Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 05, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | LORL | |
Entity Registrant Name | Loral Space & Communications Inc. | |
Entity Central Index Key | 0001006269 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Voting Common Stock | |
Security Exchange Name | NASDAQ | |
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 | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 257,686 | $ 256,947 |
Income taxes receivable | 905 | 3,903 |
Other current assets | 1,913 | 3,232 |
Total current assets | 260,504 | 264,082 |
Right-of-use asset | 661 | |
Income taxes receivable, non-current | 774 | 774 |
Investments in affiliates | 94,406 | 24,574 |
Deferred tax assets | 37,109 | 40,520 |
Other assets | 343 | 350 |
Total assets | 393,797 | 330,300 |
Current liabilities: | ||
Accrued employment costs | 1,664 | 2,573 |
Other current liabilities | 1,605 | 1,495 |
Total current liabilities | 3,269 | 4,068 |
Pension and other postretirement liabilities | 15,052 | 15,167 |
Other liabilities | 14,219 | 13,499 |
Total liabilities | 32,540 | 32,734 |
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 | (618,778) | (695,521) |
Accumulated other comprehensive loss | (30,672) | (17,620) |
Total shareholders' equity | 361,257 | 297,566 |
Total liabilities and shareholders' equity | 393,797 | 330,300 |
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 | Jun. 30, 2019 | Dec. 31, 2018 |
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 |
Shares issued and outstanding | 9,505,673 | 9,505,673 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Consolidated Statements of Operations [Abstract] | ||||
General and administrative expenses | $ (1,697) | $ (1,758) | $ (3,500) | $ (3,394) |
Operating income (loss) | (1,697) | (1,758) | (3,500) | (3,394) |
Interest and investment income | 1,566 | 1,189 | 3,168 | 2,077 |
Interest expense | (5) | (6) | (10) | (11) |
Other expense | (755) | (554) | (1,971) | (1,188) |
Income (loss) before income taxes and equity in net income (loss) of affiliates | (891) | (1,129) | (2,313) | (2,516) |
Income tax (provision) benefit | (2,160) | 5,068 | (4,226) | 5,655 |
Income (loss) before equity in net income (loss) of affiliates | (3,051) | 3,939 | (6,539) | 3,139 |
Equity in net income (loss) of affiliates | 41,278 | (3,455) | 83,282 | 1,639 |
Income (loss) from continuing operations | 38,227 | 484 | 76,743 | 4,778 |
Income (loss) from discontinued operations, net of tax | (37) | (37) | ||
Net income (loss) | 38,227 | 447 | 76,743 | 4,741 |
Other comprehensive (loss) income, net of tax | (6,646) | 628 | (13,052) | 7,772 |
Comprehensive income (loss) | $ 31,581 | $ 1,075 | $ 63,691 | $ 12,513 |
Basic | ||||
Income (loss) from continuing operations | $ 1.24 | $ 0.02 | $ 2.48 | $ 0.15 |
Income (loss) from discontinued operations, net of tax | ||||
Net income (loss) per share | 1.24 | 0.02 | 2.48 | 0.15 |
Diluted | ||||
Income (loss) from continuing operations | 1.23 | 0.02 | 2.46 | 0.15 |
Income (loss) from discontinued operations, net of tax | ||||
Net income (loss) per share | $ 1.23 | $ 0.02 | $ 2.46 | $ 0.15 |
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] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
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) | 4,294 | ||||||
Other comprehensive income (loss) | 7,144 | ||||||
Comprehensive income (loss) | 11,438 | ||||||
Cumulative effect adjustment attributable to investment in Telesat | (22,107) | (22,107) | |||||
Balance at Mar. 31, 2018 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (700,644) | (30,134) | 279,929 |
Balance, shares at Mar. 31, 2018 | 21,582 | 9,506 | 154 | ||||
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) | 4,741 | ||||||
Other comprehensive income (loss) | 7,772 | ||||||
Comprehensive income (loss) | 12,513 | ||||||
Balance at Jun. 30, 2018 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (700,197) | (29,506) | 281,004 |
Balance, shares at Jun. 30, 2018 | 21,582 | 9,506 | 154 | ||||
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 | ||||
Other comprehensive income (loss) | 23,831 | ||||||
Balance at Dec. 31, 2018 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (695,521) | (17,620) | 297,566 |
Balance, shares at Dec. 31, 2018 | 21,582 | 9,506 | 154 | ||||
Balance at Mar. 31, 2018 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (700,644) | (30,134) | 279,929 |
Balance, shares at Mar. 31, 2018 | 21,582 | 9,506 | 154 | ||||
Net income (loss) | 447 | 447 | |||||
Other comprehensive income (loss) | 628 | 628 | |||||
Comprehensive income (loss) | 1,075 | ||||||
Balance at Jun. 30, 2018 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (700,197) | (29,506) | 281,004 |
Balance, shares at Jun. 30, 2018 | 21,582 | 9,506 | 154 | ||||
Net income (loss) | 4,873 | ||||||
Other comprehensive income (loss) | 16,059 | ||||||
Comprehensive income (loss) | 20,932 | ||||||
Tax Cuts and Jobs Act, reclassification tax effect | 4,173 | (4,173) | |||||
Cumulative effect adjustment attributable to investment in Telesat | (4,370) | (4,370) | |||||
Balance at Dec. 31, 2018 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (695,521) | (17,620) | 297,566 |
Balance, shares at Dec. 31, 2018 | 21,582 | 9,506 | 154 | ||||
Net income (loss) | 38,516 | ||||||
Other comprehensive income (loss) | (6,406) | ||||||
Comprehensive income (loss) | 32,110 | ||||||
Balance at Mar. 31, 2019 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (657,005) | (24,026) | 329,676 |
Balance, shares at Mar. 31, 2019 | 21,582 | 9,506 | 154 | ||||
Balance at Dec. 31, 2018 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (695,521) | (17,620) | 297,566 |
Balance, shares at Dec. 31, 2018 | 21,582 | 9,506 | 154 | ||||
Net income (loss) | 76,743 | ||||||
Other comprehensive income (loss) | (13,052) | (13,052) | |||||
Comprehensive income (loss) | 63,691 | ||||||
Balance at Jun. 30, 2019 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (618,778) | (30,672) | 361,257 |
Balance, shares at Jun. 30, 2019 | 21,582 | 9,506 | 154 | ||||
Balance at Mar. 31, 2019 | $ 216 | $ 95 | 1,019,988 | $ (9,592) | (657,005) | (24,026) | 329,676 |
Balance, shares at Mar. 31, 2019 | 21,582 | 9,506 | 154 | ||||
Net income (loss) | 38,227 | 38,227 | |||||
Other comprehensive income (loss) | (6,646) | (6,646) | |||||
Comprehensive income (loss) | 31,581 | ||||||
Balance at Jun. 30, 2019 | $ 216 | $ 95 | $ 1,019,988 | $ (9,592) | $ (618,778) | $ (30,672) | $ 361,257 |
Balance, shares at Jun. 30, 2019 | 21,582 | 9,506 | 154 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities: | ||
Net income (loss) | $ 76,743 | $ 4,741 |
(Income) Loss from discontinued operations, net of tax | 37 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Non-cash operating items (Note 2) | (79,449) | (8,139) |
Changes in operating assets and liabilities: | ||
Other current assets | (419) | (453) |
Accrued employment costs and other current liabilities | (1,476) | (170) |
