Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 24, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Iridium Communications Inc. | |
Entity Central Index Key | 1,418,819 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | IRDM | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 | |
Entity Common Stock, Shares Outstanding | 110,377,338 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 430,721 | $ 285,873 |
Marketable securities | 20,011 | 11,753 |
Accounts receivable, net | 75,130 | 68,031 |
Inventory | 20,283 | 20,068 |
Prepaid expenses and other current assets | 26,040 | 25,347 |
Total current assets | 572,185 | 411,072 |
Property and equipment, net | 3,291,431 | 3,210,162 |
Restricted cash | 189,182 | 102,384 |
Intangible assets, net | 49,652 | 50,019 |
Other assets | 9,331 | 8,414 |
Total assets | 4,111,781 | 3,782,051 |
Current liabilities: | ||
Short-term credit facility | 72,000 | 85,500 |
Accounts payable | 35,008 | 43,100 |
Accrued expenses and other current liabilities | 49,560 | 32,215 |
Interest payable | 37,608 | 15,021 |
Deferred revenue | 19,357 | 38,390 |
Total current liabilities | 213,533 | 214,226 |
Long-term credit facility, net | 1,627,549 | 1,618,055 |
Long-term senior unsecured notes, net | 350,335 | 0 |
Deferred income tax liabilities, net | 253,394 | 246,170 |
Deferred revenue, net of current portion | 54,564 | 47,612 |
Other long-term liabilities | 4,188 | 59,519 |
Total liabilities | 2,503,563 | 2,185,582 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 300,000 shares authorized, 110,371 and 98,203 shares issued and outstanding, respectively | 110 | 98 |
Additional paid-in capital | 1,085,257 | 1,081,373 |
Retained earnings | 526,568 | 518,794 |
Accumulated other comprehensive loss, net of tax | (3,717) | (3,796) |
Total stockholders' equity | 1,608,218 | 1,596,469 |
Total liabilities and stockholders' equity | 4,111,781 | 3,782,051 |
Series A Preferred Stock | ||
Stockholders' equity: | ||
Preferred stock, value | 0 | 0 |
Series B Preferred Stock | ||
Stockholders' equity: | ||
Preferred stock, value | $ 0 | $ 0 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 2,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 110,371,000 | 98,203,000 |
Common stock, shares outstanding (in shares) | 110,371,000 | 98,203,000 |
Series A Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 1,000,000 |
Series B Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 500,000 | 500,000 |
Preferred stock, shares outstanding (in shares) | 500,000 | 500,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Services | $ 89,742 | $ 81,773 |
Subscriber equipment | 25,782 | 17,114 |
Engineering and support services | 3,624 | 5,539 |
Total revenue | 119,148 | 104,426 |
Operating expenses: | ||
Cost of services (exclusive of depreciation and amortization) | 18,952 | 16,958 |
Cost of subscriber equipment | 15,214 | 10,104 |
Research and development | 4,583 | 3,227 |
Selling, general and administrative | 22,495 | 19,217 |
Depreciation and amortization | 38,465 | 13,507 |
Total operating expenses | 99,709 | 63,013 |
Gain on Boeing transaction | 0 | 14,189 |
Operating income | 19,439 | 55,602 |
Other income (expense): | ||
Interest income (expense), net | (4,165) | 833 |
Undrawn credit facility fees | 0 | (25) |
Other income (expense), net | 37 | (62) |
Total other income (expense), net | (4,128) | 746 |
Income before income taxes | 15,311 | 56,348 |
Income tax expense | (3,839) | (18,400) |
Net income | 11,472 | 37,948 |
Net income attributable to common stockholders | $ 7,613 | $ 34,089 |
Weighted average shares outstanding - basic, excluding Series A preferred stockholders through the conversion date of March 20, 2018 (in shares) | 100,686 | 96,853 |
Weighted average shares outstanding - diluted (in shares) | 104,345 | 126,370 |
Net income attributable to common stockholders per share - basic (in dollars per share) | $ 0.08 | $ 0.35 |
Net income attributable to common stockholders per share - diluted (in dollars per share) | $ 0.07 | $ 0.30 |
Comprehensive income: | ||
Net income | $ 11,472 | $ 37,948 |
Foreign currency translation adjustments, net of tax | 92 | 2,247 |
Unrealized loss on marketable securities, net of tax | (13) | (4) |
Comprehensive income | 11,551 | 40,191 |
Series A Preferred Stock | ||
Other income (expense): | ||
Preferred stock dividends, excluding cumulative dividends | 1,750 | 1,750 |
Preferred stock dividends, total declared and paid | 7,000 | 1,750 |
Series B Preferred Stock | ||
Other income (expense): | ||
Preferred stock dividends, excluding cumulative dividends | 2,109 | 2,109 |
Preferred stock dividends, total declared and paid | $ 8,436 | $ 2,109 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net cash provided by operating activities | $ 58,277 | $ 63,864 |
Cash flows from investing activities: | ||
Capital expenditures | (82,961) | (48,944) |
Purchases of marketable securities | (17,007) | 0 |
Sales and maturities of marketable securities | 8,723 | 6,328 |
Net cash used in investing activities | (91,245) | (42,616) |
Cash flows from financing activities: | ||
Borrowings under the Credit Facility | 0 | 22,207 |
Borrowings under the senior unsecured notes | 360,000 | 0 |
Extinguishment of the Thales bills of exchange | (59,936) | 0 |
Payment of deferred financing fees | (19,445) | (1,468) |
Proceeds from exercise of stock options | 769 | 342 |
Tax payment upon settlement of stock awards | (1,405) | (1,698) |
Net cash provided by financing activities | 264,556 | 15,524 |
Effect of exchange rate changes on cash and cash equivalents | 58 | 248 |
Net increase in cash and cash equivalents | 231,646 | 37,020 |
Cash, cash equivalents, and restricted cash, beginning of period | 388,257 | 484,306 |
Cash, cash equivalents, and restricted cash, end of period | 619,903 | 521,326 |
Supplemental cash flow information: | ||
Interest paid | 787 | 0 |
Income taxes paid, net | 253 | 1,090 |
Supplemental disclosure of non-cash investing activities: | ||
Property and equipment received but not paid for yet | 42,254 | 2,759 |
Interest capitalized but not paid | 37,608 | 35,382 |
Capitalized amortization of deferred financing costs | 6,549 | 6,495 |
Capitalized stock-based compensation | 233 | 909 |
Series A Preferred Stock | ||
Cash flows from financing activities: | ||
Payment of preferred stock dividends | (7,000) | (1,750) |
Series B Preferred Stock | ||
Cash flows from financing activities: | ||
Payment of preferred stock dividends | $ (8,427) | $ (2,109) |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Iridium Communications Inc. (the “Company”) has prepared its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying condensed consolidated financial statements include the accounts of (i) the Company, (ii) its wholly owned subsidiaries, and (iii) all less than wholly owned subsidiaries that the Company controls. All material intercompany transactions and balances have been eliminated. In the opinion of management, the condensed consolidated financial statements reflect all normal recurring adjustments that the Company considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the U.S. Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the audited condensed consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 , as filed with the SEC on February 22, 2018. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Adopted Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), that supersedes nearly all existing revenue recognition guidance under generally accepted accounting principles in the United States (“U.S. GAAP”). See footnote 8 for more detail on the Company's revenue recognition. Effective January 1, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 320): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 reduces the existing diversity in practice in financial reporting across all industries by clarifying certain existing principles, including providing additional guidance on how and what an entity should consider in determining the classification of certain cash flows. The adoption of ASU 2016-15 did not have a material effect on the Company’s consolidated financial statements. Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 requires lessees to record most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current accounting. The Company intends to apply the new guidance on the effective date of January 1, 2019. Reporting organizations are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company established a project team in order to analyze the effect of the standard on its leases by reviewing its current accounting policies to identify potential differences which would result from applying the requirements of the new standard to its leases. The Company currently anticipates utilizing the practical expedient to address all current operating leases for which it is the lessor. The Company is currently evaluating the effect ASU 2016-02 may have on its future condensed consolidated financial statements and related disclosures, but a lease liability and related right-of-use asset will be recognized for operating lease arrangements where the Company is the lessee. Fair Value Measurements The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. This determination requires significant judgments to be made by management of the Company. The instruments identified as subject to fair value measurements on a recurring basis are cash and cash equivalents, marketable securities, prepaid expenses and other current assets, accounts receivable, accounts payable and accrued expenses and other current liabilities. