Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | lorl | |
Entity Registrant Name | LORAL SPACE & COMMUNICATIONS INC. | |
Entity Central Index Key | 1,006,269 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Accelerated Filer | |
Voting Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 21,427,078 | |
Nonvoting Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 9,505,673 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 248,904 | $ 255,139 |
Income taxes receivable | 10,818 | 11,105 |
Other current assets | 3,780 | 3,099 |
Total current assets | 263,502 | 269,343 |
Income taxes receivable, non-current | 1,550 | 1,550 |
Investments in affiliates | 84,363 | 53,430 |
Deferred tax assets | 56,529 | 50,016 |
Other assets | 52 | 372 |
Total assets | 405,996 | 374,711 |
Current liabilities: | ||
Accrued employment costs | 2,166 | 2,573 |
Other current liabilities | 2,262 | 1,279 |
Total current liabilities | 4,428 | 3,852 |
Pension and other postretirement liabilities | 16,390 | 18,786 |
Other liabilities | 63,390 | 61,475 |
Total liabilities | 84,208 | 84,113 |
Commitments and contingencies | ||
Shareholders' Equity: | ||
Preferred stock, 0.01 par value; 10,000,000 shares authorized, no shares issued and outstanding | ||
Common Stock: | ||
Paid-in capital | 1,019,988 | 1,019,988 |
Accumulated deficit | (654,003) | (682,831) |
Accumulated other comprehensive loss | (34,916) | (37,278) |
Total shareholders' equity | 321,788 | 290,598 |
Total liabilities and shareholders' equity | 405,996 | 374,711 |
Voting Common Stock [Member] | ||
Common Stock: | ||
Common stock, 0.01 par value | 216 | 216 |
Treasury stock (at cost), 154,494 shares of voting common stock | (9,592) | (9,592) |
Nonvoting Common Stock [Member] | ||
Common Stock: | ||
Common stock, 0.01 par value | $ 95 | $ 95 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Voting Common Stock [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 21,581,572 | 21,581,572 |
Treasury stock, shares | 154,494 | 154,494 |
Nonvoting Common Stock [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 9,505,673 | 9,505,673 |
Common stock, shares outstanding | 9,505,673 | 9,505,673 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) [Abstract] | ||||
General and administrative expense | $ (1,715) | $ (1,794) | $ (5,109) | $ (5,339) |
Operating income (loss) | (1,715) | (1,794) | (5,109) | (5,339) |
Interest and investment income | 1,263 | 728 | 3,340 | 1,754 |
Interest expense | (6) | (11) | (17) | (22) |
Other expense | (1,749) | (1,206) | (2,937) | (3,519) |
Income (loss) from continuing operations before income taxes and equity in net income (loss) of affiliates | (2,207) | (2,283) | (4,723) | (7,126) |
Income tax (provision) benefit | (6,669) | (16,552) | (1,014) | (82,236) |
Income (loss) from continuing operations before equity in net income (loss) of affiliates | (8,876) | (18,835) | (5,737) | (89,362) |
Equity in net income (loss) of affiliates | 55,095 | 43,372 | 56,734 | 183,086 |
(Loss) income from continuing operations | 46,219 | 24,537 | 50,997 | 93,724 |
Income (loss) from discontinued operations, net of tax provision | (25) | (62) | (5) | |
Net (loss) income | 46,194 | 24,537 | 50,935 | 93,719 |
Other comprehensive income (loss), net of tax | (5,410) | (12,356) | 2,362 | (15,215) |
Comprehensive income (loss) | $ 40,784 | $ 12,181 | $ 53,297 | $ 78,504 |
Net income (loss) per share: Basic | ||||
(Loss) income from continuing operations | $ 1.49 | $ 0.79 | $ 1.65 | $ 3.03 |
Income (loss) from discontinued operations, net of tax | ||||
Net (loss) income | 1.49 | 0.79 | 1.65 | 3.03 |
Net income (loss) per share: Diluted | ||||
(Loss) income from continuing operations | 1.48 | 0.77 | 1.63 | 2.98 |
Income (loss) from discontinued operations, net of tax | ||||
Net (loss) income | $ 1.48 | $ 0.77 | $ 1.63 | $ 2.98 |
Weighted average common shares outstanding: | ||||
Basic | 30,933 | 30,933 | 30,933 | 30,933 |
Diluted | 31,008 | 31,008 | 31,008 | 31,008 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Voting Common Stock [Member]Common Stock [Member] | Nonvoting Common Stock [Member]Common Stock [Member] | Paid-In Capital [Member] | Treasury Stock [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2016 | $ 216 | $ 95 | $ 1,019,988 | $ (9,592) | $ (826,460) | $ (13,836) | $ 170,411 |
Balance, shares at Dec. 31, 2016 | 21,582 | 9,506 | 154 | ||||
Net income (loss) | 93,719 | 93,719 | |||||
Other comprehensive income (loss) | (15,215) | (15,215) | |||||
Comprehensive income (loss) | 78,504 | ||||||
Cumulative effect adjustment attributable to previously unrecognized excess tax benefits on stock-based compensation | 4,741 | 4,741 | |||||
Balance at Sep. 30, 2017 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (728,000) | (29,051) | 253,656 |
Balance, shares at Sep. 30, 2017 | 21,582 | 9,506 | 154 | ||||
Balance at Dec. 31, 2016 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (826,460) | (13,836) | 170,411 |
Balance, shares at Dec. 31, 2016 | 21,582 | 9,506 | 154 | ||||
Other comprehensive income (loss) | (18,974) | ||||||
Tax cuts and Jobs Act, reclassification tax effect | (4,468) | ||||||
Balance at Dec. 31, 2017 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (682,831) | (37,278) | 290,598 |
Balance, shares at Dec. 31, 2017 | 21,582 | 9,506 | 154 | ||||
Balance at Sep. 30, 2017 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (728,000) | (29,051) | 253,656 |
Balance, shares at Sep. 30, 2017 | 21,582 | 9,506 | 154 | ||||
Net income (loss) | 40,745 | ||||||
Other comprehensive income (loss) | (3,759) | ||||||
Comprehensive income (loss) | 36,986 | ||||||
Tax cuts and Jobs Act, reclassification tax effect | 4,468 | (4,468) | |||||
Cumulative effect adjustment attributable to previously unrecognized excess tax benefits on stock-based compensation | (44) | (44) | |||||
Balance at Dec. 31, 2017 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (682,831) | (37,278) | 290,598 |
Balance, shares at Dec. 31, 2017 | 21,582 | 9,506 | 154 | ||||
Net income (loss) | 50,935 | 50,935 | |||||
Other comprehensive income (loss) | 2,362 | 2,362 | |||||
Comprehensive income (loss) | 53,297 | ||||||
Cumulative effect adjustment attributable to investment in Telesat, net of tax of $5.9 million | (22,107) | (22,107) | |||||
Balance at Sep. 30, 2018 | $ 216 | $ 95 | $ 1,019,988 | $ (9,592) | $ (654,003) | $ (34,916) | $ 321,788 |
Balance, shares at Sep. 30, 2018 | 21,582 | 9,506 | 154 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Condensed Consolidated Statements of Shareholders' Equity [Abstract] | |
Cumulative effect adjustment attributable to investment in Telesat, tax expense (benefit) | $ (5.9) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net income (loss) | $ 50,935 | $ 93,719 |
(Income) loss from discontinued operations, net of tax provision | 62 | 5 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Non-cash operating items (Note 2) | (57,158) | (155,628) |
Changes in operating assets and liabilities: | ||
Other current assets and other assets | (377) | (565) |
Accrued employment costs and other current liabilities | 576 | 759 |
Income taxes receivable and payable | 287 | 43,473 |
Pension and other postretirement liabilities | (2,396) | (1,576) |
Other liabilities | 1,915 | 2,035 |
Net cash provided by (used in) operating activities - continuing operations | (6,156) | (17,778) |
Net cash provided by (used in) operating activities - discontinued operations | (79) | (2,809) |
Net cash provided by (used in) operating activities | (6,235) | (20,587) |
Investing activities: | ||
Capital expenditures | (39) | |
Distribution received from affiliate | 242,735 | |
Net cash provided by (used in) investing activities - continuing operations | 242,696 | |
Net cash provided by (used in) investing activities - discontinued operations | ||
Net cash provided by (used in) investing activities | 242,696 | |
Cash, cash equivalents and restricted cash (Note 2) - period (decrease) increase | (6,235) | 222,109 |
Cash, cash equivalents and restricted cash (Note 2) - beginning of year | 255,443 | 37,458 |
Cash, cash equivalents and restricted cash - end of period | $ 249,208 | $ 259,567 |
Organization and Principal Busi
Organization and Principal Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization and Principal Business [Abstract] | |
Organization and Principal Business | 1. Organization and Principal Business Loral Space & Communications Inc., together with its subsidiaries (“Loral,” the “Company,” “we,” “our” and “us”) is a leading satellite communications company engaged, through our ownership interests in affiliates, in satellite-based communications services. Description of Business Loral has one operating segment consisting of satellite-based communications services. Loral participates in satellite services operations primarily through its ownership interest in Telesat Canada (“Telesat”), a leading global satellite operator. Loral holds a 62.7% economic interest and a 32.6% voting interest in Telesat. We use the equity method of accounting for our ownership interest in Telesat (see Note 5). Telesat owns and leases a satellite fleet that operates in geostationary earth orbit approximately 22,000 miles above the equator. In this orbit, satellites remain in a fixed position relative to points on the earth’s surface and provide reliable, high-bandwidth services anywhere in their coverage areas, serving as the backbone for many forms of telecommunications. On July 22, 2018, Telesat successfully launched a geostationary satellite, Telstar 19 VANTAGE, which entered commercial service in August 2018. On September 10, 2018, Telesat successfully launched another geostationary satellite, Telstar 18 VANTAGE, which entered commercial service in October 2018. Telesat is also developing a global constellation of low earth orbit (“LEO”) satellites. LEO satellites operate in a circular orbit around the earth with an altitude typically between 500 and 870 miles. Unlike geostationary orbit satellites that operate in a fixed orbital location above the equator, LEO satellites travel around the earth at high velocities requiring antennas on the ground to track their movement. LEO satellite systems have the potential to offer a number of advantages over geostationary orbit satellites to meet growing requirements for broadband services, both consumer and commercial, by providing increased data speeds and capacity, global coverage, and latency on par with, or potentially better than, terrestrial services. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) and, in our opinion, include all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of results of operations, financial position and cash flows as of the balance sheet dates presented and for the periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules. We believe that the disclosures made are adequate to keep the information presented from being misleading. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. The December 31, 2017 balance sheet has been derived from the audited consolidated financial statements at that date. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our latest Annual Report on Form 10-K filed with the SEC. Discontinued Operations On November 2, 2012, pursuant to the purchase agreement (the “Purchase Agreement”), dated as of June 26, 2012, as amended on October 30, 2012 and March 28, 2013, by and among Loral, Space Systems/Loral, LLC (formerly known as Space Systems/Loral, Inc.) (“SSL”), MacDonald, Dettwiler and Associates Ltd. (“MDA”) and MDA Communications Holdings, Inc. (“MDA Holdings”), a subsidiary of MDA, Loral completed the sale of SSL (the “SSL Sale”), its wholly ‑owned subsidiary, to MDA Holdings. Interest and other expenses that are directly related to the SSL Sale are classified as discontinued operations in the statements of operations for the three and nine months ended September 30, 2018 and 2017. Investments in Affiliates Our ownership interest in Telesat is accounted for using the equity method of accounting. Income and losses of Telesat are recorded based on our economic interest. Our equity in net income or loss of Telesat also reflects amortization of profits eliminated, to the extent of our economic interest in Telesat, on satellites we constructed for them while we owned SSL and on Loral’s sale to Telesat in April 2011 of its portion of the payload on the ViaSat-1 satellite and related assets. Non-refundable cash distributions received from Telesat in excess of our initial investment and our share of cumulative equity in comprehensive income of Telesat, net of cash distributions received in prior periods, are recorded as equity in net income of Telesat (“Excess Cash Distribution”) since we have no obligation to provide future financial support to Telesat. After receiving an Excess Cash Distribution, we do not record additional equity in net income of Telesat until our share of Telesat’s future net income exceeds the Excess Cash Distribution. Equity in losses of affiliates is not recognized after the carrying value of an investment, including advances and loans, has been reduced to zero, unless guarantees or other funding obligations exist. We had no guarantees or other funding obligations for our equity method investments as of September 30, 2018 and December 31, 2017. We use the nature of distribution approach to classify distributions from equity method investments on the statements of cash flows. The Company monitors its equity method investments for factors indicating other-than-temporary impairment. An impairment loss is recognized when there has been a loss in value of the affiliate that is other ‑than-temporary. Use of Estimates in Preparation of Financial Statements The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amount of income (loss) reported for the period. Actual results could materially differ from estimates. Significant estimates also included the allowances for doubtful accounts, income taxes, including the valuation of deferred tax assets, the fair value of liabilities indemnified, the dilutive effect of Telesat stock options (see Note 10) and our pension liabilities. Cash, Cash Equivalents and Restricted Cash As of September 30, 2018, the Company had $248.9 million of cash and cash equivalents. Cash and cash equivalents include liquid investments, primarily money market funds, with maturities of less than 90 days at the time of purchase. Management determines the appropriate classification of its investments at the time of purchase and at each balance sheet date. As of September 30, 2018 and December 31, 2017, the Company had restricted cash of $0.3 million. The restricted cash of $0.3 million represents the amount pledged as collateral to the issuer of a standby letter of credit (the “LC”). The LC, which expires in October 2018 and contains an automatic renewal period of one year, has been provided as a guaranty to the lessor of our corporate offices. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the condensed consolidated statement of cash flows (in thousands): September 30, December 31, 2018 2017 Cash and cash equivalents $ 248,904 255,139 Restricted cash included in current assets 304 — Restricted cash included in other assets — 304 Cash, cash equivalents and restricted cash shown in the statement of cash flows $ 249,208 255,443 Concentration of Credit Risk Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and receivables. Our cash and cash equivalents are maintained with high-credit-quality financial institutions. As of September 30, 2018 and December 31, 2017, our cash and cash equivalents were invested primarily in several liquid Prime and Government AAA money market funds. Such funds are not insured by the Federal Deposit Insurance Corporation. The dispersion across funds reduces the exposure of a default at any one fund. As a result, management believes that its potential credit risks are minimal. Fair Value Measurements U.S. GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. U.S. GAAP also establishes a fair value hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are described below: Level 1: Inputs represent a fair value that is derived from unadjusted quoted prices for identical assets or liabilities traded in active markets at the measurement date. Level 2: Inputs represent a fair value that is derived from quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities, and pricing inputs, other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Assets and Liabilities Measured at Fair Value The following table presents our assets and liabilities measured at fair value on a recurring and non-recurring basis (in thousands): September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Money market funds $ 247,237 $ — $ — $ 251,742 $ — $ — Other current assets: Indemnification - Sale of SSL — — 2,410 — — 2,410 Liabilities Other liabilities: Indemnification - Globalstar do Brasil S.A. $ — $ — $ 190 $ — $ — $ 293 The carrying amount of money market funds approximates fair value as of each reporting date because of the short maturity of those instruments. The Company did not have any non-financial assets or non-financial liabilities that were recognized or disclosed at fair value as of September 30, 2018 and December 31, 2017. Assets and Liabilities Measured at Fair Value on a Non-recurring Basis We review the carrying values of our equity method investments when events and circumstances warrant and consider all available evidence in evaluating when declines in fair value are other-than-temporary. The fair values of our investments are determined based on valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow projections. An impairment charge is recorded when the carrying amount of the investment exceeds its current fair value and is determined to be other-than-temporary. The asset resulting from the indemnification of SSL is for certain pre-closing taxes and reflects the excess of payments since inception over the estimated liability, which was originally determined using the fair value objective approach. The estimated liability for indemnifications relating to Globalstar do Brasil S.A. (“GdB”), originally determined using expected value analysis, is net of payments since inception. Contingencies Contingencies by their nature relate to uncertainties that require management to exercise judgment both in assessing the likelihood that a liability has been incurred as well as in estimating the amount of potential loss, if any. We accrue for costs relating to litigation, claims and other contingent matters when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties or on management’s judgment, as appropriate. Actual amounts paid may differ from amounts estimated, and such differences will be charged to operations in the period in which the final determination of the liability is made. Income Taxes Loral and its subsidiaries are subject to U.S. federal, state and local income taxation on their worldwide income and foreign taxation on certain income from sources outside the United States. Telesat is subject to tax in Canada and other jurisdictions, and Loral will provide in operating earnings any additional U.S. current and deferred tax required on distributions received or deemed to be received from Telesat. Deferred income taxes reflect the future tax effect of temporary differences between the carrying amount of assets and liabilities for financial and income tax reporting and are measured by applying anticipated statutory tax rates in effect for the year during which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent it is more likely than not that the deferred tax assets will not be realized. The tax benefit of an uncertain tax position (“UTP”) taken or expected to be taken in income tax returns is recognized only if it is “more likely than not” to be sustained on examination by the taxing authorities, based on its technical merits as of the reporting date. The tax benefit recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income taxes in income tax expense on a quarterly basis. The unrecognized tax benefit of a UTP is recognized in the period when the UTP is effectively settled. A previously recognized tax position is derecognized in the first period in which it is no longer more likely than not that such tax position would be sustained upon examination. Earnings per Share Basic earnings per share are computed based upon the weighted average number of shares of voting and non-voting common stock outstanding during each period. Shares of non-voting common stock are in all respects identical to and treated equally with shares of voting common stock except for the absence of voting rights (other than as provided in Loral’s Amended and Restated Certificate of Incorporation which was ratified by Loral’s stockholders on May 19, 2009). Diluted earnings per share are based on the weighted average number of shares of voting and non-voting common stock outstanding during each period, adjusted for the effect of unvested or unconverted restricted stock units. For diluted earnings per share, earnings are adjusted for the dilutive effect of Telesat stock options. Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in ASU No. 2018-14 remove certain disclosures that are no longer considered cost beneficial, clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant to improve effectiveness of disclosures related to employer sponsored defined benefit or other postretirement plans. The new guidance is effective for the Company on January 1, 2021, with earlier application permitted in any interim or annual period. The amendments in this ASU are to be applied on a retrospective basis to all periods presented. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements . In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. ASU No. 2018-13 eliminates, amends, and adds disclosure requirements to improve the effectiveness of fair value measurement disclosures. The new guidance is effective for the Company on January 1, 2020, with earlier application permitted in any interim or annual period. Companies may also choose to early adopt the eliminated and amended disclosures and wait to adopt the new disclosures until the effective date of the new guidance. While certain amendments are to be applied prospectively, all other amendments are to be applied retrospectively to all periods presented. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements . In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . On December 22, 2017, Public Law 115-97, known as the “Tax Cuts and Jobs Act” was signed into law. Among other things, the Tax Cuts and Jobs Act permanently reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent effective for tax years commencing January 1, 2018. According to ASU 2018-02, an entity may elect either to (a) reclassify from accumulated other comprehensive income (loss) to retained earnings the stranded income tax effects of the federal tax rate change (the “Reclassification”) or (b) provide certain disclosures. The new guidance is effective for the Company on January 1, 2019, with earlier adoption permitted in any interim or annual period. The amendments in this update are to be applied either in the period of adoption or retrospectively to each period in which the effect of the tax rate change is recognized. The Company early adopted the new guidance in the fourth quarter of 2017 and elected the Reclassification approach. As a result of adopting the new guidance, we reclassified $4.5 million of stranded deferred federal income tax benefits from accumulated other comprehensive loss to accumulated deficit in the fourth quarter of 2017 related to the change in the federal corporate income tax rate. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . ASU No. 2017-07, as it applies to the Company, amended the presentation of net periodic pension and postretirement cost (i.e. net benefit cost). The new guidance requires the service cost component to be presented separate from the non-service cost components of net benefit cost. While the service cost will be presented with other employee compensation costs within operations, the non-service cost components of net benefit cost, such as interest cost, amortization of prior service cost, and gains or losses, are required to be separately presented outside of operations, if income or loss from operations is presented. The guidance, to be applied retrospectively, is effective for the Company on January 1, 2018. Adoption of the new guidance on January 1, 2018, with retrospective effect, required us to restate the condensed consolidated statements of operations and comprehensive income for the prior-period presented. Accordingly, for the three and nine months ended September 30, 2017, of the net benefit cost of $0.4 million and $1.2 million, respectively, we reclassified the non-service cost components of $0.2 million and $0.7 million, respectively, from general and administrative expenses to other expense. Adoption of the new guidance did not affect previously reported financial position, earnings per share, or cash flows. In February 2016, the FASB amended the ASC by creating ASC Topic 842, Leases . ASC Topic 842 requires a lessee to record a right-of-use asset and a lease liability for all leases with a lease term greater than 12 months. The main difference between previous U.S. GAAP and ASC Topic 842 is the recognition under ASC 842 of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. The new guidance, effective for the Company on January 1, 2019, with earlier application permitted, is not expected to have a material effect on our condensed consolidated financial statements. Additional Cash Flow Information The following represents non-cash activities and supplemental information to the condensed consolidated statements of cash flows (in thousands): Nine Months Ended September 30, 2018 2017 Non-cash operating items: Equity in net income of affiliates $ (56,734) $ (183,086) Deferred taxes (1,237) 26,655 Depreciation and amortization 16 33 Amortization of prior service credit and actuarial loss 797 770 Net non-cash operating items – continuing operations $ (57,158) $ (155,628) Supplemental information: Interest paid – continuing operations $ 17 $ 22 Interest paid – discontinued operations $ — $ 55 Tax (refunds) payments, net - continuing operations $ (55) $ 10,038 0 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | 3. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, are as follows (in thousands): Equity in Accumulated Telesat Other Other Postretirement Comprehensive Comprehensive Benefits Income (Loss) Loss Balance, January 1, 2017 $ (14,074) $ 238 $ (13,836) Other comprehensive loss before reclassification (1,365) (18,280) (19,645) Amounts reclassified from accumulated other comprehensive loss 671 — 671 Net current-period other comprehensive loss (694) (18,280) (18,974) Tax Cuts and Jobs Act, reclassification of tax effect from accumulated other comprehensive loss to accumulated deficit (1,686) (2,782) (4,468) Balance, December 31, 2017 (16,454) (20,824) (37,278) Other comprehensive income before reclassification — 1,733 1,733 Amounts reclassified from accumulated other comprehensive loss 629 — 629 Net current-period other comprehensive income 629 1,733 2,362 Balance, September 30, 2018 $ (15,825) $ (19,091) $ (34,916) The components of other comprehensive income (loss) and related tax effects are as follows (in thousands): Three Months Ended September 30, 2018 2017 Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Amount Provision Amount Amount Provision Amount Amortization of prior service credits and net actuarial loss $ 265 (a) $ (56) $ 209 $ 257 (a) $ (90) $ 167 Equity in Telesat other comprehensive loss (7,115) 1,496 (5,619) (19,255) 6,732 (12,523) Other comprehensive loss $ (6,850) $ 1,440 $ (5,410) $ (18,998) $ 6,642 $ (12,356) Nine Months Ended September 30, 2018 2017 Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Amount Provision Amount Amount Provision Amount Amortization of prior service credits and net actuarial loss $ 797 (a) $ (168) $ 629 $ 770 (a) $ (270) $ 500 Equity in Telesat other comprehensive income (loss) 2,194 (461) 1,733 (24,184) 8,469 (15,715) Other comprehensive income (loss) $ 2,991 $ (629) $ 2,362 $ (23,414) $ 8,199 $ (15,215) (a) Reclassifications are included in other expense . |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2018 | |
Other Current Assets [Abstract] | |
Other Current Assets | 4. Other Current Assets Other current assets consists of (in thousands): September 30, December 31, 2018 2017 Indemnification receivable from SSL for pre-closing taxes (see Note 13) $ 2,410 $ 2,410 Restricted cash 304 — Due from affiliates 205 217 Prepaid expenses 443 198 Other 418 274 $ 3,780 $ 3,099 |
Investments in Affiliates
Investments in Affiliates | 9 Months Ended |
Sep. 30, 2018 | |
Investments in Affiliates [Abstract] | |
Investments in Affiliates | 5. Investments in Affiliates Investments in affiliates consist of (in thousands): September 30, December 31, 2018 2017 Telesat $ 84,363 $ 53,430 Equity in net income of affiliates consists of (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Telesat $ 55,095 $ 43,372 $ 56,734 $ 183,086 Telesat As of September 30, 2018 and December 31, 2017, we held a 62.7 % economic interest and a 32.6% voting interest in Telesat. We use the equity method of accounting for our majority economic interest in Telesat because we own 32.6% of the voting stock and do not exercise control by other means to satisfy the U.S. GAAP requirement for treatment as a consolidated subsidiary. We have also concluded that Telesat is not a variable interest entity for which we are the primary beneficiary. Loral’s equity in net income or loss of Telesat is based on our proportionate share of Telesat’s results in accordance with U.S. GAAP and in U.S. dollars. Our proportionate share of Telesat’s net income or loss is based on our economic interest as our holdings consist of common stock and non-voting participating preferred shares that have all the rights of common stock with respect to dividends, return of capital and surplus distributions, but have no voting rights. In addition to recording our share of equity in net income of Telesat, we also recorded our share of equity in other comprehensive income of Telesat of $2.2 million for the nine months ended September 30, 2018. On January 1, 2018, Telesat adopted ASC 606, Revenue from Contracts with Customers, for its U.S. GAAP reporting which we use to record our equity income in Telesat. Telesat adopted the new standard using the modified retrospective approach with a cumulative effect adjustment to reduce Telesat’s retained earnings by $44.6 million. As a result, we recorded our share of the cumulative effect adjustment by reducing our investment in Telesat by $28.0 million, increasing our deferred tax assets by $5.9 million and increasing our accumulated deficit by $22.1 million. Comparative summary financial data of Telesat presented below has not been restated and continues to be reported under the accounting standards in effect for those periods presented. For the three months ended September 30, 2017, our share of equity in net income of Teles a t, including elimination of affiliate transactions and related amortization, was $82.4 million. In the first quarter of 2017, we received a $242.7 million cash distribution from Telesat. As of June 30, 2017, the cash distribution we received from Telesat exceeded our initial investment and our share of cumulative equity in comprehensive income of Telesat, net of cash distributions received from Telesat in prior periods, by $39.0 million which we recognized as additional equity income during the six months ended June 30, 2017. For the three months ended September 30, 2017, we reduced our share of Telesat’s net income, including elimination of affiliate transactions and related amortization, of $82.4 million by the $39.0 million excess cash distribution resulting in the recognition of equity in net income of Telesat of $43.4 million. On January 1, 2018, Telesat adopted ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs, for its U.S. GAAP reporting. Comparative summary financial data of Telesat presented below has been restated as the new guidance is to be applied retrospectively. Adoption of the new guidance did not affect Telesat’s previously reported financial position or net income. In February 2017, Telesat amended its senior secured credit facilities. The amendment to the senior secured credit facilities reduced the applicable margin on the term loan B – U.S. facility (“U.S. TLB Facility”) from 3.75% to 3.0% . In March 2018, Telesat made a $50 million voluntary payment on the U.S. TLB Facility. In April 2018, Telesat amended the senior secured credit facilities, resulting in a reduction of the margin on the U.S. TLB Facility to 2.5% from 3.0%. The ability of Telesat to pay dividends or certain other restricted payments in cash to Loral is governed by applicable covenants in Telesat’s debt and shareholder agreements. Telesat’s credit agreement governing its senior secured credit facilities limits, among other items, Telesat’s ability to incur debt and make dividend payments if the total leverage ratio (“Total Leverage Ratio”) is above 4.50 :1.00, with certain exceptions. As of September 30, 2018, Telesat’s Total Leverage Ratio was 4.5 3 :1.00. Telesat is, however, permitted to pay annual consulting fees of $5.0 million to Loral in cash (see Note 14). The contribution of Loral Skynet, a wholly owned subsidiary of Loral prior to its contribution to Telesat in 2007, was recorded by Loral at the historical book value of our retained interest combined with the gain recognized on the contribution. However, the contribution was recorded by Telesat at fair value. Accordingly, the amortization of Telesat fair value adjustments applicable to the Loral Skynet assets and liabilities is proportionately eliminated in determining our share of the net income or losses of Telesat. Our equity in net income or loss of Telesat also reflects amortization of profits eliminated, to the extent of our economic interest in Telesat, on satellites we constructed for Telesat while we owned SSL and on Loral’s sale to Telesat in April 2011 of its portion of the payload on the ViaSat-1 satellite and related assets. The following table presents summary financial data for Telesat in accordance with U.S. GAAP, for the three and nine months ended September 30, 2018 and 2017 and as of September 30, 2018 and December 31, 2017 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Statement of Operations Data: Revenues $ 174,010 $ 170,151 $ 522,990 $ 514,800 Operating expenses (34,268) (34,101) (91,804) (112,876) Depreciation, amortization and stock-based compensation (47,946) (49,741) (144,732) (145,875) Other operating income (expense) 848 (204) 835 (220) Operating income 92,644 86,105 287,289 255,829 Interest expense (43,063) (37,901) (130,671) (111,765) Foreign exchange gain (loss) 42,784 103,099 (66,294) 193,259 (Loss) gain on financial instruments (202) (6,542) 30,414 (17,471) Other income 3,204 1,531 7,795 1,305 Income tax provision (7,605) (16,114) (39,190) (35,571) Net income $ 87,762 $ 130,178 $ 89,343 $ 285,586 September 30, December 31, 2018 2017 Balance Sheet Data: Current assets $ 576,052 $ 445,104 Total assets 4,054,930 4,082,472 Current liabilities 157,103 126,100 Long-term debt, including current portion 2,764,075 2,829,911 Total liabilities 3,474,619 3,538,656 Shareholders’ equity 580,311 543,816 Other We own 56% of XTAR, a joint venture between us and Hisdesat Servicios Estrategicos, S.A. (“Hisdesat”) of Spain. We account for our ownership interest in XTAR under the equity method of accounting because we do not control certain of its significant operating decisions. We have also concluded that XTAR is not a variable interest entity for which we are the primary beneficiary. As of September 30, 2018 and December 31, 2017, the carrying value of our investment in XTAR was zero . Beginning January 1, 2016, we discontinued providing for our allocated share of XTAR’s net losses as our investment was reduced to zero and we have no commitment to provide further financial support to XTAR. XTAR owns and operates an X-band satellite, XTAR-EUR, located at 29° E.L., which is designed to provide X-band communications services exclusively to United States, Spanish and allied government users throughout the satellite’s coverage area, including Europe, the Middle East and Asia. XTAR also leases 7.2 72MHz X-band transponders on the Spainsat satellite located at 30° W.L., owned by Hisdesat. These transponders, designated as XTAR-LANT, provide capacity to XTAR for additional X-band services and greater coverage and flexibility. As of September 30, 2018 and December 31, 2017, the Company also held an indirect ownership interest in a foreign company that currently serves as the exclusive service provider for Globalstar service in Mexico. The Company accounts for this ownership interest using the equity method of accounting. Loral has written-off its investment in this company, and, because we have no future funding requirements relating to this investment, there is no requirement for us to provide for our allocated share of this company’s net losses. |
Other Current Liabilities
Other Current Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Other Current Liabilities [Abstract] | |
Other Current Liabilities | 6. Other Current Liabilities Other current liabilities consists of (in thousands): September 30, December 31, 2018 2017 Due to affiliate 443 9 Accrued professional fees 1,691 1,117 Pension and other postretirement liabilities 69 69 Accrued liabilities 59 84 $ 2,262 $ 1,279 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 7. Income Taxes The following summarizes our income tax provision (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Current income tax provision $ (863) $ (1,592) $ (2,251) $ (55,581) Deferred income tax (provision) benefit (5,806) (14,960) 1,237 (26,655) Income tax provision $ (6,669) $ (16,552) $ (1,014) $ (82,236) For the nine month periods ended September 30, 2018 and 2017, our income tax provision is computed by applying an expected effective annual tax rate against the pre-tax results for each period (after adjusting for certain tax items that are discrete to each period). For the three month periods ended September 30, 2018 and 2017, this amount is then reduced by the tax benefit (provision) recorded for the six month periods ended June 30, 2018 and 2017, respectively. The current income tax provision for each period includes our anticipated income tax liability related to distributions received or deemed to be received from Telesat. The deferred income tax (provision) benefit for each period includes the impact of equity in net income of affiliates from our condensed consolidated statement of operations. In accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax- Accounting Implication of the Tax Cuts and Job Act (SAB 118), we recognized the preliminary income tax effects of the Tax Cuts and Jobs Act in our consolidated financial statements for the year ended December 31, 2017. The preliminary effect previously recorded may change in the future due to revisions in the interpretation of the Tax Cuts and Jobs Act or legislative action to clarify interpretation of the Tax Cuts and Jobs Act. The Company expects to finalize the effect of the Tax Cuts and Jobs Act and complete its accounting by December 31, 2018. In addition to reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent effective January 1, 2018, the Tax Cuts and Jobs Act included new Global Intangible Low-Taxed Income (“GILTI”) provisions effective for the first time during 2018 which require the Company to currently include in U.S. federal taxable income certain earnings of controlled foreign corporations, including Telesat. The GILTI provisions provided an incremental tax benefit of approximately $5.7 million and $12.5 million for the three and nine months ended September 30, 2018, respectively. Subsequent to the SSL Sale, to the extent that profitability from operations is not sufficient to realize the benefit from our remaining net deferred tax assets, we would generate sufficient taxable income from the appreciated value of our Telesat investment in order to prevent federal net operating losses from expiring and realize the benefit of all remaining deferred tax assets. The following summarizes amounts for UTPs included in our income tax provision (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Current provision for UTPs $ (791) $ (704) $ (2,018) $ (2,069) Deferred benefit for UTPs 167 226 425 701 Tax provision for UTPs $ (624) $ (478) $ (1,593) $ (1,368) As of September 30, 2018, we had unrecognized tax benefits relating to UTPs of $70 million. The Company recognizes interest and penalties related to income taxes in income tax expense on a quarterly basis. As of September 30, 2018, we have accrued no penalties and approximately $9.2 million for the potential payment of tax-related interest. With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years prior to 2012. Earlier years related to certain foreign jurisdictions remain subject to examination. To the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carryforward. While we intend to contest any future tax assessments for uncertain tax positions, no assurance can be provided that we would ultimately prevail. During the next twelve months, the statute of limitations for assessment of additional tax will expire with regard to certain UTPs related to our federal income tax return filed for 2012, potentially resulting in the recognition of $27.3 million of previously unrecognized tax benefits. Pursuant to the Purchase Agreement for the SSL Sale, we are obligated to indemnify SSL for taxes related to periods prior to the closing of the transaction. The following summarizes the changes to our liabilities for UTPs included in other liabilities in the condensed consolidated balance sheets (in thousands): Nine Months Ended September 30, 2018 2017 Liabilities for UTPs: Opening balance — January 1 $ 61,182 $ 68,658 Current provision for potential additional interest 2,018 2,069 Ending balance $ 63,200 $ 70,727 As of September 30, 2018, if our positions are sustained by the taxing authorities, the Company’s income tax provision from continuing operations would be reduced by approximately $46.9 million. Other than as described above, there were no significant changes to our UTPs during the nine months ended September 30, 2018 and 2017, and we do not anticipate any other significant changes to our unrecognized tax benefits during the next twelve months. |
Other Liabilities
Other Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities [Abstract] | |
Other Liabilities | 8. Other Liabilities Other liabilities consists of (in thousands): September 30, December 31, 2018 2017 Indemnification liabilities - other (see Note 13) 190 293 Liabilities for uncertain tax positions 63,200 61,182 $ 63,390 $ 61,475 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation Stock Plans The Loral amended and restated 2005 stock incentive plan (the “Stock Incentive Plan”) which allowed for the grant of several forms of stock-based compensation awards including stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses and other stock-based awards, had a ten-year term and has expired. The Company granted 75,262 restricted stock units under the Stock Incentive Plan that do not expire and remained unconverted as of September 30, 2018 and December 31, 2017. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. Earnings Per Share Telesat has awarded employee stock options, which, if exercised, would result in dilution of Loral’s economic ownership interest in Telesat from 62.7% to approximately 62.3 %. The following table presents the dilutive impact of Telesat stock options on Loral’s reported income from continuing operations for the purpose of computing diluted earnings per share (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Income from continuing operations — basic $ 46,219 $ 24,537 $ 50,997 $ 93,724 Less: Adjustment for dilutive effect of Telesat stock options (340) (713) (350) (1,346) Income from continuing operations — diluted $ 45,879 $ 23,824 $ 50,647 $ 92,378 Basic income per share is computed based upon the weighted average number of share of voting and non-voting common stock outstanding. The following is the computation of common shares outstanding for diluted earnings per share (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Weighted average common shares outstanding 30,933 30,933 30,933 30,933 Unconverted restricted stock units 75 75 75 75 Common shares outstanding for diluted earnings per share 31,008 31,008 31,008 31,008 |
Pensions and Other Employee Ben
Pensions and Other Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2018 | |
Pensions and Other Employee Benefit Plans [Abstract] | |
Pensions and Other Employee Benefit Plans | 11. Pensions and Other Employee Benefit Plans The following tables provide the components of net periodic cost for our qualified retirement plan (the “Pension Benefits”) and health care and life insurance benefits for retired employees and dependents (the “Other Benefits”) for the three and nine months ended September 30, 2018 and 2017 (in thousands): Pension Benefits Other Benefits Three Months Ended Three Months Ended September 30, September 30, 2018 2017 2018 2017 Service cost (1) $ 179 $ 175 $ 1 $ - Interest cost (2) 464 490 4 5 Expected return on plan assets (2) (657) (531) — — Amortization of net actuarial loss (2) 260 250 — 1 Amortization of prior service credits (2) — — 5 6 Net periodic cost $ 246 $ 384 $ 10 $ 12 Pension Benefits Other Benefits Nine Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Service cost (1) $ 536 $ 526 $ 1 $ 1 Interest cost (2) 1,391 1,470 12 14 Expected return on plan assets (2) (1,971) (1,593) — — Amortization of net actuarial loss (2) 780 749 — 3 Amortization of prior service credits (2) — — 17 18 Net periodic cost $ 736 $ 1,152 $ 30 $ 36 (1) Included in general and administrative expenses. (2) Included in other expense. |
Financial Instruments, Derivati
Financial Instruments, Derivative Instruments and Hedging | 9 Months Ended |
Sep. 30, 2018 | |
Financial Instruments, Derivative Instruments and Hedging [Abstract] | |
Financial Instruments, Derivative Instruments and Hedging | 12. Financial Instruments, Derivative Instruments and Hedging Financial Instruments The carrying amount of cash equivalents approximates fair value because of the short maturity of those instruments. Foreign Currency We are subject to the risks associated with fluctuations in foreign currency exchange rates. To limit this foreign exchange rate exposure, we attempt to denominate all contracts in U.S. dollars. Where appropriate, derivatives are used to minimize the risk of foreign exchange rate fluctuations to operating results and cash flows. We do not use derivative instruments for trading or speculative purposes. Derivatives and Hedging Transactions There were no derivative instruments as of September 30, 2018 and December 31, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Financial Matters In the fourth quarter of 2012, we sold our former subsidiary, SSL, to MDA pursuant to the Purchase Agreement. Under the terms of the Purchase Agreement, we are obligated to indemnify MDA and its affiliates from liabilities with respect to certain pre-closing taxes. Our consolidated balance sheets include an indemnification refund receivable of $2.4 million as of September 30, 2018 and December 31, 2017. This receivable represents payments to date net of the estimated fair value of the liability for our indemnification for our obligation with respect to certain pre-closing taxes. The final amounts for indemnification claims related to pre-closing taxes have not yet been determined. Where appropriate, we intend vigorously to contest the underlying tax assessments, but there can be no assurance that we will be successful. Although no assurance can be provided, we do not believe that these tax-related matters will have a material adverse effect on our financial position or results of operations. In connection with the sale in 2008 by Loral and certain of its subsidiaries and DASA Globalstar LLC to Globalstar Inc. of their respective interests in GdB, the Globalstar Brazilian service provider, Loral agreed to indemnify Globalstar Inc. and GdB for certain GdB pre-closing liabilities, primarily related to Brazilian taxes. Our condensed consolidated balance sheets include liabilities of $0.2 million and $0.3 million as of September 30, 2018 and December 31, 2017, respectively, for indemnification liabilities relating to the sale of GdB. See Note 14 — Related Party Transactions — Transactions with Affiliates — Telesat for commitments and contingencies relating to our agreement to indemnify Telesat for certain liabilities and our other arrangements with Telesat. Legal Proceedings We are not currently subject to any legal proceedings that, if decided adversely, could have a material adverse effect on our financial position or results of operations. In the future, however, we may become subject to legal proceedings and claims, either asserted or unasserted, that may arise in the ordinary course of business or otherwise. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Tra nsactions MHR Fund Management LLC Mark H. Rachesky, President of MHR Fund Management LLC (“MHR”), and Janet T. Yeung, a principal and the General Counsel of MHR, are members of Loral’s board of directors. Various funds affiliated with MHR and Dr. Rachesky held, as of September 30, 2018 and December 31, 2017, approximately 39.9% of the outstanding voting common stock and 58.4% of the combined outstanding voting and non-voting common stock of Loral. Transactions with Affiliates Telesat As described in Note 5, we own 62.7% of Telesat and account for our ownership interest under the equity method of accounting. In connection with the acquisition of our ownership interest in Telesat (which we refer to as the Telesat transaction), Loral and certain of its subsidiaries, our Canadian co-owner, Public Sector Pension Investment Board (“PSP”) and one of its subsidiaries, Telesat and MHR entered into a Shareholders Agreement (the “Shareholders Agreement”). The Shareholders Agreement provides for, among other things, the manner in which the affairs of Telesat and its subsidiaries will be conducted and the relationships among the parties thereto and future shareholders of Telesat. The Shareholders Agreement also contains an agreement by Loral not to engage in a competing satellite communications business and agreements by the parties to the Shareholders Agreement not to solicit employees of Telesat or any of its subsidiaries. Additionally, the Shareholders Agreement details the matters requiring the approval of the shareholders of Telesat (including veto rights for Loral over certain extraordinary actions) and provides for preemptive rights for certain shareholders upon the issuance of certain capital shares of Telesat. The Shareholders Agreement also (i) restricts the ability of holders of certain shares of Telesat to transfer such shares unless certain conditions are met or approval of the transfer is granted by the directors of Telesat, (ii) provides for a right of first offer to certain Telesat shareholders if a holder of equity shares of Telesat wishes to sell any such shares to a third party and (iii) provides for, in certain circumstances, tag-along rights in favor of shareholders that are not affiliated with Loral if Loral sells equity shares and drag-along rights in favor of Loral in case Loral or its affiliate enters into an agreement to sell all of its Telesat equity securities. In addition, the Shareholders Agreement provides for either PSP or Loral to initiate the process of conducting an initial public offering of the equity shares of Telesat (a “Telesat IPO”). In connection with our exploration of strategic initiatives to alter the status quo in our ownership of Telesat, in July 2015, we exercised our right under the Shareholders Agreement to require Telesat to conduct a Telesat IPO. Specifically, we requested that Telesat issue not more than 25 million newly issued shares of Telesat voting common stock. We also requested the termination of the Shareholders Agreement and the elimination of certain provisions in Telesat’s Articles of Incorporation, both of which we believe are important for a successful public offering. If those provisions are eliminated, an impediment to the conversion of our non-voting Telesat shares to voting shares would be eliminated. Termination