Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-38228 | |
Entity Registrant Name | Maxar Technologies Inc. | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 832809420 | |
Entity Address, Address Line One | 1300 W. 120th Avenue, | |
Entity Address, City or Town | Westminster | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80234 | |
City Area Code | 303 | |
Local Phone Number | 684-2207 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Security 12b Title | Common stock, at $0.0001 par value | |
Trading Symbol | MAXR | |
Security Exchange Name | NYSE | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001121142 | |
Amendment Flag | false | |
Common Stock | ||
Entity Common Stock, Shares Outstanding | 59,744,715 | |
Series A Junior Participating Preferred Stock | ||
Security 12b Title | Series A Junior Participating Preferred Stock, at $0.01 par value | |
Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Revenues | $ 479 | $ 509 | $ 1,473 | $ 1,645 |
Costs and expenses: | ||||
Selling, general and administrative | 92 | 132 | 275 | 368 |
Depreciation and amortization | 96 | 119 | 293 | 343 |
Impairment losses | 175 | 12 | 175 | |
Satellite insurance recovery | (183) | |||
Operating income (loss) | 27 | (237) | 219 | (198) |
Interest expense, net | 50 | 52 | 148 | 155 |
Other (income) expense, net | (1) | 5 | 2 | 10 |
Income (loss) before taxes | (22) | (294) | 69 | (363) |
Income tax expense (benefit) | 3 | (6) | 4 | (47) |
Equity in loss (income) from joint ventures, net of tax | 1 | 1 | 4 | (2) |
Net (loss) income | $ (26) | $ (289) | $ 61 | $ (314) |
(Loss) income per common share: | ||||
Basic (In dollars per share) | $ (0.44) | $ (4.88) | $ 1.02 | $ (5.45) |
Diluted (In dollars per share) | $ (0.44) | $ (4.88) | $ 1.02 | $ (5.45) |
Product | ||||
Revenues: | ||||
Revenues | $ 158 | $ 201 | $ 542 | $ 686 |
Costs and expenses: | ||||
Product costs, excluding depreciation and amortization | 159 | 220 | 521 | 661 |
Service | ||||
Revenues: | ||||
Revenues | 321 | 308 | 931 | 959 |
Costs and expenses: | ||||
Service costs, excluding depreciation and amortization | $ 105 | $ 100 | $ 336 | $ 296 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Comprehensive (Loss) Income | ||||
Net (loss) income | $ (26) | $ (289) | $ 61 | $ (314) |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustment | (5) | (4) | 6 | (4) |
Unrealized (loss) gain on derivatives | (1) | 5 | (17) | 5 |
Change in pension and other postretirement benefit plans | (1) | 2 | (1) | |
Other comprehensive (loss) income, net of tax | (6) | (9) | ||
Comprehensive (loss) income, net of tax | (32) | (289) | 52 | (314) |
Net (loss) on hedge of net investment in foreign operations | $ 0 | $ 6 | $ 5 | $ 6 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 52 | $ 35 |
Trade and other receivables, net | 484 | 464 |
Inventory | 20 | 31 |
Advances to suppliers | 7 | 42 |
Income taxes receivable | 21 | 14 |
Prepaid and other current assets | 44 | 51 |
Total current assets | 628 | 637 |
Non-current assets: | ||
Orbital receivables | 412 | 407 |
Deferred tax assets | 110 | 103 |
Property, plant and equipment, net | 824 | 747 |
Intangible assets, net | 1,065 | 1,232 |
Non-current operating lease assets | 125 | |
Goodwill | 1,759 | 1,751 |
Other assets | 119 | 124 |
Total assets | 5,042 | 5,001 |
Current liabilities: | ||
Accounts payable | 177 | 209 |
Accrued liabilities | 56 | 116 |
Accrued compensation and benefits | 99 | 100 |
Contract liabilities | 279 | 361 |
Current portion of long-term debt | 17 | 17 |
Current operating lease liabilities | 33 | |
Other current liabilities | 59 | 46 |
Total current liabilities | 720 | 849 |
Non-current liabilities: | ||
Pension and other postretirement benefits | 187 | 196 |
Contract liabilities | 5 | 60 |
Operating lease liabilities | 132 | |
Long-term debt | 3,114 | 3,030 |
Other non-current liabilities | 182 | 222 |
Total liabilities | 4,340 | 4,357 |
Stockholders' equity: | ||
Common stock ($0.0001 par value, 240 million common shares authorized and 59.6 million outstanding at September 30, 2019; no par value, unlimited authorized common shares and 59.4 million outstanding at December 31, 2018) | 1,713 | |
Additional paid-in capital | 1,780 | 59 |
Accumulated deficit | (1,152) | (1,211) |
Accumulated other comprehensive income | 73 | 82 |
Total Maxar stockholders' equity | 701 | 643 |
Noncontrolling interest | 1 | 1 |
Total stockholders' equity | 702 | 644 |
Total liabilities and stockholders' equity | $ 5,042 | $ 5,001 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 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 | 240,000,000 | |
Common stock, shares outstanding | 59,600,000 | 59,400,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows provided by (used in) Operating activities: | ||
Net income (loss) | $ 61 | $ (314) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation of property, plant and equipment | 85 | 121 |
Amortization of intangible assets | 208 | 222 |
Stock-based compensation expense | 10 | 14 |
Amortization of debt issuance costs and other noncash interest expense | 6 | 7 |
Impairment losses | 15 | 213 |
Foreign exchange losses | 5 | 3 |
Deferred income tax expense (benefit) | (29) | |
Other | 7 | 12 |
Changes in operating assets and liabilities: | ||
Trade and other receivables | (24) | (24) |
Accrued compensation and benefits | (11) | (6) |
Trade and other payables | (31) | (55) |
Accrued liabilities | (64) | 16 |
Contract liabilities | (143) | (156) |
Advances to suppliers | 35 | 39 |
Deferred tax assets | (5) | (23) |
Deferred tax liabilities | 4 | 34 |
Other | (16) | (26) |
Cash provided by operating activities | 142 | 48 |
Investing activities: | ||
Purchase of property, plant and equipment | (163) | (111) |
Purchase or development of software | (43) | (42) |
Cash collected on note receivable | 5 | |
Disposal of subsidiary and short-term investments | 3 | (1) |
Acquisitions, net of cash acquired | (6) | |
Cash used in investing activities | (203) | (155) |
Financing activities: | ||
Net proceeds from revolving credit facility | 107 | 150 |
Repayments of long-term debt | (22) | (25) |
Proceeds from securitization of orbital receivables | 18 | |
Settlement of securitization liability | (7) | (12) |
Payment of dividends | (2) | (49) |
Change in overdraft balance | 2 | |
Other financing activities | (1) | |
Cash provided by financing activities | 75 | 84 |
Increase (decrease) in cash, cash equivalents, and restricted cash | 14 | (23) |
Cash, cash equivalents, and restricted cash, beginning of year | 43 | 42 |
Cash, cash equivalents, and restricted cash, end of period | $ 57 | $ 19 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Reconciliation of cashflow information: | ||
Cash and cash equivalents | $ 52 | $ 9 |
Restricted cash included in prepaid and other current assets | 1 | 8 |
Restricted cash included in other assets | 4 | 2 |
Total cash, cash equivalents, and restricted cash | $ 57 | $ 19 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Change in Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Common StockNeptec | Common Stock | Additional paid in capital | Retained earnings (Accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interest | Neptec | 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, $0.28 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, 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 | ||||||||
Comprehensive income (loss) | (314) | |||||||
Balance at the end of period at Sep. 30, 2018 | $ 1,696 | 68 | (245) | 113 | 1 | 1,633 | ||
Balance at the end of period (in shares) at Sep. 30, 2018 | 59.2 | |||||||
Balance at the beginning of period at Mar. 31, 2018 | $ 1,558 | 53 | 117 | 105 | 1 | 1,834 | ||
Balance at the beginning of period (in shares) at Mar. 31, 2018 | 56.4 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Common shares issued as part of dissenting shareholder settlement | $ 111 | 111 | ||||||
Common shares issued as part of dissenting shareholder settlement (in shares) | 2.2 | |||||||
Common stock issued under employee stock purchase plan | $ 1 | 1 | ||||||
Common stock issued under employee stock purchase plan (in shares) | 0.1 | |||||||
Reclassification of liability classified stock-based compensation awards to equity classified | (1) | (1) | ||||||
Equity classified stock-based compensation expense | 9 | 9 | ||||||
Dividends ($0.01 for 2019 and $0.29, $0.28 for 2018 per common share) | (16) | (16) | ||||||
Comprehensive income (loss) | (40) | 8 | (32) | |||||
Balance at the end of period at Jun. 30, 2018 | $ 1,670 | 61 | 61 | 113 | 1 | 1,906 | ||
Balance at the end of period (in shares) at Jun. 30, 2018 | 58.7 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Common shares issued as part of acquisition | $ 25 | $ 25 | ||||||
Common shares issued as part of acquisition (in shares) | 0.5 | |||||||
Common stock issued under employee stock purchase plan | $ 1 | 1 | ||||||
Common stock issued upon vesting or exercise of stock-based compensation awards | 1 | (1) | ||||||
Reclassification of liability classified stock-based compensation awards to equity classified | (1) | 1 | ||||||
Equity classified stock-based compensation expense | 7 | 7 | ||||||
Dividends ($0.01 for 2019 and $0.29, $0.28 for 2018 per common share) | (17) | (17) | ||||||
Comprehensive income (loss) | (289) | (289) | ||||||
Balance at the end of period at Sep. 30, 2018 | $ 1,696 | 68 | (245) | 113 | 1 | 1,633 | ||
Balance at the end of period (in shares) at Sep. 30, 2018 | 59.2 | |||||||
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, $0.28 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 | |||||||
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 | ||||||||
Comprehensive income (loss) | $ 52 | |||||||
Balance at the end of period at Sep. 30, 2019 | 1,780 | (1,152) | 73 | 1 | $ 702 | |||
Balance at the end of period (in shares) at Sep. 30, 2019 | 59.6 | 59.6 | ||||||
Balance at the beginning of period at Mar. 31, 2019 | 1,774 | (1,271) | 76 | 1 | $ 580 | |||
Balance at the beginning of period (in shares) at Mar. 31, 2019 | 59.6 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Equity classified stock-based compensation expense | 2 | 2 | ||||||
Comprehensive income (loss) | 146 | 3 | 149 | |||||
Balance at the end of period at Jun. 30, 2019 | 1,776 | (1,125) | 79 | 1 | 731 | |||
Balance at the end of period (in shares) at Jun. 30, 2019 | 59.6 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Equity classified stock-based compensation expense | 4 | 4 | ||||||
Dividends ($0.01 for 2019 and $0.29, $0.28 for 2018 per common share) | (1) | (1) | ||||||
Comprehensive income (loss) | (26) | (6) | (32) | |||||
Balance at the end of period at Sep. 30, 2019 | $ 1,780 | $ (1,152) | $ 73 | $ 1 | $ 702 | |||