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. The fair value hierarchy consists of the following tiers: • Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying values of short-term financial instruments (primarily cash and cash equivalents, prepaid expenses and other current assets, accounts receivable, accounts payable, and accrued expenses and other current liabilities) approximate their fair values because of their short-term nature. The fair value of the Company’s investments in money market funds approximates its carrying value; such instruments are classified as Level 1 and are included in cash and cash equivalents on the accompanying condensed consolidated balance sheets. The fair value of the Company’s investments in commercial paper and short-term U.S. agency securities with original maturities of less than ninety days approximates their carrying value; such instruments are classified as Level 2 and are included in cash and cash equivalents on the accompanying condensed consolidated balance sheets. The fair value of the Company’s investments in fixed-income debt securities and commercial paper with original maturities of greater than ninety days are obtained using similar investments traded on active securities exchanges and are classified as Level 2. For fixed income securities that do not have quoted prices in active markets, the Company uses third-party vendors to price its debt securities resulting in classification as Level 2. All fixed-income securities are included in marketable securities on the accompanying condensed consolidated balance sheets. |
Cash and Cash Equivalents, Rest
Cash and Cash Equivalents, Restricted Cash and Marketable Securities | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents, Restricted Cash and Marketable Securities | Cash and Cash Equivalents, Restricted Cash and Marketable Securities Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of ninety days or less to be cash equivalents. These investments, along with cash deposited in institutional money market funds, commercial paper, regular interest bearing and non-interest bearing depository accounts, are classified as cash and cash equivalents in the accompanying condensed consolidated balance sheet. The following table summarizes the Company’s cash and cash equivalents: March 31, 2018 December 31, 2017 Recurring Fair Value Measurement (in thousands) Cash and cash equivalents: Cash $ 21,954 $ 24,092 Money market funds 400,789 251,950 Level 1 Commercial paper 7,978 9,831 Level 2 Total cash and cash equivalents $ 430,721 $ 285,873 Restricted Cash The Company is required to maintain a minimum cash reserve for debt service related to its $1.8 billion credit facility (as amended to date, the “Credit Facility”) (see Note 4). As of March 31, 2018 and December 31, 2017 , the Company’s restricted cash balance, which includes a minimum cash reserve for debt service related to the Credit Facility and the interest earned on these amounts, was $189.2 million and $102.4 million , respectively. Marketable Securities Marketable securities consist of fixed-income debt securities and commercial paper with an original maturity in excess of ninety days. These investments are classified as available-for-sale and are included in marketable securities within current assets in the accompanying condensed consolidated balance sheets. All investments are carried at fair value. Unrealized gains and losses, net of taxes, are reported as a component of other comprehensive income or loss. The specific identification method is used to determine the cost basis of the marketable securities sold. There were no material realized gains or losses on the sale of marketable securities for the three months ended March 31, 2018 and 2017 . The Company regularly monitors and evaluates the fair value of its investments to identify other-than-temporary declines in value. The Company determined that any decline in fair value of its investments is temporary at March 31, 2018 as the Company does not intend to sell these securities, and it is not likely that the Company will be required to sell the securities, before the recovery of their amortized cost basis. The following tables summarize the Company’s marketable securities: As of March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Recurring Fair Value Measurement (in thousands) Fixed-income debt securities $ 2,918 $ — $ (11 ) $ 2,907 Level 2 Commercial paper 7,156 — (10 ) 7,146 Level 2 U.S. treasury notes 9,968 — (10 ) 9,958 Level 2 Total marketable securities $ 20,042 $ — $ (31 ) $ 20,011 As of December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Recurring Fair Value Measurement (in thousands) Fixed-income debt securities $ 9,520 $ 2 $ (15 ) $ 9,507 Level 2 U.S. treasury notes 2,249 — (3 ) 2,246 Level 2 Total marketable securities $ 11,769 $ 2 $ (18 ) $ 11,753 The following table presents the contractual maturities of the Company’s marketable securities: As of March 31, 2018 As of December 31, 2017 Amortized Cost Fair Value Amortized Cost Fair Value (in thousands) Mature within one year $ 20,042 $ 20,011 $ 11,519 $ 11,504 Mature after one year and within three years — — 250 249 Total $ 20,042 $ 20,011 $ 11,769 $ 11,753 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Thales In June 2010, the Company executed a primarily fixed-price full scale development contract ("FSD") with Thales Alenia Space France ("Thales") for the design and build of satellites for Iridium ® NEXT. The total price under the FSD is $2.3 billion , and the Company expects payment obligations under the FSD to continue through 2018. As of March 31, 2018, the Company had made aggregate payments of $2.1 billion to Thales, of which $1.5 billion were financed from borrowings under the Credit Facility, and were capitalized as construction in progress within property and equipment, net in the accompanying condensed consolidated balance sheet. On March 9, 2018, the Company and Thales entered into Amendment 32 to the FSD, pursuant to which the Company and Thales unwound the changes made in Amendment 29, which allowed for the deferral of certain milestone payments totaling $100.0 million . Amendment 32 became effective on March 21, 2018 upon the receipt of proceeds from a senior unsecured notes offering as further discussed below. The Company utilized a portion of the proceeds from the senior unsecured notes to prepay in full the $59.9 million of amounts due under outstanding bills of exchange and will not utilize any new bills of exchange to defer future milestones under the FSD. In connection with the prepayment of the Thales bills of exchange, for the three months ended March 31, 2018, the Company recorded a $4.0 million loss on extinguishment of debt, included within interest expense, representing premiums paid and the write-off of unamortized debt issuance costs. The Company had no loss on extinguishment of debt recorded for the three months ended March 31, 2017. The Company’s obligations to Thales that are currently scheduled to be paid during the 12 months ending March 31, 2019 are $204.4 million . The timing of the Company’s obligations to Thales is based on current expectations regarding Thales’s manufacturing schedule and the targeted Space Exploration Technologies Corp. (“SpaceX”) launch schedule to complete the Iridium NEXT constellation in 2018. SpaceX In March 2010, the Company entered into an agreement with SpaceX to secure SpaceX as the primary launch services provider for Iridium NEXT (as amended to date, the “SpaceX Agreement”). The total price under the SpaceX Agreement for seven launches and a reflight option in the event of a launch failure is $453.1 million . The SpaceX Falcon 9 rocket is configured to carry ten Iridium NEXT satellites to orbit for each of these seven launches. In November 2016, the Company entered into an agreement for an eighth launch with SpaceX to launch five additional satellites and share the launch services with GFZ German Research Centre for Geosciences (“GFZ”). The total price under the SpaceX Agreement for the eighth launch is $61.9 million . GFZ will pay Iridium $29.8 million to share the launch services to launch NASA’s two Gravity Recovery and Climate Experiment Follow-On satellites. As of March 31, 2018 , the Company had made aggregate payments of $467.5 million to SpaceX, which were capitalized as construction in progress within property and equipment, net in the accompanying condensed consolidated balance sheet. Additionally, the Company had received $28.6 million from GFZ as of March 31, 2018 . The Company’s obligations to SpaceX that are currently scheduled to be paid during the 12 months ending March 31, 2019 are $47.5 million . The timing of the Company’s obligations to SpaceX is based on the targeted SpaceX launch schedule to complete the Iridium NEXT constellation in 2018. Iridium NEXT Launch and In-Orbit Insurance The Company is required, pursuant to its Credit Facility as further discussed below, to obtain insurance covering the launch and first 12 months of operation of the Iridium NEXT satellites. The launch and in-orbit insurance the Company has obtained contains elements, consistent with the terms of the Credit Facility, of self-insurance and deductibles, providing reimbursement only after a specified number of satellite failures. As a result, a failure of one or more of the Iridium NEXT satellites, or the occurrence of equipment failures and other related problems, could constitute an uninsured loss or require the payment of additional premiums and could harm the Company’s financial condition. Furthermore, launch and in-orbit insurance does not cover lost revenue. The total premium for the Company’s current launch and in-orbit insurance is $121.0 million ; as of March 31, 2018 , the Company had made aggregate premium payments of $91.6 million . The Company’s