Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | Maxar Technologies Inc. | |
Entity Central Index Key | 0001121142 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 59,594,485 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Revenues | $ 504 | $ 557 |
Costs and expenses: | ||
Selling, general and administrative | 103 | 103 |
Depreciation and amortization | 98 | 111 |
Operating (loss) income | (4) | 37 |
Interest expense, net | 49 | 53 |
Other expense, net | 6 | 1 |
(Loss) before taxes | (59) | (17) |
Income tax benefit | (1) | (32) |
Equity in loss from joint ventures, net of tax | 1 | |
Net (loss) income | $ (59) | $ 15 |
(Loss) earnings per common share: | ||
Basic (In dollars per share) | $ (0.99) | $ 0.27 |
Diluted (In dollars per share) | $ (0.99) | $ 0.26 |
Product | ||
Revenues: | ||
Revenues | $ 194 | $ 228 |
Costs and expenses: | ||
Product costs, excluding depreciation and amortization | 197 | 187 |
Service | ||
Revenues: | ||
Revenues | 310 | 329 |
Costs and expenses: | ||
Service costs, excluding depreciation and amortization | $ 110 | $ 119 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Comprehensive (Loss) Income | ||
Net (loss) income | $ (59) | $ 15 |
Other comprehensive (loss) income, net of tax: | ||
Foreign currency translation adjustment | (9) | 3 |
Net (loss) on hedge of net investment in foreign operations | 5 | (8) |
Unrealized loss on derivatives | (4) | (3) |
Change in pension and other postretirement benefit plans | 2 | |
Other comprehensive loss, net of tax | (6) | (8) |
Comprehensive (loss) income, net of tax | $ (65) | $ 7 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 45 | $ 35 |
Trade and other receivables, net | 467 | 464 |
Inventory | 26 | 31 |
Advances to suppliers | 17 | 42 |
Income taxes receivable | 16 | 14 |
Prepaid and other current assets | 61 | 51 |
Total current assets | 632 | 637 |
Non-current assets: | ||
Orbital receivables | 400 | 407 |
Deferred tax assets | 108 | 103 |
Property, plant and equipment, net | 768 | 747 |
Intangible assets, net | 1,175 | 1,232 |
Non-current operating lease assets | 129 | |
Goodwill | 1,751 | 1,751 |
Other assets | 115 | 124 |
Total assets | 5,078 | 5,001 |
Current liabilities: | ||
Accounts payable | 190 | 209 |
Accrued liabilities | 62 | 116 |
Accrued compensation and benefits | 101 | 100 |
Contract liabilities | 309 | 361 |
Current portion of long-term debt | 19 | 17 |
Current operating lease liabilities | 33 | |
Other current liabilities | 52 | 46 |
Total current liabilities | 766 | 849 |
Non-current liabilities: | ||
Pension and other postretirement benefits | 194 | 196 |
Contract liabilities | 43 | 60 |
Operating lease liabilities | 137 | |
Long-term debt | 3,174 | 3,030 |
Other non-current liabilities | 184 | 222 |
Total liabilities | 4,498 | 4,357 |
Stockholders’ equity: | ||
Common stock ($0.0001 par value, 240 million common shares authorized and 59.6 million outstanding at March 31, 2019; nil par value, unlimited authorized common shares and 59.4 million outstanding at December 31, 2018) | 1,713 | |
Additional paid-in capital | 1,774 | 59 |
Accumulated deficit | (1,271) | (1,211) |
Accumulated other comprehensive income | 76 | 82 |
Total Maxar stockholders' equity | 579 | 643 |
Noncontrolling interest | 1 | 1 |
Total stockholder's equity | 580 | 644 |
Total liabilities and stockholders' equity | $ 5,078 | $ 5,001 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, no par value | $ 0 | |
Common stock, authorized shares | 240 | |
Common stock, shares outstanding | 59.6 | 59.4 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows provided by (used in) Operating activities: | ||
Net (loss) income | $ (59) | $ 15 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Depreciation of property, plant and equipment | 30 | 37 |
Amortization of intangible assets | 68 | 74 |
Stock-based compensation expense (recovery) | 1 | (1) |
Amortization of debt issuance costs and other noncash interest expense | 2 | 2 |
Inventory impairment | 3 | |
Foreign exchange losses | 6 | 1 |
Deferred income tax (benefit) | (24) | |
Other | 4 | 2 |
Changes in operating assets and liabilities: | ||
Trade and other receivables | 6 | (35) |
Accrued compensation and benefits | 1 | (26) |
Trade and other payables | (11) | (47) |
Accrued liabilities | (56) | 22 |
Contract liabilities | (71) | (26) |
Advances to suppliers | 25 | 15 |
Deferred tax assets | (5) | (18) |
Deferred tax liabilities | 2 | 31 |
Other liabilities | 4 | (28) |
Other | (8) | (7) |
Cash used in operating activities | (58) | (13) |
Investing activities: | ||
Purchase of property, plant and equipment | (59) | (43) |
Purchase or development of intangible assets | (14) | (17) |
Disposal of subsidiary and short-term investments | 5 | |
Cash used in investing activities | (73) | (55) |
Financing activities: | ||
Net proceeds from revolving credit facility | 150 | 90 |
Repayments of long-term debt | (6) | (5) |
Settlement of securitization liability | (4) | (4) |
Payment of dividends | (1) | (16) |
Change in overdraft balance | 2 | |
Cash provided by financing activities | 139 | 67 |
Increase (decrease) in cash, cash equivalents, and restricted cash | 8 | (1) |
Effect of foreign exchange on cash, cash equivalents, and restricted cash | 1 | |
Cash, cash equivalents, and restricted cash, beginning of year | 43 | 42 |
Cash, cash equivalents, and restricted cash, end of period | $ 52 | $ 41 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Mar. 31, 2018 |
Reconciliation of cashflow information: | ||
Cash and cash equivalents | $ 45 | $ 25 |
Restricted cash included in prepaid and other current assets | 6 | 7 |
Restricted cash included in other assets | 1 | 9 |
Total cash, cash equivalents, and restricted cash | $ 52 | $ 41 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Change in Shareholders’ Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Additional paid in capital | Retained earnings (Accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interest | Total |
Balance at the beginning of period at Dec. 31, 2017 | $ 1,550 | $ 51 | $ 118 | $ 113 | $ 1 | $ 1,833 |
Balance at the beginning of period (in shares) at Dec. 31, 2017 | 56.2 | |||||
Increase (Decrease) in Shareholders’ Equity | ||||||
Common stock issued under employee stock purchase plan | $ 1 | 1 | ||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||
Common stock issued upon vesting or exercise of stock-based compensation awards | $ 7 | (7) | ||||
Common stock issued upon vesting or exercise of stock-based compensation awards (shares) | 0.1 | |||||
Reclassification of liability classified stock-based compensation awards to equity classified | 1 | 1 | ||||
Equity classified stock-based compensation expense | 8 | 8 | ||||
Dividends ($0.01 for 2019 and $0.29 for 2018 per common share) | (16) | (16) | ||||
Comprehensive income (loss) | 15 | (8) | 7 | |||
Balance at the end of period at Mar. 31, 2018 | $ 1,558 | 53 | 117 | 105 | 1 | 1,834 |
Balance at the end of period (in shares) at Mar. 31, 2018 | 56.4 | |||||
Balance at the beginning of period at Dec. 31, 2018 | $ 1,713 | 59 | (1,211) | 82 | 1 | $ 644 |
Balance at the beginning of period (in shares) at Dec. 31, 2018 | 59.4 | 59.4 | ||||
Increase (Decrease) in Shareholders’ Equity | ||||||
Reclassification of APIC due to U.S. Domestication | $ (1,713) | 1,713 | ||||
Common stock issued under employee stock purchase plan | 1 | $ 1 | ||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||
Common stock issued upon vesting or exercise of stock-based compensation awards (shares) | 0.1 | |||||
Equity classified stock-based compensation expense | 1 | 1 | ||||
Dividends ($0.01 for 2019 and $0.29 for 2018 per common share) | (1) | (1) | ||||
Comprehensive income (loss) | (59) | (6) | (65) | |||
Balance at the end of period at Mar. 31, 2019 | $ 1,774 | $ (1,271) | $ 76 | $ 1 | $ 580 | |
Balance at the end of period (in shares) at Mar. 31, 2019 | 59.6 | 59.6 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Change in Shareholders’ Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Change in Shareholders’ Equity | ||
Dividend per share (in dollars per share) | $ 0.01 | $ 0.29 |
General business description
General business description | 3 Months Ended |
Mar. 31, 2019 | |
General business description | |
General business description | 1. GENERAL BUSINESS DESCRIPTION Maxar Technologies Inc. (the “Company” or “Maxar”) is a global leader of advanced space technology solutions and is at the nexus of the new space economy, developing and sustaining the infrastructure and delivering the information, services, and systems that unlock the promise of space for commercial and government markets. As a trusted partner, the Company provides vertically integrated capabilities and expertise including satellites, Earth imagery, robotics, geospatial data and analytics to help customers anticipate and address their most complex mission-critical challenges with confidence. Maxar’s common stock trades on the New York Stock Exchange and Toronto Stock Exchange under the ticker MAXR. Maxar’s businesses are organized and managed in three reportable segments: Space Systems, Imagery and Services. On January 1, 2019, the Company completed a reorganization of its corporate structure pursuant to which the Company directly acquired all of the issued and outstanding shares of Maxar Technologies Ltd. (“Maxar Canada”), and the Company replaced Maxar Canada as the publicly-held parent company of the Maxar group (“U.S. Domestication”). Since its inception, Maxar Canada reported to securities regulators in both Canada and the U.S., financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Upon completion of the U.S. Domestication, and including the report herein, the Company has prepared its financial statements in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). |