Balance at the end of period (in shares) at Sep. 30, 2019 | 59.6 | 59.6 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Change in Shareholders' Equity (Parenthetical) - $ / shares | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | |
Condensed Consolidated Statements of Change in Shareholders' Equity | ||||||
Dividend per share (in dollars per share) | $ 0.29 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.28 | $ 0.29 |
General business description
General business description | 9 Months Ended |
Sep. 30, 2019 | |
General business description | |
General business description | 1. GENERAL BUSINESS DESCRIPTION Maxar Technologies Inc. (the “Company” or “Maxar”) is a leading provider of solutions in Earth intelligence and space infrastructure. Maxar helps government and commercial customers to monitor, understand and navigate the changing planet; deliver global broadband communications infrastructure; and explore and advance the use of space. The Company’s approach combines decades of deep mission understanding and a proven commercial and defense foundation to deliver services with speed, scale and cost effectiveness. The Company’s 5,800 team members in more than 30 global locations work to help customers harness the potential of space. Maxar’s stock trades on the New York Stock Exchange and Toronto Stock Exchange under the symbol “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 | 9 Months Ended |
Sep. 30, 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 subsidiaries. The Company’s Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). All intercompany balances and transactions are eliminated in consolidation. The Company’s Unaudited Condensed Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. 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. In management’s opinion, all adjustments of a normal recurring nature that are necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included. Use of estimates, assumptions and judgments The preparation of the Unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) Leases 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. Taxes In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) 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 Financial Instruments – Credit Losses |
Business combination
Business combination | 9 Months Ended |
Sep. 30, 2019 | |
Business combination | |
Business combination | 3. BUSINESS COMBINATION On July 16, 2018, the Company acquired Neptec Design Group Ltd. (“Neptec”), a leading electro-optical and electro-mechanical systems and high-performance intelligent Light Detection and Ranging company for $30 million, net of cash acquired, comprised of approximately $6 million in cash and the balance in common shares of Maxar. With Neptec, the Company will deliver end-to-end robotic systems and an expanded set of solutions in order to capture growth and accelerate advancement into new and expanding space segments. As a result of the transaction, the Company recognized $21 million of goodwill (not deductible for tax purposes), $11 million of intangible assets and $2 million of net liabilities. Neptec’s operating results are included in the Company’s consolidated financial statements beginning from the date of acquisition and had an immaterial effect on the Company’s Unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2018. Direct transaction costs of the Neptec acquisition were not material and were expensed as incurred. There were no business combinations during the nine months ended September 30, 2019. |
Trade and other receivables, ne
Trade and other receivables, net | 9 Months Ended |
Sep. 30, 2019 | |
Trade and other receivables, net | |
Trade and other receivables. net | 4. TRADE AND OTHER RECEIVABLES, NET Trade and other receivables, net consisted of the following: September 30, December 31, 2019 2018 Billed $ 218 $ 242 Unbilled 221 172 Total trade receivables 439 414 Orbital receivables, current portion 37 34 Other 10 17 Allowance for doubtful accounts (2) (1) Total trade and other receivables, net $ 484 $ 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 September 30, 2019 and December 31, 2018, long-term orbital receivables were $412 million and $407 million, respectively, and are included in Non-current assets on the Unaudited Condensed Consolidated Balance Sheets. During 2018, the Company sold orbital receivables for net proceeds of $18 million. These orbital receivables were purchased in tranches that span multiple years and include longer-term maturities. The orbital receivables that were securitized remain recognized on the consolidated balance sheets as the Company did not meet the accounting criteria for surrendering control of the receivables. The net proceeds received have been recognized as securitization liabilities and are subsequently measured at amortized cost using the effective interest rate method. The securitized orbital receivables and the securitization liabilities are being drawn down as payments are received from the customers and passed on to the purchaser of the tranche. The Company continues to recognize orbital interest revenue on the orbital receivables that are subject to the securitization transactions and recognizes interest expense to accrete the securitization liability. The amount of securitization liabilities was $103 million and $109 million at September 30, 2019 and December 31, 2018, respectively, of which $16 million and $15 million, respectively, is included in Other current liabilities on the Unaudited Condensed Consolidated Balance Sheets. The non-current amount of securitization liabilities is included in Other non-current liabilities on the Unaudited Condensed Consolidated Balance Sheets. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Inventory | |
Inventory | 5. INVENTORY Inventory consisted of the following: September 30, December 31, 2019 2018 Raw materials $ 13 $ 21 Work in process 7 10 Total inventory $ 20 $ 31 |
Property, plant and equipment,
Property, plant and equipment, net | 9 Months Ended |
Sep. 30, 2019 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: September 30, December 31, 2019 2018 Satellites $ 397 $ 397 Equipment 230 229 Leasehold improvements 98 97 Computer hardware 96 92 Land and land improvements 88 88 Buildings 46 46 Furniture and fixtures 19 19 Construction in process 298 142 Property, plant and equipment, at cost 1,272 1,110 Accumulated depreciation (448) (363) Property, plant and equipment, net $ 824 $ 747 Depreciation expense for property, plant and equipment was $26 million and $85 million, and $43 million and $121 million for the three and nine months ended September 30, 2019 and September 30, 2018, respectively. During the second quarter of 2019, the Company received insurance recoveries of $183 million related to the loss of the WorldView-4 satellite. The insurance proceeds are included in operating cash flows as they are considered business interruption insurance and represent the Company’s satellite’s loss of capacity to produce imagery for sale to the Company’s customers. |
Intangible assets
Intangible assets | 9 Months Ended |
Sep. 30, 2019 | |
Intangible assets | |
Intangible assets | 7. INTANGIBLE ASSETS Intangible assets consisted of the following: September 30, 2019 December 31, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 619 $ (92) $ 527 $ 619 $ (58) $ 561 Backlog 332 (194) 138 332 (120) 212 Technologies 328 (133) 195 330 (86) 244 Software 239 (100) 139 198 (71) 127 Image library 80 (44) 36 80 (32) 48 Trade names and other 41 (13) 28 41 (9) 32 Non-compete agreements 21 (19) 2 21 (13) 8 Total intangible assets $ 1,660 $ (595) $ 1,065 $ 1,621 $ (389) $ 1,232 Amortization expense related to intangible assets was $70 million and $208 million, and $76 million and $222 million for the three and nine months ended September 30, 2019 and September 30, 2018, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Leases | 8. 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 approximately one year to 15 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 consolidated balance sheets and will recognize lease expense on a straight-line basis in the consolidated statements 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 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 September 30, Nine Months Ended September 30, Classification 2019 2019 Operating lease expense Selling, general, and administrative expense, Product and Service costs 1 $ 8 $ 25 1 Supplemental lease balance sheet information consists of the following: September 30, Classification 2019 Assets: Operating Non-current operating lease assets $ 125 Finance Property, plant and equipment, net 8 Total lease assets $ 133 Liabilities: Current Operating Current operating lease liabilities $ 33 Finance Current portion of long-term debt 3 Non-current Operating Operating lease liabilities 132 Finance Long-term debt 3 Total lease liabilities $ 171 Supplemental lease cash flow information is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9 $ 27 Other supplemental lease information consists of the following: September 30, 2019 Weighted average remaining lease term Operating leases 9 years Finance leases 3 years Weighted average discount rate Operating leases 7.0% Finance leases 4.6% Maturities of lease liabilities are as follows: 2019 1 2020 2021 2022 2023 Thereafter Less: Imputed Interest Total Minimum Lease Payments Operating leases $ 9 $ 33 $ 30 $ 26 $ 23 $ 101 $ (57) $ 165 Finance leases 1 3 1 1 — — — 6 1 |
Restructuring liability
Restructuring liability | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring liability | |
Restructuring liability | 9. RESTRUCTURING LIABILITY 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, with cash payments occurring throughout 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 21 Payments (19) Release of reserves (2) Balance as of September 30, 2019 $ 6 |
Long-term debt and interest exp
Long-term debt and interest expense, net | 9 Months Ended |
Sep. 30, 2019 | |
Long-term debt and interest expense, net | |
Long-term debt and interest expense | 10. LONG-TERM DEBT AND INTEREST EXPENSE , NET September 30, December 31, 2019 2018 Syndicated Credit Facility: Revolving Credit Facility $ 696 $ 595 Term Loan A 500 500 Term Loan B 1,960 1,980 Debt issuance costs (35) (41) Obligations under finance leases and other 10 13 Total long-term debt 3,131 3,047 Current portion (17) (17) Non-current portion $ 3,114 $ 3,030 The Syndicated Credit Facility, with an aggregate capacity of up to $3.75 billion, is composed of: (i) a four-year senior secured first lien revolving credit facility and a four-year senior secured first lien operating credit facility (collectively, the “Revolving Credit Facility”), (ii) a senior secured first lien term A facility (“Term Loan A”) and (iii) The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued. As of September 30 , 2019 and December 31, 2018, the Company had Interest expense, net on long-term debt and other obligations are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Interest on long-term debt $ 50 $ 46 $ 143 $ 129 Interest expense on advance payments from customers 3 6 12 20 Interest on orbital securitization liability 2 1 6 5 Imputed interest and other — 1 — 2 Capitalized interest (5) (2) (13) (4) Interest expense on dissenting stockholder liability — — — 3 Interest expense, net $ 50 $ 52 $ 148 $ 155 |
