leasehold improvements 81 75 Computer hardware 78 67 Furniture and fixtures 15 15 Construction in process 1 572 388 Property, plant and equipment, at cost 1,350 1,138 Accumulated depreciation (467) (380) Property, plant and equipment, net $ 883 $ 758 1 Construction in process is primarily related to the construction of the Company’s WorldView Legion satellite constellation. |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible assets and goodwill | |
Schedule of intangible assets | December 31, December 31, 2020 2019 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 615 $ (146) $ 469 $ 615 $ (102) $ 513 Backlog 129 (79) 50 330 (217) 113 Technologies 369 (211) 158 320 (144) 176 Software 298 (125) 173 213 (83) 130 Image library 80 (58) 22 80 (48) 32 Trade names and other 38 (15) 23 37 (10) 27 Intangible assets $ 1,529 $ (634) $ 895 $ 1,595 $ (604) $ 991 |
Schedule of estimated annual amortization expense related to finite-lived intangible assets | Year Ended December 31, 2021 2022 2023 2024 2025 2026 and thereafter Amortization expense $ 190 $ 176 $ 80 $ 65 $ 54 $ 330 |
Schedule of goodwill | Earth Intelligence Space Infrastructure Total Balance as of December 31, 2018 Goodwill $ 1,597 $ 17 $ 1,614 Accumulated impairment losses (142) (17) (159) 1,455 — 1,455 Balance as of December 31, 2019 Goodwill 1,597 17 1,614 Accumulated impairment losses (142) (17) (159) 1,455 — 1,455 Acquisition of Vricon 172 — 172 Balance as of December 31, 2020 Goodwill 1,769 17 1,786 Accumulated impairment losses (142) (17) (159) $ 1,627 $ — $ 1,627 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of components of lease expense | Year ended December 31, Classification 2020 2019 Operating lease expense Selling, general, and administrative expense, Product costs, and Service costs 1 $ 47 $ 27 1 Excluding depreciation and amortization |
Supplemental lease balance sheet information | December 31, December 31, Classification 2020 2019 Assets: Operating Non-current operating lease assets $ 163 $ 176 Finance Property, plant, and equipment, net 4 5 Total lease assets $ 167 $ 181 Liabilities: Current Operating Current operating lease liabilities $ 41 $ 40 Finance Current portion long-term debt 2 2 Non-current Operating Operating lease liabilities 158 173 Finance Long-term debt 1 1 Total lease liabilities $ 202 $ 216 |
Schedule of supplemental lease cash flow information | Year ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 43 $ 30 Loss (gain) on sale of assets 1 (136) Right-of-use assets obtained in exchange for lease obligations: Operating leases 16 72 |
Schedule of other supplemental lease information | December 31, December 31, 2020 2019 Weighted average remaining lease term (in years) Operating leases 8 9 Finance leases 2 3 Weighted average discount rate Operating leases 6.5% 6.4% Finance leases 4.1% 3.5% |
Schedule of maturities of finance lease liabilities | Maturities of lease liabilities are as follows: 2021 2022 2023 2024 2025 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 43 $ 41 $ 30 $ 26 $ 24 $ 92 $ (57) $ 199 Finance leases 1 1 1 — — — — 3 |
Schedule of maturities of operating liabilities | 2021 2022 2023 2024 2025 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 43 $ 41 $ 30 $ 26 $ 24 $ 92 $ (57) $ 199 Finance leases 1 1 1 — — — — 3 |
Warrant and restructuring (Tabl
Warrant and restructuring (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring | |
Schedule of Changes to warranty and restructuring liabilities | Warranty and after-sale service Restructuring Balance as of December 31, 2018 $ 40 $ 3 Obligations incurred 3 18 Payments/uses (2) (19) Balance as of December 31, 2019 $ 41 $ 2 Obligations incurred 1 — Payments/uses (4) (2) Balance as of December 31, 2020 $ 38 $ — |
Long-term debt and interest e_2
Long-term debt and interest expense, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Long-term debt and interest expense, net | |
Summary of long term debt | December 31, December 31, 2020 2019 Syndicated Credit facility: Term Loan B $ 1,444 $ 1,960 2023 Notes 850 1,000 2027 Notes 150 — Deferred financing 32 33 Debt discount and issuance costs (57) (54) Obligations under finance leases and other 3 6 Total long-term debt 2,422 2,945 Current portion of long-term debt (8) (30) Non-current portion of long-term debt $ 2,414 $ 2,915 |
Schedule of interest expense on long term debt and other obligations | Year Ended December 31, 2020 2019 2018 Interest on long-term debt $ 191 $ 194 $ 171 Interest on orbital securitization liability 5 7 7 Interest expense on advance payments from customers 3 15 26 Imputed interest and other 2 — — Loss on debt extinguishment 7 22 — Interest expense on dissenting stockholder liability — — 3 Capitalized interest (33) (19) (7) Interest expense, net $ 175 $ 219 $ 200 |
Summary of annual contractual principal repayments on long-term debt, net of financing fees | 2021 2022 2023 2024 2025 Thereafter Total Syndicated Credit Facility $ — $ 10 $ 20 $ 1,414 $ — $ — $ 1,444 2023 Notes — — 850 — — — 850 2027 Notes — — — — — 150 150 Deferred financing 6 7 2 2 2 13 32 Finance leases and other 2 1 — — — — 3 Debt discount and issuance costs (12) (13) (14) (7) (3) (8) (57) $ (4) $ 5 $ 858 $ 1,409 $ (1) $ 155 $ 2,422 |
Financial instruments and fai_2
Financial instruments and fair value disclosures (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Financial instruments and fair value disclosures | |
Summary of financial instruments measured at fair value | Recurring Fair Value Measurements of as of December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Interest rate swaps $ — $ 20 $ — $ 20 Long-term debt 1 — 2,556 — 2,556 $ — $ 2,576 $ — $ 2,576 Recurring Fair Value Measurements of as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 1 $ — $ — $ 1 $ 1 $ — $ — $ 1 Liabilities Interest rate swaps $ — $ 18 $ — $ 18 Long-term debt 1 — 3,004 — 3,004 $ — $ 3,022 $ — $ 3,022 1 Long-term debt excludes finance leases, deferred financing and other and is carried at amortized cost. The outstanding carrying value was $2,387 million and $2,906 million at December 31, 2020 and 2019, respectively. |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivatives and Hedging | |
Schedule of foreign exchange forward contracts to hedge exposure arising from expected foreign currency denominated cash flows | As of December 31, 2020 Notional amount Maximum Contract term Derivatives designated as hedging instruments Interest rate swaps 1 $ 1,000 1.3 years As of December 31, 2019 Notional amount Maximum Contract term Derivatives designated as hedging instruments Interest rate swaps 1 $ 1,000 2.3 years Derivatives not designated as hedging instruments Foreign exchange forward contracts Sales contracts settled in U.S. dollars Euro 10 0.1 years 1 In April 2021 and 2022, the Company will have interest rate swap maturities of $500 million, respectively. |
Accumulated other comprehensi_2
Accumulated other comprehensive income (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated other comprehensive income | |
Schedule of changes in the components of accumulated other comprehensive income (loss) | Foreign Currency Translation Adjustments 1 Unrecognized (Loss) Gain on Derivatives 2 Loss on Pension and Other Postretirement Plans Total Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2017 $ 130 $ 7 $ (42) $ 95 Other comprehensive loss (19) (10) (4) (33) Tax benefit (expense) — 3 (1) 2 Balance as of December 31, 2018 $ 111 $ — $ (47) $ 64 Other comprehensive income (loss) 14 (12) (26) (24) Tax expense 1 — — 1 Balance as of December 31, 2019 $ 126 $ (12) $ (73) $ 41 Other comprehensive loss (47) (3) (43) (93) Reclassification to gain on disposal of discontinued operations 3 (78) (5) 15 (68) Tax benefit (expense) — — — — Balance as of December 31, 2020 $ 1 $ (20) $ (101) $ (120) 1 As a result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent company to a U.S. parent company, the Company’s net investment hedge was no longer necessary from the domestication date onwards. As of December 31, 2018, there was a $51 million net loss on hedge investments in foreign operations which is included in Foreign Currency Translation Adjustments. 2 As of January 1, 2019, the Company discontinued hedge accounting related to the Company’s foreign exchange contracts. The Company still applies hedge accounting to the interest rate swaps related to long-term debt. As of December 31, 2020, the balance consisted of unrecognized loss on the Company’s interest rate swaps. 3 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue | |
Summary of contract assets and contract liabilities by segment | As of December 31, 2020 Earth Intelligence 1 Space Infrastructure Total Contract liabilities $ 45 $ 234 $ 279 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 December 31, 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 year ended December 31, 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 | Year Ended December 31, 2020 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 633 $ — $ 633 Service revenues 1,081 9 — 1,090 Intersegment — 79 (79) — $ 1,081 $ 721 $ (79) $ 1,723 Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 560 $ — $ 560 Service revenues 1,085 21 — 1,106 Intersegment — 125 (125) — $ 1,085 $ 706 $ (125) $ 1,666 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Eliminations Total Product revenues $ — $ 697 $ — $ 697 Service revenues 1,058 49 — 1,107 Intersegment 1 77 (78) — $ 1,059 $ 823 $ (78) $ 1,804 |
Summary of revenue by geographic location | Year Ended December 31, 2020 2019 2018 United States $ 1,406 $ 1,240 $ 1,238 Asia 96 161 213 Europe 84 69 54 Middle East 54 57 90 Australia 37 22 17 South America 25 97 133 Canada 10 10 49 Other 11 10 10 Total revenues $ 1,723 $ 1,666 $ 1,804 |
Schedule of revenue from significant customers | Year Ended December 31, 2020 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 774 $ 288 $ — $ 1,062 Commercial and other 307 433 (79) 661 Total revenues $ 1,081 $ 721 $ (79) $ 1,723 Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 790 $ 151 $ (1) $ 940 Commercial and other 295 555 (124) 726 Total revenues $ 1,085 $ 706 $ (125) $ 1,666 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Eliminations Total U.S. federal government and agencies $ 712 $ 105 $ (1) $ 816 Commercial and other 347 718 (77) 988 Total revenues $ 1,059 $ 823 $ (78) $ 1,804 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment information | |
Summary of operating performance of the reporting segments | Year Ended December 31, 2020 2019 2018 Revenues: Earth Intelligence $ 1,081 $ 1,085 $ 1,059 Space Infrastructure 721 706 823 Intersegment eliminations (79) (125) (78) Total revenues $ 1,723 $ 1,666 $ 1,804 Adjusted EBITDA: Earth Intelligence $ 513 $ 548 $ 516 Space Infrastructure (3) (17) (75) Intersegment eliminations (27) (29) (9) Corporate and other expenses (61) (86) (49) Restructuring — (18) (13) Transaction and integration related expense (7) (16) (33) Impairment losses, including inventory (47) (17) (652) Satellite insurance recovery — 183 — (Loss) gain on sale of assets (1) 136 33 CEO severance — (3) — Gain on remeasurement of Vricon equity interest 1 85 — — Depreciation and amortization (348) (376) (439) Interest expense, net (175) (219) (200) Interest income 2 3 2 — Equity in income from joint ventures, net of tax (1) (11) (2) (Loss) income from continuing operations before taxes $ (69) $ 77 $ (923) 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 Consolidated Statements of Operations. 2 |
Schedule of capital expenditures by segment | Year Ended December 31, 2020 Earth Intelligence Space Infrastructure Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 147 $ 21 $ 53 $ 221 Intangible assets 79 1 7 87 $ 226 $ 22 $ 60 $ 308 Year Ended December 31, 2019 Earth Intelligence Space Infrastructure Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 237 $ 16 $ 4 $ 257 Intangible assets 56 3 (2) 57 $ 293 $ 19 $ 2 $ 314 Year Ended December 31, 2018 Earth Intelligence Space Infrastructure Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 158 $ 22 $ (30) $ 150 Intangible assets 55 1 — 56 $ 213 $ 23 $ (30) $ 206 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Employee benefit plans | |