insurance premium obligations to be paid during the 12 months ending March 31, 2019 are $29.4 million . The timing of the majority of the Company's obligations to the insurers is based on the targeted SpaceX launch schedule to complete the Iridium NEXT constellation in 2018. Credit Facility In October 2010, the Company entered into its $1.8 billion credit facility with a syndicate of bank lenders, which was amended and restated on March 9, 2018 (as amended to date, the “Credit Facility”). As of March 31, 2018 , the Company reported an aggregate total of $1,800.0 million in borrowings, including $100.5 million of deferred financing costs, for a net balance of $1,699.5 million in borrowings from the Credit Facility in the accompanying condensed consolidated balance sheet. Ninety-five percent of the Company's obligations under the Credit Facility are insured by Bpifrance Assurance Export S.A.S. ("BPIAE"). As amended during the three months ended March 31, 2018, future principal repayments with respect to the Credit Facility balance existing at March 31, 2018 by year and in the aggregate, are as follows: Year ending December 31, Amount (In thousands) 2018 $ 72,000 2019 126,000 2020 216,000 2021 306,000 2022 306,000 Thereafter 774,000 Total credit facility commitments $ 1,800,000 Deferred financing costs 100,451 Short-term credit facility 72,000 Long-term credit facility, net $ 1,627,549 Under the terms of the Credit Facility, the Company is required to maintain a minimum cash reserve for debt service ("DSRA") of $189.0 million as of March 31, 2018, which is classified as restricted cash on the accompanying condensed consolidated balance sheet. The Credit Facility is scheduled to mature in September 2024, subject to acceleration as described below. On March 9, 2018, the Company and its lenders amended and restated the Credit Facility by supplemental agreement, which was effective on March 21, 2018 upon the receipt of proceeds from a senior unsecured notes offering, as further discussed below. As amended and restated, the Credit Facility allowed the Company to issue the Notes and (i) delayed a portion of the principal repayments scheduled under the Credit Facility for 2018, 2019 and 2020 into 2023 and 2024 pursuant to an amended repayment installment schedule, (ii) after funding of the DSRA back to $189.0 million , allows the Company access to up to $87.0 million from the DSRA in the future if its projected cash level falls below $75.0 million , and (iii) adjusted the Company’s financial covenants, including eliminating covenants that required the Company to receive cash flows from hosted payloads and adding a covenant that requires the Company to receive $200.0 million in hosting fees from Aireon LLC, the Company's primary hosted payload customer, by December 2023. In the event that (a) the Company's cash balance exceeds $140.0 million after September 30, 2019 (subject to specified exceptions) or (b) the Company receives hosting fees from Aireon, the Company would be required pursuant to the Credit Facility to use 50% of such excess cash and up to $200.0 million of hosting fees to prepay the Credit Facility. In addition, if any of the Company's senior unsecured notes remain outstanding on October 15, 2022, which is six months prior to the scheduled maturity thereof, the maturity of all amounts remaining outstanding under the Credit Facility would be accelerated from September 30, 2024 to October 15, 2022. Fees incurred related to the amended and restated Credit Facility were $10.4 million, which were added to deferred financing costs and will be amortized over the remaining term. Interest costs incurred under the Credit Facility were $21.4 million and $21.2 million for the three months ended March 31, 2018 and 2017, respectively. Scheduled semi-annual principal repayments began on April 3, 2018. During the repayment period, interest will be paid on the same date as the principal repayments. Substantially all interest costs incurred related to the Credit Facility have been capitalized during the construction period of the Iridium NEXT assets. Notes On March 21, 2018, the Company issued $360.0 million in senior unsecured notes (the "Notes") that bear interest at 10.25% per annum and mature on April 15, 2023. Interest is payable semi-annually on April 15 and October 15, beginning on October 15, 2018, and principal is repaid in full upon maturity. The proceeds of the Notes were used to prepay the outstanding Thales bills of exchange, including premiums paid, of approximately $59.9 million issued pursuant to the FSD, replenish the DSRA under the Credit Facility to $189.0 million , and will be used to pay approximately $44.4 million in Thales milestones previously expected to be satisfied by the issuance of bills of exchange, as well as to provide the Company with sufficient cash to meet its needs, including principal and interest payments under the Credit Facility. As of March 31, 2018, the Company reported an aggregate total of $360.0 million in borrowings, including $9.7 million of deferred financing costs, for a net balance of $350.3 million in borrowings from the Notes in the accompanying condensed consolidated balance sheet. The Notes contain covenant requirements that apply to certain permitted financing actions, and are no more restrictive than the covenants in the Credit Facility. The Company was in compliance with all covenants as of March 31, 2018. The Company believes its liquidity sources will provide sufficient funds for it to meet its liquidity requirements for at least the next 12 months. Contingencies From time to time, in the normal course of business, the Company is party to various pending claims and lawsuits. The Company is not aware of any such actions that it would expect to have a material adverse impact on its business, financial results or financial condition. |
Boeing Insourcing Agreement
Boeing Insourcing Agreement | 3 Months Ended |
Mar. 31, 2018 | |
Boeing Insourcing Agreement [Abstract] | |
Boeing Insourcing Agreement | Boeing Insourcing Agreement On January 3, 2017, the Company hired the majority of the employees and third party contractors who were responsible for the operations and maintenance of the Company’s satellite constellation and ground infrastructure pursuant to an Insourcing Agreement with The Boeing Company. The Company paid Boeing $5.5 million , of which $2.75 million was paid in each of December 2016 and December 2017. As a result, the Company and Boeing terminated their previous Operations and Maintenance Agreement (“O&M Agreement”) and Iridium NEXT Support Service Agreement and entered into a new Development Services Agreement (“DSA”) with a $6.0 million minimum annual commitment through 2021 . Boeing no longer has a unilateral right to commence the de-orbit of the Company’s first-generation satellites. The acquisition of this assembled workforce was recorded as a definite-lived intangible asset in January 2017 and is being amortized over an estimated useful life of seven years . Additionally, by terminating the O&M Agreement, the Company recognized a $14.2 million gain in the first quarter of 2017, consisting of (1) the derecognition of a purchase accounting liability created when GHL Acquisition Corp. acquired Iridium Holdings LLC in 2009 related to the fair value of the contractual arrangement with Boeing as of that date, and (2) the remainder of a credit resulting from a July 2010 Boeing contract amendment. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In May 2017, the Company’s stockholders approved the amendment and restatement of the Company's 2015 Equity Incentive Plan (as so amended and restated, the “Amended 2015 Plan”), primarily to increase the number of shares available under the plan. As such, the Company registered with the SEC an additional 5,199,239 shares of common stock made available for issuance pursuant to the Amended 2015 Plan, bringing the total to 28,402,248 shares registered. Through March 31, 2018, the remaining aggregate number of shares of the Company's common stock available for future grants under the Amended 2015 plan was 13,281,967 . The Amended 2015 Plan provides for the grant of stock-based awards, including nonqualified stock options, incentive stock options, restricted stock, restricted stock units ("RSUs"), stock appreciation rights and other equity securities as incentives and rewards for employees, consultants and non-employee directors of the Company and its affiliated entities. The number of shares of common stock available for issuance under the Amended 2015 Plan is reduced by (i) one share for each share of common stock issued pursuant to an appreciation award, such as a stock option or stock appreciation right with an exercise or strike price of at least 100% of the fair market value of the underlying common stock on the date of grant, and (ii) 1.8 shares for each share of common stock issued pursuant to any stock award that is not an appreciation award, also known as a “full value award.” The Amended 2015 Plan allows the Company to utilize a broad array of equity incentives and performance cash incentives in order to secure and retain the services of its employees, directors and consultants, and to provide long-term incentives that align the interests of its employees, directors and consultants with the interests of the Company’s stockholders. The Company accounts for stock-based compensation at fair value. Stock Option Awards The fair value of stock options is determined at the grant date using the Black-Scholes option pricing model. The stock option awards granted to employees generally (i) have a term of ten years, (ii) vest over a four -year period with 25% vesting after the first year of service