Financial instruments and fair
Financial instruments and fair value disclosures | 9 Months Ended |
Sep. 30, 2019 | |
Financial instruments and fair value disclosures | |
Financial instruments and fair value disclosures | 11. 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 set forth the Company’s assets and liabilities measured at fair value on a recurring basis categorized by level within the fair value hierarchy. Financial assets and liabilities are classified within the hierarchy 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 September 30, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 5 $ — $ — $ 5 Long-term investments — — 12 12 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 3 — 3 $ 5 $ 3 $ 12 $ 20 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 1 $ — $ 1 Interest rate swaps — 22 — 22 $ — $ 23 $ — $ 23 Recurring Fair Value Measurements of as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Long-term investments — 1 24 25 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 5 — 5 $ 3 $ 6 $ 24 $ 33 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 8 $ — $ 8 Interest rate swaps — 4 — 4 $ — $ 12 $ — $ 12 In the second quarter of 2019, the Company noted an observable price change related to its investment in a privately held company and, as a result, recorded an impairment loss of $12 million. There were no investment impairment losses recognized in the three and nine months ended September 30, 2018. 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 September 30, 2019 Carrying Value Fair Value Fair Value Hierarchy Long-term debt, excluding finance leases and other $ 3,121 $ 2,943 Level 2 Orbital receivables 449 449 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 nine months ended September 30, 2019 or year ended December 31, 2018. |
Stockholders' equity
Stockholders' equity | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' equity | |
Stockholders' equity | 12. STOCKHOLDERS’ EQUITY As a result of the Company’s U.S. Domestication on January 1, 2019, a reclassification between Common Stock and Additional paid-in capital was necessary to reflect the Company’s new par value of $0.0001. The reclassification between Common Stock and Additional paid-in capital of $1.7 billion was recorded within the Unaudited Condensed Consolidated Statements of Change in Stockholders’ Equity in the first quarter of 2019. Tax Benefit Preservation Plan On May 12, 2019, the Company implemented a Tax Benefit Preservation Plan (“Tax Plan”), with the intent to preserve the value of certain deferred tax benefits (the “Tax Benefits”). The Tax Plan is intended to act as a deterrent to any person or entity acquiring shares of the Company equal to or exceeding 4.9%. For each common stock outstanding as of May 28, 2019, a dividend of one preferred stock purchase right is granted. The Tax Plan gives current shareholders the right to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock (“Series A Preferred”) at a set price of $30.92 which, upon exercise, provides for one additional share of common stock at a 50% discount on the exercise date with no cash settlement options. The Tax Plan reduces the likelihood that changes in the Company’s investor base have the unintended effect of limiting the use of the Company’s Tax Benefits. There is no impact to the financial statements as a result of the Tax Plan. As of September 30, 2019, the Company had 2,400,000 shares authorized and no shares outstanding of the Series A Preferred stock. As of December 31, 2018, the Company had no Series A Preferred stock authorized or outstanding. Changes in the components of Accumulated other comprehensive income (loss) are as follows: Foreign Total Currency Unrecognized Accumulated Other Translation (Loss) Gain on Pension Comprehensive Adjustments 1 Derivatives 2 Adjustments Income (Loss) Balance as of December 31, 2018 $ 111 $ (4) $ (25) $ 82 Other comprehensive (loss) income (4) (4) 3 (5) Tax expense — — (1) (1) Balance as of March 31, 2019 107 (8) (23) 76 Other comprehensive income (loss) 15 (12) — 3 Tax expense — — — — Balance as of June 30, 2019 122 (20) (23) 79 Other comprehensive (loss) income (5) (1) — (6) Tax expense — — — — Balance as of September 30, 2019 $ 117 $ (21) $ (23) $ 73 1 As a result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent company to a U.S. parent company, the Company’s net investment hedge was no longer necessary from the domestication date onwards. As of December 31, 2018, there was a $51 million net loss on hedge investments in foreign operations which is included in Foreign Currency Translation Adjustments. 2 As of January 1, 2019, the Company 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 September 30, 2019, the balance consisted of unrecognized loss on the Company’s interest rate swaps. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Revenue | 13. REVENUE On September 30, 2019, the Company had $2.2 billion of remaining performance obligations, which represents the transaction price of firm orders less inception to date revenues recognized. Remaining performance obligations exclude unexercised contract options and indefinite delivery/indefinite quantity contracts. The Company expects to recognize revenues relating to existing performance obligations of approximately $1.3 billion, $0.5 billion, and $0.4 billion in the three months ended December 31, 2019, year ended 2020 and thereafter, respectively. Contract liabilities by segment are as follows: Space As of September 30, 2019 Systems Imagery 1 Services Total Contract liabilities $ 121 $ 157 $ 6 $ 284 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 $105 million and $184 million as of September 30, 2019 and December 31, 2018, respectively. During the nine months ended September 30, 2019, imputed interest on advanced payments increased the contract liability balance by $12 million, which was more than offset by $91 million in revenue recognition. 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 September 30, 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 September 30, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 158 $ — $ — $ — $ 158 Service revenues 30 219 72 — 321 Intersegment 32 1 1 (34) — $ 220 $ 220 $ 73 $ (34) $ 479 Three Months Ended September 30, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 201 $ — $ — $ — $ 201 Service revenues 39 209 60 — 308 Intersegment 23 1 2 (26) — $ 263 $ 210 $ 62 $ (26) $ 509 Nine Months Ended September 30, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 542 $ — $ — $ — $ 542 Service revenues 101 618 212 — 931 Intersegment 108 3 3 (114) — $ 751 $ 621 $ 215 $ (114) $ 1,473 Nine Months Ended September 30, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 686 $ — $ — $ — $ 686 Service revenues 137 630 192 — 959 Intersegment 63 3 6 (72) — $ 886 $ 633 $ 198 $ (72) $ 1,645 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 $8 million and $23 million for the three and nine months ended September 30, 2019, respectively, as compared to $8 million and $24 million for the three and nine months ended September 30, 2018, respectively, related to these contracts, which is included in product revenues. The revenues based on geographic location of customers are as follows: Three Months Ended September 30, 2019 2018 United States $ 320 $ 312 Asia 63 92 Canada 19 38 Europe 43 28 South America 18 32 Other 16 7 Total revenues $ 479 $ 509 Nine Months Ended September 30, 2019 2018 United States $ 1,007 $ 1,020 Asia 183 264 Canada 72 139 Europe 103 97 South America 83 99 Other 25 26 Total revenues $ 1,473 $ 1,645 Revenues from significant customers are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 U.S. Federal Government and agencies $ 242 $ 207 $ 736 $ 658 Canadian Federal Government and agencies 13 24 58 83 |
Segment information
Segment information | 9 Months Ended |
Sep. 30, 2019 | |
Segment information | |
Segment information | 14. 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’s 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 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 earnings before interest, tax, depreciation and amortization (“EBITDA”) adjusted for certain items affecting comparability as specified in the calculation. Certain items affecting comparability include restructuring, impairments, satellite insurance recovery, CEO severance and transaction and integration related expense. Transaction and integration related expense includes costs associated with de-leveraging activities, acquisitions and dispositions and the integration of acquisitions. Other unallocated expenses include 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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenues: Space Systems $ 220 $ 263 $ 751 $ 886 Imagery 220 210 621 633 Services 73 62 215 198 Intersegment eliminations (34) (26) (114) (72) Total revenues $ 479 $ 509 $ 1,473 $ 1,645 Adjusted EBITDA: Space Systems $ 11 $ (7) $ 49 $ 34 Imagery 140 129 384 396 Services 9 9 22 19 Intersegment eliminations (13) (7) (26) (16) Depreciation and amortization (96) (119) (293) (343) Corporate and other expenses (19) (19) (55) (44) Restructuring 1 (2) (21) (15) Transaction and integration related expense (7) (14) (13) (24) Impairment losses, including inventory — (213) (15) (213) Satellite insurance recovery — — 183 — CEO severance — — (3) — Interest expense, net (50) (52) (148) (155) Interest income 1 — 1 — Equity loss (income) from joint ventures, net of tax 1 1 4 (2) Income (loss) before taxes $ (22) $ (294) $ 69 $ (363) The Company’s capital expenditures are as follows: Three Months Ended September 30, 2019 Space Systems Imagery Services Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 7 $ 51 $ — $ 8 $ 66 Intangible assets 1 14 1 (1) 15 $ 8 $ 65 $ 1 $ 7 $ 81 Three Months Ended September 30, 2018 Space Systems Imagery Services Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ — $ 39 $ — $ (11) $ 28 Intangible assets 5 7 — (7) 5 $ 5 $ 46 $ — $ (18) $ 33 Nine Months Ended September 30, 2019 Space Systems Imagery Services Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 14 $ 152 $ — $ (3) $ 163 Intangible assets 2 41 1 (1) 43 $ 16 $ 193 $ 1 $ (4) $ 206 Nine Months Ended September 30, 2018 Space Systems Imagery Services Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 9 $ 118 $ 1 $ (17) $ 111 Intangible assets 9 39 2 (8) 42 $ 18 $ 157 $ 3 $ (25) $ 153 Substantially all of the Company’s long-lived tangible assets were in the United States as of September 30, 2019 and December 31, 2018. |