Summary of changes in the benefit obligations, the plan assets and funded status | Pension Other Postretirement 2020 2019 2020 2019 Change in benefit obligation: Benefit obligation at beginning of year $ 583 $ 519 $ 14 $ 13 Service cost 2 2 — — Interest cost 17 21 — 1 Actuarial losses 55 71 — — Benefits paid (33) (30) — — Benefit obligation at end of year $ 624 $ 583 $ 14 $ 14 Change in fair value of plan assets: Fair value of plan assets at beginning of year $ 404 $ 352 $ — $ — Actuarial return on plan assets 40 70 — — Employer contributions 34 12 — — Benefits paid (31) (28) — — Expenses paid (3) (2) — — Fair value of plan assets at end of year 444 404 — — Unfunded status at end of year $ (180) $ (179) $ (14) $ (14) Liabilities recognized in the Consolidated Balance Sheets: Accrued compensation and benefits $ (1) $ (1) $ (1) $ (1) Pension and other postretirement benefits (179) (178) (13) (13) $ (180) $ (179) $ (14) $ (14) |
Summary of the accumulated other comprehensive income | Pension Other Postretirement 2020 2019 2020 2019 Net (loss) gain $ (110) $ (70) $ 9 $ 12 |
Schedule of weighted average assumptions used to determine the benefit obligations | Pension Other Postretirement 2020 2019 2020 2019 Discount rate 2.2 % 3.0 % 2.2 % 3.0 % |
Summary of the components of net periodic benefit cost | Pension Other Postretirement 2020 2019 2018 2020 2019 2018 Interest cost $ 17 $ 21 $ 19 $ — $ 1 $ 1 Expected return on plan assets (24) (24) (27) — — — Amortization of net loss (gain) 1 — — — (1) (1) Settlement gain — — — (4) — — Expenses paid 2 2 2 — — — Net periodic benefit cost $ (4) $ (1) $ (6) $ (4) $ — $ — |
Summary of other changes in plan assets and benefit obligations recognized in other comprehensive income | Pension Other Postretirement 2020 2019 2018 2020 2019 2018 Net loss (gain) $ 40 $ 25 $ 9 $ 4 $ — $ (2) Amortization of net (loss) gain (1) — — — 1 1 Total recognized in other comprehensive loss (income) $ 39 $ 25 $ 9 $ 4 $ 1 $ (1) Total recognized in net periodic benefit cost (credit) and other comprehensive loss (income) $ 35 $ 24 $ 3 $ — $ 1 $ (1) |
Schedule of weighted average assumptions used to determine the net periodic benefit cost | Pension Other Postretirement 2020 2019 2018 2020 2019 2018 Discount rate 3.0 % 4.1 % 3.4 % 3.0 % 4.1 % 3.4 % Expected long-term return on plan assets 6.5 % 7.0 % 7.0 % N/A N/A N/A |
Schedule of pension plan asset allocation | Asset Allocation Target Actual Cash and cash equivalents 1 % 1 % U.S. and global equity securities 71 % 71 % Fixed income 28 % 28 % 100 % 100 % |
Schedule of fair value of pension plan assets by asset category segregated by level within the fair value hierarchy | December 31, 2020 December 31, 2019 Asset Category Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3 $ — $ — $ 3 $ 5 $ — $ — $ 5 International equity securities — — — — — — 1 1 Commingled funds 1 441 398 Total assets at fair value $ 3 $ — $ — $ 444 $ 5 $ — $ 1 $ 404 1 Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not required to be classified in the fair value hierarchy table. The total fair value of these amounts are presented in this table to permit reconciliation of the fair value hierarchy to the amounts presented for total defined benefit pension plan assets. |
Schedule of expected benefit payments to be paid | 2021 2022 2023 2024 2025 2025 through 2029 Pension $ 31 $ 32 $ 32 $ 32 $ 32 $ 159 Other postretirement 1 1 1 1 1 5 $ 32 $ 33 $ 33 $ 33 $ 33 $ 164 |
Stock-based compensation plans
Stock-based compensation plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based payment plans | |
Summary of share-based compensation expense (benefit) | Year ended December 31, Classification 2020 2019 2018 Stock-based compensation expense Selling, general, and administrative expense, Product costs, and Service costs $ 43 $ 20 $ 20 |
SARs Liability Classified Awards | |
Share-based payment plans | |
Summary of share based payment activity | Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value SARs outstanding at December 31, 2019 579,320 $ 63.12 Exercised — — Cancelled or expired (197,100) 67.92 SARs outstanding at December 31, 2020 382,220 60.65 1.09 $ — SARs vested and expected to vest at December 31, 2020 382,220 60.65 1.09 $ — SARs exercisable at December 31, 2020 381,470 $ 60.68 1.08 $ — |
Summary of valuation share based compensation awards | Year Ended December 31, 2020 1 2019 2018 2 Risk-free interest rate — % 1.7 - 1.9 % 1.7 - 1.9 % Dividend yield — % 0.5 % 1.8 % Volatility — % 57 - 130 % 14 - 23 % Expected lives (in years) — 0.2 - 4.6 0.3 - 5.4 1 2 |
SARs Accounted for as Equity Classified Awards | |
Share-based payment plans | |
Summary of share based payment activity | Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value SARs outstanding at December 31, 2019 925,591 $ 51.18 Granted — — Exercised — — Cancelled or expired (115,064) 50.67 SARs outstanding at December 31, 2020 810,527 51.25 6.32 $ — SARs vested and expected to vest at December 31, 2020 810,527 51.25 6.32 $ — SARs exercisable at December 31, 2020 713,859 $ 50.95 6.25 $ — |
Restricted Share Units | Omnibus and DigitalGlobe Equity Incentive Plan | |
Share-based payment plans | |
Summary of share based payment activity | Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Awards 1 Fair Value 1 Awards 2 Fair Value 2 Awards 3 Fair Value 3 Nonvested RSUs at December 31, 2019 986,735 $ 7.91 247,498 $ 36.42 100,671 $ 54.57 Granted 2,083,425 13.57 — — — — Vested (409,551) 7.75 (159,679) 45.69 (71,427) 54.57 Modified 4 532,365 28.74 — — — — Cancelled or expired (243,005) 12.22 (17,446) 48.45 (2,928) 54.57 Nonvested RSUs at December 31, 2020 2,949,969 $ 15.33 70,373 $ 12.41 26,316 $ 54.57 1 RSUs under the 2019 Plan 2 RSUs under the Omnibus Plan 3 RSUs under the DigitalGlobe Equity Plan 4 Liability classified RSUs modified to be equity settled |
RSUs Liability Classified Awards | |
Share-based payment plans | |
Summary of share based payment activity | Weighted Average Number of Grant Date Awards 1 Fair Value 1 Nonvested RSUs at December 31, 2019 946,281 $ 6.93 Granted — — Vested (291,989) 6.93 Modified 2 (532,365) 6.93 Cancelled or expired (121,927) 6.92 Nonvested RSUs at December 31, 2020 — $ — 1 RSUs under the 2019 Plan 2 Liability classified RSUs modified to be equity settled |
Performance Share Unit | |
Share-based payment plans | |
Summary of share based payment activity | Weighted Average Number of Grant Date Awards Fair Value Nonvested PSUs at December 31, 2019 963,402 $ 6.83 Granted 371,470 20.72 Performance adjustment 240,837 6.54 Vested (481,674) 6.54 Cancelled or expired (53,355) 8.80 Nonvested PSUs at December 31, 2020 1,040,680 $ 11.76 |
Summary of valuation share based compensation awards | Year Ended December 31, 2020 2019 Risk-free interest rate 0.9 % 2.2 - 2.3 % Dividend yield 0.3 % 0.5 - 0.9 % Volatility 79 % 63 - 67 % Expected lives (in years) 2.8 2.9 - 3.0 |
Deferred Share Units (DSU) | |
Share-based payment plans | |
Summary of share based payment activity | Number of Awards Weighted Average Issuance Price DSUs outstanding at December 31, 2019 65,610 C$ 52.76 Issued — — Redeemed (32,715) 49.50 DSUs outstanding at December 31, 2020 32,895 C$ 56.01 |
Equity-settled SARs, RSUs and DSUs | |
Share-based payment plans | |
Summary of valuation share based compensation awards | Year Ended December 31, 2020 1 2019 1 2018 2 Risk-free interest rate 1.9 - 2.3 % Dividend yield 2.2 - 9.1 % Volatility 22 - 41 % Expected lives (in years) 3.0 - 7.0 1 2 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Schedule of components of earnings before income taxes | Year Ended December 31, 2020 2019 2018 U.S. $ (69) $ 77 $ (806) Non-U.S. — — (117) (Loss) income before taxes $ (69) $ 77 $ (923) |
Schedule of Income tax expense / (benefit) | Year Ended December 31, 2020 2019 2018 Current tax (benefit) expense U.S. $ (5) $ 5 $ — Non-U.S. — — — (5) 5 — Deferred tax benefit U.S. (17) — (2) Non-U.S. — — (46) (17) — (48) Income tax (benefit) expense $ (22) $ 5 $ (48) |
Schedule of reconciliation of the US statutory income tax rate to our effective income tax rate | Year Ended December 31, 2020 2019 2018 U.S. statutory income tax rate 21 % 21 % 21 % Expected income tax (benefit) expense at statutory rate $ (14) $ 16 $ (194) Non-deductible expenses 8 15 6 Tax on international operations — (1) (45) Change in valuation allowance 49 (108) 96 Base Erosion and Anti-Abuse Tax (5) 5 — Outside basis difference in assets held for sale (39) 78 — Tax credits (3) (1) (9) Non-deductible goodwill impairment — — 98 Remeasurement of previously held equity interest (18) — — Other — 1 — Income tax (benefit) expense $ (22) $ 5 $ (48) Effective income tax rate 32 % 6 % 5 % |
Schedule of significant components of deferred tax assets and liabilities | Year Ended December 31, 2020 2019 2018 Tax benefit of losses carried forward $ 209 $ 219 $ 222 Tax credits 93 82 91 Construction contract liabilities — 89 77 Property and equipment — — 15 Trade and other payables 35 41 38 Employee benefits 52 41 49 Unrealized gains and losses 20 6 6 Other 1 18 21 Deferred tax assets 410 496 519 Valuation allowance (228) (231) (304) Deferred tax assets, net of valuation allowance 182 265 215 Construction contract liabilities (10) — — Property and equipment (55) (47) — Goodwill and intangibles (106) (124) (213) Outside basis difference in assets held for sale — (78) — Other — (10) (2) Deferred tax liabilities (171) (259) (215) Deferred tax assets, net $ 11 $ 6 $ — |
NOL carryforwards by jurisdiction | Expiration Period December 31, 2020 Federal 2035 - 2037 $ 512 None 279 State 2022 - 2038 756 None 66 Non-U.S. None 16 |
Schedule of changes in unrecognized tax benefits | Year Ended December 31, 2020 2019 2018 Balance, beginning of year $ 7 $ — $ — Gross increases related to prior period tax positions 2 6 — Gross increases related to current period tax positions 1 1 — Gross decreases related to prior period tax positions (1) — — Balance, end of year $ 9 $ 7 $ — |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Net income (loss) per common share | |
Summary of calculation of basic and diluted EPS | Year Ended December 31, 2020 2019 2018 (Loss) income from continuing operations $ (46) $ 83 $ (873) Income (loss) from discontinued operations, net of tax 349 26 (377) Net income (loss) $ 303 $ 109 $ (1,250) Weighted average number of common shares outstanding-basic 60.7 59.6 58.1 Weighted dilutive effect of equity awards — 0.6 — Weighted average number of common shares outstanding-diluted 60.7 60.2 58.1 Basic net income (loss) per common share: (Loss) income from continuing operations $ (0.76) $ 1.39 $ (15.03) Income (loss) from discontinued operations, net of tax 5.75 0.44 (6.49) Basic net income (loss) per common share $ 4.99 $ 1.83 $ (21.52) Diluted net income (loss) per common share: (Loss) income from continuing operations $ (0.76) $ 1.38 $ (15.03) Income (loss) from discontinued operations, net of tax 5.75 0.43 (6.49) Diluted net income (loss) per common share $ 4.99 $ 1.81 $ (21.52) |
Supplemental cash flow (Tables)
Supplemental cash flow (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental cash flow | |
Schedule of supplemental cash flow | Year Ended December 31, 2020 2019 2018 Supplemental cash flow information: Cash paid for interest $ (205) $ (193) $ (152) Supplemental non-cash investing and financing activities: Accrued capital expenditures $ 13 $ 19 $ 19 |
General business description (D
General business description (Details) | Jul. 01, 2020 |
Vricon | |
General Business Description | |
Remaining ownership interest acquired | 50.00% |
Summary of significant accoun_4
Summary of significant accounting policies - Narratives (Details) $ in Millions | Aug. 31, 2020 | Dec. 31, 2021item | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Significant accounting policies | ||||||
Equity | $ 935 | $ 761 | ||||
Accumulated deficit | (763) | (1,064) | ||||
Orbital Receivables | ||||||