Income tax refund receivable | 2,998 | 278 |
Pension and other postretirement liabilities | (115) | (2,381) |
Other liabilities | 720 | 1,132 |
Net cash provided by (used in) operating activities – continuing operations | (998) | (4,955) |
Net cash provided by (used in) operating activities – discontinued operations | 1,737 | (47) |
Net cash provided by (used in) operating activities | 739 | (5,002) |
Cash, cash equivalents and restricted cash (Note 2) - period increase (decrease) | 739 | (5,002) |
Cash, cash equivalents and restricted cash (Note 2) - beginning of period | 257,251 | 255,443 |
Cash, cash equivalents and restricted cash - end of period | $ 257,990 | $ 250,441 |
Organization and Principal Busi
Organization and Principal Business | 6 Months Ended |
Jun. 30, 2019 | |
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. 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 | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. The December 31, 2018 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. 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. 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 acquired by Telesat in 2007 is proportionately eliminated in determining our share of the net income 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 Space Systems/Loral, LLC (formerly known as Space Systems/Loral, Inc.) (“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 June 30, 2019 and December 31, 2018. 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 June 30, 2019, the Company had $257.7 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 June 30, 2019 and December 31, 2018, other assets included restricted cash of $0.3 million which represents the amount pledged as collateral to the issuer of a standby letter of credit (the “LC”). The LC, which expires in August 2020, 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 statements of cash flows (in thousands): June 30, June 30, 2019 2018 Cash and cash equivalents $ 257,686 $ 250,137 Restricted cash included in other assets 304 304 Cash, cash equivalents and restricted cash shown in the statement of cash flows $ 257,990 $ 250,441 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 June 30, 2019 and December 31, 2018, 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): June 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Money market funds $ 255,722 $ — $ — $ 254,552 $ — $ — Other current assets: Indemnification - Sale of SSL — — 672 — — 2,410 Liabilities Other liabilities: Indemnification - Globalstar do Brasil S.A. $ — $ — $ 167 $ — $ — $ 184 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 June 30, 2019 and December 31, 2018. 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 refunds and 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 each period any additional U.S. current and deferred tax required on actual or deemed distributions from Telesat, including Global Intangible Low Taxed Income (“GILTI”). 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. Previously recognized tax positions are derecognized in the first period in which it is no longer more likely than not that the 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 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. 2018-13, 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 2016, the FASB amended the Accounting Standards Codification (“ASC”) by creating ASC Topic 842, Leases (“ASC 842”). 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 was effective for the Company on January 1, 2019. We adopted ASC 842 in the first quarter of 2019 utilizing the modified retrospective method with a practical expedient through a cumulative-effect adjustment at the beginning of the first quarter of 2019. As a result, on January 1, 2019, we recognized a right-of-use asset and lease liability for an operating lease of approximately $0.3 million on our condensed consolidated balance sheet. Additional Cash Flow Information The following represents non-cash activities and supplemental information to the condensed consolidated statements of cash flows (in thousands): Six Months Ended June 30, 2019 2018 Non-cash operating items: Equity in net income of affiliates $ (83,282) $ (1,639) Deferred taxes 3,308 (7,043) Depreciation and amortization 8 11 Right-of-use asset, net of lease liability 16 — Amortization of prior service credit and actuarial loss 501 532 Net non-cash operating items $ (79,449) $ (8,139) Supplemental information: Interest paid $ 10 $ 11 Income tax refunds $ 2,980 $ 255 Income tax payments $ 163 $ 138 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2019 | |
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): Proportionate Share of Accumulated Telesat Other Other Postretirement Comprehensive Comprehensive Benefits Income (Loss) Loss Balance, January 1, 2018 $ (16,454) $ (20,824) $ (37,278) Other comprehensive income before reclassification 953 22,033 22,986 Amounts reclassified from accumulated other comprehensive loss 845 — 845 Net current-period other comprehensive income 1,798 22,033 23,831 Tax Cuts and Jobs Act, reclassification of tax effect from accumulated other comprehensive loss to accumulated deficit — (4,173) (4,173) Balance, December 31, 2018 (14,656) (2,964) (17,620) Other comprehensive loss before reclassification — (13,447) (13,447) Amounts reclassified from accumulated other comprehensive loss 395 — 395 Net current-period other comprehensive loss 395 (13,447) (13,052) Balance, June 30, 2019 $ (14,261) $ (16,411) $ (30,672) The components of other comprehensive income (loss) and related tax effects are as follows (in thousands): Three Months Ended June 30, 2019 2018 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 $ 271 (a) $ (58) $ 213 $ 263 (a) $ (56) $ 207 Equity in Telesat other comprehensive income (6,861) 2 (6,859) 532 (111) 421 Other comprehensive (loss) income $ (6,590) $ (56) $ (6,646) $ 795 $ (167) $ 628 Six Months Ended June 30, 2019 2018 Before-Tax Tax (Provision) Net-of-Tax Before-Tax Tax Net-of-Tax Amount Benefit Amount Amount Provision Amount Amortization of prior service credits and net actuarial loss $ 501 (a) $ (106) $ 395 $ 532 (a) $ (112) $ 420 Equity in Telesat other comprehensive (loss) income (13,450) 3 (13,447) 9,309 (1,957) 7,352 Other comprehensive (loss) income $ (12,949) $ (103) $ (13,052) $ 9,841 $ (2,069) $ 7,772 (a) |
Other Current Assets
Other Current Assets | 6 Months Ended |
Jun. 30, 2019 | |
Other Current Assets [Abstract] | |
Other Current Assets | 4. Other Current Assets Other current assets consists of (in thousands): June 30, December 31, 2019 2018 Indemnification receivable from SSL for pre-closing taxes (see Note 13) $ 672 $ 2,410 Due from affiliates 176 161 Prepaid expenses 557 151 Other 508 510 $ 1,913 $ 3,232 |
Investments in Affiliates
Investments in Affiliates | 6 Months Ended |
Jun. 30, 2019 | |
Investments in Affiliates [Abstract] | |