and the remainder vesting ratably on a quarterly basis thereafter, (iii) are contingent upon employment on the vesting date, and (iv) have an exercise price equal to the fair value of the underlying shares at the date of grant. During the three months ended March 31, 2018 and 2017, the Company granted approximately 161,000 and 40,000 stock options, respectively, to its employees, with an estimated aggregate grant date fair value of $0.8 million and $0.2 million , respectively. Restricted Stock Units The RSUs granted to employees for service generally vest over a four -year period, with 25% vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. The RSUs granted to non-employee directors generally vest in full on the first anniversary of the grant date. Some RSUs granted to employees for performance vest upon the completion of defined performance goals, subject to continued employment. The Company’s RSUs are generally classified as equity awards because the RSUs will be paid in the Company's common stock upon vesting. The related compensation expense is recognized over the service period and is based on the grant date fair value of the Company's common stock and the number of shares expected to vest. The fair value of the awards is not remeasured at the end of each reporting period. The awards do not carry voting rights until they are vested and released in accordance with the terms of the award. Service-Based RSUs The majority of the annual compensation the Company provides to members of its board of directors is paid in the form of RSUs. In addition, certain members of the Company's board of directors elect to receive the remainder of their annual compensation, or a portion thereof, in the form of RSUs. An aggregate amount of approximately 110,000 and 96,000 service-based RSUs were granted to its directors as a result of these payments and elections during the three months ended March 31, 2018 and 2017, respectively, with an estimated grant date fair value of $1.3 million and $1.0 million , respectively. During the three months ended March 31, 2018 and 2017, the Company granted approximately 900,000 and 964,000 service-based RSUs, respectively, to its employees, with an estimated aggregate grant date fair value of $10.7 million and $8.5 million , respectively. Performance-Based RSUs In March 2018 and 2017, the Company granted approximately 474,000 and 1,190,000 performance-based RSUs to the Company’s executives and employees (the “Bonus RSUs”), with an estimated grant date fair value of $5.6 million and $10.5 million , respectively. Vesting of the Bonus RSUs is and was dependent upon the Company’s achievement of defined performance goals over a one -year period (fiscal year 2018 for the 2018 Bonus RSUs and fiscal year 2017 for the 2017 Bonus RSUs). The Company records stock-based compensation expense related to performance-based RSUs when it is considered probable that the performance conditions will be met. Management believes it is probable that certain of the 2018 Bonus RSUs will vest. The level of achievement, if any, of performance goals will be determined by the compensation committee of the Company’s board of directors and, if such goals are achieved, the 2018 Bonus RSUs will vest, subject to continued employment, in March 2019. A portion of the 2017 Bonus RSUs vested in March 2018 upon the determination of the level of achievement of the performance goals. Additionally, during 2018 and 2017, the Company awarded approximately 134,000 and 173,000 performance-based RSUs, respectively, to the Company’s executives (the “Executive RSUs”). The estimated aggregate grant date fair value of the Executive RSUs was $1.6 million for the 2018 grants and $1.5 million for the 2017 grants. Vesting of the Executive RSUs is and was dependent upon the Company’s achievement of defined performance goals over a two -year period (fiscal years 2018 and 2019 for the Executive RSUs granted in 2018 and fiscal years 2017 and 2018 for the Executive RSUs granted in 2017). Management believes it is probable that the Executive RSUs will vest at least in part. The vesting of Executive RSUs will ultimately range from 0 % to 150% of the number of shares underlying the Executive RSUs granted based on the level of achievement of the performance goals. If the Company achieves the performance goals, 50% of the Executive RSUs will vest on the second anniversary of the grant date, and the remaining 50% will vest on the third anniversary of the grant date, in each case subject to the executive's continued service as of the vesting date. |
Equity Transactions
Equity Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Equity Transactions | Equity Transactions Preferred Stock The Company is authorized to issue 2.0 million shares of preferred stock with a par value of $0.0001 per share. As described below, the Company issued 1.0 million shares of preferred stock in the fourth quarter of 2012 and 0.5 million shares of preferred stock in the second quarter of 2014. The remaining 0.5 million authorized shares of preferred stock remain undesignated and unissued as of March 31, 2018 . Series A Cumulative Perpetual Convertible Preferred Stock In the fourth quarter of 2012, the Company issued 1.0 million shares of its 7.00% Series A Cumulative Perpetual Convertible Preferred Stock (the "Series A Preferred Stock") in a private offering. During the three months ended March 31, 2018, the Company's daily volume-weighted average stock price remained at or above $12.26 per share for a period of 20 out of 30 trading days, thereby allowing for the conversion of the Series A Preferred Stock at the election of the Company. On March 20, 2018, the Company converted all outstanding shares of its Series A Preferred Stock into shares of common stock, resulting in the issuance of 10,599,974 shares of common stock. During the three months ended March 31, 2018, the Company declared and paid all current and cumulative dividends to holders of record of Series A Preferred Stock as of March 8, 2018. As such, during the three months ended March 31, 2018, the Company paid cash dividends of $7.0 million to the holders of the Series A Preferred Stock. During the three months ended March 31, 2017, the Company paid cash dividends of $1.8 million to holders of the Series A Preferred Stock. Series B Cumulative Perpetual Convertible Preferred Stock In May 2014, the Company issued 500,000 shares of its 6.75% Series B Cumulative Perpetual Convertible Preferred Stock (the "Series B Preferred Stock") in an underwritten public offering at a price to the public of $250 per share. The purchase price received by the Company, equal to $242.50 per share, reflected an underwriting discount of $7.50 per share. The Company received proceeds of $120.8 million from the sale of the Series B Preferred Stock, net of the $3.8 million underwriter discount and $0.4 million of offering costs. As of March 31, 2018 , there were 500,000 shares of Series B Preferred Stock outstanding. Holders of Series B Preferred Stock are entitled to receive cumulative cash dividends at a rate of 6.75% per annum of the $250 liquidation preference per share (equivalent to an annual rate of $16.875 per share). Dividends are payable quarterly in arrears on each March 15, June 15, September 15 and December 15. The Series B Preferred Stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. The Series B Preferred Stock ranks senior to the Company’s common stock with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding-up. Holders of Series B Preferred Stock generally have no voting rights except for limited voting rights if the Company fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in other specified circumstances. Holders of Series B Preferred Stock may convert some or all of their outstanding Series B Preferred Stock at an initial conversion rate of 33.456 shares of common stock per $250 liquidation preference, which is equivalent to an initial conversion price of approximately $7.47 per share of common stock (subject to adjustment in certain events). In connection with the conversion of the Series A Preferred Stock described above, the Company declared and paid all current and cumulative dividends to holders of record of Series B Preferred Stock as of March 8, 2018. As such, during the three months ended March 31, 2018, the Company paid cash dividends of $8.4 million to holders of the Series B Preferred Stock. In compliance with the Credit Facility, subsequent to the dividend payment, the Company began the planned suspension of dividends to holders of the Series B Preferred Stock for five quarters, beginning with the dividend payment that would otherwise be required to be paid in June 2018. During the three months ended March 31, 2017, the Company paid cash dividends of $2.1 million to holders of the Series B Preferred Stock. On or after May 15, 2019, the Company may, at its option, convert some or all of the Series B Preferred Stock into the number of shares of common stock that are issuable at the then-applicable conversion rate, subject to specified conditions. In the event of certain specified fundamental changes, holders of the Series B Preferred Stock will have the right to convert some or all of their shares of Series B Preferred Stock into the greater of (i) a number of shares of the Company’s common stock as subject to adjustment plus the make-whole premium, if any, and (ii) a number of shares of the Company’s common stock equal to the lesser of (a) the liquidation preference divided by the market value of the Company’s common stock on the effective date of such fundamental change and (b) 81.9672 (subject to adjustment). In certain circumstances, the Company may elect to cash settle any conversions in connection with a fundamental change. Any suspended dividends are required to be paid prior to conversion by the Company. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Effective January 1, 2018, the Company adopted ASU No. 2014-09. Under the new standard, the Company performs the following steps to determine the amount of revenue to be recognized: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the standard using the modified retrospective method with a cumulative effect adjustment recorded to opening retained earnings. This method requires application of the new guidance at the beginning of the earliest comparative period presented for revenue agreements that are not substantially complete as of the date of adoption. The Company has only applied the guidance to contracts that were not complete as of January 1, 2018. The Company does not disclose the value of unsatisfied performance obligations because the majority of its contracts have expected lengths of one year or less. The Company has not retrospectively restated contracts with modifications prior to the earliest period presented, but instead has reflected the aggregate effect of all modifications at transition. The Company derives its revenue primarily as a wholesaler of satellite communications products and services. The primary types of revenue include (i) service revenue (access and usage-based airtime fees), (ii) subscriber equipment revenue, and (iii) revenue generated by providing engineering and support services to commercial and government customers. Pursuant to wholesale agreements, the Company sells its products and services to service providers who, in turn, sell the products and services to other distributors or directly to the end users. Contracts with multiple performance obligations. At times, the Company sells services and equipment through arrangements that bundle equipment, airtime and other services. For these revenue arrangements when the Company sells services and equipment in bundled arrangements and determines that it has separate distinct performance obligations, the Company allocates the bundled contract price among the various performance obligations based on each deliverable’s stand-alone selling price. If the stand-alone selling price is not directly observable, the Company estimates the amount to be allocated for each performance obligation based on observable market transactions or the residual approach. When the Company determines the performance obligations are not distinct, the Company recognizes revenue on a combined basis as the last obligation is satisfied. To the extent the Company's contracts include variable consideration, the transaction price includes both fixed and variable consideration. The variable consideration contained within the Company's contracts with customers may include discounts, credits and other similar items. When a contract includes variable consideration, the Company evaluates the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, the Company includes the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimates are updated at each reporting date. Service revenue sold on a stand-alone basis. Service revenue is generated from the Company’s service providers through usage of its satellite system and through fixed monthly access fees per user charged to service providers. Revenue for usage is recognized when usage occurs. Revenue for fixed-per-user access fees is recognized over the usage period in which the services are provided to the end user. The Company sells prepaid services in the form of e-vouchers and prepaid cards. A liability is established equal to the cash paid upon purchase for the e-voucher or prepaid card. Under the new standard, the Company (i) recognizes revenue from the prepaid services upon the use of the e-voucher or prepaid card by the customer and (ii) estimates the expected revenue that will expire unused on an ongoing basis and recognizes this revenue in a manner consistent with the usage period. The Company does not offer refunds for unused prepaid services. Services sold to the U.S. government. The Company provides airtime and airtime support to U.S. government and other authorized customers pursuant to the Enhanced Mobile Satellite Services (“EMSS”) contract managed by the Defense Information Systems Agency (“DISA”). Effective October 22, 2013, the Company executed a five -year EMSS contract, managed by DISA. Under the terms of this agreement, authorized customers continue to utilize airtime services, provided through the U.S. Department of Defense’s (“DoD”) dedicated gateway. These services include unlimited global secure and unsecure voice, low and high-speed data, paging, broadcast and Distributed Tactical Communications Services (“DTCS”) services for an unlimited number of DoD and other federal subscribers. The fixed-price rate for the remaining contract year, which runs through October 21, 2018, is $88 million per year. Under this contract, revenue is based on the annual fee for the fixed-price contract with unlimited subscribers, and is recognized on a straight-line basis over each contractual year. The U.S. government purchases its subscriber equipment from third-party distributors and not directly from the Company. The following table summarizes the Company’s services revenue: Three Months Ended March 31, 2018 2017 (in thousands) Commercial voice and data services $ 43,730 $ 41,646 Commercial IoT data services 19,783 16,930 Hosted payload and other data services 4,229 1,197 Government services 22,000 22,000 Total services $ 89,742 $ 81,773 Subscriber equipment sold on a stand-alone basis. The Company recognizes subscriber equipment sales and the related costs at a point in time when title to the equipment (and the risks and rewards of ownership) passes to the customer, typically upon shipment. Customers do not have rights of return without prior consent from the Company. Government engineering and support services. The Company provides maintenance services to the U.S. government’s dedicated gateway. This revenue is recognized ratably over the periods in which the services are provided; the related costs are expensed as incurred. Other government and commercial engineering and support services. The Company also provides engineering services to assist customers in developing new technologies for use on the Company’s satellite system. The revenue associated with fixed fee contracts is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying its performance obligations. The Company does not include purchases of goods from a third party in its evaluation of costs incurred. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue on cost-plus-fixed-fee contracts is recognized to the extent of estimated costs incurred plus the applicable fees earned. The Company considers fixed fees under cost-plus-fixed-fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract. The following table summarizes the Company’s engineering and support services revenue: Three Months Ended March 31, 2018 2017 (in thousands) Commercial $ 81 $ 471 Government 3,543 5,068 Total $ 3,624 $ 5,539 The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheet. The Company bills amounts under its agreed-upon contractual terms at periodic intervals (for services), upon shipment (for equipment), or upon achievement of contractual milestones or as work progresses (for engineering and support services). Billing may occur subsequent to revenue recognition, resulting in accounts receivable (contract assets). The Company may also receive payments from customers before revenue is recognized, resulting in deferred revenue (contract liabilities). The Company recognized revenue that was previously recorded as deferred revenue in the amounts of $8.5 million and $7.3 million for the three months ended March 31, 2018 and 2017, respectively. The Company has also recorded costs of obtaining contracts expected to be recovered in prepaid expenses and other assets (contract assets), that are not separately disclosed on the condensed consolidated balance sheets. The commissions are recognized over the estimated prepaid usage period. The contract assets not separately disclosed are as follows: March 31, 2018 December 31, 2017 (in thousands) Contract Assets: Commissions 1,126 1,555 Other Contract Costs 3,883 3,753 The primary impact of adopting ASU 2014-09 relates to the Company’s prepaid service revenue and associated breakage. Under the new standard, the Company now estimates the expected revenue that will expire unused on an ongoing basis and recognizes this revenue in a manner consistent with the usage period. Upon adoption, the contract liability - deferred revenue, associated with prepaid service revenue, was reduced by approximately $15.7 million as a result of the change to include a breakage estimate over the usage period. Adopting the new standard had an immaterial impact on the Company’s financial statements. The impact of the implementation of the new revenue standard on the Company's condensed consolidated balance sheet, as compared to accounting under prior revenue guidance (Accounting Standards Codification ("ASC") Topic 605), was as follows: As of March 31, 2018 As reported Adjustment As adjusted (in thousands) Prepaid expenses and other current assets 26,040 483 26,523 Deferred revenue 19,357 19,526 38,883 Deferred revenue, net of current portion 54,564 (2,914 ) 51,650 Other long-term liabilities 4,188 (3,830 ) 358 Retained earnings 526,568 (12,299 ) 514,269 The impact of the implementation of the new standard on the Company's condensed consolidated statements of operations and comprehensive income was as follows: For the three months ended March 31, 2018 As reported Adjustment As adjusted (in thousands) Service revenue 89,742 (927 ) 88,815 Cost of services 18,952 (100 ) 18,852 Income before income taxes 15,311 (827 ) 14,484 Income tax expense (3,839 ) 266 (3,573 ) Net income 11,472 (561 ) 10,911 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act of 2017 (“Tax Act”). SAB 118 was effective for reporting periods that include December 22, 2017. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company made reasonable estimates of the effects of the Tax Act and recorded provisional amounts in its financial statements as of and for the year ended December 31, 2017, resulting in a net tax benefit of $150.9 million in that period. As the Company collects and prepares the necessary data, and interprets the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, it may make adjustments to the provisional amounts. Those adjustments may materially impact the Company's provision for income taxes and effective tax rate in the period in which the adjustments are made. To date, management has not made any such adjustments to the provisional amounts for the remeasurement of deferred tax assets and liabilities and the deemed repatriation of certain foreign subsidiary earnings. The accounting for the tax effects of the Tax Act will be completed during 2018. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The Company calculates basic net income per share by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share takes into account the effect of potential dilutive common shares when the effect is dilutive. The effect of potential dilutive common shares, including common stock issuable upon exercise of outstanding stock options, is computed using the treasury stock method. The effect of potential dilutive common shares from the conversion of outstanding convertible preferred securities is computed using the as-if converted method at the stated conversion rate. As noted above, the Series A Preferred Stock was converted into shares of common stock on March 20, 2018. The RSUs granted to members of the Company’s board of directors contain non-forfeitable rights to dividends and therefore are considered to be participating securities in periods of net income. As a result, the calculation of basic and diluted net income per share excludes net income attributable to the unvested RSUs granted to the Company’s board of directors from the numerator and excludes the impact of the unvested RSUs granted to the Company’s board of directors from the denominator. The computations of basic and diluted net income per share are as follows: Three Months Ended March 31, 2018 2017 (in thousands, except per share data) Numerator: Net income attributable to common stockholders (numerator for basic net income per share) $ 7,613 $ 34,089 Net income allocated to participating securities (8 ) (35 ) Numerator for basic net income per share 7,605 34,054 Dividends on Series A Preferred Stock, excluding cumulative dividends — 1,750 Dividends on Series B Preferred Stock, excluding cumulative dividends — 2,109 Numerator for diluted net income per share $ 7,605 $ 37,913 Denominator: Denominator for basic net income per share - weighted average outstanding common shares 100,686 96,853 Dilutive effect of stock options 2,172 1,136 Dilutive effect of contingently issuable shares 1,487 1,051 Dilutive effect of Series A Preferred Stock — 10,602 Dilutive effect of Series B Preferred Stock — 16,728 Denominator for diluted net income per share 104,345 126,370 Net income per share attributable to common stockholders - basic $ 0.08 $ 0.35 Net income per share attributable to common stockholders - diluted $ 0.07 $ 0.30 For the three months ended March 31, 2018 , options to purchase 0.3 million shares of common stock were not included in the computation of diluted net income per share, as the effect would be anti-dilutive and 0.3 million unvested performance-based RSUs were not included in the computation of basic and diluted net income per share, as certain performance criteria had not been satisfied. For the three months ended March 31, 2018, the impact of the preferred stock was anti-dilutive and the shares were not included in the computation of diluted net income per share. For the three months ended March 31, 2017 , options to purchase 0.2 million shares of common stock were not included in the computation of diluted net income per share, as the effect would be anti-dilutive. For the three months ended March 31, 2017 , 1.4 million unvested non-performance based RSUs were not included in the computation of basic net income per share and excluded from the computation of diluted net income per share, as the effect would be anti-dilutive, and 1.5 million unvested performance-based RSUs were not included in the computation of basic and diluted net income per share, as certain performance criteria had not been satisfied. |
Significant Accounting Polici16
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Adopted Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), that supersedes nearly all existing revenue recognition guidance under generally accepted accounting principles in the United States (“U.S. GAAP”). See footnote 8 for more detail on the Company's revenue recognition. Effective January 1, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 320): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 reduces the existing diversity in practice in financial reporting across all industries by clarifying certain existing principles, including providing additional guidance on how and what an entity should consider in determining the classification of certain cash flows. The adoption of ASU 2016-15 did not have a material effect on the Company’s consolidated financial statements. Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 requires lessees to record most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current accounting. The Company intends to apply the new guidance on the effective date of January 1, 2019. Reporting organizations are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company established a project team in order to analyze the effect of the standard on its leases by reviewing its current accounting policies to identify potential differences which would result from applying the requirements of the new standard to its leases. The Company currently anticipates utilizing the practical expedient to address all current operating leases for which it is the lessor. The Company is currently evaluating the effect ASU 2016-02 may have on its future condensed consolidated financial statements and related disclosures, but a lease liability and related right-of-use asset will be recognized for operating lease arrangements where the Company is the lessee. |
Fair Value Measurements | Fair Value Measurements The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. This determination requires significant judgments to be made by management of the Company. The instruments identified as subject to fair value measurements on a recurring basis are cash and cash equivalents, marketable securities, prepaid expenses and other current assets, accounts receivable, accounts payable and accrued expenses and other current liabilities. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. The fair value hierarchy consists of the following tiers: • Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying values of short-term financial instruments (primarily cash and cash equivalents, prepaid expenses and other current assets, accounts receivable, accounts payable, and accrued expenses and other current liabilities) approximate their fair values because of their short-term nature. The fair value of the Company’s investments in money market funds approximates its carrying value; such instruments are classified as Level 1 and are included in cash and cash equivalents on the accompanying condensed consolidated balance sheets. The fair value of the Company’s investments in commercial paper and short-term U.S. agency securities with original maturities of less than ninety days approximates their carrying value; such instruments are classified as Level 2 and are included in cash and cash equivalents on the accompanying condensed consolidated balance sheets. The fair value of the Company’s investments in fixed-income debt securities and commercial paper with original maturities of greater than ninety days are obtained using similar investments traded on active securities exchanges and are classified as Level 2. For fixed income securities that do not have quoted prices in active markets, the Company uses third-party vendors to price its debt securities resulting in classification as Level 2. All fixed-income securities are included in marketable securities on the accompanying condensed consolidated balance sheets. |