Summary of significant accounti
Summary of significant accounting policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The Unaudited Condensed Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all of its consolidated subsidiary entities. The Company’s Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) . All intercompany balances and transactions are eliminated on consolidation. The Company’s Unaudited Condensed Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K filed with the SEC. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. Use of estimates, assumptions and judgments The preparation of the Unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) which together with subsequent amendments is included in ASC 842 – Leases . This new standard requires that all leases with an initial term greater than one year be recorded on the balance sheet as a right-of-use asset and lease liability. Additional qualitative and quantitative disclosures are also required. The Company adopted the lease standard on January 1, 2019 using the modified retrospective transition approach on the effective date. The Company has elected the package of practical expedients, which allows the Company not to reassess whether any expired or existing contracts as of the adoption date are or contain a lease, lease classification for any expired or existing leases as of the adoption date and initial direct costs for any existing leases as of the adoption date. The Company has not elected the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets . Upon adoption, the Company recognized operating lease right-of-use assets and lease liabilities of $133 million and $176 million, respectively in its Unaudited Condensed Consolidated Balance Sheets. There were no material impacts to the Unaudited Condensed Consolidated Statements of Operations or Unaudited Condensed Consolidated Statements of Cash Flows. See Note 7 in this Quarterly Report on Form 10-Q for details. Taxes In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) . The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) from accumulated other comprehensive income into retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company adopted the update on January 1, 2019. There was no material impact on the Unaudited Condensed Consolidated Financial Statements. Recent Accounting Guidance Not Yet Adopted Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which together with subsequent amendments is included in ASC 326 – Financial Instruments – Credit Losses . ASU 2016-13 significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans and other financial instruments. These updates are effective for annual and interim financial statement periods beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this guidance may have on the Company’s financial statements. |
Trade and other receivables, ne
Trade and other receivables, net | 3 Months Ended |
Mar. 31, 2019 | |
Trade and other receivables, net | |
Trade and other receivables. net | 3. TRADE AND OTHER RECEIVABLES Trade and other receivables, net consisted of the following: March 31, December 31, 2019 2018 Billed $ 207 $ 242 Unbilled 213 172 Total trade receivables 420 414 Orbital receivables, current portion 34 34 Other 14 17 Allowance for doubtful accounts (1) (1) Total trade and other receivables, net $ 467 $ 464 Orbital receivables relate to performance incentives due under certain satellite construction contracts that are paid over the in-orbit life of the satellite. As of March 31, 2019 and December 31, 2018, long-term orbital receivables were $400 million and $407 million, respectively, and are included in Non-current assets on the Unaudited Condensed Consolidated Balance Sheets. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory | |
Inventory | 4. INVENTORY Inventory consisted of the following: March 31, December 31, 2019 2018 Raw materials $ 15 $ 21 Work in process 11 10 Total inventory $ 26 $ 31 |
Property, plant and equipment,
Property, plant and equipment, net | 3 Months Ended |
Mar. 31, 2019 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 5. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: March 31, December 31, 2019 2018 Satellites $ 397 $ 397 Equipment 229 229 Leasehold improvements 97 97 Computer hardware 92 92 Land and land improvements 88 88 Buildings 46 46 Furniture and fixtures 19 19 Construction in process 193 142 Property, plant and equipment, at cost 1,161 1,110 Accumulated depreciation (393) (363) Property, plant and equipment, net $ 768 $ 747 Depreciation expense for property, plant and equipment was $ 30 million and $37 million for the three months ended March 31, 2019 and March 31, 2018, respectively. |
Intangible assets
Intangible assets | 3 Months Ended |
Mar. 31, 2019 | |
Intangible assets | |
Intangible assets | 6. INTANGIBLE Intangible assets are as follows: March 31, 2019 December 31, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 619 $ (70) $ 549 $ 619 $ (58) $ 561 Backlog 332 (145) 187 332 (120) 212 Technologies 329 (101) 228 330 (86) 244 Software 210 (80) 130 198 (71) 127 Image library 80 (36) 44 80 (32) 48 Trade names and other 41 (11) 30 41 (9) 32 Non-compete agreements 21 (14) 7 21 (13) 8 Total intangible assets $ 1,632 $ (457) $ 1,175 $ 1,621 $ (389) $ 1,232 Amortization expense related to intangible assets was $ 68 million and $74 million for the three months ended March 31, 2019 and March 31, 2018, respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | 7. LEASES The Company has both operating and finance leases. The majority of the Company’s leases are operating leases related to buildings. The majority of the Company’s finance leases are related to furniture and equipment. The Company’s leases have remaining lease terms of one year to 16 years, some of which include options to extend the lease anywhere from one to ten years, and are included in the lease term when it is reasonably certain the Company will exercise the option. The Company has elected as an accounting policy not to recognize any leases with an initial term of 12 months or less on the balance sheet and will recognize the lease payments on a straight-line basis in the statement of operations. The rate implicit in the lease is typically not readily determinable; in such instances the Company uses an incremental borrowing rate to determine the present value of the lease payments. The Company uses a borrowing rate with a similar term to the lease term and considers any options if they are reasonably certain to be exercised. For adoption, the Company elected to consider the remaining lease term and payments as of the adoption date. The Company elected the practical expedient not to separate lease and non-lease components. The Company has also elected to include in minimum lease payments any executory costs that are part of the fixed lease payment. Finance lease cost, variable lease cost, and short-term lease cost are not material. The components of operating lease expense are as follows: Three months ended March 31, Classification 2019 Operating lease expense Selling, general, and administrative expense, Product costs, and Service costs $ 8 Supplemental lease balance sheet information consists of the following: March 31, Classification 2019 Assets: Operating Non-current operating lease assets $ 129 Finance Property, plant, and equipment, net 9 Total lease assets $ 138 Liabilities: Current Operating Current operating lease liabilities $ 33 Finance Other current liabilities 3 Non-current Operating Operating lease liabilities 137 Finance Other non-current liabilities 3 Total lease liabilities $ 176 Supplemental lease cash flow information is as follows: Three months ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9 Other supplemental lease information consists of the following: March 31, 2019 Weighted average remaining lease term Operating leases 9 years Finance leases 3 years Weighted average discount rate Operating leases Finance leases Maturities of lease liabilities are as follows: 2019 1 2020 2021 2022 2023 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 26 $ 31 $ 29 $ 24 $ 22 $ 100 $ (62) $ 170 Finance leases 3 3 1 — — 9 (10) 6 1 Excludes the three months ended March 31, 2019. |
Restructuring liability
Restructuring liability | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring liability | |
Restructuring liability | 8. RESTRUCTURING On February 27, 2019, the Company announced a restructuring plan to implement cost-saving measures, including a reduction in the Company’s workforce. The reduction in the Company’s workforce was substantially completed in the first quarter of 2019. Restructuring expense is included in Product costs, excluding depreciation and amortization, Service costs, excluding depreciation and amortization, and Selling, general and administrative expense in the Company’s Unaudited Condensed Consolidated Statements of Operations. Changes to restructuring liabilities during the period consisted of the following: Restructuring Liability Balance as of December 31, 2018 $ 6 Obligations incurred 20 Payments (5) Balance as of March 31, 2019 $ 21 |
Long-term debt and interest exp
Long-term debt and interest expense | 3 Months Ended |
Mar. 31, 2019 | |
Long-term debt and interest expense | |