Number of international financial institutions | item | 2 | |||||
Term of facility | 7 years | |||||
Prior period error correction adjustment | ||||||
Significant accounting policies | ||||||
Accumulated other comprehensive income (loss) | 18 | |||||
Accumulated deficit | (18) | |||||
Selling, general and administrative | ||||||
Research and development | ||||||
Research and development costs | 15 | 10 | $ 88 | |||
Prepaid and other current assets | ||||||
Significant accounting policies | ||||||
Current deferred contract costs | 6 | 6 | ||||
Other non-current assets | ||||||
Significant accounting policies | ||||||
Non-current deferred contract costs | $ 41 | 37 | ||||
Enhanced View contract | ||||||
Significant accounting policies | ||||||
Number of performance obligations | item | 1 | |||||
Contractual term | 10 years | |||||
Period of option | 3 years | |||||
Term of first option year exercised | 1 year | |||||
Direct Access Program | ||||||
Significant accounting policies | ||||||
Number of performance obligations | item | 2 | |||||
Space Infrastructure | COVID-19 | ||||||
Significant accounting policies | ||||||
Growth in estimated total cost-at-completion ("EAC") | $ 27 | |||||
Space Infrastructure | Commercial Satellite Contract | ||||||
Significant accounting policies | ||||||
Estimated loss | 42 | |||||
Space Infrastructure | Commercial Satellite Contract | COVID-19 | ||||||
Significant accounting policies | ||||||
Estimated loss | 16 | |||||
Pension Adjustments | ||||||
Significant accounting policies | ||||||
Equity | $ (101) | $ (73) | $ (47) | $ (42) |
Summary of significant accoun_5
Summary of significant accounting policies - Investments (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2020 | |
Summarized Consolidated Balance Sheets | ||||
Current assets | $ 468 | $ 1,261 | ||
Total assets | 4,483 | 5,157 | ||
Total liabilities | 663 | 996 | ||
Total liabilities | 3,547 | 4,395 | ||
Summarized Consolidated Statement of Operations | ||||
Net income (loss) | $ 303 | 109 | $ (1,250) | |
Vricon | ||||
Equity method investments | ||||
Remaining ownership interest acquired | 50.00% | |||
Vricon | ||||
Summarized Consolidated Balance Sheets | ||||
Current assets | 49 | |||
Non-current assets | 5 | |||
Total assets | 54 | |||
Total liabilities | 10 | |||
Summarized Consolidated Statement of Operations | ||||
Revenues | 54 | 21 | ||
Gross profit | 51 | 19 | ||
Income from operations | 32 | 2 | ||
Net income (loss) | $ 24 | $ 1 |
Summary of significant accoun_6
Summary of significant accounting policies - Property, plant and equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Land improvements | |
Significant accounting policies | |
Estimated useful life | 20 years |
Buildings | Minimum | |
Significant accounting policies | |
Estimated useful life | 7 years |
Buildings | Maximum | |
Significant accounting policies | |
Estimated useful life | 45 years |
Equipment | Minimum | |
Significant accounting policies | |
Estimated useful life | 2 years |
Equipment | Maximum | |
Significant accounting policies | |
Estimated useful life | 40 years |
Satellites | Minimum | |
Significant accounting policies | |
Estimated useful life | 11 years 6 months |
Satellites | Maximum | |
Significant accounting policies | |
Estimated useful life | 15 years |
Furniture and fixtures | Minimum | |
Significant accounting policies | |
Estimated useful life | 2 years |
Furniture and fixtures | Maximum | |
Significant accounting policies | |
Estimated useful life | 10 years |
Computer hardware | Minimum | |
Significant accounting policies | |
Estimated useful life | 2 years |
Computer hardware | Maximum | |
Significant accounting policies | |
Estimated useful life | 13 years |
Summary of significant accoun_7
Summary of significant accounting policies - Intangible assets and goodwill (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
Significant accounting policies | ||
Insurance recoveries received | $ 183 | |
Customer relationships | Minimum | ||
Significant accounting policies | ||
Estimated useful life | 9 years | |
Customer relationships | Maximum | ||
Significant accounting policies | ||
Estimated useful life | 21 years | |
Backlog | Minimum | ||
Significant accounting policies | ||
Estimated useful life | 2 years | |
Backlog | Maximum | ||
Significant accounting policies | ||
Estimated useful life | 5 years | |
Technologies | Minimum | ||
Significant accounting policies | ||
Estimated useful life | 5 years | |
Technologies | Maximum | ||
Significant accounting policies | ||
Estimated useful life | 13 years | |
Software | Minimum | ||
Significant accounting policies | ||
Estimated useful life | 2 years | |
Software | Maximum | ||
Significant accounting policies | ||
Estimated useful life | 10 years | |
Image library | ||
Significant accounting policies | ||
Estimated useful life | 5 years | |
Trade name and other | Minimum | ||
Significant accounting policies | ||
Estimated useful life | 1 year | |
Trade name and other | Maximum | ||
Significant accounting policies | ||
Estimated useful life | 20 years | |
Non-compete agreements | ||
Significant accounting policies | ||
Estimated useful life | 2 years |
Summary of significant accoun_8
Summary of significant accounting policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Recently Adopted Accounting Pronouncements | |||
Package practical expedients | true | ||
Hindsight practical expedient | false | ||
Operating lease right-of-use assets | $ 163 | $ 176 | |
Operating lease liability | $ 199 | ||
ASU 2016-02 | |||
Recently Adopted Accounting Pronouncements | |||
Operating lease right-of-use assets | $ 133 | ||
Operating lease liability | $ 176 |
Discontinued operations - Narra
Discontinued operations - Narratives (Details) $ in Millions, $ in Billions | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Apr. 08, 2020USD ($) | Apr. 08, 2020CAD ($) | |
Discontinued Operations | |||
Gain on disposal of discontinued operations, net of tax | $ 317 | ||
Reclassification of accumulated other comprehensive loss to gain on disposal of discontinued operations | (68) | ||
MDA business | Discontinued operations | |||
Discontinued Operations | |||
Aggregate purchase price | $ 729 | $ 1 | |
Gain on disposal of discontinued operations, net of tax | 317 | ||
Tax on gain on disposal of discontinued operations | 12 | ||
Reclassification of accumulated other comprehensive loss to gain on disposal of discontinued operations | 68 | ||
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 | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Costs and expenses: | |||
Income (loss) from operations of discontinued operations, net of tax | $ 32 | $ 26 | $ (377) |
Gain on disposal of discontinued operations, net of tax | 317 | ||
Income (loss) from discontinued operations, net of tax | 349 | 26 | (377) |
MDA business | Discontinued operations | |||
Revenues: | |||
Total revenues | 86 | 367 | 420 |
Costs and expenses: | |||
Selling, general and administrative | 13 | 88 | 59 |
Depreciation and amortization | 4 | 11 | 10 |
Impairment loss | 12 | 12 | 477 |
Operating (loss) income | (5) | 23 | (389) |
Interest expense, net | 1 | 1 | 1 |
Other (income) expense, net | (34) | 3 | |
Income before taxes | 28 | 19 | (390) |
Income tax benefit | (4) | (7) | (13) |
Income (loss) from operations of discontinued operations, net of tax | 32 | 26 | (377) |
Gain on disposal of discontinued operations, net of tax | 317 | ||
Income (loss) from discontinued operations, net of tax | 349 | 26 | (377) |
Goodwill impairment | 0 | 477 | |
Investment impairment loss | 0 | 12 | 0 |
MDA business | Discontinued operations | Product | |||
Revenues: | |||
Total revenues | 44 | 206 | 238 |
Costs and expenses: | |||
Costs, excluding depreciation and amortization | 38 | 149 | 149 |
MDA business | Discontinued operations | Service | |||
Revenues: | |||
Total revenues | 42 | 161 | 182 |
Costs and expenses: | |||
Costs, excluding depreciation and amortization | $ 24 | $ 84 | $ 114 |
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 |
Business combination - Narrativ
Business combination - Narratives (Details) - USD ($) $ in Millions | Jul. 01, 2020 | Dec. 31, 2020 |
Business combination | ||
Purchase consideration net of estimated cash at closing | $ 120 | |
Remeasurement gain on acquisition | 85 | |
Other (income) expense | ||
Business combination | ||
Remeasurement gain on acquisition | 85 | |
2027 Notes | ||
Business combination | ||
Long-term Debt, Gross | $ 150 | 150 |
Vricon | ||
Business combination | ||
Remaining ownership interest acquired | 50.00% | |
Purchase consideration | $ 143 | |
Cash on hand | 23 | |
Purchase consideration net of estimated cash at closing | 120 | |
Cash settlement of equity awards | 26 | |
Call option purchase price | $ 117 | |
Vricon | Other (income) expense | ||
Business combination | ||
Remeasurement gain on acquisition | $ 85 |
Business combination - Unaudite
Business combination - Unaudited pro forma financial information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Proforma information | ||
Revenue | $ 1,734 | $ 1,706 |
Net income | $ 302 | $ 119 |
Business combination - Purchase
Business combination - Purchase Price Allocation (Details) - USD ($) $ in Millions | Jul. 01, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Liabilities | ||||
Goodwill | $ 1,627 | $ 1,455 | $ 1,455 | |
Vricon | ||||
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 | 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 | 7 | |||
Total Assets | 115 | |||
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 | 88 | |||
Goodwill | $ 172 |
Business combination - Intangib
Business combination - Intangible assets of Vricon (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Jul. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible assets | ||||
Goodwill | $ 1,627 | $ 1,455 | $ 1,455 | |
Vricon | ||||
Intangible assets | ||||
Carrying Value | 73 | |||
Goodwill | $ 172 | |||
Backlog | Vricon | ||||
Intangible assets | ||||
Carrying Value | $ 21 | |||
Weighted average useful life (in years) | 2 years | |||
Trademarks | Vricon | ||||
Intangible assets | ||||
Carrying Value | $ 1 | |||
Weighted average useful life (in years) | 1 year | |||
Technologies | Vricon | ||||
Intangible assets | ||||
Carrying Value | $ 49 | |||
Weighted average useful life (in years) | 9 years | |||
Software | Vricon | ||||
Intangible assets | ||||
Carrying Value | $ 2 | |||
Software | Vricon | Minimum | ||||
Intangible assets | ||||
Weighted average useful life (in years) | 2 years | |||
Software | Vricon | Maximum | ||||
Intangible assets | ||||
Weighted average useful life (in years) | 3 years |
Trade and other receivables, _3
Trade and other receivables, net (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Trade and other receivables | ||
Total trade receivables | $ 276 | $ 311 |
Orbital receivables, current portion | 49 | 43 |
Other | 3 | 4 |
Allowance for doubtful accounts | (1) | (1) |
Total trade and other receivables, net | 327 | 357 |
U.S government receivables | ||
Trade and other receivables | ||
Billed | 84 | 88 |
Unbilled | 76 | 46 |
Total trade receivables | 160 | 134 |
Other governments and commercial receivables | ||
Trade and other receivables | ||
Billed | 97 | 123 |
Unbilled | 19 | 54 |
Total trade receivables | $ 116 | $ 177 |
Trade and other receivables - O
Trade and other receivables - Orbital receivables (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)customer | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Trade and other receivables | |||
Orbital receivables, net | $ 361 | $ 382 | |
Impairment to long-term orbital receivables | 14 | 14 | $ 22 |
Changes in allowance for expected credit losses related to non-current orbital receivables | |||
Allowance at the beginning of the period | (35) | (21) | |
Additions | (14) | (14) | |
Allowance at the end of the period | $ (49) | $ (35) | $ (21) |
Accounts Receivable | Credit Concentration Risk | |||
Trade and other receivables | |||
Number of customers | customer | 14 | ||
Accounts Receivable | Credit Concentration Risk | Largest Customer | |||