Revenue Recognition | Subscriber equipment sold on a stand-alone basis. The Company recognizes subscriber equipment sales and the related costs at a point in time when title to the equipment (and the risks and rewards of ownership) passes to the customer, typically upon shipment. Customers do not have rights of return without prior consent from the Company. Government engineering and support services. The Company provides maintenance services to the U.S. government’s dedicated gateway. This revenue is recognized ratably over the periods in which the services are provided; the related costs are expensed as incurred. Other government and commercial engineering and support services. The Company also provides engineering services to assist customers in developing new technologies for use on the Company’s satellite system. The revenue associated with fixed fee contracts is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying its performance obligations. The Company does not include purchases of goods from a third party in its evaluation of costs incurred. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue on cost-plus-fixed-fee contracts is recognized to the extent of estimated costs incurred plus the applicable fees earned. The Company considers fixed fees under cost-plus-fixed-fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheet. The Company bills amounts under its agreed-upon contractual terms at periodic intervals (for services), upon shipment (for equipment), or upon achievement of contractual milestones or as work progresses (for engineering and support services). Billing may occur subsequent to revenue recognition, resulting in accounts receivable (contract assets). The Company may also receive payments from customers before revenue is recognized, resulting in deferred revenue (contract liabilities). The Company recognized revenue that was previously recorded as deferred revenue in the amounts of $8.5 million and $7.3 million for the three months ended March 31, 2018 and 2017, respectively. The Company has also recorded costs of obtaining contracts expected to be recovered in prepaid expenses and other assets (contract assets), that are not separately disclosed on the condensed consolidated balance sheets. The commissions are recognized over the estimated prepaid usage period. Effective January 1, 2018, the Company adopted ASU No. 2014-09. Under the new standard, the Company performs the following steps to determine the amount of revenue to be recognized: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the standard using the modified retrospective method with a cumulative effect adjustment recorded to opening retained earnings. This method requires application of the new guidance at the beginning of the earliest comparative period presented for revenue agreements that are not substantially complete as of the date of adoption. The Company has only applied the guidance to contracts that were not complete as of January 1, 2018. The Company does not disclose the value of unsatisfied performance obligations because the majority of its contracts have expected lengths of one year or less. The Company has not retrospectively restated contracts with modifications prior to the earliest period presented, but instead has reflected the aggregate effect of all modifications at transition. The Company derives its revenue primarily as a wholesaler of satellite communications products and services. The primary types of revenue include (i) service revenue (access and usage-based airtime fees), (ii) subscriber equipment revenue, and (iii) revenue generated by providing engineering and support services to commercial and government customers. Pursuant to wholesale agreements, the Company sells its products and services to service providers who, in turn, sell the products and services to other distributors or directly to the end users. Contracts with multiple performance obligations. At times, the Company sells services and equipment through arrangements that bundle equipment, airtime and other services. For these revenue arrangements when the Company sells services and equipment in bundled arrangements and determines that it has separate distinct performance obligations, the Company allocates the bundled contract price among the various performance obligations based on each deliverable’s stand-alone selling price. If the stand-alone selling price is not directly observable, the Company estimates the amount to be allocated for each performance obligation based on observable market transactions or the residual approach. When the Company determines the performance obligations are not distinct, the Company recognizes revenue on a combined basis as the last obligation is satisfied. To the extent the Company's contracts include variable consideration, the transaction price includes both fixed and variable consideration. The variable consideration contained within the Company's contracts with customers may include discounts, credits and other similar items. When a contract includes variable consideration, the Company evaluates the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, the Company includes the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimates are updated at each reporting date. Service revenue sold on a stand-alone basis. Service revenue is generated from the Company’s service providers through usage of its satellite system and through fixed monthly access fees per user charged to service providers. Revenue for usage is recognized when usage occurs. Revenue for fixed-per-user access fees is recognized over the usage period in which the services are provided to the end user. The Company sells prepaid services in the form of e-vouchers and prepaid cards. A liability is established equal to the cash paid upon purchase for the e-voucher or prepaid card. Under the new standard, the Company (i) recognizes revenue from the prepaid services upon the use of the e-voucher or prepaid card by the customer and (ii) estimates the expected revenue that will expire unused on an ongoing basis and recognizes this revenue in a manner consistent with the usage period. The Company does not offer refunds for unused prepaid services. Services sold to the U.S. government. The Company provides airtime and airtime support to U.S. government and other authorized customers pursuant to the Enhanced Mobile Satellite Services (“EMSS”) contract managed by the Defense Information Systems Agency (“DISA”). Effective October 22, 2013, the Company executed a five -year EMSS contract, managed by DISA. Under the terms of this agreement, authorized customers continue to utilize airtime services, provided through the U.S. Department of Defense’s (“DoD”) dedicated gateway. These services include unlimited global secure and unsecure voice, low and high-speed data, paging, broadcast and Distributed Tactical Communications Services (“DTCS”) services for an unlimited number of DoD and other federal subscribers. The fixed-price rate for the remaining contract year, which runs through October 21, 2018, is $88 million per year. Under this contract, revenue is based on the annual fee for the fixed-price contract with unlimited subscribers, and is recognized on a straight-line basis over each contractual year. The U.S. government purchases its subscriber equipment from third-party distributors and not directly from the Company. The primary impact of adopting ASU 2014-09 relates to the Company’s prepaid service revenue and associated breakage. Under the new standard, the Company now estimates the expected revenue that will expire unused on an ongoing basis and recognizes this revenue in a manner consistent with the usage period. Upon adoption, the contract liability - deferred revenue, associated with prepaid service revenue, was reduced by approximately $15.7 million as a result of the change to include a breakage estimate over the usage period. |
Cash and Cash Equivalents, Re17
Cash and Cash Equivalents, Restricted Cash and Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Summary of Company's Cash and Cash Equivalents | The following table summarizes the Company’s cash and cash equivalents: March 31, 2018 December 31, 2017 Recurring Fair Value Measurement (in thousands) Cash and cash equivalents: Cash $ 21,954 $ 24,092 Money market funds 400,789 251,950 Level 1 Commercial paper 7,978 9,831 Level 2 Total cash and cash equivalents $ 430,721 $ 285,873 |
Summary of Company's Marketable Securities | The following tables summarize the Company’s marketable securities: As of March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Recurring Fair Value Measurement (in thousands) Fixed-income debt securities $ 2,918 $ — $ (11 ) $ 2,907 Level 2 Commercial paper 7,156 — (10 ) 7,146 Level 2 U.S. treasury notes 9,968 — (10 ) 9,958 Level 2 Total marketable securities $ 20,042 $ — $ (31 ) $ 20,011 As of December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Recurring Fair Value Measurement (in thousands) Fixed-income debt securities $ 9,520 $ 2 $ (15 ) $ 9,507 Level 2 U.S. treasury notes 2,249 — (3 ) 2,246 Level 2 Total marketable securities $ 11,769 $ 2 $ (18 ) $ 11,753 |
Summary of Contractual Maturities of Company's Marketable Securities | The following table presents the contractual maturities of the Company’s marketable securities: As of March 31, 2018 As of December 31, 2017 Amortized Cost Fair Value Amortized Cost Fair Value (in thousands) Mature within one year $ 20,042 $ 20,011 $ 11,519 $ 11,504 Mature after one year and within three years — — 250 249 Total $ 20,042 $ 20,011 $ 11,769 $ 11,753 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Credit Facility future principal payments | uture principal repayments with respect to the Credit Facility balance existing at March 31, 2018 by year and in the aggregate, are as follows: Year ending December 31, Amount (In thousands) 2018 $ 72,000 2019 126,000 2020 216,000 2021 306,000 2022 306,000 Thereafter 774,000 Total credit facility commitments $ 1,800,000 Deferred financing costs 100,451 Short-term credit facility 72,000 Long-term credit facility, net $ 1,627,549 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Company's service revenue | The following table summarizes the Company’s services revenue: Three Months Ended March 31, 2018 2017 (in thousands) Commercial voice and data services $ 43,730 $ 41,646 Commercial IoT data services 19,783 16,930 Hosted payload and other data services 4,229 1,197 Government services 22,000 22,000 Total services $ 89,742 $ 81,773 The following table summarizes the Company’s engineering and support services revenue: Three Months Ended March 31, 2018 2017 (in thousands) Commercial $ 81 $ 471 Government 3,543 5,068 Total $ 3,624 $ 5,539 |