Investments in Affiliates | 5. Investments in Affiliates Investments in affiliates consist of (in thousands): June 30, December 31, 2019 2018 Telesat $ 94,406 $ 24,574 Equity in net income (loss) of affiliates consists of (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Telesat $ 41,278 $ (3,455) $ 83,282 $ 1,639 Telesat As of June 30, 2019 and December 31, 2018, 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 loss of Telesat of $13.5 million for the six months ended June 30, 2019. On January 1, 2019, Telesat adopted ASC 842, Leases, for its U.S. GAAP reporting which we use to record our equity income in Telesat. Telesat adopted the new guidance using the modified retrospective approach with the cumulative effect of initially applying the standard being recorded on the balance sheet. As a result, on January 1, 2019, Telesat recognized a right-of-use asset of $19.6 million and lease liability of $20.0 million on its condensed consolidated balance sheet. Comparative summary financial information of Telesat presented below has not been restated and continues to be reported under the accounting standards in effect for those periods presented. 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 June 30, 2019, Telesat’s Total Leverage Ratio was 4.75:1.00. Telesat is, however, permitted to pay annual consulting fees of $5.0 million to Loral in cash (see Note 14). The following table presents summary financial data for Telesat in accordance with U.S. GAAP as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and 2018 (in thousands): June 30, December 31, 2019 2018 Balance Sheet Data: Current assets $ 741,714 $ 628,125 Total assets 4,068,167 3,942,847 Current liabilities 118,201 139,401 Long-term debt, including current portion 2,756,055 2,764,599 Total liabilities 3,464,565 3,474,504 Shareholders’ equity 603,602 468,343 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Statement of Operations Data: Revenues $ 172,995 $ 164,114 $ 340,639 $ 348,980 Operating expenses (30,405) (26,933) (68,384) (57,536) Depreciation, amortization and stock-based compensation (54,093) (48,287) (107,891) (96,786) Other operating expense (10) (15) (65) (13) Operating income 88,487 88,879 164,299 194,645 Interest expense (46,492) (42,520) (93,335) (87,608) Foreign exchange gain (loss) 45,946 (45,777) 98,415 (109,078) (Loss) gain on financial instruments (21,263) (1,767) (36,375) 30,616 Other income 4,272 2,973 8,106 4,591 Income tax provision (6,481) (7,815) (11,036) (31,585) Net income (loss) $ 64,469 $ (6,027) $ 130,074 $ 1,581 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 June 30, 2019 and December 31, 2018, 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 June 30, 2019 and December 31, 2018, 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. As of June 30, 2019 and December 31, 2018, the carrying value of this investment was zero. Because Loral has written-off its investment in this company and has 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 | 6 Months Ended |
Jun. 30, 2019 | |
Other Current Liabilities [Abstract] | |
Other Current Liabilities | 6. Other Current Liabilities Other current liabilities consists of (in thousands): June 30, December 31, 2019 2018 Operating lease liability, current $ 677 $ — Due to affiliate 3 164 Accrued professional fees 805 1,206 Pension and other postretirement liabilities 69 69 Accrued liabilities 51 56 $ 1,605 $ 1,495 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 7. Income Taxes The following summarizes our income tax (provision) benefit (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Current income tax provision $ (316) $ (834) $ (918) $ (1,388) Deferred income tax (provision) benefit (1,844) 5,902 (3,308) 7,043 Income tax (provision) benefit $ (2,160) $ 5,068 $ (4,226) $ 5,655 For the six month periods ended June 30, 2019 and 2018, our income tax (provision) benefit 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 June 30, 2019 and 2018, this amount is then reduced by the tax recorded for the three months ended March 31, 2019 and 2018. After utilization of our net operating loss carryforward and foreign tax credits, there was no federal income tax on GILTI from Telesat for the three and six month periods ended June 30, 2019 and 2018. The deferred income tax (provision) benefit for each period includes the impact of equity in net income (loss) of affiliates from our condensed consolidated statement of operations. Subsequent to the sale of SSL to MDA Communications Holdings, Inc., a subsidiary of Maxar Technologies Ltd. (formerly known as MacDonald, Dettwiler and Associates Ltd.) (“MDA”) in 2012 (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) benefit (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Current provision for UTPs $ (277) $ (747) $ (737) $ (1,227) Deferred benefit for UTPs 60 157 153 258 Tax provision for UTPs $ (217) $ (590) $ (584) $ (969) As of June 30, 2019, we had unrecognized tax benefits relating to UTPs of $43 million. The Company recognizes interest and penalties related to income taxes in income tax expense on a quarterly basis. As of June 30, 2019, we have accrued no penalties and approximately $1.2 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 2014. 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. Pursuant to the purchase agreement for the SSL Sale, we are obligated to indemnify SSL for certain 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 sheet (in thousands): Six Months Ended June 30, 2019 Liabilities for UTPs: Opening balance — January 1 $ 13,315 Current provision for potential additional interest 737 Ending balance $ 14,052 As of June 30, 2019, if our positions are sustained by the taxing authorities, the Company’s income tax provision would be reduced by approximately $6.6 million. Other than as described above, there were no significant changes to our UTPs during the six months ended June 30, 2019 and 2018, and we do not anticipate any other significant changes to our unrecognized tax benefits during the next twelve months. |
Other Liabilities
Other Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities [Abstract] | |
Other Liabilities | 8. Other Liabilities Other liabilities consists of (in thousands): June 30, December 31, 2019 2018 Indemnification liabilities - other (see Note 13) $ 167 $ 184 Liabilities for uncertain tax positions 14,052 13,315 $ 14,219 $ 13,499 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