Trade and other receivables | |||
Concentration risk, percentage | 19.00% | 27.00% |
Trade and other receivables - E
Trade and other receivables - Expected timing of total contractual cash flows (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Contract receivable | ||
2021 | $ 69 | |
2022 | 70 | |
2023 | 77 | |
2024 | 76 | |
2025 | 69 | |
Thereafter | 340 | |
Total | 701 | |
Orbital receivables | ||
Proceeds from sale of orbital receivables | 0 | $ 0 |
Orbital receivables repurchased | $ 0 | $ 24 |
Trade and other receivables - S
Trade and other receivables - Securitization liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Trade and other receivables, net | ||
Current portion | $ 14 | $ 17 |
Non-current portion | 47 | 48 |
Total securitization liabilities | $ 61 | $ 65 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory | ||
Raw materials | $ 22 | $ 13 |
Work in process | 9 | 7 |
Total inventory | $ 31 | $ 20 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, plant and equipment | |||
Property, plant and equipment, at cost | $ 1,350 | $ 1,138 | |
Accumulated depreciation | (467) | (380) | |
Property, plant and equipment, net | 883 | 758 | |
Depreciation | 93 | 107 | $ 150 |
Satellites | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 397 | 397 | |
Equipment | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 207 | 196 | |
Leasehold improvements | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 81 | 75 | |
Computer hardware | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 78 | 67 | |
Furniture and fixtures | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 15 | 15 | |
Construction in process | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | $ 572 | $ 388 |
Property, plant and equipment -
Property, plant and equipment - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)building | Dec. 31, 2020USD ($)property | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2020property | |
Property, plant and equipment | ||||||
Reduction of gain on sale leaseback | $ 1 | $ (136) | $ (33) | |||
Gain on sale of assets | (1) | $ 136 | $ 33 | |||
Properties in Palo Alto, California | ||||||
Property, plant and equipment | ||||||
Net proceeds | $ 280 | |||||
Reduction of gain on sale leaseback | $ (136) | $ 4 | ||||
Number of properties | property | 1 | 1 | ||||
Number of buildings | building | 1 | |||||
Proceeds from sale of building | $ 68 | |||||
Gain on sale of assets | $ 33 |
Intangible assets and goodwil_2
Intangible assets and goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-lived intangible assets: | |||
Gross carrying value | $ 1,529 | $ 1,595 | |
Accumulated amortization | (634) | (604) | |
Net carrying value | 895 | 991 | |
Amortization of intangible assets | 255 | 269 | $ 289 |
Customer relationships | |||
Finite-lived intangible assets: | |||
Gross carrying value | 615 | 615 | |
Accumulated amortization | (146) | (102) | |
Net carrying value | 469 | 513 | |
Backlog | |||
Finite-lived intangible assets: | |||
Gross carrying value | 129 | 330 | |
Accumulated amortization | (79) | (217) | |
Net carrying value | 50 | 113 | |
Technologies | |||
Finite-lived intangible assets: | |||
Gross carrying value | 369 | 320 | |
Accumulated amortization | (211) | (144) | |
Net carrying value | 158 | 176 | |
Software | |||
Finite-lived intangible assets: | |||
Gross carrying value | 298 | 213 | |
Accumulated amortization | (125) | (83) | |
Net carrying value | 173 | 130 | |
Image library | |||
Finite-lived intangible assets: | |||
Gross carrying value | 80 | 80 | |
Accumulated amortization | (58) | (48) | |
Net carrying value | 22 | 32 | |
Trade names and other | |||
Finite-lived intangible assets: | |||
Gross carrying value | 38 | 37 | |
Accumulated amortization | (15) | (10) | |
Net carrying value | $ 23 | $ 27 |
Intangible assets and goodwil_3
Intangible assets and goodwill - Estimated annual amortization expense (Details) $ in Millions | Dec. 31, 2020USD ($) |
Amortization expense | |
2021 | $ 190 |
2022 | 176 |
2023 | 80 |
2024 | 65 |
2025 | 54 |
2026 and thereafter | $ 330 |
Intangible assets and goodwil_4
Intangible assets and goodwill - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill | |||
Goodwill | $ 1,786,000 | $ 1,614,000 | $ 1,614,000 |
Accumulated impairment losses | (159,000) | (159,000) | (159,000) |
Goodwill, net | 1,627,000 | 1,455,000 | 1,455,000 |
Impairment losses | 0 | 0 | |
Acquisition of Vricon | 172,000 | ||
Earth intelligence | |||
Goodwill | |||
Goodwill | 1,769,000 | 1,597,000 | 1,597,000 |
Accumulated impairment losses | (142,000) | (142,000) | (142,000) |
Goodwill, net | 1,627,000 | 1,455,000 | 1,455,000 |
Acquisition of Vricon | 172,000 | ||
Space Infrastructure | |||
Goodwill | |||
Goodwill | 17,000 | 17,000 | 17,000 |
Accumulated impairment losses | $ (17,000) | $ (17,000) | $ (17,000) |
Leases (Details)
Leases (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)property | Sep. 30, 2020property | |
Leases | |||
Operating lease right-of-use assets | $ 176 | $ 163 | |
Operating Lease, Liability | $ 199 | ||
Minimum | |||
Leases | |||
Option to extend - Operating | 6 months | ||
Option to extend - Finance | 6 months | ||
Maximum | |||
Leases | |||
Remaining lease term - Operating | 14 years | ||
Remaining lease term - Finance | 14 years | ||
Option to extend - Operating | 10 years | ||
Option to extend - Finance | 10 years | ||
Properties in Palo Alto, California | |||
Leases | |||
Operating lease right-of-use assets | $ 63 | ||
Operating Lease, Liability | $ 63 | ||
Number of properties | property | 1 | 1 | |
Properties in Palo Alto, California | Minimum | |||
Leases | |||
Lease term | 2 years | ||
Properties in Palo Alto, California | Maximum | |||
Leases | |||
Lease term | 10 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases | |||
Rent expense | $ 26 | ||
Selling, general, and administrative expense, Product costs, and Service costs | |||
Leases | |||
Operating lease expense | $ 47 | $ 27 |
Leases - Supplemental lease bal
Leases - Supplemental lease balance sheet information (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Leases | ||
Non-current operating lease assets | $ 163 | $ 176 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Non-current operating lease assets | |
Finance | $ 4 | 5 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net. | |
Total leased assets | $ 167 | 181 |
Current operating lease liabilities | $ 41 | 40 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current operating lease liabilities | |
Operating lease liability, non current | $ 158 | 173 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liability, non current | |
Finance lease liability, current | $ 2 | 2 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | |
Finance lease liability, non current | $ 1 | 1 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | |
Total leased Liabilities | $ 202 | $ 216 |
Leases - Supplemental lease cas
Leases - Supplemental lease cash flow information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 43 | $ 30 | |
Reduction of gain on sale leaseback | 1 | (136) | $ (33) |
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | $ 16 | $ 72 |
Leases - Other Supplemental lea
Leases - Other Supplemental lease information (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases | ||
Operating leases - Weighted average remaining lease term | 8 years | 9 years |
Finance leases - Weighted average remaining lease term | 2 years | 3 years |
Operating leases - Weighted average discount rate | 6.50% | 6.40% |
Finance leases - Weighted average discount rate | 4.10% | 3.50% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Millions | Dec. 31, 2020USD ($) |
Operating leases | |
2021 | $ 43 |
2022 | 41 |
2023 | 30 |
2024 | 26 |
2025 | 24 |
Thereafter | 92 |
Less: imputed interest | (57) |
Total minimum lease payments | 199 |
Finance leases | |
2021 | 1 |
2022 | 1 |
2023 | 1 |
Total minimum lease payments | $ 3 |
Warranty and restructuring co_2
Warranty and restructuring costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring | |||
Balance at beginning of period | $ 2 | $ 3 | |
Obligations incurred | 18 | $ 13 | |
Payments/uses | (2) | (19) | |
Balance at end of period | 2 | 3 | |
Warranty and after-sale service | |||
Balance at beginning of period | 41 | 40 | |
Obligations incurred | 1 | 3 | |
Payments/uses | (4) | (2) | |
Balance at end of period | $ 38 | $ 41 | $ 40 |
Long-term debt and interest e_3
Long-term debt and interest expense, net (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Jul. 01, 2020 | Dec. 31, 2019 |
Long-term debt and interest expenses | |||
Debt discount and issuance costs | $ (57) | $ (54) | |
Obligations under finance leases and other | 3 | 6 | |
Total long-term debt | 2,422 | 2,945 | |
Current portion of long-term debt | (8) | (30) | |
Non-current portion of long-term debt | 2,414 | 2,915 | |
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 | $ 150 | |
Deferred financing | |||
Long-term debt and interest expenses | |||
Long-term debt | $ 32 | $ 33 |
Long-term debt and interest e_4
Long-term debt and interest expense, net - Syndicated credit facility (Details) $ in Millions | Jun. 25, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 30, 2019USD ($) | Oct. 31, 2017USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 31, 2019USD ($) |
Long-term debt and interest expenses | ||||||||
Loss from early extinguishment of debt | $ (7) | $ (22) | ||||||
Unamortized debt issuance cost expensed | $ 16 | 11 | $ 9 | |||||
At the end of each fiscal quarter | ||||||||
Long-term debt and interest expenses | ||||||||
Interest coverage ratio | 2 | |||||||
2023 Notes | ||||||||
Long-term debt and interest expenses | ||||||||
Aggregate principal amount | $ 1,000 | $ 1,000 | ||||||
Aggregate principal amount repurchased | $ 150 | |||||||
Interest rate (as a percent) | 9.75% | 9.75% | ||||||
Notes issue price percentage | 98.00% | |||||||
Percentage of principal amount of repurchased debt | 112.45% | |||||||
Percentage of premium paid on repurchase of notes | 12.45% | |||||||
2023 Notes | Redemption in period of 12 months beginning on December 15, 2021 | ||||||||
Long-term debt and interest expenses | ||||||||
Debt instrument redemption price percentage | 107.313% | |||||||
2023 Notes | Redemption in period of 12 months beginning on December 15, 2022 | ||||||||
Long-term debt and interest expenses | ||||||||
Debt instrument redemption price percentage | 103.656% | |||||||
2023 Notes | Redemption in period of 12 months beginning on December 15, 2023 | ||||||||
Long-term debt and interest expenses | ||||||||
Debt instrument redemption price percentage | 100.00% | |||||||
2023 Notes | Redemption before December 15, 2021 | ||||||||
Long-term debt and interest expenses | ||||||||
Debt instrument redemption price percentage | 100.00% | |||||||
Percentage of principle amount of debt redeemed | 40.00% | |||||||
2023 Notes | Change of control occurs | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 101 | |||||||
2023 Notes | At the end of the previous fiscal year | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 7.25 | |||||||
2023 Notes | At the end of the current fiscal quarter | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 7.50 | |||||||
2023 Notes | At the end of each fiscal quarter for the next 18 months | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 7.75 | |||||||
2023 Notes | At the end of each fiscal quarter for the next twelve months | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 7.50 | |||||||
2023 Notes | At the end of each fiscal quarter for the next six months | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 6.50 | |||||||
2023 Notes | At the end of each fiscal quarter | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 5.75 | |||||||
2023 Notes | Upon a disposition of a business line for greater than $500 million | ||||||||
Long-term debt and interest expenses | ||||||||
Reduction in each maximum level of Debt to EBITDA | 0.25 | |||||||
Minimum amount of disposition of business line to trigger a reduction in each maximum level of consolidated debt to EBITDA | $ 500 | |||||||