Long-term debt and interest expense | 9. LONG-TERM DEBT AND INTEREST EXPENSE March 31, December 31, 2019 2018 Syndicated credit facility: Revolving loan payable $ 734 $ 595 Operating loan payable in Canadian dollars (March 31, 2019 - C$15 million; December 31, 2018 - C$0 million) 11 — Term Loan A 500 500 Term Loan B 1,975 1,980 Debt issuance costs (39) (41) Obligations under finance leases and other 12 13 Total long-term debt 3,193 3,047 Current portion (19) (17) Non-current portion $ 3,174 $ 3,030 The Syndicated Credit Facility is composed of: (i) a four-year senior secured first lien revolving credit facility and a four-year senior secured first lien operating facility (collectively, the “Revolving Credit Facility”), (ii) a senior secured first lien term A facility (“Term Loan A”) and (iii) a seven-year senior secured first lien term B facility (“Term Loan B”) in an aggregate principal amount of $3.75 billion. The net proceeds of the Syndicated Credit Facility were used, along with cash on hand, to consummate the acquisition of DigitalGlobe, to refinance all amounts outstanding under the Company’s existing syndicated credit facility and senior term loans, to repay DigitalGlobe’s outstanding indebtedness, to pay transaction fees and expenses, to fund working capital and for general corporate purposes. The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued. As of March 31, 2019 and December 31, 2018, the Company also had $15 million and $18 million, respectively, of issued and undrawn letters of credit outstanding under the Revolving Credit Facility. Interest expense on long-term debt and other obligations are as follows: Three Months Ended 2019 2018 Interest on long-term debt $ 45 $ 40 Interest expense on advance payments from customers 5 8 Interest on orbital securitization liability 2 2 Imputed interest and other — 2 Capitalized interest (3) (1) Interest expense on dissenting stockholder liability — 2 Total interest expense $ 49 $ 53 |
Financial instruments and fair
Financial instruments and fair value disclosures | 3 Months Ended |
Mar. 31, 2019 | |
Financial instruments and fair value disclosures | |
Financial instruments and fair value disclosures | 10. FINANCIAL INSTRUMENTS AND FAIR VALUE DISCLOSURES Fair value is determined based on the assumptions that market participants would use in pricing the asset or liability. The Company utilizes the following fair value hierarchy in determining fair value: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs) The following tables present assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. These fair values are included as components of Other current liabilities, Other non-current liabilities, Prepaid and other current assets, and Other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets. Recurring Fair Value Measurements of as of March 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 4 — 4 $ 3 $ 4 $ — $ 7 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 3 $ — $ 3 Interest rate swaps — 9 — 9 $ — $ 12 $ — $ 12 Recurring Fair Value Measurements of as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 5 — 5 $ 3 $ 5 $ — $ 8 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 8 — 8 Interest rate swaps — 4 — 4 $ — $ 12 $ — $ 12 The Company determines fair value of its derivative financial instruments based on internal valuation models, such as discounted cash flow analysis, using management estimates and observable market-based inputs, as applicable. Management estimates include assumptions concerning the amount and timing of estimated future cash flows and application of appropriate discount rates. Observable market-based inputs are sourced from third parties and include interest rates and yield curves, currency spot and forward rates, and credit spreads, as applicable. Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are all short-term in nature; therefore, the carrying value of these items approximates their fair value. The following tables provide additional fair value information related to the Company’s financial instruments: As of March 31, 2019 Carrying value Fair value Fair value hierarchy Long-term debt, excluding finance leases and other $ 3,181 $ 3,083 Level 2 Orbital receivables 434 434 Level 2 As of December 31, 2018 Carrying value Fair value Fair value hierarchy Long-term debt, excluding finance leases and other $ 3,034 $ 2,925 Level 2 Orbital receivables 441 441 Level 2 There were no transfers into or out of each of the levels of the fair value hierarchy during the three months ended March 31, 2019 or year ended December 31, 2018 . |
Stockholders' equity
Stockholders' equity | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' equity | |
Stockholders' equity | 11. Changes in the components of Accumulated other comprehensive income (loss) are as follows: Foreign Net (Loss) Income Total Currency on Hedge Unrecognized Accumulated Other Translation Investments in (Loss) Gain on Pension Comprehensive Adjustments Foreign Operations Derivatives 1 Adjustments Income (Loss) Balance as of December 31, 2018 $ 162 $ (51) $ (4) $ (25) $ 82 Other comprehensive (loss) income (9) 5 (4) 3 (5) Tax expense — — — (1) (1) Balance as of March 31, 2019 $ 153 $ (46) $ (8) $ (23) $ 76 1 As of January 1, 2019, the Company has discontinued hedge accounting related to the Company’s foreign exchange contracts. The Company still applies hedge accounting to the interest rate swaps related to long-term debt. As of March 31, 2019 the balance consisted of unrecognized loss on the Company’s interest rate swaps. As a result of the Company’s U.S. Domestication on January 1, 2019, a reclassification between Common Stock and Additional paid-in capital was necessary to reflect the Company’s new par value of $0.0001. The reclassification between Common Stock and Additional paid-in capital of $1.7 billion has been reflected within the Unaudited Condensed Consolidated Statements of Change in Stockholders’ Equity at March 31, 2019. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue | |
Revenue | 12. REVENUE On March 31, 2019, the Company had $1.9 billion of remaining performance obligations, which represents the transaction price of firm orders less inception to date sales recognized. Remaining performance obligations exclude unexercised contract options and indefinite delivery/indefinite quantity contracts. The Company expects to recognize sales relating to existing performance obligations of approximately $1.0 billion, $0.3 billion, and $0.6 billion in the years 2019, 2020 and thereafter, respectively. Contract liabilities by segment are as follows: Space As of March 31, 2019 Systems Imagery 1 Services Total Contract liabilities $ 128 $ 222 $ 2 $ 352 Space As of December 31, 2018 Systems Imagery 1 Services Total Contract liabilities $ 172 $ 247 $ 2 $ 421 1 The contract liability balance associated with the Company’s EnhancedView Contract was $ 159 million and $184 million as of March 31, 2019 and December 31, 2018, respectively. During the three months ended March 31, 2019, imputed interest on advanced payments increased the contract liability balance by $5 million, and $30 million in revenue was recognized, decreasing the contract liability balance. The contract liability balance associated with the Company’s EnhancedView Contract is expected to be recognized as revenue through August 31, 2020. There were no deferred contract costs on the Unaudited Condensed Consolidated Balance Sheets associated with this contract as of March 31, 2019 or December 31, 2018. The decrease in total contract liabilities was primarily due to revenues recognized. The Company’s primary sources of revenues are as follows: Three months ended March 31, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 194 $ — $ — $ — $ 194 Service revenues 45 199 66 — 310 Intersegment 35 1 2 (38) — $ 274 $ 200 $ 68 $ (38) $ 504 Three months ended March 31, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 228 $ — $ — $ — $ 228 Service revenues 51 210 68 — 329 Intersegment 14 1 2 (17) — $ 293 $ 211 $ 70 $ (17) $ 557 Certain of the Company’s contracts with customers in the Space Systems segment include a significant financing component since payments are received from the customer more than one year after delivery of the promised goods or services. The Company recognized orbital interest revenue of $7 million and $8 million for the three months ended March 31, 2019 and 2018, respectively related to these contracts, which is included in product revenues. The approximate revenues based on geographic location of customers are as follows: Three Months Ended March 31, 2019 2018 United States $ 338 $ 369 Asia 68 76 Canada 25 48 Europe 26 33 South America 39 22 Other 8 9 Total revenues $ 504 $ 557 Revenues from significant customers are as follows: Three Months Ended March 31, 2019 2018 U.S. Federal Government and agencies $ 231 $ 232 Canadian Federal Government and agencies 20 28 |
Segment information
Segment information | 3 Months Ended |
Mar. 31, 2019 | |
Segment information | |