Impairment losses
Impairment losses | 9 Months Ended |
Sep. 30, 2019 | |
Impairment losses | |
Impairment losses | 15. IMPAIRMENT LOSSES Property, plant and equipment impairment The Company recognized an impairment loss of $86 million on its property, plant and equipment for the three months ended September 30, 2018. The impairment loss on property, plant and equipment was due to obsolescence and reduced future use of equipment and buildings in the Space Systems segment. Impairment loss in the Space Systems segment was based on fair value less cost of disposal for those assets in an orderly liquidation. Fair value was based on observable inputs where possible (Level 2), in which market data could be applied. However, due to the specialized nature of the majority of these assets, inputs for the valuation were unobservable (Level 3). The Company did not have material property, plant and equipment impairment during the nine months ended September 30, 2019. Intangible asset impairment The Company identified triggering events for impairment during the three months ended September 30, 2018 related to intangible assets of its GeoComm business, a reporting unit in the Space Systems segment. At the beginning of the year, the Company forecasted it would be awarded three to four contracts for GeoComm satellites, or approximately thirty percent of the overall 2018 industry awards. During the three months ended September 30, 2018, it became clear that industry and macroeconomic factors had declined substantially from earlier forecasts. Due to the decline in the GeoComm market, and the uncertainty surrounding the future of the Company’s GeoComm business, an impairment loss was recognized, primarily due to future cash flows associated with the intangible assets not being sufficient to cover the total book value of those assets. For the nine months ended September 30, 2018, the Company recognized a total impairment loss of $89 million related to the technology, trade name, software, and customer relationship intangible assets of the GeoComm business. The Company did not record an impairment of intangible assets for the nine months ended September 30, 2019. Inventory impairment The Company re-evaluated the carrying value of its inventory that was previously pegged to forecasted usage. All GeoComm inventory subject to future use based on forecasts was assessed for possible obsolescence. The result of the reassessment of future usage of the on hand inventory was inventory impairment of $38 million for the three months ended September 30, 2018 which is included in Product costs, excluding depreciation and amortization on the Unaudited Condensed Consolidated Statement of Operations. The Company did not have material inventory impairment during the nine months ended September 30, 2019. |
Employee benefit plans
Employee benefit plans | 9 Months Ended |
Sep. 30, 2019 | |
Employee benefit plans | |
Employee benefit plans | 16. EMPLOYEE BENEFIT PLANS The following table summarizes the components of net periodic benefit cost for the Company’s pension plans: Three Months Ended September 30, Nine Months Ended September 30, Pension Pension 2019 2018 2019 2018 Service cost $ 1 $ 2 $ 3 $ 5 Interest cost 5 — 17 — Expected return on plan assets (7) — (22) — Amortization of net loss — — 1 — Expenses paid 1 — 2 — Net periodic benefit cost $ — $ 2 $ 1 $ 5 Contributions The funding policy for the Company’s pension plans is to contribute at least the minimum required by applicable laws and regulations or to directly make benefit payments where appropriate. The Company expects to contribute approximately $14 million to its pension plans for the year ending December 31, 2019. As of September 30, 2019, all legal funding requirements had been met. |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income taxes | |
Income taxes | 17. INCOME TAXES On January 1, 2019, the Company completed the U.S. Domestication. The Company has estimated there are no material corporate tax liabilities 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. The Company is also subject to the Base Erosion and Anti-Abuse Tax (“BEAT”). In computing income tax expense for the nine months ended September 30, 2019, the Company applied the estimated annual effective tax rate to non-U.S. pre-tax income. No income tax expense or benefit was recognized on U.S. source income or loss as the Company does not expect to recognize the tax expense or benefit on U.S. source income or loss projected for the year. This resulted in an effective income tax rate of 13.5% for the nine months ended September 30, 2019. For the nine months ended September 30, 2018, income tax expense was computed as (22.0%). The effective tax rate increased primarily due to changes in corporate structure, the application of U.S. tax law and a change in the mix of income between jurisdictions. |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings per share | |
Earnings per share | 18. EARNINGS PER SHARE The following table includes the calculation of basic and diluted net (loss) income per common share: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net (loss) income $ (26) $ (289) $ 61 $ (314) Weighted average number of common shares outstanding-basic 59.6 59.2 59.6 57.6 Weighted dilutive effect of equity awards — — 0.4 — Weighted average number of common shares outstanding-diluted 59.6 59.2 60.0 57.6 (Loss) income per common share: Basic $ (0.44) $ (4.88) $ 1.02 $ (5.45) Diluted $ (0.44) $ (4.88) $ 1.02 $ (5.45) |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Contingencies | |
Contingencies | 19. CONTINGENCIES Contingencies in the normal course of business As discussed in Note 4, satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price of the satellite is contingent upon in-orbit performance of the satellite. The Company’s ultimate receipt of orbital performance incentives is subject to the continued performance of its satellites generally over the contractually stipulated life of the satellites. A complete or partial loss of a satellite’s functionality can result in loss of orbital receivable payments or repayment of amounts received by the Company under a warranty payback arrangement. The Company generally receives the present value of the orbital receivables if there is a launch failure or a failure caused by a customer error, but will forfeit some or all of the orbital receivables if the loss is caused by satellite failure or as a result of Company error. The Company recognizes orbital performance incentives in the financial statements based on the amounts that are expected to be received and believes that it will not incur a material loss relating to the incentives recognized. With respect to the Company’s securitized liability for the orbital receivables, upon the occurrence of an event of default under the securitization facility agreement or upon the occurrence of limited events, the Company may be required to repurchase on demand any affected receivables at their then net present value. The Company may incur liquidated damages on programs as a result of delays due to slippage, or for programs which fail to meet all milestone requirements as outlined within the contractual arrangements with customers. Losses on programs related to liquidated damages result in a reduction of revenue. Changes in estimates related to contracts accounted for using the cost-to-cost method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes. Unrecoverable costs on contracts that are expected to be incurred in future periods are recorded in program cost in the current period. The Company enters into agreements in the ordinary course of business with resellers and others. Most of these agreements require the Company to indemnify the other party against third-party claims alleging that one of its products infringes or misappropriates a patent, copyright, trademark, trade secret or other intellectual property right. Certain of these agreements require the Company to indemnify the other party against claims relating to property damage, personal injury or acts or omissions by the Company, its employees, agents or representatives. From time to time, the Company has made guarantees regarding the performance of its systems to its customers. Some of these agreements do not limit the maximum potential future payments the Company could be obligated to make. The Company evaluates and estimates potential losses from such indemnification based on the likelihood that the future event will occur. The Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such indemnification and guarantees in the Unaudited Condensed Consolidated Financial Statements. The Company has entered into industrial cooperation agreements, sometimes referred to as offset agreements, as a condition to entering into contracts for its products and services from certain customers in foreign countries. These agreements are designed to return economic value to the foreign country and may be satisfied through activities that do not require a direct cash payment, including transferring technology, 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, the Company entered into an agreement with a Ukrainian customer to provide a communication satellite system. In 2014, following the annexation of Crimea by the Russian Federation, the Company declared force majeure with respect to the program. 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 Maxar. Maxar 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 Maxar, challenging the Company’s right to terminate for force majeure, purporting to terminate the contract for default by Maxar (a position since withdrawn), and seeking recovery from Maxar 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. The Company believes it has sound defenses to the petitioner’s claims, and will vigorously defend the claims asserted. The Company has accrued an amount that it believes is within the range of probable outcomes for resolving this matter; the amount is not material to the 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 the Company in excess of the amount reserved, the Company could incur additional amounts and its results of operations and financial condition could be adversely affected. On January 14, 2019, a Maxar stockholder filed a putative class action lawsuit captioned Oregon Laborers Employers Pension Trust Fund, et al. v. Maxar Technologies Inc., Charles O’Brien vs. Maxar Technologies Inc. On October 21, 2019, a Maxar stockholder filed a putative class action lawsuit captioned McCurdy v. Maxar Technologies Inc., et al. The Company is a party to various other legal proceedings and claims that arise in the ordinary course of business as either a plaintiff or defendant. As a matter of course, the Company is prepared both to litigate these matters to judgment, as well as to evaluate and consider all reasonable settlement opportunities. The Company has established accrued liabilities for these matters where losses are deemed probable and reasonably estimable. The outcome of any of these other proceedings, either individually or in the aggregate, is not expected to have a material adverse effect on the Company’s financial position, results of operations or liquidity. |