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 Six Months Ended June 30, June 30, 2019 2019 2018 Income from continuing operations — basic $ 38,227 $ 76,743 $ 4,778 Less: Adjustment for dilutive effect of Telesat stock options (230) (484) (10) Income from continuing operations — diluted $ 37,997 $ 76,259 $ 4,768 Telesat stock options are excluded from the calculation of diluted income per share for the three months ended June 30, 2018 as the effect would have been antidilutive. 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 Six Months Ended June 30, June 30, 2019 2018 2019 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 | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 and 2018 (in thousands): Pension Benefits Other Benefits Three Months Ended Three Months Ended June 30, June 30, 2019 2018 2019 2018 Service cost (1) $ 183 $ 170 $ — $ — Interest cost (2) 499 463 5 4 Expected return on plan assets (2) (609) (657) — — Amortization of net actuarial loss (2) 272 257 (1) — Amortization of prior service credits (2) — — — 6 Net periodic cost $ 345 $ 233 $ 4 $ 10 Pension Benefits Other Benefits Six Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Service cost (1) $ 361 $ 357 $ — $ — Interest cost (2) 1,009 927 10 8 Expected return on plan assets (2) (1,216) (1,314) — — Amortization of net actuarial loss (2) 503 520 (2) — Amortization of prior service credits (2) — — — 12 Net periodic cost $ 657 $ 490 $ 8 $ 20 (1) Included in general and administrative expenses. (2) Included in other expense. |
Financial Instruments, Derivati
Financial Instruments, Derivative Instruments and Hedging | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
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 for the SSL Sale. 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 $0.7 million and $2.4 million as of June 30, 2019 and December 31, 2018, respectively. Certain tax assessments against SSL for 2007 to 2010 have been settled, resulting in our having received during the second quarter of 2019 a $1.7 million refund of prior indemnification payments. The remaining receivable as of June 30, 2019 represents payments to date over the estimated fair value of our remaining liability for our indemnification of SSL pre-closing taxes where the final amounts 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 as of June 30, 2019 and December 31, 2018 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. Lease Arrangements We lease certain facilities and equipment under agreements expiring at various dates. We may renew, extend or modify a lease covering facilities as needed. We have no sublease income in any of the periods presented. We changed our method of accounting for leases in the first quarter of 2019 due to the adoption of ASC 842. We adopted ASC 842 as of January 1, 2019 using the modified retrospective transition method and elected to apply the transition as of the beginning of the period of adoption. Accordingly, financial information as of and for the three and six months ended June 30, 2019 is presented under ASC 842, whereas the financial information for the three and six months ended June 30, 2018 and as of December 31, 2018 is presented under ASC 840, Leases. Upon adoption of ASC 842, we recognized a right-of-use asset and lease liability of $0.3 million for an operating lease on our condensed consolidated balance sheet as of January 1, 2019. In March 2019, the operating lease was modified by extending the lease termination date from June 30, 2019 to June 30, 2020 and increasing the rent for the extension period. Lease costs expensed for the three and six months ended June 30, 2019 and 2018 were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Rent Expense $ 171 $ 159 $ 334 $ 318 Lease payments for the six months ended June 30, 2019 were $0.3 million. The remaining lease term as of June 30, 2019 is 12 months, and we used a discount rate of 7.5% to compute the lease liability. The following is a reconciliation of the lease liability to future lease payments as of June 30, 2019 (in thousands): 2019 2020 Total Operating lease liability, current $ 332 $ 345 $ 677 Future interest 18 5 23 Future lease payments $ 350 $ 350 $ 700 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 | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions 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 June 30, 2019 and December 31, 2018, 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 June 30, 2019 and 2018 and $2.5 million for each of the six-month periods ended June 30, 2019 and 2018. For each of the six-month periods ended June 30, 2019 and 2018, Loral received payments in cash from Telesat, net of withholding taxes, of $2.4 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 $0.9 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 stock option grant agreements (the “Stock Option Grant Agreements”) and a restricted stock unit grant agreement (the “RSU Grant Agreement,” and, together with the Stock Option Grant Agreements, the “Grant Agreements”) with respect to shares in Telesat 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 Stock Option Grant Agreements document grants to the Participants of Telesat stock options (including tandem SAR rights) 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 Stock Option 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 RSU Grant Agreement documents a grant to the Participant of restricted stock units with respect to shares in Telesat and provides for certain rights, obligations and restrictions related to such restricted stock units, which include, among other things: (x) 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 RSU Grant Agreement; and (y) 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 the termination of the Participant’s employment. 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. 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. The amount due to Loral primarily due to the management agreement was $6.7 million as of June 30, 2019 and December 31, 2018. 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 six months ended June 30, 2019 and 2018, and we had an allowance of $6.6 million against receivables from XTAR as of June 30, 2019 and December 31, 2018. 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 six month periods ended June 30, 2019 and 2018, Mr. Targoff earned consulting fees of $360,000 and $720,000, respectively, and reimbursed Loral net expenses of $11,250 and $22,500, respectively. |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 6 Months Ended |
Jun. 30, 2019 | |
Basis of Presentation [Abstract] | |
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. 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 acquired by Telesat in 2007 is proportionately eliminated in determining our share of the net income 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 Space Systems/Loral, LLC (formerly known as Space Systems/Loral, Inc.) (“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 June 30, 2019 and December 31, 2018. 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 June 30, 2019, the Company had $257.7 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 June 30, 2019 and December 31, 2018, other assets included restricted cash of $0.3 million which represents the amount pledged as collateral to the issuer of a standby letter of credit (the “LC”). The LC, which expires in August 2020, 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 statements of cash flows (in thousands): June 30, June 30, 2019 2018 Cash and cash equivalents $ 257,686 $ 250,137 Restricted cash included in other assets 304 304 Cash, cash equivalents and restricted cash shown in the statement of cash flows $ 257,990 $ 250,441 |