or modification of the Shareholders Agreement and conversion of our non-voting shares to voting shares would enable us, after a Telesat IPO and subject to the receipt of any necessary regulatory approvals, to obtain majority voting control of Telesat. To date, we and PSP have not reached agreement on governance matters following a Telesat IPO. In the event a strategic transaction to combine Loral and Telesat into one public company that we are pursuing is not likely to be achievable in a timely manner or on satisfactory terms, we may further pursue our right to a Telesat IPO. There can be no assurance as to whether, when or on what terms a Telesat IPO, termination or modification of the Shareholders Agreement or any requested changes to Telesat’s Articles of Incorporation may occur or that any particular economic, tax, structural or other objectives or benefits with respect to a Telesat IPO will be achieved. If a Telesat IPO is expected to proceed under unfavorable terms or at an unfavorable price, we may withdraw our demand for a Telesat IPO. Depending upon the outcome of discussions with PSP relating to Telesat strategic matters, we may assert certain claims against PSP for actions we believe violated our rights relating to the affairs of Telesat under the Telesat Shareholders Agreement and otherwise. In response to our claims, PSP has informed us that it believes that it may have claims against us, although we are not aware of the legal or factual basis for any such claims. We and PSP have agreed that, pending the outcome of our discussions, it would be beneficial to delay the commencement of any action relating to either party’s claims and have entered into an agreement (the “Tolling Agreement”) which preserves the parties’ rights to assert against one another legal claims relating to Telesat. We also included Telesat as a party to the Tolling Agreement because, as a technical matter of Canadian law and for purposes of potentially seeking equitable relief, Telesat may be a necessary party. There can be no assurance that if the Tolling Agreement lapses that we and PSP will not pursue legal claims against one another relating to Telesat. If we pursue claims against PSP, there can be no assurance that our claims will be successful or that the relief we seek will be granted. If PSP pursues claims against us, there can be no assurance that PSP will not prevail on its claims. Under the Shareholders Agreement, in the event that, except in certain limited circumstances, either (i) ownership or control, directly or indirectly, by Dr. Rachesky of Loral’s voting stock falls below certain levels other than in connection with certain specified circumstances, including an acquisition by a Strategic Competitor (as defined in the Shareholders Agreement) or (ii) there is a change in the composition of a majority of the members of the Loral Board of Directors over a consecutive two-year period without the approval of the incumbent directors, Loral will lose its veto rights relating to certain extraordinary actions by Telesat and its subsidiaries. In addition, after either of these events, PSP will have certain rights to enable it to exit from its investment in Telesat, including a right to cause Telesat to conduct an initial public offering in which PSP’s shares would be the first shares offered or, if no such offering has occurred within one year due to a lack of cooperation from Loral or Telesat, to cause the sale of Telesat and to drag along the other shareholders in such sale, subject to Loral’s right to call PSP’s shares at fair market value. The Shareholders Agreement provides for a board of directors of Telesat consisting of 10 directors, three nominated by Loral, three nominated by PSP and four independent directors to be selected by a nominating committee comprised of one PSP nominee, one nominee of Loral and one of the independent directors then in office. Each party to the Shareholders Agreement is obligated to vote all of its Telesat shares for the election of the directors nominated by the nominating committee. Pursuant to action by the board of directors taken on October 31, 2007, Dr. Rachesky, who is non-executive Chairman of the Board of Directors of Loral, was appointed non-executive Chairman of the Board of Directors of Telesat. In addition, Michael B. Targoff, Loral’s Vice Chairman, serves on the board of directors of Telesat. On October 31, 2007 , Loral and Telesat entered into a consulting services agreement (the “Consulting Agreement”). Pursuant to the terms of the Consulting Agreement, Loral provides to Telesat certain non-exclusive consulting services in relation to the business of Loral Skynet which was transferred to Telesat as part of the Telesat transaction as well as with respect to certain aspects of the satellite communications business of Telesat. The Consulting Agreement has a term of seven-years with an automatic renewal for an additional seven-year term if Loral is not then in material default under the Shareholders Agreement. Upon expiration of the initial term on October 31, 2014, the Consulting Agreement was automatically renewed for the additional seven-year term. In exchange for Loral’s services under the Consulting Agreement, Telesat pays Loral an annual fee of $ 5.0 million , payable quarterly in arrears on the last day of March, June, September and December of each year during the term of the Consulting Agreement. Our general and administrative expenses are net of income related to the Consulting Agreement of $ 1.25 million for each of the three ‑month periods ended September 30, 2018 and 2017 and $3.8 million for each of the nine-month periods ended September 30, 2018 and 2017, respectively. For each of the nine-month periods ended September 30, 2018 and 2017, Loral received payments in cash from Telesat, net of withholding taxes, of $3.6 million for consulting fees. In connection with the acquisition of our ownership interest in Telesat in 2007, Loral retained the benefit of tax recoveries related to the transferred assets and indemnified Telesat (“Telesat Indemnification”) for certain liabilities, including Loral Skynet’s tax liabilities arising prior to January 1, 2007. The Telesat Indemnification includes certain tax disputes currently under review in various jurisdictions including Brazil. The Brazilian tax authorities challenged Loral Skynet’s historical characterization of its revenue generated in Brazil for the years 2003 to 2006. Telesat received and challenged, on Loral Skynet’s behalf, tax assessments from Brazil totaling approximately $0.8 million. The Company believes that Loral Skynet’s filing position will ultimately be sustained requiring no payment under the Telesat Indemnification. There can be no assurance that there will be no future claims under the Telesat Indemnification related to tax disputes. Loral’s employees and retirees participate in certain welfare plans sponsored or managed by Telesat. Loral pays Telesat an annual administrative fee of $0.1 million and reimburses Telesat for the plan costs attributable to Loral participants. Loral, along with Telesat, PSP and 4440480 Canada Inc., an indirect wholly-owned subsidiary of Loral (the “Special Purchaser”), entered into grant agreements (the “Grant Agreements”) with certain executives of Telesat (each, a “Participant” and collectively, the “Participants”). Each of the Participants is or was, at the time, an executive of Telesat. The Grant Agreements confirm grants of Telesat stock options (including tandem SAR rights) to the Participants and provide for certain rights, obligations and restrictions related to such stock options, which include, among other things: (w) the possible obligation of the Special Purchaser to purchase the shares in the place of Telesat should Telesat be prohibited by applicable law or under the terms of any credit agreement applicable to Telesat from purchasing such shares, or otherwise default on such purchase obligation, pursuant to the terms of the Grant Agreements; and (x) the obligation of the Special Purchaser to purchase shares upon exercise by Telesat of its call right under Telesat's Management Stock Incentive Plan in the event of a Participant’s termination of employment; and, in the case of certain executives, (y) the right of each such Participant to require the Special Purchaser or Loral to purchase a portion of the shares in Telesat owned by him in the event of exercise after termination of employment to cover taxes that are greater than the minimum withholding amount; and (z) the right of each such Participant to require Telesat to cause the Special Purchaser or Loral to purchase a portion of the shares in Telesat owned by him, or that are issuable to him under Telesat's Management Stock Incentive Plan at the relevant time, in the event that more than 90 % of Loral's common stock is acquired by an unaffiliated third party that does not also purchase all of PSP's and its affiliates' interest in Telesat. The Grant Agreements further provide that, in the event the Special Purchaser is required to purchase shares, such shares, together with the obligation to pay for such shares, shall be transferred to a subsidiary of the Special Purchaser, which subsidiary shall be wound up into Telesat, with Telesat agreeing to the acquisition of such subsidiary by Telesat from the Special Purchaser for nominal consideration and with the purchase price for the shares being paid by Telesat within ten (10 ) business days after completion of the winding-up of such subsidiary into Telesat. In the first quarter of 2017, Loral received a $242.7 million cash distribution from Telesat (see Note 5). Other As described in Note 5, we own 56% of XTAR, a joint venture between Loral and Hisdesat and account for our investment in XTAR under the equity method of accounting. SSL constructed XTAR’s satellite, which was successfully launched in February 2005. XTAR and Loral have entered into a management agreement whereby Loral provides general and specific services of a technical, financial and administrative nature to XTAR. For the services provided by Loral, XTAR, until December 31, 2013, was charged a quarterly management fee equal to 3.7% of XTAR’s quarterly gross revenues. Amounts due to Loral primarily due to the management agreement were $ 6.8 million as of September 30, 2018 and December 31, 2017. Beginning in 2008, Loral and XTAR agreed to defer amounts owed to Loral under this agreement, and XTAR has agreed that its excess cash balance (as defined), will be applied at least quarterly towards repayment of its payables owed to Loral, as well as to Hisdesat and Telesat. No cash was received under this agreement for the nine months ended September 30, 2018 and 2017, and we had an allowance of $6.6 million against receivables from XTAR as of September 30, 2018 and December 31, 2017. Loral and Hisdesat have agreed to waive future management fees for an indefinite period starting January 1, 2014. Consulting Agreement On December 14, 2012 , Loral entered into a consulting agreement with Michael B. Targoff, Vice Chairman of the Company and former Chief Executive Officer and President. Pursuant to this agreement, Mr. Targoff is engaged as a part-time consultant to the Board to assist the Board with respect to the oversight of strategic matters relating to Telesat and XTAR. Under the agreement, Mr. Targoff receives consulting fees of $ 120,000 per month and reimburses the Company for certain expenses. For each of the three and nine month periods ended September 30, 2018 and 2017, Mr. Targoff earned $360,000 and $1,080,000 respectively, in consulting fees. For each of the three months ended September 30, 2018 and 2017, Mr. Targoff reimbursed Loral net expenses of $11,250 and for the nine months ended September 30, 2018 and 2017, Mr. Targoff reimbursed Loral net expenses of $33,750 and $42,750 , respectively. |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation [Abstract] | |
Discontinued Operations | Discontinued Operations On November 2, 2012, pursuant to the purchase agreement (the “Purchase Agreement”), dated as of June 26, 2012, as amended on October 30, 2012 and March 28, 2013, by and among Loral, Space Systems/Loral, LLC (formerly known as Space Systems/Loral, Inc.) (“SSL”), MacDonald, Dettwiler and Associates Ltd. (“MDA”) and MDA Communications Holdings, Inc. (“MDA Holdings”), a subsidiary of MDA, Loral completed the sale of SSL (the “SSL Sale”), its wholly ‑owned subsidiary, to MDA Holdings. Interest and other expenses that are directly related to the SSL Sale are classified as discontinued operations in the statements of operations for the three and nine months ended September 30, 2018 and 2017. |