Segment information | 13. SEGMENT INFORMATION The Company’s business is organized into three reportable segments based on the nature of the products and services offered: (i) Space Systems; (ii) Imagery; and (iii) Services. The Space Systems reportable segment supplies space-based and ground-based infrastructure and information solutions including communication and imaging satellites, satellite payloads and antenna subsystems, space-based and airborne surveillance solutions, robotic systems and associated ground infrastructure and support services. The Imagery segment is a supplier of high resolution Earth imagery and radar data sourced from the Company owned satellite constellations and third-party providers. The Services segment combines imagery, analytic expertise and innovative technology to deliver integrated intelligence solutions to customers. Transactions between segments are generally negotiated and accounted for under terms and conditions similar to other government and commercial contracts. The reconciling item “corporate and other unallocated expenses” includes items such as corporate office costs, regulatory costs, executive and director compensation, foreign exchange gains and losses, and fees for audit, legal and consulting services. The Company’s Chief Operating Decision Maker (“CODM”) measures the performance of each segment based on revenue and Adjusted EBITDA. Adjusted EBITDA is defined as EBITDA adjusted for certain items affecting comparability as specified in the calculation. Other unallocated expenses include SSL retention costs and foreign exchange gains and losses which are not included in segment Adjusted EBITDA. The following table summarizes the operating performance of the Company’s segments: Three Months Ended March 31, 2019 2018 Revenues: Space Systems $ 274 $ 293 Imagery 200 211 Services 68 70 Intersegment eliminations (38) (17) Total revenues $ 504 $ 557 Adjusted EBITDA: Space Systems $ 10 $ 28 Imagery 121 134 Services 7 4 Intersegment eliminations (3) (2) Depreciation and amortization (98) (111) Corporate and other unallocated expenses (18) (13) Restructuring (20) — Acquisition and integration related expense (4) (4) Inventory impairment (3) — CEO severance (3) — Interest expense, net (49) (53) Equity loss from joint ventures, net of tax 1 — Net (loss) earnings before income taxes $ (59) $ (17) The Company’s capital expenditures are as follows: Space Corporate and Three months ended March 31, 2019 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 6 $ 50 $ — $ 3 $ 59 Intangible assets 1 13 — — 14 $ 7 $ 63 $ — $ 3 $ 73 Space Corporate and Three months ended March 31, 2018 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 5 $ 38 $ — $ — $ 43 Intangible assets — 17 — — 17 $ 5 $ 55 $ — $ — $ 60 Substantially all of the Company’s long-lived tangible assets were in the United States as of March 31, 2019 and December 31, 2018. |
Employee benefit plans
Employee benefit plans | 3 Months Ended |
Mar. 31, 2019 | |
Employee benefit plans | |
Employee benefit plans | 14. EMPLOYEE BENEFIT PLANS The following table summarizes the components of net periodic benefit (credits) costs for the Company’s pension plans: Three Months Ended March 31, Pension 2019 2018 Service cost $ 1 $ 2 Interest cost 6 — Expected return on plan assets (6) — Expenses paid — — Net periodic benefit (credit) cost $ 1 $ 2 Contributions. The funding policy for the Company’s pension plans is to contribute at least the minimum required by applicable laws and regulations or to directly make benefit payments where appropriate. At March 31, 2019, all legal funding requirements had been met. The Company expects to contribute approximately $14 million to its pension plans for the year ending December 31, 2019. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income taxes | |
Income taxes | 15. INCOME TAXES On January 1, 2019, the Company completed the U.S. Domestication. The Company has estimated there are no material corporate tax consequences as a result of the U.S. Domestication; however, the Company’s effective tax rate is expected to increase in the future primarily due to related changes in corporate structure and the application of U.S. tax law to the Company. In prior years, the Company’s income taxes were described as Canadian and non-Canadian. Following the U.S. Domestication, the Company will describe its income tax in the context of U.S. and non-U.S. Following the U.S. Domestication, the Company is subject to taxation on a material amount of Global Intangible Low-Tax Income (“GILTI”) earned by foreign subsidiaries. The Company has elected to treat the tax effect of GILTI as a current period expense when incurred. The Company expects the net impact of the GILTI for the 2019 fiscal year to be immaterial due to a corresponding change in the valuation allowance. In computing income tax expense for the quarter ended March 31, 2019, the Company applied the estimated annual effective tax rate to non-U.S. pre-tax income. No income tax expense was recognized on U.S. income as the Company does not expect to recognize the benefit of U.S. losses recorded in the year. This resulted in an effective income tax rate of 14.4% in the quarter ended March 31, 2019. In the quarter ended March 31, 2018, income tax expense was computed as (17.5%). The effective tax rate increased primarily due to transactions undertaken in the course of the U.S. Domestication and a change in the mix of income between jurisdictions. |
Earnings per share
Earnings per share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings per share | |
Earnings per share | 16. EARNINGS PER SHARE The following table includes the calculation of basic and diluted Earnings per common share: Three Months Ended March 31, 2019 2018 Net (loss) income $ (59) $ 15 Weighted average number of common shares outstanding-basic 59.5 56.4 Weighted dilutive effect of equity awards — 0.3 Weighted average number of common shares outstanding-diluted 59.5 56.7 Earnings per common share: Basic $ (0.99) $ 0.27 Dilutive $ (0.99) $ 0.26 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Contingencies | |
Contingencies | 17. CONTINGENCIES Contingencies in the Normal Course of Business As discussed in Note 3, satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price of the satellite is contingent upon in-orbit performance of the satellite. The Company’s ultimate receipt of orbital performance incentives is subject to the continued performance of its satellites generally over the contractually stipulated life of the satellites. A complete or partial loss of a satellite’s functionality can result in loss of orbital receivable payments or repayment of amounts received by the Company under a warranty payback arrangement. The Company generally receives the present value of the orbital receivables if there is a launch failure or a failure caused by a customer error, but will forfeit some or all of the orbital receivables if the loss is caused by satellite failure or as a result of Company error. The Company recognizes orbital performance incentives in the financial statements based on the amounts that are expected to be received and believes that it will not incur a material loss relating to the incentives recognized. The Company may incur liquidated damages on programs as a result of delays due to slippage, or for programs which fail to meet all milestone requirements as outlined within the contractual arrangements with customers. Losses on programs related to liquidated damages result in a reduction of revenue recognition. The Company enters into agreements in the ordinary course of business with resellers and others. Most of these agreements require the Company to indemnify the other party against third-party claims alleging that one of its products infringes or misappropriates a patent, copyright, trademark, trade secret or other intellectual property right. Certain of these agreements require the Company to indemnify the other party against claims relating to property damage, personal injury or acts or omissions by the Company, its employees, agents or representatives. From time to time, the Company has made guarantees regarding the performance of its systems to its customers. Some of these agreements do not limit the maximum potential future payments the Company could be obligated to make. The Company evaluates and estimates potential losses from such indemnification based on the likelihood that the future event will occur. The Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such indemnification and guarantees in the Unaudited Condensed Consolidated Financial Statements. The Company has entered into industrial cooperation agreements, sometimes referred to as offset agreements, as a condition to entering into contracts for its products and services from certain customers in foreign countries. These agreements are designed to return economic value to the foreign country and may be satisfied through activities that do not require a direct cash payment, including transferring technology, providing manufacturing, training and other consulting support to in-country projects. These agreements may provide for penalties in the event the Company fails to perform in accordance with offset requirements. The Company has historically not been required to pay any such penalties. Legal Proceedings In 2010, we entered into an agreement with a Ukrainian customer to provide a communication satellite system. In 2014, following the annexation of Crimea by the Russian Federation, we declared force majeure with respect to the program. The Ukrainian customer accepted that an event of force majeure had occurred. Following various unsuccessful efforts to arrive at a new contractual framework to take account of the changed circumstances (including the force majeure and various financial issues), the contract with the Ukrainian customer was terminated by us. We completed work on the spacecraft, which is in storage. In July 2018, the Ukrainian customer issued a statement of claim in the arbitration it had commenced against us, challenging our right to terminate for force majeure, purporting to terminate the contract for default by us, and seeking