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 June 30, 2019 and December 31, 2018, 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): June 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Money market funds $ 255,722 $ — $ — $ 254,552 $ — $ — Other current assets: Indemnification - Sale of SSL — — 672 — — 2,410 Liabilities Other liabilities: Indemnification - Globalstar do Brasil S.A. $ — $ — $ 167 $ — $ — $ 184 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 June 30, 2019 and December 31, 2018. 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 refunds and 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 each period any additional U.S. current and deferred tax required on actual or deemed distributions from Telesat, including Global Intangible Low Taxed Income (“GILTI”). 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. Previously recognized tax positions are derecognized in the first period in which it is no longer more likely than not that the 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 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) | 6 Months Ended |
Jun. 30, 2019 | |
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 statements of cash flows (in thousands): June 30, June 30, 2019 2018 Cash and cash equivalents $ 257,686 $ 250,137 Restricted cash included in other assets 304 304 Cash, cash equivalents and restricted cash shown in the statement of cash flows $ 257,990 $ 250,441 |
Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring basis | The following table presents our assets and liabilities measured at fair value on a recurring and non-recurring basis (in thousands): June 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Money market funds $ 255,722 $ — $ — $ 254,552 $ — $ — Other current assets: Indemnification - Sale of SSL — — 672 — — 2,410 Liabilities Other liabilities: Indemnification - Globalstar do Brasil S.A. $ — $ — $ 167 $ — $ — $ 184 |
Additional Cash Flow Information | The following represents non-cash activities and supplemental information to the condensed consolidated statements of cash flows (in thousands): Six Months Ended June 30, 2019 2018 Non-cash operating items: Equity in net income of affiliates $ (83,282) $ (1,639) Deferred taxes 3,308 (7,043) Depreciation and amortization 8 11 Right-of-use asset, net of lease liability 16 — Amortization of prior service credit and actuarial loss 501 532 Net non-cash operating items $ (79,449) $ (8,139) Supplemental information: Interest paid $ 10 $ 11 Income tax refunds $ 2,980 $ 255 Income tax payments $ 163 $ 138 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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): Proportionate Share of Accumulated Telesat Other Other Postretirement Comprehensive Comprehensive Benefits Income (Loss) Loss Balance, January 1, 2018 $ (16,454) $ (20,824) $ (37,278) Other comprehensive income before reclassification 953 22,033 22,986 Amounts reclassified from accumulated other comprehensive loss 845 — 845 Net current-period other comprehensive income 1,798 22,033 23,831 Tax Cuts and Jobs Act, reclassification of tax effect from accumulated other comprehensive loss to accumulated deficit — (4,173) (4,173) Balance, December 31, 2018 (14,656) (2,964) (17,620) Other comprehensive loss before reclassification — (13,447) (13,447) Amounts reclassified from accumulated other comprehensive loss 395 — 395 Net current-period other comprehensive loss 395 (13,447) (13,052) Balance, June 30, 2019 $ (14,261) $ (16,411) $ (30,672) |
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 June 30, 2019 2018 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 $ 271 (a) $ (58) $ 213 $ 263 (a) $ (56) $ 207 Equity in Telesat other comprehensive income (6,861) 2 (6,859) 532 (111) 421 Other comprehensive (loss) income $ (6,590) $ (56) $ (6,646) $ 795 $ (167) $ 628 Six Months Ended June 30, 2019 2018 Before-Tax Tax (Provision) Net-of-Tax Before-Tax Tax Net-of-Tax Amount Benefit Amount Amount Provision Amount Amortization of prior service credits and net actuarial loss $ 501 (a) $ (106) $ 395 $ 532 (a) $ (112) $ 420 Equity in Telesat other comprehensive (loss) income (13,450) 3 (13,447) 9,309 (1,957) 7,352 Other comprehensive (loss) income $ (12,949) $ (103) $ (13,052) $ 9,841 $ (2,069) $ 7,772 (a) |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Current Assets [Abstract] | |
Schedule of Other Current Assets | Other current assets consists of (in thousands): June 30, December 31, 2019 2018 Indemnification receivable from SSL for pre-closing taxes (see Note 13) $ 672 $ 2,410 Due from affiliates 176 161 Prepaid expenses 557 151 Other 508 510 $ 1,913 $ 3,232 |
Investments in Affiliates (Tabl
Investments in Affiliates (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments in and Advances to Affiliates [Line Items] | |
Investments in Affiliates | Investments in affiliates consist of (in thousands): June 30, December 31, 2019 2018 Telesat $ 94,406 $ 24,574 |
Equity in Net (Loss) Income of Affiliates | Equity in net income (loss) of affiliates consists of (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Telesat $ 41,278 $ (3,455) $ 83,282 $ 1,639 |
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 as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and 2018 (in thousands): June 30, December 31, 2019 2018 Balance Sheet Data: Current assets $ 741,714 $ 628,125 Total assets 4,068,167 3,942,847 Current liabilities 118,201 139,401 Long-term debt, including current portion 2,756,055 2,764,599 Total liabilities 3,464,565 3,474,504 Shareholders’ equity 603,602 468,343 Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Statement of Operations Data: Revenues $ 172,995 $ 164,114 $ 340,639 $ 348,980 Operating expenses (30,405) (26,933) (68,384) (57,536) Depreciation, amortization and stock-based compensation (54,093) (48,287) (107,891) (96,786) Other operating expense (10) (15) (65) (13) Operating income 88,487 88,879 164,299 194,645 Interest expense (46,492) (42,520) (93,335) (87,608) Foreign exchange gain (loss) 45,946 (45,777) 98,415 (109,078) (Loss) gain on financial instruments (21,263) (1,767) (36,375) 30,616 Other income 4,272 2,973 8,106 4,591 Income tax provision (6,481) (7,815) (11,036) (31,585) Net income (loss) $ 64,469 $ (6,027) $ 130,074 $ 1,581 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Current Liabilities [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consists of (in thousands): June 30, December 31, 2019 2018 Operating lease liability, current $ 677 $ — Due to affiliate 3 164 Accrued professional fees 805 1,206 Pension and other postretirement liabilities 69 69 Accrued liabilities 51 56 $ 1,605 $ 1,495 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Taxes [Abstract] | |