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% | |||||||
Syndicated Credit Facility | At the end of the previous fiscal year | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 7.25 | |||||||
Syndicated Credit Facility | At the end of the current fiscal quarter | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 7.50 | |||||||
Syndicated Credit Facility | At the end of each fiscal quarter for the next 18 months | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 7.75 | |||||||
Syndicated Credit Facility | At the end of each fiscal quarter for the next twelve months | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 7.50 | |||||||
Syndicated Credit Facility | At the end of each fiscal quarter for the next six months | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 6.50 | |||||||
Syndicated Credit Facility | For each fiscal quarter thereafter | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum debt to EBITDA | 5.75 | |||||||
Syndicated Credit Facility | Upon a disposition of a business line for greater than $500 million | ||||||||
Long-term debt and interest expenses | ||||||||
Reduction in each maximum level of Debt to EBITDA | 0.25 | |||||||
Revolving Credit Facility | ||||||||
Long-term debt and interest expenses | ||||||||
Extended term of debt | 2 years | |||||||
Maximum borrowing capacity | $ 500 | $ 1,250 | ||||||
Letter of credit outstanding | $ 18 | $ 31 | $ 18 | |||||
Outstanding credit facility | $ 0 | |||||||
Revolving Credit Facility | Upon a disposition of a business line for greater than $500 million | ||||||||
Long-term debt and interest expenses | ||||||||
Minimum amount of disposition of business line to trigger a reduction in each maximum level of consolidated debt to EBITDA | $ 500 | |||||||
Revolving Credit Facility | U.S. Libor | Minimum | ||||||||
Long-term debt and interest expenses | ||||||||
Spread on variable rate | 1.20% | |||||||
Revolving Credit Facility | U.S. Libor | Maximum | ||||||||
Long-term debt and interest expenses | ||||||||
Spread on variable rate | 4.25% | |||||||
Revolving Credit Facility | Adjusted Base Rate | Minimum | ||||||||
Long-term debt and interest expenses | ||||||||
Spread on variable rate | 0.20% | |||||||
Revolving Credit Facility | Adjusted Base Rate | Maximum | ||||||||
Long-term debt and interest expenses | ||||||||
Spread on variable rate | 3.25% | |||||||
Letter of credit | ||||||||
Long-term debt and interest expenses | ||||||||
Maximum borrowing capacity | $ 200 | |||||||
Senior secured first lien revolving credit facility | Maturing in December 2023 | ||||||||
Long-term debt and interest expenses | ||||||||
Aggregate principal amount | 500 | |||||||
Senior Secured First Lien Operating Facility | Maturing in October 2024 | ||||||||
Long-term debt and interest expenses | ||||||||
Aggregate principal amount | $ 2,000 | |||||||
Term Loan A | ||||||||
Long-term debt and interest expenses | ||||||||
Loss from early extinguishment of debt | $ 22 | |||||||
Term Loan A | Adjusted Base Rate | ||||||||
Long-term debt and interest expenses | ||||||||
Spread on variable rate | 1.75% | |||||||
Term Loan B | ||||||||
Long-term debt and interest expenses | ||||||||
Debt Repaid | $ 511 | |||||||
Unamortized debt issuance cost expensed | $ 7 | |||||||
Installment payments as a percentage of original principal amount | 1.00% | |||||||
Term Loan B | U.S. Libor | ||||||||
Long-term debt and interest expenses | ||||||||
Spread on variable rate | 2.75% | |||||||
DigitalGlobe | Syndicated Credit Facility | ||||||||
Long-term debt and interest expenses | ||||||||
Aggregate principal amount | $ 3,750 | |||||||
DigitalGlobe | Senior secured first lien revolving credit facility | ||||||||
Long-term debt and interest expenses | ||||||||
Term of debt | 4 years | |||||||
DigitalGlobe | Senior Secured First Lien Operating Facility | ||||||||
Long-term debt and interest expenses | ||||||||
Term of debt | 4 years |
Long term debt and interest exp
Long term debt and interest expense, net - Deferred Financing (Details) - Deferred financing - USD ($) $ in Millions | 1 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | |
Long-term debt and interest expenses | ||
Long-term debt | $ 33 | $ 32 |
Properties in Palo Alto, California | ||
Long-term debt and interest expenses | ||
Net proceeds | 291 | |
Long-term debt | $ 33 | |
Lease term | 10 years | |
Weighted average discount rate | 4.62% |
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 | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest expenses | |||
Interest on long-term debt | $ 191 | $ 194 | $ 171 |
Interest on orbital securitization liability | 5 | 7 | 7 |
Interest expense on advance payments from customers | 3 | 15 | 26 |
Imputed interest and other | 2 | ||
Loss on debt extinguishment | 7 | 22 | |
Interest expense on dissenting stockholder liability | 3 | ||
Capitalized interest | (33) | (19) | (7) |
Interest expense, net | $ 175 | $ 219 | $ 200 |
Long term debt and interest e_2
Long term debt and interest expense, net - Annual contractual principal repayments (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Finance leases | ||
2021 | $ 1 | |
2021 | 2 | |
2022 | 1 | |
2023 | 1 | |
Total minimum lease payments | 3 | |
Debt discount and issuance costs | ||
2021 | (12) | |
2022 | (13) | |
2023 | (14) | |
2024 | (7) | |
2025 | (3) | |
Thereafter | (8) | |
Total | (57) | $ (54) |
Total | ||
2021 | (4) | |
2022 | 5 | |
2023 | 858 | |
2024 | 1,409 | |
2025 | (1) | |
Thereafter | 155 | |
Total long-term debt | 2,422 | |
Syndicated Credit Facility | ||
Long-term debt | ||
2022 | 10 | |
2023 | 20 | |
2024 | 1,414 | |
Total | 1,444 | |
2023 Notes | ||
Long-term debt | ||
2023 | 850 | |
Total | 850 | |
2027 Notes | ||
Long-term debt | ||
Thereafter | 150 | |
Total | 150 | |
Deferred financing | ||
Long-term debt | ||
2021 | 6 | |
2022 | 7 | |
2023 | 2 | |
2024 | 2 | |
2025 | 2 | |
Thereafter | 13 | |
Total | $ 32 |
Financial instruments and fai_3
Financial instruments and fair value disclosures - Financial instruments measured at fair value (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Orbital receivables, net | $ 361 | $ 382 |
Recurring | ||
Assets | ||
Long-term investments | 1 | |
Assets fair value | 1 | |
Liabilities | ||
Long-term debt | 2,556 | 3,004 |
Liabilities fair value | 2,576 | 3,022 |
Recurring | Interest rate swaps | ||
Liabilities | ||
Derivative financial instruments | 20 | 18 |
Recurring | Level 1 | ||
Assets | ||
Long-term investments | 1 | |
Assets fair value | 1 | |
Recurring | Level 2 | ||
Liabilities | ||
Long-term debt | 2,556 | 3,004 |
Liabilities fair value | 2,576 | 3,022 |
Recurring | Level 2 | Interest rate swaps | ||
Liabilities | ||
Derivative financial instruments | $ 20 | $ 18 |
Financial instruments and fai_4
Financial instruments and fair value disclosures - Financial instruments recorded at carrying value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Financial instruments and fair value disclosures | ||
Fair value assets level 1 to level 2 transfers | $ 0 | $ 0 |
Fair value assets level 2 to level 1 transfers | 0 | 0 |
Fair value assets transfers into level 3 | 0 | 0 |
Fair value assets transfers out of level 3 | 0 | 0 |
Fair value liabilities level 1 to level 2 transfers | 0 | 0 |
Fair value liabilities level 2 to level 1 transfers | 0 | 0 |
Fair value liabilities transfers into level 3 | 0 | 0 |
Fair value liabilities transfers out of level 3 | 0 | 0 |
Carrying value | ||
Financial instruments and fair value disclosures | ||
Long-term debt excludes finance leases, deferred financing and other | $ 2,387 | $ 2,906 |
Derivatives and Hedging - Cash
Derivatives and Hedging - Cash flow hedges (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2022 | Apr. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 05, 2018 | |
Derivatives and Hedging | |||||
Average interest rate | 2.56% | ||||
Interest rate swaps | Forecast | |||||
Derivatives and Hedging | |||||
Maturities of interest rate swaps | $ 500 | $ 500 | |||
Derivatives designated as hedging instruments | Interest rate swaps | |||||
Derivatives and Hedging | |||||
Notional amount | $ 1,000 | $ 1,000 | |||
Derivatives designated as hedging instruments | Interest rate swaps | Maximum | |||||
Derivatives and Hedging | |||||
Contract term | 1 year 3 months 18 days | ||||
Derivatives designated as hedging instruments | Purchase contracts settled in US dollars | Japanese Yen | |||||
Derivatives and Hedging | |||||
Notional amount | $ 10 | ||||
Derivatives designated as hedging instruments | Purchase contracts settled in US dollars | Japanese Yen | Maximum | |||||
Derivatives and Hedging | |||||
Contract term | 1 month 6 days |
Derivatives and Hedging - Earni
Derivatives and Hedging - Earnings and other comprehensive income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative instruments | |||
Effective portion of gains and losses included in other comprehensive income | $ (3) | $ (12) | $ (7) |
Estimated loss expected to be recognized in Net income (loss) | 16 | ||
Derivatives designated as hedging instruments | Interest rate swaps | |||
Derivative instruments | |||
Effective portion of gains and losses included in other comprehensive income | $ 3 | $ 13 | $ 5 |
Derivatives and Hedging - Net i
Derivatives and Hedging - Net investment hedge (Details) - Term Loan B - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives and Hedging | |||
Long-term debt | $ 1,444 | $ 1,960 | |
Net investment hedge | |||
Derivatives and Hedging | |||
Long-term debt | $ 271 | ||
Long-term debt excludes finance leases, deferred financing and other | $ 256 |
Accumulated other comprehensi_3
Accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | $ 761 | ||
Reclassification to gain on disposal of discontinued operations | (68) | ||
Balance at the end of period | 935 | $ 761 | |
Accumulated other comprehensive income (loss) | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 41 | 64 | $ 95 |
Other comprehensive (loss) income | (93) | (24) | (33) |
Tax benefit (expense) | 1 | 2 | |
Reclassification to gain on disposal of discontinued operations | (68) | ||
Balance at the end of period | (120) | 41 | 64 |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 126 | 111 | 130 |
Other comprehensive (loss) income | (47) | 14 | (19) |
Tax benefit (expense) | 1 | ||
Reclassification to gain on disposal of discontinued operations | (78) | ||
Balance at the end of period | 1 | 126 | 111 |
Net (Loss) Income Hedge Investments in Foreign Operations | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | 51 | ||
Balance at the end of period | 51 | ||
Unrecognized (Loss) Gain on Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | (12) | 7 | |
Other comprehensive (loss) income | (3) | (12) | (10) |
Tax benefit (expense) | 3 | ||
Reclassification to gain on disposal of discontinued operations | (5) | ||
Balance at the end of period | (20) | (12) | |
Pension Adjustments | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance at the beginning of period | (73) | (47) | (42) |
Other comprehensive (loss) income | (43) | (26) | (4) |
Tax benefit (expense) | (1) | ||
Reclassification to gain on disposal of discontinued operations | 15 | ||
Balance at the end of period | $ (101) | $ (73) | $ (47) |
Revenue - Remaining performance
Revenue - Remaining performance obligations (Details) $ in Billions | Dec. 31, 2020USD ($) |
Revenue | |
Remaining performance obligation | $ 1.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue | |
Remaining performance obligation | $ 1.1 |
Revenue | |
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 |
Revenue | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue | |
Remaining performance obligation | $ 0.3 |
Revenue | |
Expected timing of satisfaction |
Revenue - Contract assets and l
Revenue - Contract assets and liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Contract assets and contract liabilities | ||
Contract Liabilities | $ 279 | $ 275 |
Earth intelligence | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 45 | 130 |