recovery from us in the amount of approximately $227 million. Discovery has concluded, and the matter is scheduled to be heard by the arbitration panel in December 2019. We have sound defenses to the petitioner’s claims, and will vigorously defend the claims asserted against us. We have accrued an amount that we believe is within the range of probable outcomes for resolving this matter; the amount is not material to our consolidated financial statements. However, the outcome of any arbitration is difficult to predict, and in the event that the arbitration results in a finding against us in excess of the amount we have reserved, our business, results of operations and financial condition could be adversely affected. In January 2019, a Maxar stockholder filed a class action lawsuit in the District Court of Colorado, naming Maxar and members of management as defendants alleging, among other things, that our public disclosures were deficient in violation of the federal securities laws and seeking monetary damages. Once the court appoints a lead plaintiff, that plaintiff will have sixty days to file a consolidated amended complaint and we will have sixty days to file a response. Also in January 2019, a Maxar stockholder resident in Canada issued a proposed class action lawsuit in the Ontario Superior Court of Justice against Maxar and members of management claiming misrepresentations in Maxar’s public disclosures and seeking monetary damages. The Canadian case has not yet been served on us. We believe that these cases are without merit and we intend to vigorously defend against them. We are a party to various other legal proceedings and claims that arise in the ordinary course of business as either a plaintiff or defendant. As a matter of course, we are prepared both to litigate these matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. We have established accrued liabilities for these matters where losses are deemed probable and reasonably estimable. The outcome of any of these other proceedings, either individually or in the aggregate, is not expected to have a material adverse effect on our financial position, results of operations or liquidity. |
Supplemental cash flow
Supplemental cash flow | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental cash flow | |
Supplemental cash flow | 18. SUPPLEMENTAL CASH FLOW Selected cash payments and non-cash activities are as follows: Three Months Ended March 31, 2019 2018 Supplemental cash flow information: Cash paid for interest 1 $ (79) $ (54) Income tax payments (1) (1) Supplemental non-cash investing and financing activities: Accrued capital expenditures 13 5 1 The Company has the option to elect different interest periods on the Revolving Credit Facility. In the fourth quarter of 2017 and 2018, the Company elected a 3-month interest rate for a portion of its debt with payments due in the first quarter of the following year. In both 2019 and 2018 the Company made interest payments in the first quarter totaling $42 million and $21 million, respectively, which related to the fourth quarter of the previous year. |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent events | |
Subsequent events | 19. SUBSEQUENT EVENTS Subsequent to March 31, 2019, the insurance carriers accepted the Company’s $183 million claim for loss arising from the on-orbit failure of the WorldView-4 satellite and the Company has collected $154 million in proceeds. The Company expects to receive the remaining insurance proceeds by the end of the second quarter of 2019. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of significant accounting policies | |
Basis of preparation | Basis of preparation The Unaudited Condensed Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all of its consolidated subsidiary entities. The Company’s Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) . All intercompany balances and transactions are eliminated on consolidation. The Company’s Unaudited Condensed Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K filed with the SEC. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. |
Use of estimates, assumptions and judgments | Use of estimates, assumptions and judgments The preparation of the Unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) which together with subsequent amendments is included in ASC 842 – Leases . This new standard requires that all leases with an initial term greater than one year be recorded on the balance sheet as a right-of-use asset and lease liability. Additional qualitative and quantitative disclosures are also required. The Company adopted the lease standard on January 1, 2019 using the modified retrospective transition approach on the effective date. The Company has elected the package of practical expedients, which allows the Company not to reassess whether any expired or existing contracts as of the adoption date are or contain a lease, lease classification for any expired or existing leases as of the adoption date and initial direct costs for any existing leases as of the adoption date. The Company has not elected the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets . Upon adoption, the Company recognized operating lease right-of-use assets and lease liabilities of $133 million and $176 million, respectively in its Unaudited Condensed Consolidated Balance Sheets. There were no material impacts to the Unaudited Condensed Consolidated Statements of Operations or Unaudited Condensed Consolidated Statements of Cash Flows. See Note 7 in this Quarterly Report on Form 10-Q for details. Taxes In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) . The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) from accumulated other comprehensive income into retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company adopted the update on January 1, 2019. There was no material impact on the Unaudited Condensed Consolidated Financial Statements. |
Recent Accounting Guidance Not Yet Adopted | Recent Accounting Guidance Not Yet Adopted Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which together with subsequent amendments is included in ASC 326 – Financial Instruments – Credit Losses . ASU 2016-13 significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on loans and other financial instruments. These updates are effective for annual and interim financial statement periods beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of this guidance may have on the Company’s financial statements. |
Trade and other receivables, _2
Trade and other receivables, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Trade and other receivables, net | |
Schedule of trade and other receivables, net | March 31, December 31, 2019 2018 Billed $ 207 $ 242 Unbilled 213 172 Total trade receivables 420 414 Orbital receivables, current portion 34 34 Other 14 17 Allowance for doubtful accounts (1) (1) Total trade and other receivables, net $ 467 $ 464 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory | |
Schedule of inventory | March 31, December 31, 2019 2018 Raw materials $ 15 $ 21 Work in process 11 10 Total inventory $ 26 $ 31 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment, net | Property, plant and equipment, net consisted of the following: March 31, December 31, 2019 2018 Satellites $ 397 $ 397 Equipment 229 229 Leasehold improvements 97 97 Computer hardware 92 92 Land and land improvements 88 88 Buildings 46 46 Furniture and fixtures 19 19 Construction in process 193 142 Property, plant and equipment, at cost 1,161 1,110 Accumulated depreciation (393) (363) Property, plant and equipment, net $ 768 $ 747 |
Intangible assets (Tables)
Intangible assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Intangible assets | |
Schedule of intangible assets | March 31, 2019 December 31, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 619 $ (70) $ 549 $ 619 $ (58) $ 561 Backlog 332 (145) 187 332 (120) 212 Technologies 329 (101) 228 330 (86) 244 Software 210 (80) 130 198 (71) 127 Image library 80 (36) 44 80 (32) 48 Trade names and other 41 (11) 30 41 (9) 32 Non-compete agreements 21 (14) 7 21 (13) 8 Total intangible assets $ 1,632 $ (457) $ 1,175 $ 1,621 $ (389) $ 1,232 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Schedule of components of lease expense | Three months ended March 31, Classification 2019 Operating lease expense Selling, general, and administrative expense, Product costs, and Service costs $ 8 |
Supplemental lease balance sheet information | March 31, Classification 2019 Assets: Operating Non-current operating lease assets $ 129 Finance Property, plant, and equipment, net 9 Total lease assets $ 138 Liabilities: Current Operating Current operating lease liabilities $ 33 Finance Other current liabilities 3 Non-current Operating Operating lease liabilities 137 Finance Other non-current liabilities 3 Total lease liabilities $ 176 |
Schedule of supplemental lease cash flow information | Three months ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9 |
Schedule of other supplemental lease information | March 31, 2019 Weighted average remaining lease term Operating leases 9 years Finance leases 3 years Weighted average discount rate Operating leases Finance leases |
Schedule of maturities of finance lease liabilities | 2019 1 2020 2021 2022 2023 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 26 $ 31 $ 29 $ 24 $ 22 $ 100 $ (62) $ 170 Finance leases 3 3 1 — — 9 (10) 6 1 Excludes the three months ended March 31, 2019 |