Summary of Income Tax Benefit (Provision) | The following summarizes our income tax (provision) benefit (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Current income tax provision $ (316) $ (834) $ (918) $ (1,388) Deferred income tax (provision) benefit (1,844) 5,902 (3,308) 7,043 Income tax (provision) benefit $ (2,160) $ 5,068 $ (4,226) $ 5,655 |
Summary of Uncertain Tax Positions Included in Income Tax Provision | The following summarizes amounts for UTPs included in our income tax (provision) benefit (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Current provision for UTPs $ (277) $ (747) $ (737) $ (1,227) Deferred benefit for UTPs 60 157 153 258 Tax provision for UTPs $ (217) $ (590) $ (584) $ (969) |
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 sheet (in thousands): Six Months Ended June 30, 2019 Liabilities for UTPs: Opening balance — January 1 $ 13,315 Current provision for potential additional interest 737 Ending balance $ 14,052 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities [Abstract] | |
Schedule of Long Term Liabilities | Other liabilities consists of (in thousands): June 30, December 31, 2019 2018 Indemnification liabilities - other (see Note 13) $ 167 $ 184 Liabilities for uncertain tax positions 14,052 13,315 $ 14,219 $ 13,499 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 Six Months Ended June 30, June 30, 2019 2019 2018 Income from continuing operations — basic $ 38,227 $ 76,743 $ 4,778 Less: Adjustment for dilutive effect of Telesat stock options (230) (484) (10) Income from continuing operations — diluted $ 37,997 $ 76,259 $ 4,768 |
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 Six Months Ended June 30, June 30, 2019 2018 2019 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) | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 and 2018 (in thousands): Pension Benefits Other Benefits Three Months Ended Three Months Ended June 30, June 30, 2019 2018 2019 2018 Service cost (1) $ 183 $ 170 $ — $ — Interest cost (2) 499 463 5 4 Expected return on plan assets (2) (609) (657) — — Amortization of net actuarial loss (2) 272 257 (1) — Amortization of prior service credits (2) — — — 6 Net periodic cost $ 345 $ 233 $ 4 $ 10 Pension Benefits Other Benefits Six Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Service cost (1) $ 361 $ 357 $ — $ — Interest cost (2) 1,009 927 10 8 Expected return on plan assets (2) (1,216) (1,314) — — Amortization of net actuarial loss (2) 503 520 (2) — Amortization of prior service credits (2) — — — 12 Net periodic cost $ 657 $ 490 $ 8 $ 20 (1) Included in general and administrative expenses. (2) Included in other expense. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies [Abstract] | |
Operating Leases Expense Net of Sublease Income | Lease costs expensed for the three and six months ended June 30, 2019 and 2018 were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Rent Expense $ 171 $ 159 $ 334 $ 318 |
Reconciliation of the Lease Liability to Future Lease Payments | The following is a reconciliation of the lease liability to future lease payments as of June 30, 2019 (in thousands): 2019 2020 Total Operating lease liability, current $ 332 $ 345 $ 677 Future interest 18 5 23 Future lease payments $ 350 $ 350 $ 700 |
Organization and Principal Bu_2
Organization and Principal Business (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2019segment | |
Organization And Principal Business [Line Items] | |
Number of operating segment | 1 |
Telesat Canada [Member] | |
Organization And Principal Business [Line Items] | |
Economic interest in affiliate | 62.70% |
Voting interest in affiliate | 32.60% |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Basis of Presentation [Line Items] | ||||
Cash and cash equivalents | $ 257,686 | $ 256,947 | $ 250,137 | |
Restricted cash | 304 | $ 304 | ||
Investments in affiliates, guarantee or other funding obligations | 0 | $ 0 | ||
Operating lease liability | $ 300 | |||
Right-of-use asset | $ 661 | 300 | ||
Accounting Standards Update 2016-02 [Member] | Restatement Adjustment [Member] | ||||
Basis of Presentation [Line Items] | ||||
Operating lease liability | 300 | |||
Right-of-use asset | $ 300 |
Basis of Presentation (Reconcil
Basis of Presentation (Reconciliation of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 257,686 | $ 256,947 | $ 250,137 | |
Restricted cash included in other assets | 304 | 304 | ||
Cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 257,990 | $ 257,251 | $ 250,441 | $ 255,443 |
Basis of Presentation (Assets a
Basis of Presentation (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets, Fair Value | ||
Indemnification - Sale of SSL | $ 672 | $ 2,410 |
Money Market Funds [Member] | Level 1 [Member] | ||
Assets, Fair Value | ||
Cash equivalents | 255,722 | 254,552 |
Money Market Funds [Member] | Level 2 [Member] | ||
Assets, Fair Value | ||
Cash equivalents | ||
Sale of SSL, Nov. 02, 2012 [Member] | Level 2 [Member] | ||
Assets, Fair Value | ||
Indemnification - Sale of SSL | ||
Sale of SSL, Nov. 02, 2012 [Member] | Level 3 [Member] | ||
Assets, Fair Value | ||
Indemnification - Sale of SSL | 672 | 2,410 |
Globalstar do Brasil S.A. [Member] | Level 3 [Member] | ||
Liabilities, Fair Value | ||
Indemnification - Globalstar do Brasil S.A. | $ 167 | $ 184 |
Basis of Presentation (Addition
Basis of Presentation (Additional Cash Flow Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Non-cash operating items: | ||||
Equity in net (income) loss of affiliates | $ (41,278) | $ 3,455 | $ (83,282) | $ (1,639) |
Deferred taxes | 3,308 | (7,043) | ||
Depreciation and amortization | 8 | 11 | ||
Right-of-use asset, net of lease liability | 16 | |||
Amortization of prior service credit and actuarial (gain) loss | 501 | 532 | ||
Net non-cash operating items | (79,449) | (8,139) | ||
Supplemental information: | ||||
Interest paid | 10 | 11 | ||
Income tax refunds | 2,980 | 255 | ||
Income tax payments | $ 163 | $ 138 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Components of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive income (loss), beginning balance | $ (17,620) | $ (17,620) | ||||||
Other comprehensive income (loss), Net-of-tax Amount | $ (6,646) | $ 628 | (13,052) | $ 7,772 | ||||
Accumulated other comprehensive income (loss), ending balance | (30,672) | (30,672) | $ (17,620) | $ (17,620) | ||||
Postretirement Benefits [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive income (loss), beginning balance | (14,656) | $ (16,454) | (14,656) | (16,454) | (16,454) | |||
Other comprehensive income (loss) before reclassification | 953 | |||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 395 | 845 | ||||||
Other comprehensive income (loss), Net-of-tax Amount | 395 | 1,798 | ||||||
Accumulated other comprehensive income (loss), ending balance | (14,261) | (14,261) | (14,656) | (14,656) | ||||