Investments in Affiliates | Investments in Affiliates Our ownership interest in Telesat is accounted for using the equity method of accounting. Income and losses of Telesat are recorded based on our economic interest. Our equity in net income or loss of Telesat also reflects amortization of profits eliminated, to the extent of our economic interest in Telesat, on satellites we constructed for them while we owned SSL and on Loral’s sale to Telesat in April 2011 of its portion of the payload on the ViaSat-1 satellite and related assets. Non-refundable cash distributions received from Telesat in excess of our initial investment and our share of cumulative equity in comprehensive income of Telesat, net of cash distributions received in prior periods, are recorded as equity in net income of Telesat (“Excess Cash Distribution”) since we have no obligation to provide future financial support to Telesat. After receiving an Excess Cash Distribution, we do not record additional equity in net income of Telesat until our share of Telesat’s future net income exceeds the Excess Cash Distribution. Equity in losses of affiliates is not recognized after the carrying value of an investment, including advances and loans, has been reduced to zero, unless guarantees or other funding obligations exist. We had no guarantees or other funding obligations for our equity method investments as of September 30, 2018 and December 31, 2017. We use the nature of distribution approach to classify distributions from equity method investments on the statements of cash flows. The Company monitors its equity method investments for factors indicating other-than-temporary impairment. An impairment loss is recognized when there has been a loss in value of the affiliate that is other ‑than-temporary. |
Use of Estimates in Preparation of Financial Statements | Use of Estimates in Preparation of Financial Statements The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amount of income (loss) reported for the period. Actual results could materially differ from estimates. Significant estimates also included the allowances for doubtful accounts, income taxes, including the valuation of deferred tax assets, the fair value of liabilities indemnified, the dilutive effect of Telesat stock options (see Note 10) and our pension liabilities. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash As of September 30, 2018, the Company had $248.9 million of cash and cash equivalents. Cash and cash equivalents include liquid investments, primarily money market funds, with maturities of less than 90 days at the time of purchase. Management determines the appropriate classification of its investments at the time of purchase and at each balance sheet date. As of September 30, 2018 and December 31, 2017, the Company had restricted cash of $0.3 million. The restricted cash of $0.3 million represents the amount pledged as collateral to the issuer of a standby letter of credit (the “LC”). The LC, which expires in October 2018 and contains an automatic renewal period of one year, has been provided as a guaranty to the lessor of our corporate offices. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the condensed consolidated statement of cash flows (in thousands): September 30, December 31, 2018 2017 Cash and cash equivalents $ 248,904 255,139 Restricted cash included in current assets 304 — Restricted cash included in other assets — 304 Cash, cash equivalents and restricted cash shown in the statement of cash flows $ 249,208 255,443 |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and receivables. Our cash and cash equivalents are maintained with high-credit-quality financial institutions. As of September 30, 2018 and December 31, 2017, our cash and cash equivalents were invested primarily in several liquid Prime and Government AAA money market funds. Such funds are not insured by the Federal Deposit Insurance Corporation. The dispersion across funds reduces the exposure of a default at any one fund. As a result, management believes that its potential credit risks are minimal. |
Fair Value Measurements | Fair Value Measurements U.S. GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. U.S. GAAP also establishes a fair value hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are described below: Level 1: Inputs represent a fair value that is derived from unadjusted quoted prices for identical assets or liabilities traded in active markets at the measurement date. Level 2: Inputs represent a fair value that is derived from quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities, and pricing inputs, other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Assets and Liabilities Measured at Fair Value The following table presents our assets and liabilities measured at fair value on a recurring and non-recurring basis (in thousands): September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Money market funds $ 247,237 $ — $ — $ 251,742 $ — $ — Other current assets: Indemnification - Sale of SSL — — 2,410 — — 2,410 Liabilities Other liabilities: Indemnification - Globalstar do Brasil S.A. $ — $ — $ 190 $ — $ — $ 293 The carrying amount of money market funds approximates fair value as of each reporting date because of the short maturity of those instruments. The Company did not have any non-financial assets or non-financial liabilities that were recognized or disclosed at fair value as of September 30, 2018 and December 31, 2017. Assets and Liabilities Measured at Fair Value on a Non-recurring Basis We review the carrying values of our equity method investments when events and circumstances warrant and consider all available evidence in evaluating when declines in fair value are other-than-temporary. The fair values of our investments are determined based on valuation techniques using the best information available and may include quoted market prices, market comparables and discounted cash flow projections. An impairment charge is recorded when the carrying amount of the investment exceeds its current fair value and is determined to be other-than-temporary. The asset resulting from the indemnification of SSL is for certain pre-closing taxes and reflects the excess of payments since inception over the estimated liability, which was originally determined using the fair value objective approach. The estimated liability for indemnifications relating to Globalstar do Brasil S.A. (“GdB”), originally determined using expected value analysis, is net of payments since inception. |
Contingencies | Contingencies Contingencies by their nature relate to uncertainties that require management to exercise judgment both in assessing the likelihood that a liability has been incurred as well as in estimating the amount of potential loss, if any. We accrue for costs relating to litigation, claims and other contingent matters when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties or on management’s judgment, as appropriate. Actual amounts paid may differ from amounts estimated, and such differences will be charged to operations in the period in which the final determination of the liability is made. |
Income Taxes | Income Taxes Loral and its subsidiaries are subject to U.S. federal, state and local income taxation on their worldwide income and foreign taxation on certain income from sources outside the United States. Telesat is subject to tax in Canada and other jurisdictions, and Loral will provide in operating earnings any additional U.S. current and deferred tax required on distributions received or deemed to be received from Telesat. Deferred income taxes reflect the future tax effect of temporary differences between the carrying amount of assets and liabilities for financial and income tax reporting and are measured by applying anticipated statutory tax rates in effect for the year during which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent it is more likely than not that the deferred tax assets will not be realized. The tax benefit of an uncertain tax position (“UTP”) taken or expected to be taken in income tax returns is recognized only if it is “more likely than not” to be sustained on examination by the taxing authorities, based on its technical merits as of the reporting date. The tax benefit recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income taxes in income tax expense on a quarterly basis. The unrecognized tax benefit of a UTP is recognized in the period when the UTP is effectively settled. A previously recognized tax position is derecognized in the first period in which it is no longer more likely than not that such tax position would be sustained upon examination. |
Earnings Per Share | Earnings per Share Basic earnings per share are computed based upon the weighted average number of shares of voting and non-voting common stock outstanding during each period. Shares of non-voting common stock are in all respects identical to and treated equally with shares of voting common stock except for the absence of voting rights (other than as provided in Loral’s Amended and Restated Certificate of Incorporation which was ratified by Loral’s stockholders on May 19, 2009). Diluted earnings per share are based on the weighted average number of shares of voting and non-voting common stock outstanding during each period, adjusted for the effect of unvested or unconverted restricted stock units. For diluted earnings per share, earnings are adjusted for the dilutive effect of Telesat stock options. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the condensed consolidated statement of cash flows (in thousands): September 30, December 31, 2018 2017 Cash and cash equivalents $ 248,904 255,139 Restricted cash included in current assets 304 — Restricted cash included in other assets — 304 Cash, cash equivalents and restricted cash shown in the statement of cash flows $ 249,208 255,443 |
Assets and Liabilities Measured at Fair Value | The following table presents our assets and liabilities measured at fair value on a recurring and non-recurring basis (in thousands): September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Money market funds $ 247,237 $ — $ — $ 251,742 $ — $ — Other current assets: Indemnification - Sale of SSL — — 2,410 — — 2,410 Liabilities Other liabilities: Indemnification - Globalstar do Brasil S.A. $ — $ — $ 190 $ — $ — $ 293 |
Additional Cash Flow Information | The following represents non-cash activities and supplemental information to the condensed consolidated statements of cash flows (in thousands): Nine Months Ended September 30, 2018 2017 Non-cash operating items: Equity in net income of affiliates $ (56,734) $ (183,086) Deferred taxes (1,237) 26,655 Depreciation and amortization 16 33 Amortization of prior service credit and actuarial loss 797 770 Net non-cash operating items – continuing operations $ (57,158) $ (155,628) Supplemental information: Interest paid – continuing operations $ 17 $ 22 Interest paid – discontinued operations $ — $ 55 Tax (refunds) payments, net - continuing operations $ (55) $ 10,038 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss, net of tax, are as follows (in thousands): Equity in Accumulated Telesat Other Other Postretirement Comprehensive Comprehensive Benefits Income (Loss) Loss Balance, January 1, 2017 $ (14,074) $ 238 $ (13,836) Other comprehensive loss before reclassification (1,365) (18,280) (19,645) Amounts reclassified from accumulated other comprehensive loss 671 — 671 Net current-period other comprehensive loss (694) (18,280) (18,974) Tax Cuts and Jobs Act, reclassification of tax effect from accumulated other comprehensive loss to accumulated deficit (1,686) (2,782) (4,468) Balance, December 31, 2017 (16,454) (20,824) (37,278) Other comprehensive income before reclassification — 1,733 1,733 Amounts reclassified from accumulated other comprehensive loss 629 — 629 Net current-period other comprehensive income 629 1,733 2,362 Balance, September 30, 2018 $ (15,825) $ (19,091) $ (34,916) |
Schedule of Other Comprehensive Income (Loss) and Related Income Tax Effects | The components of other comprehensive income (loss) and related tax effects are as follows (in thousands): Three Months Ended September 30, 2018 2017 Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Amount Provision Amount Amount Provision Amount Amortization of prior service credits and net actuarial loss $ 265 (a) $ (56) $ 209 $ 257 (a) $ (90) $ 167 Equity in Telesat other comprehensive loss (7,115) 1,496 (5,619) (19,255) 6,732 (12,523) Other comprehensive loss $ (6,850) $ 1,440 $ (5,410) $ (18,998) $ 6,642 $ (12,356) Nine Months Ended September 30, 2018 2017 Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Amount Provision Amount Amount Provision Amount Amortization of prior service credits and net actuarial loss $ 797 (a) $ (168) $ 629 $ 770 (a) $ (270) $ 500 Equity in Telesat other comprehensive income (loss) 2,194 (461) 1,733 (24,184) 8,469 (15,715) Other comprehensive income (loss) $ 2,991 $ (629) $ 2,362 $ (23,414) $ 8,199 $ (15,215) (a) Reclassifications are included in other expense . |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Current Assets [Abstract] | |
Schedule of Other Current Assets | Other current assets consists of (in thousands): September 30, December 31, 2018 2017 Indemnification receivable from SSL for pre-closing taxes (see Note 13) $ 2,410 $ 2,410 Restricted cash 304 — Due from affiliates 205 217 Prepaid expenses 443 198 Other 418 274 $ 3,780 $ 3,099 |
Investments in Affiliates (Tabl
Investments in Affiliates (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments in and Advances to Affiliates [Line Items] | |