Schedule of maturities of operating liabilities | 2019 1 2020 2021 2022 2023 Thereafter Less: imputed interest Total minimum lease payments Operating leases $ 26 $ 31 $ 29 $ 24 $ 22 $ 100 $ (62) $ 170 Finance leases 3 3 1 — — 9 (10) 6 1 Excludes the three months ended March 31, 2019 |
Restructuring liability (Tables
Restructuring liability (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring liability | |
Schedule of changes to restructuring liabilities | Restructuring Liability Balance as of December 31, 2018 $ 6 Obligations incurred 20 Payments (5) Balance as of March 31, 2019 $ 21 |
Long term debt and interest exp
Long term debt and interest expense (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Long-term debt and interest expense | |
Summary of long term debt | March 31, December 31, 2019 2018 Syndicated credit facility: Revolving loan payable $ 734 $ 595 Operating loan payable in Canadian dollars (March 31, 2019 - C$15 million; December 31, 2018 - C$0 million) 11 — Term Loan A 500 500 Term Loan B 1,975 1,980 Debt issuance costs (39) (41) Obligations under finance leases and other 12 13 Total long-term debt 3,193 3,047 Current portion (19) (17) Non-current portion $ 3,174 $ 3,030 |
Schedule of interest expense on long term debt and other obligations | Three Months Ended 2019 2018 Interest on long-term debt $ 45 $ 40 Interest expense on advance payments from customers 5 8 Interest on orbital securitization liability 2 2 Imputed interest and other — 2 Capitalized interest (3) (1) Interest expense on dissenting stockholder liability — 2 Total interest expense $ 49 $ 53 |
Financial instruments and fai_2
Financial instruments and fair value disclosures (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Financial instruments and fair value disclosures | |
Summary of financial instruments measured at fair value in the accompanying consolidated balance sheets | Recurring Fair Value Measurements of as of March 31, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 4 — 4 $ 3 $ 4 $ — $ 7 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 3 $ — $ 3 Interest rate swaps — 9 — 9 $ — $ 12 $ — $ 12 Recurring Fair Value Measurements of as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 5 — 5 $ 3 $ 5 $ — $ 8 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 8 — 8 Interest rate swaps — 4 — 4 $ — $ 12 $ — $ 12 |
Summary of financial instruments recorded at carrying value in the accompanying consolidated balance sheets | As of March 31, 2019 Carrying value Fair value Fair value hierarchy Long-term debt, excluding finance leases and other $ 3,181 $ 3,083 Level 2 Orbital receivables 434 434 Level 2 As of December 31, 2018 Carrying value Fair value Fair value hierarchy Long-term debt, excluding finance leases and other $ 3,034 $ 2,925 Level 2 Orbital receivables 441 441 Level 2 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' equity | |
Schedule of changes in the components of accumulated other comprehensive income (loss) | Foreign Net (Loss) Income Total Currency on Hedge Unrecognized Accumulated Other Translation Investments in (Loss) Gain on Pension Comprehensive Adjustments Foreign Operations Derivatives 1 Adjustments Income (Loss) Balance as of December 31, 2018 $ 162 $ (51) $ (4) $ (25) $ 82 Other comprehensive (loss) income (9) 5 (4) 3 (5) Tax expense — — — (1) (1) Balance as of March 31, 2019 $ 153 $ (46) $ (8) $ (23) $ 76 1 As of January 1, 2019, the Company has discontinued hedge accounting related to the Company’s foreign exchange contracts. The Company still applies hedge accounting to the interest rate swaps related to long-term debt. As of March 31, 2019 the balance consisted of unrecognized loss on the Company’s interest rate swaps. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue | |
Summary of contract assets and contract liabilities by segment | Space As of March 31, 2019 Systems Imagery 1 Services Total Contract liabilities $ 128 $ 222 $ 2 $ 352 Space As of December 31, 2018 Systems Imagery 1 Services Total Contract liabilities $ 172 $ 247 $ 2 $ 421 1 The contract liability balance associated with the Company’s EnhancedView Contract was $ 159 million and $184 million as of March 31, 2019 and December 31, 2018, respectively. During the three months ended March 31, 2019, imputed interest on advanced payments increased the contract liability balance by $5 million, and $30 million in revenue was recognized, decreasing the contract liability balance. The contract liability balance associated with the Company’s EnhancedView Contract is expected to be recognized as revenue through August 31, 2020. There were no deferred contract costs on the Unaudited Condensed Consolidated Balance Sheets associated with this contract as of March 31, 2019 or December 31, 2018. |
Summary of revenue by primary sources | Three months ended March 31, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 194 $ — $ — $ — $ 194 Service revenues 45 199 66 — 310 Intersegment 35 1 2 (38) — $ 274 $ 200 $ 68 $ (38) $ 504 Three months ended March 31, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 228 $ — $ — $ — $ 228 Service revenues 51 210 68 — 329 Intersegment 14 1 2 (17) — $ 293 $ 211 $ 70 $ (17) $ 557 |
Summary of revenue by geographic location | Three Months Ended March 31, 2019 2018 United States $ 338 $ 369 Asia 68 76 Canada 25 48 Europe 26 33 South America 39 22 Other 8 9 Total revenues $ 504 $ 557 |
Schedule of revenue from significant customers | Three Months Ended March 31, 2019 2018 U.S. Federal Government and agencies $ 231 $ 232 Canadian Federal Government and agencies 20 28 |
Segment information (Tables)
Segment information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment information | |
Summary of operating performance of the reporting segments | Three Months Ended March 31, 2019 2018 Revenues: Space Systems $ 274 $ 293 Imagery 200 211 Services 68 70 Intersegment eliminations (38) (17) Total revenues $ 504 $ 557 Adjusted EBITDA: Space Systems $ 10 $ 28 Imagery 121 134 Services 7 4 Intersegment eliminations (3) (2) Depreciation and amortization (98) (111) Corporate and other unallocated expenses (18) (13) Restructuring (20) — Acquisition and integration related expense (4) (4) Inventory impairment (3) — CEO severance (3) — Interest expense, net (49) (53) Equity loss from joint ventures, net of tax 1 — Net (loss) earnings before income taxes $ (59) $ (17) |
Schedule of capital expenditures by segment | Space Corporate and Three months ended March 31, 2019 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 6 $ 50 $ — $ 3 $ 59 Intangible assets 1 13 — — 14 $ 7 $ 63 $ — $ 3 $ 73 Space Corporate and Three months ended March 31, 2018 Systems Imagery Services eliminations Total Capital expenditures: Property, plant and equipment $ 5 $ 38 $ — $ — $ 43 Intangible assets — 17 — — 17 $ 5 $ 55 $ — $ — $ 60 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Employee benefit plans | |
Summary of the components of net periodic benefit (credits) cost | Three Months Ended March 31, Pension 2019 2018 Service cost $ 1 $ 2 Interest cost 6 — Expected return on plan assets (6) — Expenses paid — — Net periodic benefit (credit) cost $ 1 $ 2 |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings per share | |
Summary of calculation of basic and diluted EPS | Three Months Ended March 31, 2019 2018 Net (loss) income $ (59) $ 15 Weighted average number of common shares outstanding-basic 59.5 56.4 Weighted dilutive effect of equity awards — 0.3 Weighted average number of common shares outstanding-diluted 59.5 56.7 Earnings per common share: Basic $ (0.99) $ 0.27 Dilutive $ (0.99) $ 0.26 |
Supplemental cash flow (Tables)
Supplemental cash flow (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental cash flow | |
Schedule of supplemental cash flow | Three Months Ended March 31, 2019 2018 Supplemental cash flow information: Cash paid for interest 1 $ (79) $ (54) Income tax payments (1) (1) Supplemental non-cash investing and financing activities: Accrued capital expenditures 13 5 1 The Company has the option to elect different interest periods on the Revolving Credit Facility. In the fourth quarter of 2017 and 2018, the Company elected a 3-month interest rate for a portion of its debt with payments due in the first quarter of the following year. In both 2019 and 2018 the Company made interest payments in the first quarter totaling $42 million and $21 million, respectively, which related to the fourth quarter of the previous year. |
General business description (D
General business description (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
General business description | |
Number of reportable segments | 3 |
Summary of significant accoun_3
Summary of significant accounting policies - Narratives (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 |
Leases | ||
Operating lease right-of-use assets | $ 129 | |
Operating lease liability | $ 170 | |
ASU 2016-02 | ||
Leases | ||
Operating lease right-of-use assets | $ 133 | |
Operating lease liability | $ 176 |
Trade and other receivables, _3
Trade and other receivables, net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Trade and other receivables, net | ||
Billed | $ 207 | $ 242 |
Unbilled | 213 | 172 |
Total trade receivables | 420 | 414 |
Orbital receivables, current portion | 34 | 34 |
Other | 14 | 17 |
Allowance for doubtful accounts | (1) | (1) |
Total trade and other receivables, net | $ 467 | $ 464 |
Trade and other receivables, _4
Trade and other receivables, net - Orbital receivables (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Trade and other receivables, net | ||
Orbital receivables | $ 400 | $ 407 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory | ||