Proportionate Share of Telesat Other Comprehensive Loss [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive income (loss), beginning balance | (2,964) | (20,824) | (2,964) | (20,824) | (20,824) | |||
Other comprehensive income (loss) before reclassification | (13,447) | 22,033 | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | ||||||||
Other comprehensive income (loss), Net-of-tax Amount | (13,447) | 22,033 | ||||||
Tax Cuts and Jobs Act, reclassification of tax effect from accumulated other comprehensive loss to accumulated deficit | (4,173) | |||||||
Accumulated other comprehensive income (loss), ending balance | (16,411) | (16,411) | (2,964) | (2,964) | ||||
Accumulated Other Comprehensive Loss [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive income (loss), beginning balance | (17,620) | (37,278) | (17,620) | $ (37,278) | (37,278) | |||
Other comprehensive income (loss) before reclassification | (13,447) | 22,986 | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 395 | 845 | ||||||
Other comprehensive income (loss), Net-of-tax Amount | (6,646) | $ (6,406) | $ 628 | $ 7,144 | (13,052) | 16,059 | 23,831 | |
Tax Cuts and Jobs Act, reclassification of tax effect from accumulated other comprehensive loss to accumulated deficit | (4,173) | |||||||
Accumulated other comprehensive income (loss), ending balance | $ (30,672) | $ (30,672) | $ (17,620) | $ (17,620) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) (Components of Other Comprehensive Income and Related Tax Effects) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Accumulated Other Comprehensive Loss [Abstract] | |||||
Amortization of prior service credits and net actuarial loss, Before-Tax Amount | [1] | $ 271 | $ 263 | $ 501 | $ 532 |
Proportionate share of Telesat Holdco other comprehensive income (loss), Before-Tax Amount | (6,861) | 532 | (13,450) | 9,309 | |
Other comprehensive income (loss), Before-Tax Amount | (6,590) | 795 | (12,949) | 9,841 | |
Amortization of prior service credits and net actuarial loss, Tax (Provision) Benefit | (58) | (56) | (106) | (112) | |
Proportionate share of Telesat Holdco other comprehensive income (loss), Tax (Provision) Benefit | 2 | (111) | 3 | (1,957) | |
Other comprehensive income, Tax (Provision) Benefit | (56) | (167) | (103) | (2,069) | |
Amortization of prior service credits and net actuarial gain (loss), Net-of-Tax Amount | 213 | 207 | 395 | 420 | |
Proportionate share of Telesat Holdco other comprehensive income (loss), Net-of-Tax Amount | (6,859) | 421 | (13,447) | 7,352 | |
Other comprehensive income (loss), Net-of-tax Amount | $ (6,646) | $ 628 | $ (13,052) | $ 7,772 | |
[1] | Reclassifications are included in other expense. |
Other Current Assets (Schedule
Other Current Assets (Schedule of Other Current Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Current Assets [Abstract] | ||
Indemnification receivable from SSL for pre-closing taxes (see note 13) | $ 672 | $ 2,410 |
Due from affiliates | 176 | 161 |
Prepaid expenses | 557 | 151 |
Other | 508 | 510 |
Total other current assets | $ 1,913 | $ 3,232 |
Investments in Affiliates (Narr
Investments in Affiliates (Narrative) (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Investments in and Advances to Affiliates [Line Items] | ||||||
Investments in affiliates | $ 94,406 | $ 94,406 | $ 24,574 | |||
Proportionate share of Telesat Holdco other comprehensive income (loss), Before-Tax Amount | $ (6,861) | $ 532 | $ (13,450) | $ 9,309 | ||
Telesat Canada [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Economic interest in affiliate | 62.70% | 62.70% | ||||
Voting interest in affiliate | 32.60% | 32.60% | ||||
Investments in affiliates | $ 94,406 | $ 94,406 | 24,574 | |||
Operating lease right of use asset | $ 19,600 | |||||
Operating lease liability | $ 20,000 | |||||
Proportionate share of Telesat Holdco other comprehensive income (loss), Before-Tax Amount | (13,500) | |||||
Consulting fees payable in cash | 5,000 | |||||
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% | ||||
Globalstar do Brasil S.A. [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Investments in affiliates | $ 0 | $ 0 | $ 0 | |||
Equity Method Investment Senior Secured Credit Facility [Member] | Telesat Canada [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Minimum total leverage ratio | 4.50 | 4.50 | ||||
Minimum total leverage ratio to incur debt and make payments | 4.75 | 4.75 |
Investments in Affiliates (Inve
Investments in Affiliates (Investments in Affiliates) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||
Investments in affiliates | $ 94,406 | $ 24,574 |
Telesat Canada [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in affiliates | $ 94,406 | $ 24,574 |
Investments in Affiliates (Equi
Investments in Affiliates (Equity in Net Income (Losses) of Affiliates) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity in net income (loss) of affiliates | $ 41,278 | $ (3,455) | $ 83,282 | $ 1,639 |
Telesat Canada [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in net income (loss) of affiliates | $ 41,278 | $ (3,455) | $ 83,282 | $ 1,639 |
Investments in Affiliates (Eq_2
Investments in Affiliates (Equity Method Investment, Summarized Financial Data) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Summary Financial Data: | |||||
Current assets | $ 741,714 | $ 741,714 | $ 628,125 | ||
Total assets | 4,068,167 | 4,068,167 | 3,942,847 | ||
Current liabilities | 118,201 | 118,201 | 139,401 | ||
Long-term debt, including current portion | 2,756,055 | 2,756,055 | 2,764,599 | ||
Total liabilities | 3,464,565 | 3,464,565 | 3,474,504 | ||
Shareholders' equity | 603,602 | 603,602 | $ 468,343 | ||
Revenues | 172,995 | $ 164,114 | 340,639 | $ 348,980 | |
Operating expenses | (30,405) | (26,933) | (68,384) | (57,536) | |
Depreciation, amortization and stock-based compensation | (54,093) | (48,287) | (107,891) | (96,786) | |
Other operating income (expense) | (10) | (15) | (65) | (13) | |
Operating income | 88,487 | 88,879 | 164,299 | 194,645 | |
Interest expense | (46,492) | (42,520) | (93,335) | (87,608) | |
Foreign exchange (loss) gain | 45,946 | (45,777) | 98,415 | (109,078) | |
Gain (loss) on financial instruments | (21,263) | (1,767) | (36,375) | 30,616 | |
Other income (expense) | 4,272 | 2,973 | 8,106 | 4,591 | |
Income tax provision | (6,481) | (7,815) | (11,036) | (31,585) | |
Net (loss) income | $ 64,469 | $ (6,027) | $ 130,074 | $ 1,581 |
Other Current Liabilities (Sche
Other Current Liabilities (Schedule of Other Current Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Current Liabilities [Abstract] | ||
Operating lease liability, current | $ 677 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Liabilities Current | |
Due to affiliate | $ 3 | $ 164 |
Accrued professional fees | 805 | 1,206 |
Pension and other postretirement liabilities | 69 | 69 |
Accrued liabilities | 51 | 56 |