Supplemental cash flow
Supplemental cash flow | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental cash flow | |
Supplemental cash flow | 20. SUPPLEMENTAL CASH FLOW Selected cash payments and non-cash activities are as follows: Nine Months Ended September 30, 2019 2018 Supplemental cash flow information: Cash paid for interest $ (174) $ (139) Income tax (payments) refunds (4) 2 Supplemental non-cash investing and financing activities: Accrued capital expenditures 20 27 Acquisitions — 25 Impairment loss on equity investment 12 — |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent events | |
Subsequent events | 21. SUBSEQUENT EVENTS Senior Secured Notes On November 4, 2019, the Company announced the commencement of a private offering of $1.25 billion aggregate principal amount of Senior Secured Notes due 2023 (the “Notes”). The Notes will be senior, first-priority secured obligations of the Company initially guaranteed on a senior, first-priority secured basis by the Company’s subsidiaries that are guarantors under its existing syndicated credit facility. Concurrent Amendment to Revolving Credit Facility On November 4, 2019, the Company entered into an amendment (the “Credit Facility Amendment”) with lenders under the Company’s Revolving Credit Facility under the Syndicated Credit Facility Agreement. The terms of the Credit Facility Amendment (1) modify certain financial covenant levels to permit maximum levels of Consolidated Debt to EBITDA (each as defined in the Syndicated Credit Facility Agreement) of 7.25x at the end of the current fiscal year, 7.50x at the end of the next fiscal quarter, 7.75x at the end of each fiscal quarter for the next 18 months, 7.50x at the end of each fiscal quarter for the next twelve months, 6.50x at the end of each fiscal quarter for the next six months and 5.75x for each fiscal quarter thereafter (subject to a 0.25x reduction in each maximum level upon a disposition of a business line for greater than $500 million); (2) extend the maturity of the Revolving Credit Facility to a date that is approximately four years subsequent to closing of the Credit Facility Amendment; (3) restrict investment capacity in certain permitted investments; (4) restrict future increases in quarterly dividend payment levels; (5) modify certain margin and standby fee terms; (6) modify the priority of application of voluntary prepayments resulting from certain asset sales (including to allow the Company to prioritize prepayment of the Company’s Term Loan A-1 and Term Loan A-2 ahead of Term Loan B Facility with proceeds from the Company’s Palo Alto land sale); and (7) restrict use of proceeds of future borrowings. The Credit Facility Amendment is conditioned on consummation of Notes offering other than with respect to priority of prepayments resulting from asset sale proceeds and certain other technical amendments, which are effective immediately. In addition, the Company intends to cancel the Operating Credit Facility and reduce committed borrowing capacity under the Revolving Credit Facility to $500 million. As of September 30, 2019, on an as adjusted basis after giving effect to the Amendment to the Revolving Credit Facility and Notes offering, the Company would have $500 million in available borrowing capacity under the Revolving Credit Facility less any letters of credit outstanding thereunder. Sale Leaseback Agreements On November 1, 2019, the Company entered into a purchase and sale agreement for two properties in Palo Alto, California, for a total of $291 million. Contemporaneously with the closing of the sale, the Company will enter into two lease agreements, for which the Company will leaseback the properties. The leases will be considered operating leases with gross annual rent payments of $12 million for a period of two years for one property, and annual payments of $8 million for a period of ten years for the other property, both subject to 3% annual escalation . |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 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 subsidiaries. The Company’s Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). All intercompany balances and transactions are eliminated in consolidation. The Company’s Unaudited Condensed Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at fair value. 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. In management’s opinion, all adjustments of a normal recurring nature that are necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included. |
Use of estimates, assumptions and judgments | Use of estimates, assumptions and judgments The preparation of the Unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) Leases 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. Taxes In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) |
Trade and other receivables, _2
Trade and other receivables, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Trade and other receivables, net | |
Schedule of trade and other receivables, net | September 30, December 31, 2019 2018 Billed $ 218 $ 242 Unbilled 221 172 Total trade receivables 439 414 Orbital receivables, current portion 37 34 Other 10 17 Allowance for doubtful accounts (2) (1) Total trade and other receivables, net $ 484 $ 464 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory | |
Schedule of inventory | September 30, December 31, 2019 2018 Raw materials $ 13 $ 21 Work in process 7 10 Total inventory $ 20 $ 31 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment, net | Property, plant and equipment, net consisted of the following: September 30, December 31, 2019 2018 Satellites $ 397 $ 397 Equipment 230 229 Leasehold improvements 98 97 Computer hardware 96 92 Land and land improvements 88 88 Buildings 46 46 Furniture and fixtures 19 19 Construction in process 298 142 Property, plant and equipment, at cost 1,272 1,110 Accumulated depreciation (448) (363) Property, plant and equipment, net $ 824 $ 747 |
Intangible assets (Tables)
Intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Intangible assets | |
Schedule of intangible assets | September 30, 2019 December 31, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Customer relationships $ 619 $ (92) $ 527 $ 619 $ (58) $ 561 Backlog 332 (194) 138 332 (120) 212 Technologies 328 (133) 195 330 (86) 244 Software 239 (100) 139 198 (71) 127 Image library 80 (44) 36 80 (32) 48 Trade names and other 41 (13) 28 41 (9) 32 Non-compete agreements 21 (19) 2 21 (13) 8 Total intangible assets $ 1,660 $ (595) $ 1,065 $ 1,621 $ (389) $ 1,232 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Schedule of components of lease expense | Three Months Ended September 30, Nine Months Ended September 30, Classification 2019 2019 Operating lease expense Selling, general, and administrative expense, Product and Service costs 1 $ 8 $ 25 |
Supplemental lease balance sheet information | September 30, Classification 2019 Assets: Operating Non-current operating lease assets $ 125 Finance Property, plant and equipment, net 8 Total lease assets $ 133 Liabilities: Current Operating Current operating lease liabilities $ 33 Finance Current portion of long-term debt 3 Non-current Operating Operating lease liabilities 132 Finance Long-term debt 3 Total lease liabilities $ 171 |
Schedule of supplemental lease cash flow information | Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9 $ 27 |
Schedule of other supplemental lease information | September 30, 2019 Weighted average remaining lease term Operating leases 9 years Finance leases 3 years Weighted average discount rate Operating leases 7.0% Finance leases 4.6% |
Schedule of maturities of finance lease liabilities | 2019 1 2020 2021 2022 2023 Thereafter Less: Imputed Interest Total Minimum Lease Payments Operating leases $ 9 $ 33 $ 30 $ 26 $ 23 $ 101 $ (57) $ 165 Finance leases 1 3 1 1 — — — 6 1 |
Schedule of maturities of operating liabilities | 2019 1 2020 2021 2022 2023 Thereafter Less: Imputed Interest Total Minimum Lease Payments Operating leases $ 9 $ 33 $ 30 $ 26 $ 23 $ 101 $ (57) $ 165 Finance leases 1 3 1 1 — — — 6 1 |
Restructuring liability (Tables
Restructuring liability (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring liability | |
Schedule of changes to restructuring liabilities | Restructuring Liability Balance as of December 31, 2018 $ 6 Obligations incurred 21 Payments (19) Release of reserves (2) Balance as of September 30, 2019 $ 6 |
Long term debt and interest exp
Long term debt and interest expense, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Long-term debt and interest expense, net | |
Summary of long term debt | September 30, December 31, 2019 2018 Syndicated Credit Facility: Revolving Credit Facility $ 696 $ 595 Term Loan A 500 500 Term Loan B 1,960 1,980 Debt issuance costs (35) (41) Obligations under finance leases and other 10 13 Total long-term debt 3,131 3,047 Current portion (17) (17) Non-current portion $ 3,114 $ 3,030 |
Schedule of interest expense on long term debt and other obligations | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Interest on long-term debt $ 50 $ 46 $ 143 $ 129 Interest expense on advance payments from customers 3 6 12 20 Interest on orbital securitization liability 2 1 6 5 Imputed interest and other — 1 — 2 Capitalized interest (5) (2) (13) (4) Interest expense on dissenting stockholder liability — — — 3 Interest expense, net $ 50 $ 52 $ 148 $ 155 |
Financial instruments and fai_2
Financial instruments and fair value disclosures (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2019 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 5 $ — $ — $ 5 Long-term investments — — 12 12 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 3 — 3 $ 5 $ 3 $ 12 $ 20 Liabilities Derivative financial instruments Foreign exchange forward contracts & embedded derivatives $ — $ 1 $ — $ 1 Interest rate swaps — 22 — 22 $ — $ 23 $ — $ 23 Recurring Fair Value Measurements of as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Short-term investments $ 3 $ — $ — $ 3 Long-term investments — 1 24 25 Derivative financial instruments Foreign exchange forward contracts & embedded derivatives — 5 — 5 $ 3 $ 6 $ 24 $ 33 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 September 30, 2019 Carrying Value Fair Value Fair Value Hierarchy Long-term debt, excluding finance leases and other $ 3,121 $ 2,943 Level 2 Orbital receivables 449 449 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) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' equity | |