Earth intelligence | Enhanced View contract | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 0 | 78 |
Increase in contract liability due to imputed interest on advance payments | 3 | |
Revenue recognized | 81 | |
Space Infrastructure | ||
Contract assets and contract liabilities | ||
Contract Liabilities | $ 234 | $ 145 |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue by source (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | |||
Revenues | $ 1,723 | $ 1,666 | $ 1,804 |
Product | |||
Revenue | |||
Revenues | 633 | 560 | 697 |
Service | |||
Revenue | |||
Revenues | 1,090 | 1,106 | 1,107 |
Earth intelligence | |||
Revenue | |||
Revenues | 1,081 | 1,085 | 1,059 |
Space Infrastructure | |||
Revenue | |||
Revenues | 721 | 706 | 823 |
Space Infrastructure | Commercial Satellite Contract | |||
Revenue | |||
Estimated loss | 42 | ||
Space Infrastructure | COVID-19 | |||
Revenue | |||
Growth in estimated total cost-at-completion ("EAC") | 27 | ||
Space Infrastructure | COVID-19 | Commercial Satellite Contract | |||
Revenue | |||
Estimated loss | 16 | ||
Space Systems | |||
Revenue | |||
Orbital interest revenue | 30 | 31 | 32 |
Operating Segments | |||
Revenue | |||
Revenues | (79) | (125) | (78) |
Operating Segments | Earth intelligence | |||
Revenue | |||
Revenues | 1,081 | 1,085 | 1,059 |
Operating Segments | Earth intelligence | Service | |||
Revenue | |||
Revenues | 1,081 | 1,085 | 1,058 |
Operating Segments | Space Infrastructure | |||
Revenue | |||
Revenues | 721 | 706 | 823 |
Operating Segments | Space Infrastructure | Product | |||
Revenue | |||
Revenues | 633 | 560 | 697 |
Operating Segments | Space Infrastructure | Service | |||
Revenue | |||
Revenues | 9 | 21 | 49 |
Intersegment eliminations | |||
Revenue | |||
Revenues | (79) | (125) | (78) |
Intersegment eliminations | Earth intelligence | |||
Revenue | |||
Revenues | 1 | ||
Intersegment eliminations | Space Infrastructure | |||
Revenue | |||
Revenues | $ 79 | $ 125 | $ 77 |
Revenue - Disaggregation of r_2
Revenue - Disaggregation of revenue on geographic location of customers (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | |||
Revenues | $ 1,723 | $ 1,666 | $ 1,804 |
U.S. | |||
Revenue | |||
Revenues | 1,406 | 1,240 | 1,238 |
Asia | |||
Revenue | |||
Revenues | 96 | 161 | 213 |
Europe | |||
Revenue | |||
Revenues | 84 | 69 | 54 |
Middle East | |||
Revenue | |||
Revenues | 54 | 57 | 90 |
Australia | |||
Revenue | |||
Revenues | 37 | 22 | 17 |
South America | |||
Revenue | |||
Revenues | 25 | 97 | 133 |
Canada | |||
Revenue | |||
Revenues | 10 | 10 | 49 |
Other | |||
Revenue | |||
Revenues | $ 11 | $ 10 | $ 10 |
Revenue - Disaggregation of r_3
Revenue - Disaggregation of revenue from significant customers (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | |||
Revenues | $ 1,723 | $ 1,666 | $ 1,804 |
U.S. Federal Government and agencies | |||
Revenue | |||
Revenues | 1,062 | 940 | 816 |
Commercial and other | |||
Revenue | |||
Revenues | $ 661 | $ 726 | $ 988 |
Commercial and other | Revenue | Customer concentration risk | |||
Revenue | |||
Concentration risk, percentage | 11.00% | ||
Commercial and other | Revenue | Customer concentration risk | Maximum | |||
Revenue | |||
Concentration risk, percentage | 10.00% | 10.00% | |
Operating Segments | |||
Revenue | |||
Revenues | $ (79) | $ (125) | $ (78) |
Intersegment eliminations | |||
Revenue | |||
Revenues | (79) | (125) | (78) |
Intersegment eliminations | U.S. Federal Government and agencies | |||
Revenue | |||
Revenues | (1) | (1) | |
Intersegment eliminations | Commercial and other | |||
Revenue | |||
Revenues | (79) | (124) | (77) |
Earth intelligence | |||
Revenue | |||
Revenues | 1,081 | 1,085 | 1,059 |
Earth intelligence | U.S. Federal Government and agencies | |||
Revenue | |||
Revenues | 774 | 790 | 712 |
Earth intelligence | Commercial and other | |||
Revenue | |||
Revenues | 307 | 295 | 347 |
Earth intelligence | Operating Segments | |||
Revenue | |||
Revenues | 1,081 | 1,085 | 1,059 |
Earth intelligence | Intersegment eliminations | |||
Revenue | |||
Revenues | 1 | ||
Space Infrastructure | |||
Revenue | |||
Revenues | 721 | 706 | 823 |
Space Infrastructure | U.S. Federal Government and agencies | |||
Revenue | |||
Revenues | 288 | 151 | 105 |
Space Infrastructure | Commercial and other | |||
Revenue | |||
Revenues | 433 | 555 | 718 |
Space Infrastructure | Operating Segments | |||
Revenue | |||
Revenues | 721 | 706 | 823 |
Space Infrastructure | Intersegment eliminations | |||
Revenue | |||
Revenues | $ 79 | $ 125 | $ 77 |
Segment information - Operating
Segment information - Operating performance (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment information | |||
Number of reportable segments | segment | 2 | ||
Total revenues | $ 1,723 | $ 1,666 | $ 1,804 |
Corporate and other expense | (61) | (86) | (49) |
Restructuring | (18) | (13) | |
Transaction and integration related expense | (7) | (16) | (33) |
Inventory impairment | (47) | (17) | (652) |
Gain on sale of assets | (1) | 136 | 33 |
Reduction of gain on sale leaseback | (1) | 136 | 33 |
CEO severance | (3) | ||
Gain on remeasurement of Vricon equity interest | 85 | ||
Depreciation and amortization | (348) | (376) | (439) |
Interest expense, net | (175) | (219) | (200) |
Interest income | 3 | 2 | |
Equity loss (income) from joint ventures, net of tax | (1) | (11) | (2) |
(Loss) income before taxes | (69) | 77 | (923) |
Other (income) expense | |||
Segment information | |||
Gain on remeasurement of Vricon equity interest | 85 | ||
Operating Segments | |||
Segment information | |||
Total revenues | (79) | (125) | (78) |
Operating Segments | Earth Intelligence | |||
Segment information | |||
Total revenues | 1,081 | 1,085 | 1,059 |
Adjusted EBITDA | 513 | 548 | 516 |
Operating Segments | Space Infrastructure | |||
Segment information | |||
Total revenues | 721 | 706 | 823 |
Adjusted EBITDA | (3) | (17) | (75) |
Intersegment eliminations | |||
Segment information | |||
Total revenues | (79) | (125) | (78) |
Adjusted EBITDA | $ (27) | $ (29) | $ (9) |
Segment information - Capital e
Segment information - Capital expenditures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment information | |||
Capital expenditures, property, plant and equipment | $ 221 | $ 257 | $ 150 |
Capital expenditures, intangible assets | 87 | 57 | 56 |
Capital expenditures | 308 | 314 | 206 |
Intersegment eliminations | |||
Segment information | |||
Capital expenditures, property, plant and equipment | 53 | 4 | (30) |
Capital expenditures, intangible assets | 7 | (2) | |
Capital expenditures | 60 | 2 | (30) |
Earth Intelligence | Operating Segments | |||
Segment information | |||
Capital expenditures, property, plant and equipment | 147 | 237 | 158 |
Capital expenditures, intangible assets | 79 | 56 | 55 |
Capital expenditures | 226 | 293 | 213 |
Space Infrastructure | Operating Segments | |||
Segment information | |||
Capital expenditures, property, plant and equipment | 21 | 16 | 22 |
Capital expenditures, intangible assets | 1 | 3 | 1 |
Capital expenditures | $ 22 | $ 19 | $ 23 |
Impairment Losses (Details)
Impairment Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, plant and equipment | |||
Property, plant and equipment impairment losses | $ 0 | $ 0 | $ 271,000 |
Intangible asset impairment losses | 0 | 0 | 124,000 |
Inventory impairment losses | 0 | 3,000 | 66,000 |
Goodwill impairment | 0 | 0 | |
Orbital receivables impairment | 14,000 | $ 14,000 | 22,000 |
Future premium payments and other assets impairment | 10,000 | ||
Software | |||
Property, plant and equipment | |||
Intangible asset impairment losses | 2,000 | ||
Earth Intelligence | |||
Property, plant and equipment | |||
Goodwill impairment | 142,000 | ||
Earth Intelligence | Prepaid Assets | |||
Property, plant and equipment | |||
Property, plant and equipment impairment losses | $ 33,000 | ||
Earth Intelligence | Satellites | |||
Property, plant and equipment | |||
Property, plant and equipment impairment losses | 150,000 | ||
Space Infrastructure | |||
Property, plant and equipment | |||
Goodwill impairment | 17,000 | ||
Space Infrastructure | GeoComn business | |||
Property, plant and equipment | |||
Intangible asset impairment losses | 122,000 | ||
Inventory impairment losses | 66,000 | ||
Space Infrastructure | Equipment And Building | GeoComn business | |||
Property, plant and equipment | |||
Property, plant and equipment impairment losses | $ 121,000 |
Employee benefit plans - Change
Employee benefit plans - Changes in benefit obligations, plan assets and funded status (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets and (liabilities) recognized in the Consolidated Balance Sheets: | |||||
Pension and other postretirement benefits | $ (192) | $ (192) | $ (191) | ||
Pension | |||||
Change in benefit obligation | |||||
Benefit obligation at beginning of year | $ 583 | 583 | 519 | ||
Service cost | 2 | 2 | |||
Interest cost | 17 | 21 | $ 19 | ||
Actuarial (gains) losses | 55 | 71 | |||
Benefits paid | (33) | (30) | |||
Benefit obligation at end of year | 624 | 624 | 583 | 519 | |
Change in plan assets | |||||
Fair value of plan assets at beginning of year | 404 | 404 | 352 | ||
Actuarial gains (losses) on plan assets | 40 | 70 | |||
Employer contributions | 15 | 3 | 34 | 12 | |
Benefits paid | (31) | (28) | |||
Expenses paid | (2) | (2) | (2) | ||
Expenses paid | (3) | (2) | |||
Fair value of plan assets at end of year | 444 | 444 | 404 | 352 | |
Funded status at end of year | (180) | (180) | (179) | ||
Assets and (liabilities) recognized in the Consolidated Balance Sheets: | |||||
Accrued compensation and benefits | (1) | (1) | (1) | ||
Pension and other postretirement benefits | (179) | (179) | (178) | ||
Total | (180) | (180) | (179) | ||
Decrease in pension benefit obligation | 41 | ||||
Decrease in fair value of plan assets | 40 | ||||
Aggregate accumulated benefit obligation | 624 | 624 | 583 | ||
Other Postretirement | |||||
Change in benefit obligation | |||||
Benefit obligation at beginning of year | $ 14 | 14 | 13 | ||
Interest cost | 1 | 1 | |||
Benefit obligation at end of year | 14 | 14 | 14 | $ 13 | |
Change in plan assets | |||||
Funded status at end of year | (14) | (14) | (14) | ||
Assets and (liabilities) recognized in the Consolidated Balance Sheets: | |||||
Accrued compensation and benefits | (1) | (1) | (1) | ||
Pension and other postretirement benefits | (13) | (13) | (13) | ||
Total | $ (14) | $ (14) | $ (14) |
Employee benefit plans - Compon
Employee benefit plans - Components of net periodic benefit cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pension | |||
Employee benefit plans | |||
Interest cost | $ 17 | $ 21 | $ 19 |
Expected return on plan assets | (24) | (24) | (27) |
Actual return on plan assets | 40 | 70 | |
Amortization of net loss (gain) | 1 | ||
Expenses paid | 2 | 2 | 2 |
Net periodic benefit cost | (4) | (1) | (6) |
Other Postretirement | |||
Employee benefit plans | |||
Interest cost | 1 | 1 | |
Amortization of net loss (gain) | $ (1) | $ (1) | |
Settlement loss recognized | (4) | ||
Net periodic benefit cost | $ (4) |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Employee benefit plans | ||||
Expense recorded | $ 16 | |||
Pension | ||||
Employee benefit plans | ||||
Aggregate accumulated benefit obligation | $ 624 | 624 | $ 583 | |
Employer contributions | 15 | $ 3 | 34 | $ 12 |
Expected future contribution by the employer | $ 16 | $ 16 |
Employee benefit plans - Net lo
Employee benefit plans - Net loss and prior service credit balances (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Pension | ||
Employee benefit plans | ||
Net (loss) gain | $ (110) | $ (70) |
Other Postretirement | ||
Employee benefit plans | ||
Net (loss) gain | $ 9 | $ 12 |
Employee benefit plans - Weight
Employee benefit plans - Weighted average assumptions to determine benefit obligations (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Pension | ||
Employee benefit plans | ||
Discount rate | 2.20% | 3.00% |
Other Postretirement | ||
Employee benefit plans | ||