Other current liabilities, total | $ 1,605 | $ 1,495 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Income Taxes [Abstract] | |
Unrecognized tax benefits | $ 43,000 |
Accrued tax penalties | 0 |
Unrecognized tax benefits, interest on income taxes accrued | 1,200 |
Unrecognized tax benefits that would reduce the income tax provision | $ 6,600 |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Tax Benefit (Provision)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes [Abstract] | ||||
Current income tax provision | $ (316) | $ (834) | $ (918) | $ (1,388) |
Deferred income tax (provision) benefit | (1,844) | 5,902 | (3,308) | 7,043 |
Income tax benefit (provision) | $ (2,160) | $ 5,068 | $ (4,226) | $ 5,655 |
Income Taxes (Summary of Uncert
Income Taxes (Summary of Uncertain Tax Positions Included in Income Tax Provision) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes [Abstract] | ||||
Current (provision) benefit for UTPs | $ (277) | $ (747) | $ (737) | $ (1,227) |
Deferred benefit (provision) for UTPs | 60 | 157 | 153 | 258 |
Tax (provision) benefit for UTPs | $ (217) | $ (590) | $ (584) | $ (969) |
Income Taxes (Summary of Change
Income Taxes (Summary of Changes to Company's Liabilities For UTPs) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Income Taxes [Abstract] | |
Opening balance - January 1 | $ 13,315 |
Current provision for potential additional interest | 737 |
Ending balance | $ 14,052 |
Other Liabilities (Schedule of
Other Liabilities (Schedule of Long Term Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Liabilities [Abstract] | ||
Indemnification liabilities (see Note 13) | $ 167 | $ 184 |
Liabilities for uncertain tax positions | 14,052 | 13,315 |
Long-term liabilities | $ 14,219 | $ 13,499 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2019shares | |
Stock-Based Compensation [Abstract] | |
Unconverted restricted stock units | 75,262 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - Telesat Canada [Member] | 6 Months Ended |
Jun. 30, 2019 | |
Economic interest in affiliate | 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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Income from continuing operations — basic | $ 38,227 | $ 484 | $ 76,743 | $ 4,778 |
Less: Adjustment for dilutive effect of Telesat stock options | (230) | (484) | (10) | |
Income from continuing operations — diluted | $ 37,997 | $ 76,259 | $ 4,768 |
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
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 | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Pension Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | [1] | $ 183 | $ 170 | $ 361 | $ 357 |
Interest cost | [2] | 499 | 463 | 1,009 | 927 |
Expected return on plan assets | [2] | (609) | (657) | (1,216) | (1,314) |
Amortization of net actuarial loss (gain) | [2] | 272 | 257 | 503 | 520 |
Net periodic cost | 345 | 233 | 657 | 490 | |
Other Benefits [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Interest cost | [2] | 5 | 4 | 10 | 8 |
Amortization of net actuarial loss (gain) | [2] | (1) | (2) | ||
Amortization of prior service cost (credit) | [2] | 6 | 12 | ||
Net periodic cost | $ 4 | $ 10 | $ 8 | $ 20 | |
[1] | Included in general and administrative expenses. | ||||
[2] | Included in other expense. |
Financial Instruments, Deriva_2
Financial Instruments, Derivative Instruments and Hedging (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Financial Instruments, Derivative Instruments and Hedging [Abstract] | ||
Derivative instruments | $ 0 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Contingencies And Commitments [Line Items] | ||||||
Operating lease liability | $ 300 | |||||
Right-of-use asset | $ 661 | $ 661 | $ 300 | |||
Sublease income | $ 0 | $ 0 | 0 | $ 0 | ||
Operating lease payments | $ 300 | |||||
Operating lease, term of contract | 12 months | 12 months | ||||
Operating lease, discount rate | 7.50% | 7.50% | ||||
Sale of SSL, Nov. 02, 2012 [Member] | Pre Closing Taxes Indemnification [Member] | ||||||
Contingencies And Commitments [Line Items] | ||||||
Indemnification refund receivable | $ 700 | $ 700 | $ 2,400 | |||
Indemnification refund received | 1,700 | |||||
Globalstar do Brasil S.A. [Member] | ||||||
Contingencies And Commitments [Line Items] | ||||||
Loss contingency accrual | $ 200 | $ 200 | $ 200 |
Commitments and Contingencies_3
Commitments and Contingencies (Operating Leases Expense Net of Sublease Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Commitments and Contingencies [Abstract] | ||||
Rent expense | $ 171 | $ 334 | ||
ASU 2016-02 Transition [Abstract] | ||||
Rent expense | $ 159 | $ 318 |
Commitments and Contingencies_4
Commitments and Contingencies (Schedule of Future Minimum Payments) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Stock-Based Compensation [Abstract] | |
Operating lease liability, current, 2019 | $ 332 |
Future interest, 2019 | 18 |
Future Lease payments, 2019 | 350 |
Operating lease liability, current, 2020 | 345 |
Future interest, 2020 | 5 |
Future Lease payments, 2020 | 350 |
Operating lease liability, current, Total | $ 677 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Liabilities Current |
Future interest, Total | $ 23 |
Future Lease payments, Total | $ 700 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2013 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2009 | |
Related Party Transaction [Line Items] | |||||||
Amounts due under the transaction | $ 176,000 | $ 176,000 | $ 161,000 | ||||
Transaction, Consulting Agreement [Member] | Director [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction, date | Dec. 14, 2012 | ||||||
Transaction fee | 360,000 | $ 360,000 | $ 720,000 | $ 720,000 | |||
Transaction income during the period | $ 11,250 | 11,250 | 22,500 | 22,500 | |||
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% | |||||
Common stock, percentage acquired by an unaffiliated third party | 90.00% | ||||||
Duration for shares to be paid, days | 10 days | ||||||
Telesat Canada [Member] | Transaction, Consulting Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction, date | Oct. 31, 2007 | ||||||
Consulting agreement term | The Consulting Agreement has a term of seven-years with an automatic renewal for an additional seven-year term | ||||||
Transaction income during the period | $ 1,250,000 | $ 1,250,000 | $ 2,500,000 | 2,500,000 | |||
Transaction payments received during the period | 2,400,000 | $ 2,400,000 | |||||
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 Participation In Welfare Plans 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 | $ 900,000 | ||||||
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] | |||||||
Due from affiliates | $ 6,700,000 | $ 6,700,000 | |||||
Amount of doubtful accounts receivable | $ 6,600,000 | $ 6,600,000 | $ 6,600,000 | ||||
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% | |||||
Percentage of combined ownership of voting and non-voting common stock | 58.40% | 58.40% | 58.40% |