Schedule of changes in the components of accumulated other comprehensive income (loss) | Foreign Total Currency Unrecognized Accumulated Other Translation (Loss) Gain on Pension Comprehensive Adjustments 1 Derivatives 2 Adjustments Income (Loss) Balance as of December 31, 2018 $ 111 $ (4) $ (25) $ 82 Other comprehensive (loss) income (4) (4) 3 (5) Tax expense — — (1) (1) Balance as of March 31, 2019 107 (8) (23) 76 Other comprehensive income (loss) 15 (12) — 3 Tax expense — — — — Balance as of June 30, 2019 122 (20) (23) 79 Other comprehensive (loss) income (5) (1) — (6) Tax expense — — — — Balance as of September 30, 2019 $ 117 $ (21) $ (23) $ 73 1 As a result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent company to a U.S. parent company, the Company’s net investment hedge was no longer necessary from the domestication date onwards. As of December 31, 2018, there was a $51 million net loss on hedge investments in foreign operations which is included in Foreign Currency Translation Adjustments. 2 As of January 1, 2019, the Company 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 September 30, 2019, the balance consisted of unrecognized loss on the Company’s interest rate swaps. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Summary of contract assets and contract liabilities by segment | Space As of September 30, 2019 Systems Imagery 1 Services Total Contract liabilities $ 121 $ 157 $ 6 $ 284 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 $105 million and $184 million as of September 30, 2019 and December 31, 2018, respectively. During the nine months ended September 30, 2019, imputed interest on advanced payments increased the contract liability balance by $12 million, which was more than offset by $91 million in revenue recognition. 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 September 30, 2019 or December 31, 2018. |
Summary of revenue by primary sources | Three Months Ended September 30, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 158 $ — $ — $ — $ 158 Service revenues 30 219 72 — 321 Intersegment 32 1 1 (34) — $ 220 $ 220 $ 73 $ (34) $ 479 Three Months Ended September 30, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 201 $ — $ — $ — $ 201 Service revenues 39 209 60 — 308 Intersegment 23 1 2 (26) — $ 263 $ 210 $ 62 $ (26) $ 509 Nine Months Ended September 30, 2019 Space Systems Imagery Services Eliminations Total Product revenues $ 542 $ — $ — $ — $ 542 Service revenues 101 618 212 — 931 Intersegment 108 3 3 (114) — $ 751 $ 621 $ 215 $ (114) $ 1,473 Nine Months Ended September 30, 2018 Space Systems Imagery Services Eliminations Total Product revenues $ 686 $ — $ — $ — $ 686 Service revenues 137 630 192 — 959 Intersegment 63 3 6 (72) — $ 886 $ 633 $ 198 $ (72) $ 1,645 |
Summary of revenue by geographic location | Three Months Ended September 30, 2019 2018 United States $ 320 $ 312 Asia 63 92 Canada 19 38 Europe 43 28 South America 18 32 Other 16 7 Total revenues $ 479 $ 509 Nine Months Ended September 30, 2019 2018 United States $ 1,007 $ 1,020 Asia 183 264 Canada 72 139 Europe 103 97 South America 83 99 Other 25 26 Total revenues $ 1,473 $ 1,645 |
Schedule of revenue from significant customers | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 U.S. Federal Government and agencies $ 242 $ 207 $ 736 $ 658 Canadian Federal Government and agencies 13 24 58 83 |
Segment information (Tables)
Segment information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment information | |
Summary of operating performance of the reporting segments | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenues: Space Systems $ 220 $ 263 $ 751 $ 886 Imagery 220 210 621 633 Services 73 62 215 198 Intersegment eliminations (34) (26) (114) (72) Total revenues $ 479 $ 509 $ 1,473 $ 1,645 Adjusted EBITDA: Space Systems $ 11 $ (7) $ 49 $ 34 Imagery 140 129 384 396 Services 9 9 22 19 Intersegment eliminations (13) (7) (26) (16) Depreciation and amortization (96) (119) (293) (343) Corporate and other expenses (19) (19) (55) (44) Restructuring 1 (2) (21) (15) Transaction and integration related expense (7) (14) (13) (24) Impairment losses, including inventory — (213) (15) (213) Satellite insurance recovery — — 183 — CEO severance — — (3) — Interest expense, net (50) (52) (148) (155) Interest income 1 — 1 — Equity loss (income) from joint ventures, net of tax 1 1 4 (2) Income (loss) before taxes $ (22) $ (294) $ 69 $ (363) |
Schedule of capital expenditures by segment | Three Months Ended September 30, 2019 Space Systems Imagery Services Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 7 $ 51 $ — $ 8 $ 66 Intangible assets 1 14 1 (1) 15 $ 8 $ 65 $ 1 $ 7 $ 81 Three Months Ended September 30, 2018 Space Systems Imagery Services Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ — $ 39 $ — $ (11) $ 28 Intangible assets 5 7 — (7) 5 $ 5 $ 46 $ — $ (18) $ 33 Nine Months Ended September 30, 2019 Space Systems Imagery Services Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 14 $ 152 $ — $ (3) $ 163 Intangible assets 2 41 1 (1) 43 $ 16 $ 193 $ 1 $ (4) $ 206 Nine Months Ended September 30, 2018 Space Systems Imagery Services Corporate and eliminations Total Capital expenditures: Property, plant and equipment $ 9 $ 118 $ 1 $ (17) $ 111 Intangible assets 9 39 2 (8) 42 $ 18 $ 157 $ 3 $ (25) $ 153 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Employee benefit plans | |
Summary of the components of net periodic benefit (credits) cost | Three Months Ended September 30, Nine Months Ended September 30, Pension Pension 2019 2018 2019 2018 Service cost $ 1 $ 2 $ 3 $ 5 Interest cost 5 — 17 — Expected return on plan assets (7) — (22) — Amortization of net loss — — 1 — Expenses paid 1 — 2 — Net periodic benefit cost $ — $ 2 $ 1 $ 5 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings per share | |
Summary of calculation of basic and diluted EPS | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net (loss) income $ (26) $ (289) $ 61 $ (314) Weighted average number of common shares outstanding-basic 59.6 59.2 59.6 57.6 Weighted dilutive effect of equity awards — — 0.4 — Weighted average number of common shares outstanding-diluted 59.6 59.2 60.0 57.6 (Loss) income per common share: Basic $ (0.44) $ (4.88) $ 1.02 $ (5.45) Diluted $ (0.44) $ (4.88) $ 1.02 $ (5.45) |
Supplemental cash flow (Tables)
Supplemental cash flow (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental cash flow | |
Schedule of supplemental cash flow | Nine Months Ended September 30, 2019 2018 Supplemental cash flow information: Cash paid for interest $ (174) $ (139) Income tax (payments) refunds (4) 2 Supplemental non-cash investing and financing activities: Accrued capital expenditures 20 27 Acquisitions — 25 Impairment loss on equity investment 12 — |
General business description (D
General business description (Details) | 9 Months Ended |
Sep. 30, 2019employeesegmentitem | |
General business description | |
Number of team members | employee | 5,800 |
Number of global locations | item | 30 |
Number of reportable segments | segment | 3 |
Summary of significant accoun_3
Summary of significant accounting policies - Narratives (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jan. 01, 2019 |
Leases | ||
Operating lease right-of-use assets | $ 125 | |
Operating lease liability | $ 165 | |
ASU 2016-02 | ||
Leases | ||
Operating lease right-of-use assets | $ 133 | |
Operating lease liability | $ 176 |
Business combination (Details)
Business combination (Details) $ in Millions | Jul. 16, 2018USD ($) | Sep. 30, 2019USD ($)item | Dec. 31, 2018USD ($) |
Business combination | |||
Goodwill | $ 1,759 | $ 1,751 | |
Number of business combinations | item | 0 | ||
Neptec | |||
Business combination | |||
Purchase consideration | $ 30 | ||
Cash paid for acquisition | 6 | ||
Goodwill | 21 | ||
Intangible assets, net | 11 | ||
Net liabilities | $ 2 |
Trade and other receivables, _3
Trade and other receivables, net (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Trade and other receivables, net | ||
Billed | $ 218 | $ 242 |
Unbilled | 221 | 172 |
Total trade receivables | 439 | 414 |
Orbital receivables, current portion | 37 | 34 |
Other | 10 | 17 |
Allowance for doubtful accounts | (2) | (1) |
Total trade and other receivables, net | $ 484 | $ 464 |
Trade and other receivables, _4
Trade and other receivables, net - Orbital receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2019 | |
Trade and other receivables | ||
Orbital receivables | $ 407 | $ 412 |
Orbital receivables | ||
Proceeds from sale of orbital receivables | 18 | |
Securitization liabilities | 109 | 103 |
Other current liabilities | ||
Orbital receivables | ||
Securitization liabilities | $ 15 | $ 16 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory | ||
Raw materials | $ 13 | $ 21 |
Work in process | 7 | 10 |
Total | 20 | 31 |
Total inventory | $ 20 | $ 31 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | $ 1,272 | $ 1,272 | $ 1,110 | |||
Accumulated depreciation | (448) | (448) | (363) | |||
Property, plant and equipment, net | 824 | 824 | 747 | |||
Depreciation | 26 | $ 43 | 85 | $ 121 | ||
Satellite insurance recovery | 183 | |||||
Satellites | ||||||
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | 397 | 397 | 397 | |||
Satellite insurance recovery | $ 183 | |||||
Equipment | ||||||
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | 230 | 230 | 229 | |||
Leasehold improvements | ||||||
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | 98 | 98 | 97 | |||
Computer hardware | ||||||
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | 96 | 96 | 92 | |||
Land and Land improvements | ||||||
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | 88 | 88 | 88 | |||
Buildings | ||||||
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | 46 | 46 | 46 | |||
Furniture and fixtures | ||||||
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | 19 | 19 | 19 | |||
Construction in process | ||||||
Property, plant and equipment | ||||||
Property, plant and equipment, at cost | $ 298 | $ 298 | $ 142 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Finite-lived intangible assets: | |||||
Gross carrying value | $ 1,660 | $ 1,660 | $ 1,621 | ||
Accumulated amortization | (595) | (595) | (389) | ||
Net carrying value | 1,065 | 1,065 | 1,232 | ||
Impairment losses of intangible assets | 0 | $ 89 | |||
Amortization of intangible assets | 70 | $ 76 | 208 | $ 222 | |
Trade names and other | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 41 | 41 | 41 | ||