Raw materials | $ 15 | $ 21 |
Work in process | 11 | 10 |
Total inventory | $ 26 | $ 31 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, plant and equipment | |||
Property, plant and equipment, at cost | $ 1,161 | $ 1,110 | |
Accumulated depreciation | (393) | (363) | |
Property, plant and equipment, net | 768 | 747 | |
Depreciation | 30 | $ 37 | |
Satellites | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 397 | 397 | |
Equipment | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 229 | 229 | |
Leasehold improvements | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 97 | 97 | |
Computer hardware | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 92 | 92 | |
Land and Land improvements | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 88 | 88 | |
Buildings | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 46 | 46 | |
Furniture and fixtures | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | 19 | 19 | |
Construction in process | |||
Property, plant and equipment | |||
Property, plant and equipment, at cost | $ 193 | $ 142 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Finite-lived intangible assets: | |||
Gross carrying value | $ 1,632 | $ 1,621 | |
Accumulated amortization | (457) | (389) | |
Net carrying value | 1,175 | 1,232 | |
Amortization of intangible assets | 68 | $ 74 | |
Trade names and other | |||
Finite-lived intangible assets: | |||
Gross carrying value | 41 | 41 | |
Accumulated amortization | (11) | (9) | |
Net carrying value | 30 | 32 | |
Customer relationships | |||
Finite-lived intangible assets: | |||
Gross carrying value | 619 | 619 | |
Accumulated amortization | (70) | (58) | |
Net carrying value | 549 | 561 | |
Backlog | |||
Finite-lived intangible assets: | |||
Gross carrying value | 332 | 332 | |
Accumulated amortization | (145) | (120) | |
Net carrying value | 187 | 212 | |
Technologies | |||
Finite-lived intangible assets: | |||
Gross carrying value | 329 | 330 | |
Accumulated amortization | (101) | (86) | |
Net carrying value | 228 | 244 | |
Software | |||
Finite-lived intangible assets: | |||
Gross carrying value | 210 | 198 | |
Accumulated amortization | (80) | (71) | |
Net carrying value | 130 | 127 | |
Image library | |||
Finite-lived intangible assets: | |||
Gross carrying value | 80 | 80 | |
Accumulated amortization | (36) | (32) | |
Net carrying value | 44 | 48 | |
Non-compete agreements | |||
Finite-lived intangible assets: | |||
Gross carrying value | 21 | 21 | |
Accumulated amortization | (14) | (13) | |
Net carrying value | $ 7 | $ 8 |
Leases (Details)
Leases (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Option to extend - Operating | true |
Option to extend - Finance | true |
Minimum | |
Leases | |
Remaining lease term - Operating | 1 year |
Remaining lease term - Finance | 1 year |
Option to extend - Operating | 1 year |
Option to extend - Finance | 1 year |
Maximum | |
Leases | |
Remaining lease term - Operating | 16 years |
Remaining lease term - Finance | 16 years |
Option to extend - Operating | 10 years |
Option to extend - Finance | 10 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Selling, general, and administrative expense, Product costs, and Service costs | |
Leases | |
Operating lease cost | $ 8 |
Leases - Supplemental lease bal
Leases - Supplemental lease balance sheet information (Details) $ in Millions | Mar. 31, 2019USD ($) |
Leases | |
Non-current operating lease assets | $ 129 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Non-current operating lease assets |
Finance | $ 9 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net |
Total leased assets | $ 138 |
Current operating lease liabilities | $ 33 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current operating lease liabilities |
Operating lease liability, non current | $ 137 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liability, non current |
Finance lease liability, current | $ 3 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current |
Finance lease liability, non current | $ 3 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent |
Total leased Liabilities | $ 176 |
Leases - Supplemental lease cas
Leases - Supplemental lease cash flow information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 9 |
Leases - Other Supplemental lea
Leases - Other Supplemental lease information (Details) | Mar. 31, 2019 |
Leases | |
Operating leases - Weighted average remaining lease term (Years) | 9 years |
Finance leases - Weighted average remaining lease term (Years) | 3 years |
Operating leases - Weighted average discount rate | 7.10% |
Finance leases - Weighted average discount rate | 4.70% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Millions | Mar. 31, 2019USD ($) |
Operating leases | |
2019 | $ 26 |
2020 | 31 |
2021 | 29 |
2022 | 24 |
2023 | 22 |
Thereafter | 100 |
Less: imputed interest | (62) |
Total minimum lease payments | 170 |
Finance leases | |
2019 | 3 |
2020 | 3 |
2021 | 1 |
Thereafter | 9 |
Less: imputed interest | (10) |
Total minimum lease payments | $ 6 |
Restructuring liability (Detail
Restructuring liability (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Restructuring liability | |
Balance as of December 31, 2018 | $ 6 |
Obligations incurred | 20 |
Payments | (5) |
Balance as of March 31, 2019 | $ 21 |
Long term debt and interest e_2
Long term debt and interest expense (Details) $ in Millions, $ in Millions | Mar. 31, 2019CAD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) |
Long-term debt and interest expenses | ||||
Debt issuance costs | $ (39) | $ (41) | ||
Obligations under finance leases and other | 12 | 13 | ||
Total long-term debt | 3,193 | 3,047 | ||
Current portion | (19) | (17) | ||
Non-current portion | 3,174 | 3,030 | ||
Revolving loan payable | ||||
Long-term debt and interest expenses | ||||
Long-term debt | 734 | 595 | ||
Operating loan payable | ||||
Long-term debt and interest expenses | ||||
Long-term debt | $ 15 | 11 | $ 0 | |
Term Loan A | ||||
Long-term debt and interest expenses | ||||
Long-term debt | 500 | 500 | ||
Term Loan B | ||||
Long-term debt and interest expenses | ||||
Long-term debt | $ 1,975 | $ 1,980 |
Long term debt and interest e_3
Long term debt and interest expense - Syndicated credit facility (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Letter of credit | ||
Long-term debt and interest expenses | ||
Maximum borrowing capacity | $ 200 | |
Letter of credit outstanding | $ 15 | $ 18 |
DigitalGlobe | Senior secured first lien revolving credit facility | ||
Long-term debt and interest expenses | ||
Term of debt | 4 years | |
DigitalGlobe | Senior Secured First Lien Operating Facility | ||
Long-term debt and interest expenses | ||
Term of debt | 4 years | |
DigitalGlobe | Term Loan B | ||
Long-term debt and interest expenses | ||
Term of debt | 7 years | |
Aggregate principal amount | $ 3,750 |
Long term debt and interest e_4
Long term debt and interest expense - Interest expense on long term debts and other obligations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest expenses | ||
Interest on long-term debt | $ 45 | $ 40 |
Interest expense on advance payments from customers | 5 | 8 |
Interest on orbital securitization liability | 2 | 2 |
Imputed interest and other | 2 | |
Capitalized interest | (3) | (1) |
Interest expense on dissenting stockholder liability | 2 | |
Total interest expense | $ 49 | $ 53 |
Financial instruments and fai_3
Financial instruments and fair value disclosures - Financial instruments measured at fair value (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Short-term investments | $ 3 | $ 3 |
Assets fair value | 7 | 8 |
Liabilities | ||
Liabilities fair value | 12 | 12 |
Foreign exchange forward contracts & embedded derivatives | ||
Assets | ||
Derivative financial instruments | 4 | 5 |
Liabilities | ||
Derivative financial instruments | 3 | 8 |
Interest rate swaps | ||
Liabilities | ||
Derivative financial instruments | 9 | 4 |
Level 1 | ||
Assets | ||
Short-term investments | 3 | 3 |
Assets fair value | 3 | 3 |
Level 2 | ||
Assets | ||
Assets fair value | 4 | 5 |
Liabilities | ||
Liabilities fair value | 12 | 12 |
Level 2 | Foreign exchange forward contracts & embedded derivatives | ||
Assets | ||
Derivative financial instruments | 4 | 5 |
Liabilities | ||
Derivative financial instruments | 3 | 8 |
Level 2 | Interest rate swaps | ||
Liabilities | ||
Derivative financial instruments | $ 9 | $ 4 |
Financial instruments and fai_4
Financial instruments and fair value disclosures - Financial instruments recorded at carrying value (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Financial instruments and fair value disclosures | ||
Fair value assets level 1 to level 2 transfers | $ 0 | $ 0 |
Fair value assets level 2 to level 1 transfers | 0 | 0 |
Fair value assets transfers into level 3 | 0 | 0 |
Fair value assets transfers out of level 3 | 0 | 0 |
Fair value liabilities level 1 to level 2 transfers | 0 | 0 |
Fair value liabilities level 2 to level 1 transfers | 0 | 0 |
Fair value liabilities transfers into level 3 | 0 | 0 |
Fair value liabilities transfers out of level 3 | 0 | 0 |
Level 2 | Carrying value | ||
Financial instruments and fair value disclosures | ||
Long-term debt, excluding finance leases and other | 3,181 | 3,034 |
Orbital receivable | 434 | 441 |
Level 2 | Fair value | ||
Financial instruments and fair value disclosures | ||
Long-term debt, excluding finance leases and other | 3,083 | 2,925 |
Orbital receivable | $ 434 | $ 441 |
Stockholders' equity - Componen