Discount rate | 2.20% | 3.00% |
Employee benefit plans - Summar
Employee benefit plans - Summarizes the other changes in plan assets and benefit obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pension | |||
Employee benefit plans | |||
Net loss (gain) | $ 40 | $ 25 | $ 9 |
Amortization of net (loss) gain | (1) | ||
Total recognized in other comprehensive loss (income) | 39 | 25 | 9 |
Total recognized in net periodic benefit cost (credit) and other comprehensive loss (income) | 35 | 24 | 3 |
Other Postretirement | |||
Employee benefit plans | |||
Net loss (gain) | 4 | (2) | |
Amortization of net (loss) gain | 1 | 1 | |
Total recognized in other comprehensive loss (income) | $ 4 | 1 | (1) |
Total recognized in net periodic benefit cost (credit) and other comprehensive loss (income) | $ 1 | $ (1) |
Employee benefit plans - Weig_2
Employee benefit plans - Weighted average assumptions used to determine net periodic benefit cost (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pension | |||
Employee benefit plans | |||
Discount rate | 3.00% | 4.10% | 3.40% |
Expected long-term return on plan assets | 6.50% | 7.00% | 7.00% |
Other Postretirement | |||
Employee benefit plans | |||
Discount rate | 3.00% | 4.10% | 3.40% |
Employee benefit plans - Plan a
Employee benefit plans - Plan assets by asset category segregated by level (Details) - Pension - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Employee benefit plans | |||
Total assets at fair value | $ 444 | $ 404 | $ 352 |
Level 1 | |||
Employee benefit plans | |||
Total assets at fair value | 3 | 5 | |
Level 3 | |||
Employee benefit plans | |||
Total assets at fair value | 1 | ||
Cash and cash equivalents | |||
Employee benefit plans | |||
Total assets at fair value | 3 | 5 | |
Cash and cash equivalents | Level 1 | |||
Employee benefit plans | |||
Total assets at fair value | 3 | 5 | |
International equity securities | |||
Employee benefit plans | |||
Total assets at fair value | 1 | ||
International equity securities | Level 3 | |||
Employee benefit plans | |||
Total assets at fair value | 1 | ||
Other | |||
Employee benefit plans | |||
Total assets at fair value | $ 441 | $ 398 |
Employee benefit plans - Target
Employee benefit plans - Target Asset Allocations (Details) | Dec. 31, 2020 |
Target asset allocations for each major category of the plan assets | |
Target | 100.00% |
Actual | 100.00% |
Percentage points to rebalance the portfolio within | 2.00% |
Cash and cash equivalents | |
Target asset allocations for each major category of the plan assets | |
Target | 1.00% |
Actual | 1.00% |
U.S. equity securities | |
Target asset allocations for each major category of the plan assets | |
Target | 71.00% |
Actual | 71.00% |
Fixed income | |
Target asset allocations for each major category of the plan assets | |
Target | 28.00% |
Actual | 28.00% |
Employee benefit plans - Estima
Employee benefit plans - Estimated Future Benefit Payments (Details) $ in Millions | Dec. 31, 2020USD ($) |
Estimated Future Benefit Payments | |
2021 | $ 32 |
2022 | 33 |
2023 | 33 |
2024 | 33 |
2025 | 33 |
Years 2025 - 2029 | 164 |
Pension | |
Estimated Future Benefit Payments | |
2021 | 31 |
2022 | 32 |
2023 | 32 |
2024 | 32 |
2025 | 32 |
Years 2025 - 2029 | 159 |
Other Postretirement | |
Estimated Future Benefit Payments | |
2021 | 1 |
2022 | 1 |
2023 | 1 |
2024 | 1 |
2025 | 1 |
Years 2025 - 2029 | $ 5 |
Stock-based compensation plan_2
Stock-based compensation plans (Details) | Mar. 27, 2019CAD ($)shares | Oct. 01, 2001CAD ($)shares | Jul. 31, 2017shares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017shares |
Share Appreciation Rights | Non-employee Director | ||||||||
Share-based payment plans | ||||||||
Granted (in shares) | 0 | |||||||
Restricted Share Units | ||||||||
Share-based payment plans | ||||||||
Granted (in shares) | 2,083,425 | |||||||
Granted (per share) | $ / shares | $ 13.57 | |||||||
LTIP Plans | Share Appreciation Rights | ||||||||
Share-based payment plans | ||||||||
Granted (in shares) | 0 | |||||||
Pre 2017 LTIP | Share Appreciation Rights | ||||||||
Share-based payment plans | ||||||||
Shares authorized | 6,820,000 | |||||||
Term of award | 5 years | |||||||
2017 LTIP | Share Appreciation Rights | ||||||||
Share-based payment plans | ||||||||
Shares authorized | 1,900,000 | |||||||
Term of award | 10 years | |||||||
Omnibus Plan | ||||||||
Share-based payment plans | ||||||||
Granted (in shares) | 0 | 0 | ||||||
Shares reserved for issuance | 1,100,000 | |||||||
Term of award | 10 years | |||||||
Omnibus Plan | Non-employee Director | ||||||||
Share-based payment plans | ||||||||
Granted (in shares) | 0 | |||||||
Omnibus Plan | Share Appreciation Rights | ||||||||
Share-based payment plans | ||||||||
Term of award | 10 years | |||||||
2019 Incentive Award Plan | ||||||||
Share-based payment plans | ||||||||
Shares reserved for issuance | 2,525,000 | |||||||
Deferred Share Unit Plan | ||||||||
Share-based payment plans | ||||||||
Shares reserved for issuance | 100,000 | |||||||
Legacy Employee Stock Purchase Plan | ||||||||
Share-based payment plans | ||||||||
Granted (in shares) | 1,500,000 | 22,541 | 22,541 | 41,288 | ||||
Maximum shares that can be issued in one year under the plan | 300,000 | |||||||
Percentage of market value of shares that employees can purchase | 85.00% | |||||||
Maximum employee contribution of base salary | 10.00% | |||||||
Maximum employee contribution of base salary per annum | $ | $ 20,000 | |||||||
Granted (per share) | $ / shares | $ 6.20 | $ 42.20 | ||||||
Employee Share Purchase Plan | ||||||||
Share-based payment plans | ||||||||
Granted (in shares) | 5,000,000 | 543,184 | 89,398 | 89,398 | ||||
Percentage of market value of shares that employees can purchase | 85.00% | |||||||
Maximum employee contribution of base salary | 10.00% | |||||||
Maximum employee contribution of base salary per annum | $ | $ 25,000 | |||||||
Granted (per share) | $ / shares | $ 9.75 | $ 6.09 | ||||||
DigitalGlobe Equity Plan | Restricted Share Units | ||||||||
Share-based payment plans | ||||||||
Granted (in shares) | 0 |
Stock-based compensation plan_3
Stock-based compensation plans - Share Appreciation Rights (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2020USD ($)employee$ / sharesshares | Dec. 31, 2020$ / shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018$ / shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017shares | Dec. 31, 2020USD ($) | |
Additional disclosures | ||||||||
Incremental Expense | $ | $ 3 | |||||||
Number of employees affected due to modification of settlement | employee | 37 | |||||||
Omnibus Plan | ||||||||
Number of Awards | ||||||||
Granted (in shares) | 0 | |||||||
Share Appreciation Rights | Pre 2017 LTIP | ||||||||
Additional disclosures | ||||||||
Vesting period | 3 years | |||||||
Vesting percentage | 33.33% | |||||||
Share Appreciation Rights | 2017 LTIP | ||||||||
Additional disclosures | ||||||||
Vesting period | 4 years | |||||||
Vesting percentage | 25.00% | |||||||
Share Appreciation Rights | Omnibus Plan | ||||||||
Additional disclosures | ||||||||
Vesting period | 4 years | |||||||
Vesting percentage | 25.00% | |||||||
SARs Liability Classified Awards | ||||||||
Number of Awards | ||||||||
Outstanding at the beginning of the period (in shares) | 579,320 | |||||||
Granted (in shares) | 0 | 0 | ||||||
Exercised (in shares) | 0 | 0 | ||||||
Cancelled or expired (in shares) | (197,100) | |||||||
Outstanding at the end of the period (in shares) | 382,220 | 382,220 | 579,320 | |||||
Vested and expected to vest at the end of the period | 382,220 | |||||||
Exercisable at the end of the period | 381,470 | |||||||
Weighted Average Exercise Price | ||||||||
Outstanding at the beginning of the period (per share) | $ / shares | $ 63.12 | |||||||
Cancelled or expired (per share) | $ / shares | 67.92 | |||||||
Outstanding at the end of the period (per share) | $ / shares | 60.65 | |||||||
Vested and expected to vest at the end of the period | $ / shares | 60.65 | |||||||
Exercisable at the end of the period | $ / shares | 60.68 | |||||||
Contractual Term (in years) | ||||||||
Outstanding at the end of the period | 1 year 1 month 2 days | |||||||
Vested and expected to vest at the end of the period | 1 year 1 month 2 days | |||||||
Exercisable at the end of the period | 1 year 29 days | |||||||
SARs Accounted for as Equity Classified Awards | ||||||||
Number of Awards | ||||||||
Outstanding at the beginning of the period (in shares) | 925,591 | |||||||
Granted (in shares) | 0 | 0 | ||||||
Exercised (in shares) | 0 | 0 | ||||||
Cancelled or expired (in shares) | (115,064) | |||||||
Outstanding at the end of the period (in shares) | 810,527 | 810,527 | 925,591 | |||||
Vested and expected to vest at the end of the period | 810,527 | |||||||
Exercisable at the end of the period | 713,859 | |||||||
Weighted Average Exercise Price | ||||||||
Outstanding at the beginning of the period (per share) | $ / shares | 51.18 | |||||||
Cancelled or expired (per share) | $ / shares | 50.67 | |||||||
Outstanding at the end of the period (per share) | $ / shares | 51.25 | |||||||
Vested and expected to vest at the end of the period | $ / shares | 51.25 | |||||||
Exercisable at the end of the period | $ / shares | $ 50.95 | |||||||
Contractual Term (in years) | ||||||||
Outstanding at the end of the period | 6 years 3 months 25 days | |||||||
Vested and expected to vest at the end of the period | 6 years 3 months 25 days | |||||||
Exercisable at the end of the period | 6 years 3 months | |||||||
Weighted Average Grant Date Fair Value | ||||||||
Granted (per share) | $ / shares | $ 10.37 | |||||||
Restricted Share Units | ||||||||
Number of Awards | ||||||||
Outstanding at the beginning of the period (in shares) | 986,735 | |||||||
Granted (in shares) | 2,083,425 | |||||||
Vested (in shares) | (409,551) | |||||||
Modified (in shares) | 532,365 | |||||||
Cancelled or expired (in shares) | (243,005) | |||||||
Outstanding at the end of the period (in shares) | 2,949,969 | 2,949,969 | 986,735 | |||||
Weighted Average Grant Date Fair Value | ||||||||
Outstanding at the beginning of the period (per share) | $ / shares | $ 7.91 | |||||||
Granted (per share) | $ / shares | 13.57 | |||||||
Vested (per share) | $ / shares | 7.75 | |||||||
Cancelled or expired (per share) | $ / shares | 12.22 | |||||||
Modified (per share) | $ / shares | 28.74 | |||||||
Outstanding at the end of the period (per share) | $ / shares | $ 15.33 | $ 15.33 | $ 7.91 | |||||
Additional disclosures | ||||||||
Vesting period | 3 years | |||||||
Restricted Share Units | Omnibus and DigitalGlobe Equity Incentive Plan | ||||||||
Number of Awards | ||||||||
Vested (in shares) | (640,657) | |||||||
Weighted Average Grant Date Fair Value | ||||||||
Total fair value of vested awards | $ | $ 14 | $ 14 | $ 19 | |||||
Additional disclosures | ||||||||
Total unrecognized compensation expense | $ | $ 19 | |||||||
Weighted average remaining period (in years) | 1 year 1 month 6 days | |||||||
Restricted Share Units | Omnibus Plan | ||||||||
Number of Awards | ||||||||
Outstanding at the beginning of the period (in shares) | 247,498 | |||||||
Vested (in shares) | (159,679) | |||||||
Cancelled or expired (in shares) | (17,446) | |||||||
Outstanding at the end of the period (in shares) | 70,373 | 70,373 | 247,498 | |||||
Weighted Average Grant Date Fair Value | ||||||||
Outstanding at the beginning of the period (per share) | $ / shares | $ 36.42 | |||||||
Vested (per share) | $ / shares | 45.69 | |||||||
Cancelled or expired (per share) | $ / shares | 48.45 | |||||||
Outstanding at the end of the period (per share) | $ / shares | $ 12.41 | $ 12.41 | $ 36.42 | |||||
Additional disclosures | ||||||||
Vesting percentage | 33.33% | |||||||
Restricted Share Units | DigitalGlobe Equity Plan | ||||||||
Number of Awards | ||||||||
Outstanding at the beginning of the period (in shares) | 100,671 | |||||||
Granted (in shares) | 0 | |||||||
Vested (in shares) | (71,427) | |||||||
Cancelled or expired (in shares) | (2,928) | |||||||