Accumulated amortization | (13) | (13) | (9) | ||
Net carrying value | 28 | 28 | 32 | ||
Customer relationships | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 619 | 619 | 619 | ||
Accumulated amortization | (92) | (92) | (58) | ||
Net carrying value | 527 | 527 | 561 | ||
Backlog | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 332 | 332 | 332 | ||
Accumulated amortization | (194) | (194) | (120) | ||
Net carrying value | 138 | 138 | 212 | ||
Technologies | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 328 | 328 | 330 | ||
Accumulated amortization | (133) | (133) | (86) | ||
Net carrying value | 195 | 195 | 244 | ||
Software | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 239 | 239 | 198 | ||
Accumulated amortization | (100) | (100) | (71) | ||
Net carrying value | 139 | 139 | 127 | ||
Image library | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 80 | 80 | 80 | ||
Accumulated amortization | (44) | (44) | (32) | ||
Net carrying value | 36 | 36 | 48 | ||
Non-compete agreements | |||||
Finite-lived intangible assets: | |||||
Gross carrying value | 21 | 21 | 21 | ||
Accumulated amortization | (19) | (19) | (13) | ||
Net carrying value | $ 2 | $ 2 | $ 8 |
Leases (Details)
Leases (Details) | 9 Months Ended |
Sep. 30, 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 | 15 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) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Selling, general, and administrative expense, Product and Service costs | ||
Leases | ||
Operating lease expense | $ 8 | $ 25 |
Leases - Supplemental lease bal
Leases - Supplemental lease balance sheet information (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases | |
Non-current operating lease assets | $ 125 |
Operating Lease, Right-of-Use Asset, Balance Sheet Location | us-gaap:OperatingLeaseRightOfUseAsset |
Finance | $ 8 |
Finance Lease, Right-of-Use Asset, Balance Sheet Location | us-gaap:PropertyPlantAndEquipmentNet |
Total leased assets | $ 133 |
Current operating lease liabilities | $ 33 |
Operating Lease, Liability, Current, Balance Sheet Location | us-gaap:OperatingLeaseLiabilityCurrent |
Operating lease liability, non current | $ 132 |
Operating Lease, Liability, Non-current, Balance Sheet Location | us-gaap:OperatingLeaseLiabilityNoncurrent |
Finance lease liability, current | $ 3 |
Finance Lease, Liability, Current, Balance Sheet Location | us-gaap:OtherLiabilitiesCurrent |
Finance lease liability, non current | $ 3 |
Finance Lease, Liability, Noncurrent, Balance Sheet Location | us-gaap:OtherLiabilitiesNoncurrent |
Total leased Liabilities | $ 171 |
Leases - Supplemental lease cas
Leases - Supplemental lease cash flow information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 9 | $ 27 |
Leases - Other Supplemental lea
Leases - Other Supplemental lease information (Details) | Sep. 30, 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 | 7.00% |
Finance leases - Weighted average discount rate | 4.60% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Millions | Sep. 30, 2019USD ($) |
Operating leases | |
2019 | $ 9 |
2020 | 33 |
2021 | 30 |
2022 | 26 |
2023 | 23 |
Thereafter | 101 |
Less: imputed interest | (57) |
Total minimum lease payments | 165 |
Finance leases | |
2019 | 1 |
2020 | 3 |
2021 | 1 |
2022 | 1 |
Total minimum lease payments | $ 6 |
Restructuring liability (Detail
Restructuring liability (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring liability | ||||
Balance as of December 31, 2018 | $ 6 | |||
Obligations incurred | $ (1) | $ 2 | 21 | $ 15 |
Payments | (19) | |||
Release of reserves | (2) | |||
Balance as of September 30, 2019 | $ 6 | $ 6 |
Long term debt and interest e_2
Long term debt and interest expense, net (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Long-term debt and interest expenses, net | ||
Debt issuance costs | $ (35) | $ (41) |
Obligations under finance leases and other | 10 | 13 |
Total long-term debt | 3,131 | 3,047 |
Current portion | (17) | (17) |
Non-current portion | 3,114 | 3,030 |
Revolving loan payable | ||
Long-term debt and interest expenses, net | ||
Long-term debt | 696 | 595 |
Term Loan A | ||
Long-term debt and interest expenses, net | ||
Long-term debt | 500 | 500 |
Term Loan B | ||
Long-term debt and interest expenses, net | ||
Long-term debt | $ 1,960 | $ 1,980 |
Long term debt and interest e_3
Long term debt and interest expense, net - Syndicated credit facility (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Letter of credit | |
Long-term debt and interest expenses, net | |
Maximum borrowing capacity | $ 200 |
Letter of credit outstanding | $ 18 |
DigitalGlobe | Senior secured first lien revolving credit facility | |
Long-term debt and interest expenses, net | |
Term of debt | 4 years |
DigitalGlobe | Senior Secured First Lien Operating Facility | |
Long-term debt and interest expenses, net | |
Term of debt | 4 years |
DigitalGlobe | Term Loan B | |
Long-term debt and interest expenses, net | |
Term of debt | 7 years |
Aggregate principal amount | $ 3,750 |
Long term debt and interest e_4
Long term debt and interest expense, net - Interest expense on long term debts and other obligations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest expense, net | ||||
Interest on long-term debt | $ 50 | $ 46 | $ 143 | $ 129 |
Interest expense on advance payments from customers | 3 | 6 | 12 | 20 |
Interest on orbital securitization liability | 2 | 1 | 6 | 5 |
Imputed interest and other | 1 | 2 | ||
Capitalized interest | (5) | (2) | (13) | (4) |
Interest expense on dissenting stockholder liability | 3 | |||
Interest expense, net | $ 50 | $ 52 | $ 148 | $ 155 |
Financial instruments and fai_3
Financial instruments and fair value disclosures - Financial instruments measured at fair value (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Liabilities | |||||
Impairment losses | $ 12 | $ 15 | $ 213 | ||
Impairment of investments | $ 0 | $ 0 | |||
Recurring | |||||
Assets | |||||
Short-term investments | 5 | $ 3 | |||
Long-term investments | 12 | 25 | |||
Assets fair value | 20 | 33 | |||
Liabilities | |||||
Liabilities fair value | 23 | 12 | |||
Recurring | Foreign exchange forward contracts & embedded derivatives | |||||
Assets | |||||
Derivative financial instruments | 3 | 5 | |||
Liabilities | |||||
Derivative financial instruments | 1 | 8 | |||
Recurring | Interest rate swaps | |||||
Liabilities | |||||
Derivative financial instruments | 22 | 4 | |||
Recurring | Level 1 | |||||
Assets | |||||
Short-term investments | 5 | 3 | |||
Assets fair value | 5 | 3 | |||
Recurring | Level 2 | |||||
Assets | |||||
Long-term investments | 1 | ||||
Assets fair value | 3 | 6 | |||
Liabilities | |||||
Liabilities fair value | 23 | 12 | |||
Recurring | Level 2 | Foreign exchange forward contracts & embedded derivatives | |||||
Assets | |||||
Derivative financial instruments | 3 | 5 | |||
Liabilities | |||||
Derivative financial instruments | 1 | 8 | |||
Recurring | Level 2 | Interest rate swaps | |||||
Liabilities | |||||
Derivative financial instruments | 22 | 4 | |||
Recurring | Level 3 | |||||
Assets | |||||
Long-term investments | 12 | 24 | |||
Assets fair value | $ 12 | $ 24 |
Financial instruments and fai_4
Financial instruments and fair value disclosures - Financial instruments recorded at carrying value (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 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 | 3,121 | 3,034 |
Orbital receivable | 449 | 441 |
Level 2 | Fair value | ||
Financial instruments and fair value disclosures | ||
Long-term debt, excluding finance leases and other | 2,943 | 2,925 |
Orbital receivable | $ 449 | $ 441 |
Stockholders' equity - Componen
Stockholders' equity - Components of accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | $ 643 | |||
Balance at the end of period | $ 701 | |||
Net loss on hedge investments in foreign operations | $ 51 | |||
Accumulated other comprehensive income (loss) | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | 79 | $ 76 | 82 | |
Other comprehensive (loss) income | (6) | 3 | (5) | |
Tax expense | (1) | |||
Balance at the end of period | 73 | 79 | 76 | |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | 122 | 107 | 111 | |
Other comprehensive (loss) income | (5) | 15 | (4) | |
Balance at the end of period | 117 | 122 | 107 | |
Unrecognized (Loss) Gain on Derivative Instruments | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | (20) | (8) | (4) | |
Other comprehensive (loss) income | (1) | (12) | (4) | |
Balance at the end of period | (21) | (20) | (8) | |
Pension Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Balance at the beginning of period | (23) | (23) | (25) | |
Other comprehensive (loss) income | 3 | |||
Tax expense | (1) | |||
Balance at the end of period | $ (23) | $ (23) | $ (23) |
Stockholders' equity (Details)
Stockholders' equity (Details) $ / shares in Units, $ in Millions | May 28, 2019item$ / shares | May 12, 2019 | Mar. 31, 2019USD ($) | Sep. 30, 2019$ / sharesshares | Jan. 01, 2019$ / shares | Dec. 31, 2018shares |
Stockholders' equity | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Series A Junior Participating Preferred Stock | ||||||
Stockholders' equity | ||||||
Preferred stock, authorized shares | shares | 2,400,000 | 0 | ||||
Preferred stock, shares outstanding | shares | 0 | 0 | ||||
Rights offering | ||||||
Stockholders' equity | ||||||
Percentage of shares acquired by entity under tax plan | 4.90% | |||||
Number of preferred stock purchase right granted as dividend | item | 1 | |||||
Number of additional shares of common stock upon exercise | item | 1 | |||||
Percentage of discount on additional shares of common stock upon exercise | 50.00% | |||||
Rights offering | Series A Junior Participating Preferred Stock | ||||||
Stockholders' equity | ||||||
Percentage of right to purchase shares of preferred stock | 0.01% | |||||
Share price | $ / shares | $ 30.92 | |||||
Common Stock | ||||||
Stockholders' equity | ||||||
Reclassification of APIC due to U.S. Domestication | $ | $ (1,713) | |||||
Additional paid in capital | ||||||
Stockholders' equity | ||||||
Reclassification of APIC due to U.S. Domestication | $ | $ 1,713 |
Revenue - Remaining performance
Revenue - Remaining performance obligations (Details) $ in Billions | Sep. 30, 2019USD ($) |
Revenue | |
Remaining performance obligation | $ 2.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue | |
Remaining performance obligation | $ 1.3 |
Revenue | |
Expected timing of satisfaction | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue | |
Remaining performance obligation | $ 0.5 |
Revenue | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue | |
Remaining performance obligation | $ 0.4 |
Revenue | |
Expected timing of satisfaction |
Revenue - Contract assets and l