Investments in Affiliates | Investments in affiliates consist of (in thousands): September 30, December 31, 2018 2017 Telesat $ 84,363 $ 53,430 |
Equity in Net (Loss) Income of Affiliates | Equity in net income of affiliates consists of (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Telesat $ 55,095 $ 43,372 $ 56,734 $ 183,086 |
Telesat Canada [Member] | |
Investments in and Advances to Affiliates [Line Items] | |
Summary Financial Data, Equity Method Investment | The following table presents summary financial data for Telesat in accordance with U.S. GAAP, for the three and nine months ended September 30, 2018 and 2017 and as of September 30, 2018 and December 31, 2017 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Statement of Operations Data: Revenues $ 174,010 $ 170,151 $ 522,990 $ 514,800 Operating expenses (34,268) (34,101) (91,804) (112,876) Depreciation, amortization and stock-based compensation (47,946) (49,741) (144,732) (145,875) Other operating income (expense) 848 (204) 835 (220) Operating income 92,644 86,105 287,289 255,829 Interest expense (43,063) (37,901) (130,671) (111,765) Foreign exchange gain (loss) 42,784 103,099 (66,294) 193,259 (Loss) gain on financial instruments (202) (6,542) 30,414 (17,471) Other income 3,204 1,531 7,795 1,305 Income tax provision (7,605) (16,114) (39,190) (35,571) Net income $ 87,762 $ 130,178 $ 89,343 $ 285,586 September 30, December 31, 2018 2017 Balance Sheet Data: Current assets $ 576,052 $ 445,104 Total assets 4,054,930 4,082,472 Current liabilities 157,103 126,100 Long-term debt, including current portion 2,764,075 2,829,911 Total liabilities 3,474,619 3,538,656 Shareholders’ equity 580,311 543,816 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Current Liabilities [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consists of (in thousands): September 30, December 31, 2018 2017 Due to affiliate 443 9 Accrued professional fees 1,691 1,117 Pension and other postretirement liabilities 69 69 Accrued liabilities 59 84 $ 2,262 $ 1,279 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes [Abstract] | |
Summary of Income Tax Benefit (Provision) | The following summarizes our income tax provision (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Current income tax provision $ (863) $ (1,592) $ (2,251) $ (55,581) Deferred income tax (provision) benefit (5,806) (14,960) 1,237 (26,655) Income tax provision $ (6,669) $ (16,552) $ (1,014) $ (82,236) |
Summary of Uncertain Tax Positions Included in Income Tax Provision | The following summarizes amounts for UTPs included in our income tax provision (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Current provision for UTPs $ (791) $ (704) $ (2,018) $ (2,069) Deferred benefit for UTPs 167 226 425 701 Tax provision for UTPs $ (624) $ (478) $ (1,593) $ (1,368) |
Summary of Changes to Company's Liabilities for UTPs | The following summarizes the changes to our liabilities for UTPs included in other liabilities in the condensed consolidated balance sheets (in thousands): Nine Months Ended September 30, 2018 2017 Liabilities for UTPs: Opening balance — January 1 $ 61,182 $ 68,658 Current provision for potential additional interest 2,018 2,069 Ending balance $ 63,200 $ 70,727 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | Other liabilities consists of (in thousands): September 30, December 31, 2018 2017 Indemnification liabilities - other (see Note 13) 190 293 Liabilities for uncertain tax positions 63,200 61,182 $ 63,390 $ 61,475 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Dilutive Impact of Equity Method Investee Stock Options | The following table presents the dilutive impact of Telesat stock options on Loral’s reported income from continuing operations for the purpose of computing diluted earnings per share (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Income from continuing operations — basic $ 46,219 $ 24,537 $ 50,997 $ 93,724 Less: Adjustment for dilutive effect of Telesat stock options (340) (713) (350) (1,346) Income from continuing operations — diluted $ 45,879 $ 23,824 $ 50,647 $ 92,378 |
Schedule of Weighted Average Number of Shares for Calculating Diluted Earnings per Share | The following is the computation of common shares outstanding for diluted earnings per share (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Weighted average common shares outstanding 30,933 30,933 30,933 30,933 Unconverted restricted stock units 75 75 75 75 Common shares outstanding for diluted earnings per share 31,008 31,008 31,008 31,008 |
Pensions and Other Employee B_2
Pensions and Other Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Pensions and Other Employee Benefit Plans [Abstract] | |
Components of Net Periodic Cost | The following tables provide the components of net periodic cost for our qualified retirement plan (the “Pension Benefits”) and health care and life insurance benefits for retired employees and dependents (the “Other Benefits”) for the three and nine months ended September 30, 2018 and 2017 (in thousands): Pension Benefits Other Benefits Three Months Ended Three Months Ended September 30, September 30, 2018 2017 2018 2017 Service cost (1) $ 179 $ 175 $ 1 $ - Interest cost (2) 464 490 4 5 Expected return on plan assets (2) (657) (531) — — Amortization of net actuarial loss (2) 260 250 — 1 Amortization of prior service credits (2) — — 5 6 Net periodic cost $ 246 $ 384 $ 10 $ 12 Pension Benefits Other Benefits Nine Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Service cost (1) $ 536 $ 526 $ 1 $ 1 Interest cost (2) 1,391 1,470 12 14 Expected return on plan assets (2) (1,971) (1,593) — — Amortization of net actuarial loss (2) 780 749 — 3 Amortization of prior service credits (2) — — 17 18 Net periodic cost $ 736 $ 1,152 $ 30 $ 36 (1) Included in general and administrative expenses. (2) Included in other expense. |
Organization and Principal Bu_2
Organization and Principal Business (Narrative) (Details) - segment | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Organization and Principal Business [Line Items] | ||
Number of operating segments | 1 | |
Telesat Canada [Member] | ||
Organization and Principal Business [Line Items] | ||
Economic interest in affiliate | 62.70% | 62.70% |
Voting interest in affiliate | 32.60% | 32.60% |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Cash and cash equivalents | $ 255,139 | $ 248,904 | $ 255,139 | ||
Restricted cash, current | $ 304 | ||||
Restricted cash | 304 | $ 304 | |||
Federal statutory tax rate | 21.00% | 35.00% | |||
Guarantees or other funding obligations | 0 | $ 0 | $ 0 | ||
Defined Benefit Plan Net Periodic Benefit Cost | $ 400 | $ 1,200 | |||
Other Expense [Member] | Adjustments for New Accounting Pronouncement [Member] | |||||
Defined Benefit Plan Net Periodic Benefit Cost | $ 200 | $ 700 | |||
Retained Earnings (Accumulated Deficit) [Member] | |||||
Tax cuts and Jobs Act, reclassification tax effect | 4,468 | ||||
Accumulated Other Comprehensive Loss [Member] | |||||
Tax cuts and Jobs Act, reclassification tax effect | $ (4,468) | $ (4,468) |
Basis of Presentation (Reconcil
Basis of Presentation (Reconciliation of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 248,904 | $ 255,139 | ||
Restricted cash included in current assets | 304 | |||
Restricted cash included in other assets | 304 | |||
Cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 249,208 | $ 255,443 | $ 259,567 | $ 37,458 |
Basis of Presentation (Assets a
Basis of Presentation (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets and Liabilities | ||
Indemnification receivable from SS/L for pre-closing taxes (see Note 13) | $ 2,410 | $ 2,410 |
Money Market Funds [Member] | Level 1 [Member] | ||
Assets and Liabilities | ||
Cash equivalents | 247,237 | 251,742 |
Money Market Funds [Member] | Level 2 [Member] | ||
Assets and Liabilities | ||
Cash equivalents | ||
Sale of SS/L, Nov. 02, 2012 [Member] | Level 2 [Member] | ||
Assets and Liabilities | ||
Indemnification receivable from SS/L for pre-closing taxes (see Note 13) | ||
Sale of SS/L, Nov. 02, 2012 [Member] | Level 3 [Member] | ||
Assets and Liabilities | ||
Indemnification receivable from SS/L for pre-closing taxes (see Note 13) | 2,410 | 2,410 |
Globalstar do Brasil S.A. [Member] | Level 2 [Member] | ||
Assets and Liabilities | ||
Indemnification liabilities | ||
Globalstar do Brasil S.A. [Member] | Level 3 [Member] | ||
Assets and Liabilities | ||
Indemnification liabilities | $ 190 | $ 293 |
Basis of Presentation (Addition
Basis of Presentation (Additional Cash Flow Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Non-cash operating items: | ||||
Equity in net (income) loss of affiliates | $ (55,095) | $ (43,372) | $ (56,734) | $ (183,086) |
Deferred taxes | (1,237) | 26,655 | ||
Depreciation and amortization | 16 | 33 | ||
Amortization of prior service credit and actuarial (gain) loss | 797 | 770 | ||
Net non-cash operating items - continuing operations | (57,158) | (155,628) | ||
Continuing Operations [Member] | ||||
Supplemental information: | ||||
Interest paid | 17 | 22 | ||
Tax payments (refunds) | $ (55) | 10,038 | ||
Discontinued Operations [Member] | ||||
Supplemental information: | ||||
Interest paid | $ 55 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Components of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accumulated other comprehensive income (loss), beginning balance | $ (37,278) | |||||
Net current-period other comprehensive income (loss) | $ (5,410) | $ (12,356) | 2,362 | $ (15,215) | ||
Accumulated other comprehensive income (loss), ending balance | (34,916) | $ (37,278) | (34,916) | $ (37,278) | ||
Postretirement Benefits [Member] | ||||||
Accumulated other comprehensive income (loss), beginning balance | (16,454) | (14,074) | (14,074) | |||
Other comprehensive income (loss) before reclassification | (1,365) | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 629 | 671 | ||||
Net current-period other comprehensive income (loss) | 629 | (694) | ||||
Tax cuts and Jobs Act, reclassification tax effect from accumulated other comprehensive loss to accumulated deficit | (1,686) | |||||
Accumulated other comprehensive income (loss), ending balance | (15,825) | (16,454) | (15,825) | (16,454) | ||
Proportionate Share of Telesat Other Comprehensive Income (Loss) [Member] | ||||||
Accumulated other comprehensive income (loss), beginning balance | (20,824) | 238 | 238 | |||
Other comprehensive income (loss) before reclassification | 1,733 | (18,280) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | ||||||
Net current-period other comprehensive income (loss) | 1,733 | (18,280) | ||||
Tax cuts and Jobs Act, reclassification tax effect from accumulated other comprehensive loss to accumulated deficit | (2,782) | |||||
Accumulated other comprehensive income (loss), ending balance | (19,091) | (20,824) | (19,091) | (20,824) | ||
Accumulated Other Comprehensive Loss [Member] | ||||||
Accumulated other comprehensive income (loss), beginning balance | (37,278) | (13,836) | (13,836) | |||
Other comprehensive income (loss) before reclassification | 1,733 | (19,645) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 629 | 671 | ||||
Net current-period other comprehensive income (loss) | (3,759) | 2,362 | $ (15,215) | (18,974) | ||
Tax cuts and Jobs Act, reclassification tax effect from accumulated other comprehensive loss to accumulated deficit | (4,468) | (4,468) | ||||
Accumulated other comprehensive income (loss), ending balance | $ (34,916) | $ (37,278) | $ (34,916) | $ (37,278) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Components of Other Comprehensive Income and Related Tax Effects) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Accumulated Other Comprehensive Loss [Abstract] | |||||
Amortization of prior service credits and net actuarial loss, Before-Tax Amount | [1] | $ 265 | $ 257 | $ 797 | $ 770 |
Proportionate share of Telesat other comprehensive income (loss), Before-Tax Amount | (7,115) | (19,255) | 2,194 | (24,184) | |
Other comprehensive income (loss), Before-Tax Amount | (6,850) | (18,998) | 2,991 | (23,414) | |
Amortization of prior service credits and net actuarial loss, Tax (Provision) Benefit | (56) | (90) | (168) | (270) | |
Proportionate share of Telesat other comprehensive income (loss), Tax (Provision) Benefit | 1,496 | 6,732 | (461) | 8,469 | |
Other comprehensive income, Tax (Provision) Benefit | 1,440 | 6,642 | (629) | 8,199 | |
Amortization of prior service credits and net actuarial gain (loss), Net-of-Tax Amount | 209 | 167 | 629 | 500 | |
Proportionate share of Telesat other comprehensive income (loss), Net-of-Tax Amount | (5,619) | (12,523) | 1,733 | (15,715) | |
Other comprehensive income (loss), Net-of-Tax Amount | $ (5,410) | $ (12,356) | $ 2,362 | $ (15,215) | |
[1] | Reclassifications are included in other expense. |
Other Current Assets (Schedule
Other Current Assets (Schedule of Other Current Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other Current Assets [Abstract] | ||
Indemnification receivable from SS/L for pre-closing taxes (see Note 13) | $ 2,410 | $ 2,410 |
Restricted cash, current | 304 | |
Due from affiliates | 205 | 217 |
Prepaid expenses | 443 | 198 |
Other | 418 | 274 |
Total other current assets | $ 3,780 | $ 3,099 |
Investments in Affiliates (Narr