Outstanding at the end of the period (in shares) | 26,316 | 26,316 | 100,671 | |||||
Weighted Average Grant Date Fair Value | ||||||||
Outstanding at the beginning of the period (per share) | $ / shares | $ 54.57 | |||||||
Vested (per share) | $ / shares | 54.57 | |||||||
Cancelled or expired (per share) | $ / shares | 54.57 | |||||||
Outstanding at the end of the period (per share) | $ / shares | $ 54.57 | $ 54.57 | $ 54.57 | |||||
RSUs Liability Classified Awards | ||||||||
Number of Awards | ||||||||
Outstanding at the beginning of the period (in shares) | 946,281 | |||||||
Vested (in shares) | (291,989) | 0 | 0 | |||||
Modified (in shares) | (532,365) | (532,365) | ||||||
Cancelled or expired (in shares) | (121,927) | |||||||
Outstanding at the end of the period (in shares) | 0 | 0 | 946,281 | |||||
Weighted Average Grant Date Fair Value | ||||||||
Outstanding at the beginning of the period (per share) | $ / shares | $ 6.93 | |||||||
Vested (per share) | $ / shares | 6.93 | |||||||
Cancelled or expired (per share) | $ / shares | 6.92 | |||||||
Modified (per share) | $ / shares | $ 6.93 | |||||||
Outstanding at the end of the period (per share) | $ / shares | $ 6.93 | |||||||
Additional disclosures | ||||||||
Cash paid to settle liability classified awards | $ | $ 4 |
Stock-based compensation plan_4
Stock-based compensation plans - Performance Shares Units (Details) - Performance Share Unit $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Number of common stock | 2 | |
Payout percentage | 200.00% | |
Payout percentage in equity | 100.00% | |
Payout percentage in cash | 100.00% | |
Summary of awards | ||
Outstanding at the beginning of the period (in shares) | shares | 963,402 | 0 |
Granted (in shares) | shares | 371,470 | |
Performance Adjustment (in shares) | shares | 240,837 | |
Vested (in shares) | shares | (481,674) | 0 |
Cancelled or expired (in shares) | shares | (53,355) | |
Outstanding at the end of the period (in shares) | shares | 1,040,680 | 963,402 |
Weighted Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (per share) | $ / shares | $ 6.83 | |
Granted (per share) | $ / shares | 20.72 | |
Performance adjustment (per share) | $ / shares | 6.54 | |
Vested (per share) | $ / shares | 6.54 | |
Cancelled or expired (per share) | $ / shares | 8.80 | |
Outstanding at the end of the period (per share) | $ / shares | $ 11.76 | $ 6.83 |
Additional disclosures | ||
Cash used to settle awards | $ | $ 3 | |
Total unrecognized compensation expense | $ | $ 10 | |
Weighted average remaining period (in years) | 1 year 2 months 12 days | |
Valuation of Share-Based Compensation Awards | ||
Risk-free interest rate | 0.90% | |
Risk-free interest rate, minimum | 2.20% | |
Risk-free interest rate, maximum | 2.30% | |
Dividend yield | 0.30% | |
Expected lives (in years) | 2 years 9 months 18 days | |
Volatility | 79.00% | |
Volatility, minimum | 63.00% | |
Volatility, maximum | 67.00% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance percentage | 0.00% | |
Valuation of Share-Based Compensation Awards | ||
Dividend yield | 0.50% | |
Expected lives (in years) | 2 years 10 months 24 days | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance percentage | 200.00% | |
Valuation of Share-Based Compensation Awards | ||
Dividend yield | 0.90% | |
Expected lives (in years) | 3 years |
Stock-based compensation plan_5
Stock-based compensation plans - Deferred Share Units (Details) - Deferred Share Units (DSU) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Awards | |||
Outstanding at the beginning of the period (in shares) | 65,610 | ||
Issued (in shares) | 0 | 0 | |
Redeemed (in shares) | (32,715) | (41,993) | 0 |
Outstanding at the end of the period (in shares) | 32,895 | 65,610 | |
Weighted Average Issuance Price | |||
Outstanding at the beginning of the period (per share) | $ 52.76 | ||
Redeemed (per share) | 49.50 | ||
Outstanding at the end of the period (per share) | $ 56.01 | $ 52.76 |
Stock-based compensation plan_6
Stock-based compensation plans - Share-based compensation expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Selling, general, and administrative expense, Product costs, and Service costs | |||
Share-based payment plans | |||
Share-based compensation expense before taxes | $ 43 | $ 20 | $ 20 |
Stock-based compensation plan_7
Stock-based compensation plans - Valuation of Share-Based Compensation Awards (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SARs Liability Classified Awards | |||
Valuation of Share-Based Compensation Awards | |||
Risk-free interest rate, minimum | 1.70% | 1.70% | |
Risk-free interest rate, maximum | 1.90% | 1.90% | |
Dividend yield | 0.50% | 1.80% | |
Volatility, minimum | 57.00% | 14.00% | |
Volatility, maximum | 130.00% | 23.00% | |
Granted (in shares) | 0 | 0 | |
SARs Liability Classified Awards | Minimum | |||
Valuation of Share-Based Compensation Awards | |||
Expected lives (in years) | 2 months 12 days | 3 months 18 days | |
SARs Liability Classified Awards | Maximum | |||
Valuation of Share-Based Compensation Awards | |||
Expected lives (in years) | 4 years 7 months 6 days | 5 years 4 months 24 days | |
Equity-settled SARs, RSUs and DSUs | |||
Valuation of Share-Based Compensation Awards | |||
Risk-free interest rate, minimum | 1.90% | ||
Risk-free interest rate, maximum | 2.30% | ||
Volatility, minimum | 3.00% | ||
Volatility, maximum | 7.00% | ||
Granted (in shares) | 0 | 0 | |
Equity-settled SARs, RSUs and DSUs | Minimum | |||
Valuation of Share-Based Compensation Awards | |||
Dividend yield | 2.20% | ||
Expected lives (in years) | 22 years | ||
Equity-settled SARs, RSUs and DSUs | Maximum | |||
Valuation of Share-Based Compensation Awards | |||
Dividend yield | 9.10% | ||
Expected lives (in years) | 41 years |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income taxes | |||
U.S. | $ (69) | $ 77 | $ (806) |
Non-U.S | (117) | ||
(Loss) income before taxes | (69) | 77 | (923) |
Current tax (benefit) expense | |||
U.S. | (5) | 5 | |
Total | (5) | 5 | |
Deferred tax benefit | |||
U.S. | (17) | (2) | |
Non-U.S. | (46) | ||
Total | (17) | (48) | |
Income tax (benefit) expense | $ (22) | $ 5 | $ (48) |
Income taxes - Income tax rate
Income taxes - Income tax rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income taxes | |||
Statutory U.S. Federal income tax rate | 21.00% | 21.00% | 21.00% |
Expected income tax (benefit) expense at statutory rate | $ (14) | $ 16 | $ (194) |
Non-deductible expenses | 8 | 15 | 6 |
Tax on international operations | (1) | (45) | |
Change in valuation allowance | 49 | (108) | 96 |
Base Erosion and Anti-Abuse Tax | (5) | 5 | |
Outside basis difference in assets held for sale | (39) | 78 | |
Tax credits | (3) | (1) | (9) |
Non-deductible goodwill impairment | 98 | ||
Remeasurement of previously held equity interest | (18) | ||
Other | 1 | ||
Income tax (benefit) expense | $ (22) | $ 5 | $ (48) |
Effective income tax rate | 32.00% | 6.00% | 5.00% |
Income taxes - Components of de
Income taxes - Components of deferred tax assets and liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of deferred tax assets and liabilities: | |||
Tax benefit of losses carried forward | $ 209 | $ 219 | $ 222 |
Tax credits | 93 | 82 | 91 |
Construction contract liabilities | 89 | 77 | |
Property and equipment | 15 | ||
Trade and other payables | 35 | 41 | 38 |
Employee benefits | 52 | 41 | 49 |
Unrealized gains and losses | 20 | 6 | 6 |
Other | 1 | 18 | 21 |
Deferred tax assets | 410 | 496 | 519 |
Valuation allowance | (228) | (231) | (304) |
Deferred tax assets, net of valuation allowance | 182 | 265 | 215 |
Construction contract liabilities | (10) | ||
Property and equipment | (55) | (47) | |
Goodwill and intangibles | (106) | (124) | (213) |
Outside basis difference in assets held for sale | (78) | ||
Other | (10) | (2) | |
Deferred tax liabilities | (171) | (259) | $ (215) |
Deferred tax assets, net | 11 | 6 | |
Decrease in valuation allowance | $ 3 | ||
Deferred tax liability on investments | $ 78 |
Income taxes - Tax credit carry
Income taxes - Tax credit carryforward (Details) $ in Millions | Dec. 31, 2020USD ($) |
Income taxes | |
Income tax receivables through acquisition | $ 2 |
Federal | |
Income taxes | |
Operating losses carried forward | 791 |
Net operating losses carried forward subject to expiration | 512 |
Net operating losses carried forward not subject to expiration | 279 |
Tax credits carried forward research and development | 77 |
Foreign | |
Income taxes | |
Operating losses carried forward | 16 |
Net operating losses carried forward not subject to expiration | 16 |
U.S. | |
Income taxes | |
Tax credits carried forward research and development | 5 |
State | |
Income taxes | |
Operating losses carried forward | 822 |
Net operating losses carried forward subject to expiration | 756 |
Net operating losses carried forward not subject to expiration | 66 |
Tax credits carried forward research and development | $ 11 |
Income taxes - Changes in unrec
Income taxes - Changes in unrecognized tax benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in unrecognized tax benefits | ||
Balance, beginning of the year | $ 7 | |
Gross increases related to prior period tax positions | 2 | $ 6 |
Gross increases related to current period tax positions | 1 | 1 |
Gross decreases related to prior period tax positions | (1) | |
Balance, end of year | 9 | 7 |
Unrecognized tax benefits | $ 7 | $ 7 |
Earnings per common share (Deta
Earnings per common share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net income (loss) per common share | |||
Income from continuing operations | $ (46) | $ 83 | $ (873) |
Income from discontinued operations, net of tax | 349 | 26 | (377) |
Net income (loss) | $ 303 | $ 109 | $ (1,250) |
Weighted average number of common shares outstanding - basic (in shares) | 60.7 | 59.6 | 58.1 |
Weighted dilutive effect of equity awards (in shares) | 0.6 | ||
Weighted average number of common shares outstanding-diluted | 60.7 | 60.2 | 58.1 |
Basic net income per common share: | |||
Income from continuing operations (in dollars per share) | $ (0.76) | $ 1.39 | $ (15.03) |
Income from discontinued operations, net of tax (in dollars per share) | 5.75 | 0.44 | (6.49) |
Basic net income (loss) per common share (in dollars per share) | 4.99 | 1.83 | (21.52) |
Diluted net income per common share: | |||
Loss from continuing operations (in dollars per share) | (0.76) | 1.38 | (15.03) |
Income from discontinued operations, net of tax (in dollars per share) | 5.75 | 0.43 | (6.49) |
Diluted net income (loss) per common share (in dollars per share) | $ 4.99 | $ 1.81 | $ (21.52) |
Earnings per share - Anti-dilut
Earnings per share - Anti-dilutive securities (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net income (loss) per common share | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4 | 2 | 3 |
Commitments and contingencies (
Commitments and contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2019 | Jul. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies | ||||
Repurchase Of Orbital Receivables | $ 0 | $ 24 | ||
Pending Litigation | Ukranian customer | ||||
Commitments and Contingencies | ||||
Recovery amount sought | $ 227 | |||
Pending Litigation | Stockholder class action | ||||
Commitments and Contingencies | ||||
Recovery amount sought | $ 700 |
Supplemental cash flow - (Detai
Supplemental cash flow - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental cash flow information: | |||
Cash paid for interest | $ (205) | $ (193) | $ (152) |
Supplemental non-cash investing and financing activities: | |||
Accrued capital expenditures | $ 13 | $ 19 | $ 19 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event $ in Millions | Feb. 11, 2021USD ($) |
Subsequent events | |
Maximum expose to liquidated damages | $ 9 |
Sirius XM | |
Subsequent events | |
Unbilled Contracts Receivable | $ 29 |
Contract term | 15 years |
Acceptance Receivables | Sirius XM | |
Subsequent events | |
Unbilled Contracts Receivable | $ 15 |
Orbital Receivables | Sirius XM | |
Subsequent events | |
Unbilled Contracts Receivable | $ 14 |