Revenue - Contract assets and liabilities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Contract assets and contract liabilities | ||
Contract Liabilities | $ 284 | $ 421 |
Space Systems | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 121 | 172 |
Imagery | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 157 | 247 |
Imagery | Enhanced View contract | ||
Contract assets and contract liabilities | ||
Contract Liabilities | 105 | 184 |
Increase in contract liability due to imputed interest on advance payments | 12 | |
Revenue recognized | 91 | |
Deferred contract costs | 0 | 0 |
Services | ||
Contract assets and contract liabilities | ||
Contract Liabilities | $ 6 | $ 2 |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue by source (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Revenues | $ 479 | $ 509 | $ 1,473 | $ 1,645 |
Product | ||||
Revenue | ||||
Revenues | 158 | 201 | 542 | 686 |
Service | ||||
Revenue | ||||
Revenues | 321 | 308 | 931 | 959 |
Space Systems | ||||
Revenue | ||||
Orbital interest revenue | 8 | 8 | 23 | 24 |
Operating Segments | Product | ||||
Revenue | ||||
Revenues | 158 | 201 | 542 | 686 |
Operating Segments | Service | ||||
Revenue | ||||
Revenues | 321 | 308 | 931 | 959 |
Operating Segments | Space Systems | ||||
Revenue | ||||
Revenues | 220 | 263 | 751 | 886 |
Operating Segments | Space Systems | Product | ||||
Revenue | ||||
Revenues | 158 | 201 | 542 | 686 |
Operating Segments | Space Systems | Service | ||||
Revenue | ||||
Revenues | 30 | 39 | 101 | 137 |
Operating Segments | Imagery | ||||
Revenue | ||||
Revenues | 220 | 210 | 621 | 633 |
Operating Segments | Imagery | Service | ||||
Revenue | ||||
Revenues | 219 | 209 | 618 | 630 |
Operating Segments | Services | ||||
Revenue | ||||
Revenues | 73 | 62 | 215 | 198 |
Operating Segments | Services | Service | ||||
Revenue | ||||
Revenues | 72 | 60 | 212 | 192 |
Intersegment eliminations | ||||
Revenue | ||||
Revenues | (34) | (26) | (114) | (72) |
Intersegment eliminations | Space Systems | ||||
Revenue | ||||
Revenues | 32 | 23 | 108 | 63 |
Intersegment eliminations | Imagery | ||||
Revenue | ||||
Revenues | 1 | 1 | 3 | 3 |
Intersegment eliminations | Services | ||||
Revenue | ||||
Revenues | $ 1 | $ 2 | $ 3 | $ 6 |
Revenue - Disaggregation of r_2
Revenue - Disaggregation of revenue on geographic location of customers (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Revenues | $ 479 | $ 509 | $ 1,473 | $ 1,645 |
U.S. | ||||
Revenue | ||||
Revenues | 320 | 312 | 1,007 | 1,020 |
Asia | ||||
Revenue | ||||
Revenues | 63 | 92 | 183 | 264 |
Canada | ||||
Revenue | ||||
Revenues | 19 | 38 | 72 | 139 |
Europe | ||||
Revenue | ||||
Revenues | 43 | 28 | 103 | 97 |
South America | ||||
Revenue | ||||
Revenues | 18 | 32 | 83 | 99 |
Other | ||||
Revenue | ||||
Revenues | $ 16 | $ 7 | $ 25 | $ 26 |
Revenue - Disaggregation of r_3
Revenue - Disaggregation of revenue from significant customers (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Revenues | $ 479 | $ 509 | $ 1,473 | $ 1,645 |
U.S. Federal Government and agencies | ||||
Revenue | ||||
Revenues | 242 | 207 | 736 | 658 |
Canadian Federal Government and agencies | ||||
Revenue | ||||
Revenues | $ 13 | $ 24 | $ 58 | $ 83 |
Segment information - Operating
Segment information - Operating performance (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment information | ||||
Number of reportable segments | segment | 3 | |||
Total revenues | $ 479 | $ 509 | $ 1,473 | $ 1,645 |
Depreciation and amortization | (96) | (119) | (293) | (343) |
Corporate and other unallocated expenses | (19) | (19) | (55) | (44) |
Restructuring Charges | (1) | 2 | 21 | 15 |
Acquisition and integration related expense | (7) | (14) | (13) | (24) |
Satellite insurance recovery | 183 | |||
Inventory impairment | 0 | (38) | ||
CEO severance | (3) | |||
Impairment losses, including inventory | (213) | (15) | (213) | |
Interest expense, net | (50) | (52) | (148) | (155) |
Interest income | 1 | 1 | ||
Equity loss (income) from joint ventures, net of tax | 1 | 1 | 4 | (2) |
Income (loss) before taxes | (22) | (294) | 69 | (363) |
Operating Segments | Space Systems | ||||
Segment information | ||||
Total revenues | 220 | 263 | 751 | 886 |
Adjusted EBITDA | 11 | (7) | 49 | 34 |
Operating Segments | Imagery | ||||
Segment information | ||||
Total revenues | 220 | 210 | 621 | 633 |
Adjusted EBITDA | 140 | 129 | 384 | 396 |
Operating Segments | Services | ||||
Segment information | ||||
Total revenues | 73 | 62 | 215 | 198 |
Adjusted EBITDA | 9 | 9 | 22 | 19 |
Intersegment eliminations | ||||
Segment information | ||||
Total revenues | (34) | (26) | (114) | (72) |
Adjusted EBITDA | (13) | (7) | (26) | (16) |
Intersegment eliminations | Space Systems | ||||
Segment information | ||||
Total revenues | 32 | 23 | 108 | 63 |
Intersegment eliminations | Imagery | ||||
Segment information | ||||
Total revenues | 1 | 1 | 3 | 3 |
Intersegment eliminations | Services | ||||
Segment information | ||||
Total revenues | $ 1 | $ 2 | $ 3 | $ 6 |
Segment information - Capital e
Segment information - Capital expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment information | ||||
Capital expenditures, property, plant and equipment | $ 66 | $ 28 | $ 163 | $ 111 |
Capital expenditures, intangible assets | 15 | 5 | 43 | 42 |
Capital expenditures | 81 | 33 | 206 | 153 |
Operating Segments | Space Systems | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 7 | 14 | 9 | |
Capital expenditures, intangible assets | 1 | 5 | 2 | 9 |
Capital expenditures | 8 | 5 | 16 | 18 |
Operating Segments | Imagery | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 51 | 39 | 152 | 118 |
Capital expenditures, intangible assets | 14 | 7 | 41 | 39 |
Capital expenditures | 65 | 46 | 193 | 157 |
Operating Segments | Services | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 1 | |||
Capital expenditures, intangible assets | 1 | 1 | 2 | |
Capital expenditures | 1 | 1 | 3 | |
Intersegment eliminations | ||||
Segment information | ||||
Capital expenditures, property, plant and equipment | 8 | (11) | (3) | (17) |
Capital expenditures, intangible assets | (1) | (7) | (1) | (8) |
Capital expenditures | $ 7 | $ (18) | $ (4) | $ (25) |
Impairment losses (Details)
Impairment losses (Details) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017contract | |
Impairment Losses [Line Items] | |||
Impairment of property, plant and equipment | $ 86 | ||
Percent of the overall 2018 industry awards | 30.00% | ||
Impairment losses of intangible assets | $ 0 | 89 | |
Inventory impairment | $ 0 | $ 38 | |
Minimum | |||
Impairment Losses [Line Items] | |||
Number of contracts | contract | 3 | ||
Maximum | |||
Impairment Losses [Line Items] | |||
Number of contracts | contract | 4 |
Employee benefit plans - Compon
Employee benefit plans - Components of net periodic benefit (credits) cost (Details) - Pensions Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee benefit plans | ||||
Service cost | $ 1 | $ 2 | $ 3 | $ 5 |
Interest cost | 5 | 17 | ||
Expected return on plan assets | (7) | (22) | ||
Amortization of net loss | 1 | |||
Expenses paid | $ 1 | 2 | ||
Net periodic benefit cost | $ 2 | $ 1 | $ 5 |
Employee benefit plans - Narrat
Employee benefit plans - Narrative (Details) $ in Millions | Sep. 30, 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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income taxes | ||||
Income tax expense (benefit) | $ 3 | $ (6) | $ 4 | $ (47) |
Effective income tax rate | 13.50% | 22.00% |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings per share | ||||
Net (loss) income | $ (26) | $ (289) | $ 61 | $ (314) |
Weighted average number of common shares outstanding - basic (in shares) | 59.6 | 59.2 | 59.6 | 57.6 |
Weighted dilutive effect of equity awards (in shares) | 0.4 | |||
Weighted average number of common shares outstanding-diluted | 59.6 | 59.2 | 60 | 57.6 |
(Loss) income per common share: | ||||
Basic (In dollars per share) | $ (0.44) | $ (4.88) | $ 1.02 | $ (5.45) |
Diluted (In dollars per share) | $ (0.44) | $ (4.88) | $ 1.02 | $ (5.45) |
Contingencies (Details)
Contingencies (Details) $ in Millions | 1 Months Ended |
Jul. 31, 2018USD ($) | |
Pending Litigation | Ukranian customer | |
Contingencies | |
Recovery amount sought | $ 227 |
Supplemental cash flow - (Detai
Supplemental cash flow - (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Supplemental cash flow information: | |||
Cash paid for interest | $ (174) | $ (139) | |
Income tax (payments) refunds | (4) | 2 | |
Supplemental non-cash investing and financing activities: | |||
Accrued capital expenditures | 20 | 27 | |
Impairment loss on equity investment | $ 175 | $ 12 | 175 |
Acquisitions | $ 25 |
Subsequent events (Details)
Subsequent events (Details) - Subsequent event $ in Millions | Nov. 04, 2019USD ($) | Nov. 01, 2019USD ($)propertyagreement | Sep. 30, 2019USD ($) |
Subsequent events | |||
Number of properties sold | property | 2 | ||
Proceeds from Sale of Property | $ 291 | ||
Number of lease agreements | agreement | 2 | ||
Credit Facility Amendment | |||
Subsequent events | |||
Period of extension | 4 years | ||
Current borrowing capacity | $ 500 | ||
Remaining borrowing capacity | $ 500 | ||
Leased property one | |||
Subsequent events | |||
Gross annual lease payments | $ 12 | ||
Lease term | 2 years | ||
Percentage of escalation of annual lease payments | 3.00% | ||
Leased property two | |||
Subsequent events | |||
Gross annual lease payments | $ 8 | ||
Lease term | 10 years | ||
Percentage of escalation of annual lease payments | 3.00% | ||
Notes | |||
Subsequent events | |||
Aggregate principal amount | $ 1,250 | ||
End of the current fiscal year | Credit Facility Amendment | |||
Subsequent events | |||
Consolidated Debt to EBITDA | 7.25% | ||
End of the next fiscal quarter | Credit Facility Amendment | |||
Subsequent events | |||
Consolidated Debt to EBITDA | 7.50% | ||
End of each fiscal quarter for the next 18 months | Credit Facility Amendment | |||
Subsequent events | |||
Consolidated Debt to EBITDA | 7.75% | ||
End of each fiscal quarter for the next twelve months | Credit Facility Amendment | |||
Subsequent events | |||
Consolidated Debt to EBITDA | 7.50% | ||
End of each fiscal quarter for the next six months | Credit Facility Amendment | |||
Subsequent events | |||
Consolidated Debt to EBITDA | 6.50% | ||
Each fiscal quarter thereafter | Credit Facility Amendment | |||
Subsequent events | |||
Consolidated Debt to EBITDA | 5.75% | ||
Disposition of a business line for greater than $500 million | Credit Facility Amendment | |||
Subsequent events | |||
Percentage of reduction in each maximum level | 0.25% | ||
Minimum amount of disposition of business line to trigger a reduction in each maximum level of consolidated debt to EBITDA | $ 500 |