Investments in Affiliates (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Apr. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2017 | Jan. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Investments in and Advances to Affiliates [Line Items] | |||||||||||
Distribution received from affiliate | $ 242,735 | ||||||||||
Equity in net income (loss) of affiliates | $ 55,095 | $ 43,372 | $ 56,734 | 183,086 | |||||||
Cumulative effect adjustment attributable to investment in Telesat, tax expense (benefit) | (5,900) | ||||||||||
Cumulative effect adjustment attributable to investment in Telesat, net of tax | (22,107) | ||||||||||
Investments in affiliates | $ 84,363 | $ 84,363 | $ 53,430 | ||||||||
Telesat Canada [Member] | |||||||||||
Investments in and Advances to Affiliates [Line Items] | |||||||||||
Economic interest in affiliate | 62.70% | 62.70% | 62.70% | ||||||||
Voting interest in affiliate | 32.60% | 32.60% | 32.60% | ||||||||
Distribution received from affiliate | $ 242,700 | ||||||||||
Equity method investment, share of equity in net income (loss) of investee | 82,400 | ||||||||||
Equity in net income (loss) of affiliates | $ 55,095 | 43,372 | $ 56,734 | $ 183,086 | |||||||
Equity method investment, excess cash distribution recognized as equity income | $ 39,000 | ||||||||||
Investments in affiliates | 84,363 | 84,363 | $ 53,430 | ||||||||
Equity method investment, excess equity income previously recognized recovered | $ 39,000 | ||||||||||
Equity method investment, share of equity in other comprehensive income of investee | 2,200 | ||||||||||
Consulting fees payable in cash | 5,000 | ||||||||||
Telesat Canada [Member] | Adjustments for New Accounting Pronouncement [Member] | |||||||||||
Investments in and Advances to Affiliates [Line Items] | |||||||||||
Equity method investment, cumulative effect adjustment on retained earnings | (44,600) | ||||||||||
Cumulative effect adjustment attributable to investment in Telesat, tax expense (benefit) | (5,900) | ||||||||||
Cumulative effect adjustment attributable to investment in Telesat, net of tax | (22,100) | ||||||||||
Investments in affiliates | $ (28,000) | $ (28,000) | |||||||||
Telesat Canada [Member] | Term Loan B - U.S. Facility [Member] | |||||||||||
Investments in and Advances to Affiliates [Line Items] | |||||||||||
Equity method investment, applicable margin on senior credit facility | 2.50% | 3.00% | 3.75% | ||||||||
Equity method investment, debt repayment | $ 50,000 | ||||||||||
Telesat Canada [Member] | Equity Method Investment Senior Secured Credit Facility [Member] | |||||||||||
Investments in and Advances to Affiliates [Line Items] | |||||||||||
Minimum total leverage ratio | 4.50 | 4.50 | |||||||||
Actual Total Leverage Ratio to incur debt and make payments | 4.53 | 4.53 | |||||||||
XTAR, LLC [Member] | |||||||||||
Investments in and Advances to Affiliates [Line Items] | |||||||||||
Investments in affiliates | $ 0 | $ 0 | $ 0 | ||||||||
Percentage of ownership interest | 56.00% | 56.00% |
Investments in Affiliates (Inve
Investments in Affiliates (Investments in Affiliates) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | ||
Investments in affiliates | $ 84,363 | $ 53,430 |
Telesat Canada [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in affiliates | $ 84,363 | $ 53,430 |
Investments in Affiliates (Equi
Investments in Affiliates (Equity in Net Income (Losses) of Affiliates) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity in net income (loss) of affiliates | $ 55,095 | $ 43,372 | $ 56,734 | $ 183,086 |
Telesat Canada [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in net income (loss) of affiliates | $ 55,095 | $ 43,372 | $ 56,734 | $ 183,086 |
Investments in Affiliates (Eq_2
Investments in Affiliates (Equity Method Investment, Summarized Financial Data) (Details) - Telesat Canada [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Statement of Operations Data: | |||||
Revenues | $ 174,010 | $ 170,151 | $ 522,990 | $ 514,800 | |
Operating expenses | (34,268) | (34,101) | (91,804) | (112,876) | |
Depreciation, amortization and stock-based compensation | (47,946) | (49,741) | (144,732) | (145,875) | |
Gain (loss) on disposition of long lived asset | 848 | (204) | 835 | (220) | |
Operating income (loss) | 92,644 | 86,105 | 287,289 | 255,829 | |
Interest expense | (43,063) | (37,901) | (130,671) | (111,765) | |
Foreign exchange gains (loss) | 42,784 | 103,099 | (66,294) | 193,259 | |
Gain (loss) on financial instruments | (202) | (6,542) | 30,414 | (17,471) | |
Other income (expense) | 3,204 | 1,531 | 7,795 | 1,305 | |
Income tax provision | (7,605) | (16,114) | (39,190) | (35,571) | |
Net income (loss) | 87,762 | $ 130,178 | 89,343 | $ 285,586 | |
Current assets | 576,052 | 576,052 | $ 445,104 | ||
Total assets | 4,054,930 | 4,054,930 | 4,082,472 | ||
Current liabilities | 157,103 | 157,103 | 126,100 | ||
Long-term debt, including current portion | 2,764,075 | 2,764,075 | 2,829,911 | ||
Total liabilities | 3,474,619 | 3,474,619 | 3,538,656 | ||
Shareholders' equity/Members' equity (deficit) | $ 580,311 | $ 580,311 | $ 543,816 |
Other Current Liabilities (Sche
Other Current Liabilities (Schedule of Other Current Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other Current Liabilities [Abstract] | ||
Due to affiliate | $ 443 | $ 9 |
Accrued professional fees | 1,691 | 1,117 |
Pension and other postretirement liabilities | 69 | 69 |
Accrued liabilities | 59 | 84 |
Other current liabilities, total | $ 2,262 | $ 1,279 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | |||||
Unrecognized tax benefits relating to UTPs | $ 70,000 | $ 70,000 | |||
Unrecognized tax benefits, income tax penalties accrued | 0 | 0 | |||
Unrecognized tax benefits, interest on income taxes accrued | 9,200 | $ 9,200 | |||
Federal statutory tax rate | 21.00% | 35.00% | |||
Deferred income tax (benefit) provision | 5,806 | $ 14,960 | $ (1,237) | $ 26,655 | |
Potential change in unrecognized tax benefits during next twelve months | 27,300 | 27,300 | |||
Unrecognized tax benefits that would reduce the income tax provision | 46,900 | 46,900 | |||
Global Intangible Low-Taxed Income ("GILTI") [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Deferred income tax (benefit) provision | $ (5,700) | $ (12,500) |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Tax Benefit (Provision)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Taxes [Abstract] | ||||
Total current income tax (provision) benefit | $ (863) | $ (1,592) | $ (2,251) | $ (55,581) |
Total deferred income tax (provision) benefit | (5,806) | (14,960) | 1,237 | (26,655) |
Income tax (provision) benefit | $ (6,669) | $ (16,552) | $ (1,014) | $ (82,236) |
Income Taxes (Summary of Uncert
Income Taxes (Summary of Uncertain Tax Positions Included in Income Tax Provision) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Taxes [Abstract] | ||||
Current (provision) benefit for UTPs | $ (791) | $ (704) | $ (2,018) | $ (2,069) |
Deferred benefit (provision) for UTPs | 167 | 226 | 425 | 701 |
Tax (provision) benefit for UTPs | $ (624) | $ (478) | $ (1,593) | $ (1,368) |
Income Taxes (Summary of Change
Income Taxes (Summary of Changes to Company's Liabilities For UTPs) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Taxes [Abstract] | ||
Opening balance - January 1 | $ 61,182 | $ 68,658 |
Current provision for potential additional interest | 2,018 | 2,069 |
Ending balance | $ 63,200 | $ 70,727 |
Other Liabilities (Schedule of
Other Liabilities (Schedule of Other Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Other Liabilities [Abstract] | ||||
Indemnification liabilities - other (see Note 13) | $ 190 | $ 293 | ||
Liabilities for uncertain tax positions | 63,200 | 61,182 | $ 70,727 | $ 68,658 |
Other liabilities | $ 63,390 | $ 61,475 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation [Abstract] | ||
Unconverted restricted stock units | 75,262 | 75,262 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - Telesat Canada [Member] | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Equity Method Investment Economic Ownership Percentage | 62.70% | 62.70% |
Percentage of economic interest as result of dilution upon exercise of stock options | 62.30% |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Dilutive Impact of Equity Method Investee Stock Options) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Income (loss) from continuing operations - basic | $ 46,219 | $ 24,537 | $ 50,997 | $ 93,724 |
Less: Adjustment for dilutive effect of Telesat stock options | (340) | (713) | (350) | (1,346) |
Income (loss) from continuing operations - diluted | $ 45,879 | $ 23,824 | $ 50,647 | $ 92,378 |
Earnings Per Share (Schedule _2
Earnings Per Share (Schedule of Weighted Average Number of Shares for Calculating Diluted Earnings Per Share) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Weighted average common shares outstanding | 30,933 | 30,933 | 30,933 | 30,933 |
Unconverted restricted stock units | 75 | 75 | 75 | 75 |
Common shares outstanding for diluted earnings per share | 31,008 | 31,008 | 31,008 | 31,008 |
Pensions and Other Employee B_3
Pensions and Other Employee Benefits Plans (Components of Net Periodic Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Defined Benefit Plan Disclosure [Line Items] | |||||
Net periodic cost | $ 400 | $ 1,200 | |||
Pension Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | [1] | $ 179 | 175 | $ 536 | 526 |
Interest cost | [2] | 464 | 490 | 1,391 | 1,470 |
Expected return on plan assets | [2] | (657) | (531) | (1,971) | (1,593) |
Amortization of net actuarial loss | [2] | 260 | 250 | 780 | 749 |
Net periodic cost | 246 | 384 | 736 | 1,152 | |
Other Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | [1] | 1 | 1 | 1 | |
Interest cost | [2] | 4 | 5 | 12 | 14 |
Amortization of net actuarial loss | [2] | 1 | 3 | ||
Amortization of prior service credits | [2] | 5 | 6 | 17 | 18 |
Net periodic cost | $ 10 | $ 12 | $ 30 | $ 36 | |
[1] | Included in general and administrative expenses. | ||||
[2] | Included in other expense. |
Financial Instruments, Deriva_2
Financial Instruments, Derivative Instruments and Hedging (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Financial Instruments, Derivative Instruments and Hedging [Abstract] | ||
Derivative instruments | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Contingencies And Commitments [Line Items] | ||
Indemnification receivable from SS/L for pre-closing taxes (see Note 13) | $ 2,410 | $ 2,410 |
Globalstar do Brasil S.A. [Member] | ||
Contingencies And Commitments [Line Items] | ||
Loss contingency accrual | $ 200 | $ 300 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2013 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2009 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||||||||
Distribution received from affiliate | $ 242,735,000 | |||||||
Transaction, Consulting Agreement [Member] | Director [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction, date | Dec. 14, 2012 | |||||||
Transaction fee | $ 360,000 | $ 360,000 | $ 1,080,000 | 1,080,000 | ||||
Transaction income during the period | $ 11,250 | 11,250 | 33,750 | 42,750 | ||||
Monthly Fee [Member] | Transaction, Consulting Agreement [Member] | Director [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Transaction fee | $ 120,000 | |||||||
Telesat Canada [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Economic interest in affiliate | 62.70% | 62.70% | 62.70% | |||||
Common stock, percentage acquired by an unaffiliated third party | 90.00% | |||||||
Duration for shares to be paid, days | 10 days | |||||||
Distribution received from affiliate | $ 242,700,000 | |||||||
Telesat Canada [Member] | Transaction, Consulting Agreement [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction, date | Oct. 31, 2007 | |||||||
Transaction income during the period | $ 1,250,000 | $ 1,250,000 | $ 3,800,000 | 3,800,000 | ||||
Transaction payments received during the period | 3,600,000 | $ 3,600,000 | ||||||
Telesat Canada [Member] | Annual Fee [Member] | Transaction, Consulting Agreement [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Transaction fee | 5,000,000 | |||||||
Telesat Canada [Member] | Annual Fee [Member] | Transaction, Welfare Plan Participation Administrative Fee [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Transaction fee | $ 100,000 | |||||||
Telesat Canada [Member] | Years 2003 to 2006 [Member] | Brazil [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Tax assessment imposed audit | $ 800,000 | |||||||
XTAR, LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of ownership interest | 56.00% | 56.00% | ||||||
XTAR, LLC [Member] | Transaction, Management Agreement [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Allowance for doubtful accounts receivable, noncurrent | $ 6,600,000 | $ 6,600,000 | $ 6,600,000 | |||||
Due from Affiliates | $ 6,800,000 | $ 6,800,000 | $ 6,800,000 | |||||
Management fee charged as a percentage of revenue | 3.70% | |||||||
MHR Funds [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of outstanding voting common stock | 39.90% | 39.90% | 39.90% | |||||
Percentage of combined ownership of voting and non-voting common stock | 58.40% | 58.40% | 58.40% |