Stockholders' equity - Components of accumulated other comprehensive income (loss) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of period | $ 643 |
Balance at the end of period | 579 |
Accumulated other comprehensive income (loss) | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of period | 82 |
Other comprehensive (loss) income | (5) |
Tax expense | (1) |
Balance at the end of period | 76 |
Foreign Currency Translation Adjustments | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of period | 162 |
Other comprehensive (loss) income | (9) |
Balance at the end of period | 153 |
Net (Loss) Income Hedge Investments in Foreign Operations | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of period | (51) |
Other comprehensive (loss) income | 5 |
Balance at the end of period | (46) |
Unrecognized (Loss) Gain on Derivative Instruments | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of period | (4) |
Other comprehensive (loss) income | (4) |
Balance at the end of period | (8) |
Pension Adjustments | |
Accumulated Other Comprehensive Income (Loss) | |
Balance at the beginning of period | (25) |
Other comprehensive (loss) income | 3 |
Tax expense | (1) |
Balance at the end of period | $ (23) |
Stockholders' equity (Details)
Stockholders' equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock | ||
Stockholders' equity | ||
Reclassification of APIC due to U.S. Domestication | $ (1,713) | |
Additional paid in capital | ||
Stockholders' equity | ||
Reclassification of APIC due to U.S. Domestication | $ 1,713 |
Revenue - Remaining performance
Revenue - Remaining performance obligations (Details) $ in Billions | Mar. 31, 2019USD ($) |
Revenue | |
Remaining performance obligation | $ 1.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue | |
Remaining performance obligation | $ 1 |
Revenue | |
Expected timing of satisfaction | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue | |
Remaining performance obligation | $ 0.3 |
Revenue | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue | |
Remaining performance obligation | $ 0.6 |
Revenue | |
Expected timing of satisfaction |
Revenue - Contract assets and l
Revenue - Contract assets and liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Contract assets and contract liabilities | ||
Contract Liabilities | $ 352 | $ 421 |
Space Systems | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 128 | 172 |
Imagery | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 222 | 247 |
Imagery | EnhancedView contract | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 159 | 184 |
Increase in contract liability due to imputed interest on advance payments | 5 | |
Revenue recognized | 30 | |
Deferred contract costs | 0 | 0 |
Services | ||
Contract assets and contract liabilities | ||
Contract Liabilities | $ 2 | $ 2 |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue by source (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | ||
Revenues | $ 504 | $ 557 |
Product | ||
Revenue | ||
Revenues | 194 | 228 |
Service | ||
Revenue | ||
Revenues | 310 | 329 |
Space Systems | ||
Revenue | ||
Orbital interest revenue | 7 | 8 |
Operating Segments | Product | ||
Revenue | ||
Revenues | 194 | 228 |
Operating Segments | Service | ||
Revenue | ||
Revenues | 310 | 329 |
Operating Segments | Space Systems | ||
Revenue | ||
Revenues | 274 | 293 |
Operating Segments | Space Systems | Product | ||
Revenue | ||
Revenues | 194 | 228 |
Operating Segments | Space Systems | Service | ||
Revenue | ||
Revenues | 45 | 51 |
Operating Segments | Imagery | ||
Revenue | ||
Revenues | 200 | 211 |
Operating Segments | Imagery | Service | ||
Revenue | ||
Revenues | 199 | 210 |
Operating Segments | Services | ||
Revenue | ||
Revenues | 68 | 70 |
Operating Segments | Services | Service | ||
Revenue | ||
Revenues | 66 | 68 |
Intersegment eliminations | ||
Revenue | ||
Revenues | (38) | (17) |
Intersegment eliminations | Space Systems | ||
Revenue | ||
Revenues | 35 | 14 |
Intersegment eliminations | Imagery | ||
Revenue | ||
Revenues | 1 | 1 |
Intersegment eliminations | Services | ||
Revenue | ||
Revenues | $ 2 | $ 2 |
Revenue - Disaggregation of r_2
Revenue - Disaggregation of revenue on geographic location of customers (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | ||
Revenues | $ 504 | $ 557 |
U.S. | ||
Revenue | ||
Revenues | 338 | 369 |
Asia | ||
Revenue | ||
Revenues | 68 | 76 |
Canada | ||
Revenue | ||
Revenues | 25 | 48 |
Europe | ||
Revenue | ||
Revenues | 26 | 33 |
South America | ||
Revenue | ||
Revenues | 39 | 22 |
Other | ||
Revenue | ||
Revenues | $ 8 | $ 9 |
Revenue - Disaggregation of r_3
Revenue - Disaggregation of revenue from significant customers (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | ||
Revenues | $ 504 | $ 557 |
U.S. Federal Government and agencies | ||
Revenue | ||
Revenues | 231 | 232 |
Canadian Federal Government and agencies | ||
Revenue | ||
Revenues | $ 20 | $ 28 |
Segment information - Operating
Segment information - Operating performance (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | |
Segment information | ||
Number of reportable segments | segment | 3 | |
Total revenues | $ 504 | $ 557 |
Depreciation and amortization | (98) | (111) |
Corporate and other unallocated expenses | (18) | (13) |
Restructuring Charges | 20 | |
Acquisition and integration related expense | (4) | (4) |
Inventory impairment | (3) | |
CEO severance | (3) | |
Interest expense, net | (49) | (53) |
Equity loss from joint ventures, net of tax | 1 | |
(Loss) before taxes | (59) | (17) |
Operating Segments | Space Systems | ||
Segment information | ||
Total revenues | 274 | 293 |
Adjusted EBITDA | 10 | 28 |
Operating Segments | Imagery | ||
Segment information | ||
Total revenues | 200 | 211 |
Adjusted EBITDA | 121 | 134 |
Operating Segments | Services | ||
Segment information | ||
Total revenues | 68 | 70 |
Adjusted EBITDA | 7 | 4 |
Intersegment eliminations | ||
Segment information | ||
Total revenues | (38) | (17) |
Adjusted EBITDA | (3) | (2) |
Intersegment eliminations | Space Systems | ||
Segment information | ||
Total revenues | 35 | 14 |
Intersegment eliminations | Imagery | ||
Segment information | ||
Total revenues | 1 | 1 |
Intersegment eliminations | Services | ||
Segment information | ||
Total revenues | $ 2 | $ 2 |
Segment information - Capital e
Segment information - Capital expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment information | ||
Capital expenditures, property, plant and equipment | $ 59 | $ 43 |
Capital expenditures, intangible assets | 14 | 17 |
Capital expenditures | 73 | 60 |
Operating Segments | Space Systems | ||
Segment information | ||
Capital expenditures, property, plant and equipment | 6 | 5 |
Capital expenditures, intangible assets | 1 | |
Capital expenditures | 7 | 5 |
Operating Segments | Imagery | ||
Segment information | ||
Capital expenditures, property, plant and equipment | 50 | 38 |
Capital expenditures, intangible assets | 13 | 17 |
Capital expenditures | 63 | $ 55 |
Intersegment eliminations | ||
Segment information | ||
Capital expenditures, property, plant and equipment | 3 | |
Capital expenditures | $ 3 |
Employee benefit plans - Compon
Employee benefit plans - Components of net periodic benefit (credits) cost (Details) - Pensions Plans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Employee benefit plans | ||
Service cost | $ 1 | $ 2 |
Interest cost | 6 | |
Expected return on plan assets | (6) | |
Net periodic benefit (credit) cost | $ 1 | $ 2 |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) $ in Millions | Mar. 31, 2019USD ($) |
Pensions Plans | |
Employee benefit plans | |
Expected future contribution by the employer | $ 14 |
Income taxes - Income tax rate
Income taxes - Income tax rate (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income taxes | ||
Income tax benefit | $ (1) | $ (32) |
Effective income tax rate | 14.40% | (17.50%) |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings per share | ||
Net (loss) income | $ (59) | $ 15 |
Weighted average number of common shares outstanding - basic (in shares) | 59.5 | 56.4 |
Weighted dilutive effect of equity awards | 0.3 | |
Weighted average number of common shares outstanding-diluted | 59.5 | 56.7 |
Earnings per common share: | ||
Basic (In dollars per share) | $ (0.99) | $ 0.27 |
Diluted (In dollars per share) | $ (0.99) | $ 0.26 |
Contingencies (Details)
Contingencies (Details) - Pending Litigation - USD ($) $ in Millions | 1 Months Ended | |
Jan. 31, 2019 | Jul. 31, 2018 | |
Ukranian customer | ||
Contingencies | ||
Recovery amount sought | $ 227 | |
Stockholder class action | ||
Contingencies | ||
Time period for lead plaintiff to file a consolidated amended complaint after the court appoints a lead plaintiff | 60 days | |
Time period for the Company to file a response to the consolidated amended complaint | 60 days |
Supplemental cash flow - (Detai
Supplemental cash flow - (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Supplemental cash flow information: | ||
Cash paid for interest | $ (79) | $ (54) |
Income tax payments | (1) | (1) |
Supplemental non-cash investing and financing activities: | ||
Accrued capital expenditures | 13 | 5 |
Amount of interest payments made on Revolving Credit Facility | $ 42 | $ 21 |
Subsequent events (Details)
Subsequent events (Details) - Subsequent event $ in Millions | 1 Months Ended |
May 09, 2019USD ($) | |
Insurance Settlement | |
Subsequent events | |
Proceeds from insurance loss | $ 154 |
Insurance Claim | |
Subsequent events | |
Amount of Company’s claim for loss arising from on-orbit failure of the WorldView-4 satellite | $ 183 |