Schedule of recognized contract costs | The contract assets not separately disclosed are as follows: March 31, 2018 December 31, 2017 (in thousands) Contract Assets: Commissions 1,126 1,555 Other Contract Costs 3,883 3,753 |
Schedule of impact of implementation of new revenue standard | The impact of the implementation of the new revenue standard on the Company's condensed consolidated balance sheet, as compared to accounting under prior revenue guidance (Accounting Standards Codification ("ASC") Topic 605), was as follows: As of March 31, 2018 As reported Adjustment As adjusted (in thousands) Prepaid expenses and other current assets 26,040 483 26,523 Deferred revenue 19,357 19,526 38,883 Deferred revenue, net of current portion 54,564 (2,914 ) 51,650 Other long-term liabilities 4,188 (3,830 ) 358 Retained earnings 526,568 (12,299 ) 514,269 The impact of the implementation of the new standard on the Company's condensed consolidated statements of operations and comprehensive income was as follows: For the three months ended March 31, 2018 As reported Adjustment As adjusted (in thousands) Service revenue 89,742 (927 ) 88,815 Cost of services 18,952 (100 ) 18,852 Income before income taxes 15,311 (827 ) 14,484 Income tax expense (3,839 ) 266 (3,573 ) Net income 11,472 (561 ) 10,911 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computations of Basic and Diluted Net Income Per Share | The computations of basic and diluted net income per share are as follows: Three Months Ended March 31, 2018 2017 (in thousands, except per share data) Numerator: Net income attributable to common stockholders (numerator for basic net income per share) $ 7,613 $ 34,089 Net income allocated to participating securities (8 ) (35 ) Numerator for basic net income per share 7,605 34,054 Dividends on Series A Preferred Stock, excluding cumulative dividends — 1,750 Dividends on Series B Preferred Stock, excluding cumulative dividends — 2,109 Numerator for diluted net income per share $ 7,605 $ 37,913 Denominator: Denominator for basic net income per share - weighted average outstanding common shares 100,686 96,853 Dilutive effect of stock options 2,172 1,136 Dilutive effect of contingently issuable shares 1,487 1,051 Dilutive effect of Series A Preferred Stock — 10,602 Dilutive effect of Series B Preferred Stock — 16,728 Denominator for diluted net income per share 104,345 126,370 Net income per share attributable to common stockholders - basic $ 0.08 $ 0.35 Net income per share attributable to common stockholders - diluted $ 0.07 $ 0.30 |
Cash and Cash Equivalents, Re21
Cash and Cash Equivalents, Restricted Cash and Marketable Securities - Summary of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents: | ||
Cash | $ 21,954 | $ 24,092 |
Total cash and cash equivalents | 430,721 | 285,873 |
Level 1 | ||
Cash and cash equivalents: | ||
Money market funds | 400,789 | 251,950 |
Level 2 | ||
Cash and cash equivalents: | ||
Commercial paper | $ 7,978 | $ 9,831 |
Cash and Cash Equivalents, Re22
Cash and Cash Equivalents, Restricted Cash and Marketable Securities - Narrative (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Abstract] | ||
Line of credit maximum capacity | $ 1,800,000,000 | |
Restricted cash | $ 189,182,000 | $ 102,384,000 |
Cash and Cash Equivalents, Re23
Cash and Cash Equivalents, Restricted Cash and Marketable Securities - Summary of Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents: | ||
Available-for-sale Securities, Amortized Cost | $ 20,042 | $ 11,769 |
Available-for-sale Securities, Gross Unrealized Gains | 0 | 2 |
Available-for-sale Securities, Gross Unrealized Losses | (31) | (18) |
Available-for-sale Securities, Estimated Fair Value | 20,011 | 11,753 |
Level 2 | U.S. treasury notes | ||
Cash and cash equivalents: | ||
Available-for-sale Securities, Amortized Cost | 9,968 | 2,249 |
Available-for-sale Securities, Gross Unrealized Gains | 0 | 0 |
Available-for-sale Securities, Gross Unrealized Losses | (10) | (3) |
Available-for-sale Securities, Estimated Fair Value | 9,958 | 2,246 |
Level 2 | Fixed-income debt securities | ||
Cash and cash equivalents: | ||
Available-for-sale Securities, Amortized Cost | 2,918 | 9,520 |
Available-for-sale Securities, Gross Unrealized Gains | 0 | 2 |
Available-for-sale Securities, Gross Unrealized Losses | (11) | (15) |
Available-for-sale Securities, Estimated Fair Value | 2,907 | $ 9,507 |
Level 2 | Commercial Paper | ||
Cash and cash equivalents: | ||
Available-for-sale Securities, Amortized Cost | 7,156 | |
Available-for-sale Securities, Gross Unrealized Gains | 0 | |
Available-for-sale Securities, Gross Unrealized Losses | (10) | |
Available-for-sale Securities, Estimated Fair Value | $ 7,146 |
Cash and Cash Equivalents, Re24
Cash and Cash Equivalents, Restricted Cash and Marketable Securities - Summary of Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Marketable securities: | ||
Mature within one year - Amortized Cost | $ 20,042 | $ 11,519 |
Mature after one year and within three years - Amortized Cost | 0 | 250 |
Available-for-sale Securities, Amortized Cost | 20,042 | 11,769 |
Mature within one year - Fair Value | 20,011 | 11,504 |
Mature after one year and within three years - Fair Value | 0 | 249 |
Total - Fair Value | $ 20,011 | $ 11,753 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Mar. 21, 2018USD ($) | Nov. 30, 2016USD ($)Satellite | Jun. 30, 2010USD ($) | Mar. 31, 2010USD ($)LaunchSatellite | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Extinguishment of the Thales bills of exchange | $ 59,936,000 | $ 0 | ||||
GFZ German Research Centre for Geosciences | Eighth Launch with SpaceX | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Due from Joint Venture for Rideshare Project | $ 29,800,000 | |||||
Thales Alenia Space France | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Commitments, price for design and build of satellites | $ 2,300,000,000 | |||||
Contract aggregate payment | 2,100,000,000 | |||||
Borrowings under credit facility | 1,500,000,000 | |||||
Obligation due in next fiscal year | 204,400,000 | |||||
Thales Alenia Space France | Bills of Exchange | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Debt instrument face amount | $ 100,000,000 | |||||
Extinguishment of the Thales bills of exchange | $ 59,900,000 | |||||
Loss on extinguishment of debt | 4,000,000 | $ 0 | ||||
Space Exploration Technologies Corp | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Contract aggregate payment | 467,500,000 | |||||
Obligation due in next fiscal year | 47,500,000 | |||||
Space Exploration Technologies Corp | One to Seven Launch with SpaceX | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Maximum commitment amount | $ 453,100,000 | |||||
Number of satellites carried to orbit for each of initial seven launches | Satellite | 10 | |||||
Number of launches for agreement | Launch | 7 | |||||
Space Exploration Technologies Corp | GFZ German Research Centre for Geosciences | Eighth Launch with SpaceX | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Joint Venture Contribution for Rideshare Project | 28,600,000 | |||||
Number of additional satellites to launch | Satellite | 5 | |||||
Commitments price for launching of additional satellites | $ 61,900,000 | |||||
Space Exploration Technologies Corp | GFZ German Research Centre for Geosciences | Gravity Recovery and Climate Experiment Follow-On Satellites | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Number of satellites to launch | Satellite | 2 | |||||
Next Launch And Inorbit Insurers | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Contract aggregate payment | 91,600,000 | |||||
Obligation due in next fiscal year | 29,400,000 | |||||
Insurance policy premium | $ 121,000,000 | |||||
Insurance coverage period | 12 months |
Commitments and Contingencies26
Commitments and Contingencies - Credit Facility and Notes (Details) - USD ($) | Mar. 31, 2018 | Mar. 21, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2010 |
Line of Credit Facility [Line Items] | |||||||
Long-term senior unsecured notes, net | $ 350,335,000 | $ 350,335,000 | $ 0 | ||||
Extinguishment of the Thales bills of exchange | $ 59,936,000 | $ 0 | |||||
Cash and cash equivalents, period to fund operations | 12 months | ||||||
Line of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Credit facility carrying amount | 1,800,000,000 | $ 1,800,000,000 | $ 1,800,000,000 | ||||
Deferred financing costs | 100,500,000 | 100,500,000 | |||||
Credit facility, net | 1,699,500,000 | $ 1,699,500,000 | |||||
Percentage of company obligations insured | 95.00% | ||||||
Minimum required cash reserve balance for credit facility | 189,000,000 | $ 189,000,000 | |||||
Credit facility delays DSRA contributions | 87,000,000 | $ 87,000,000 | |||||
Restricted cash | 75,000,000 | $ 75,000,000 | |||||
Debt instrument, period of credit facility maturity acceleration | 6 months | ||||||
Credit facility, interest expense | $ 21,400,000 | $ 21,200,000 | |||||
Debt issuance costs, net | 10,400,000 | 10,400,000 | |||||
Unsecured Notes | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument face amount | 360,000,000 | $ 360,000,000 | 360,000,000 | ||||
Debt issuance costs, net | 9,700,000 | 9,700,000 | |||||
Long-term senior unsecured notes, net | $ 350,300,000 | $ 350,300,000 | |||||
Debt instrument interest rate | 10.25% | ||||||
Bills of Exchange | Thales Alenia Space France | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument face amount | $ 100,000,000 | ||||||
Extinguishment of the Thales bills of exchange | 59,900,000 | ||||||
Bills of Exchange | Scenario, Forecast | Thales Alenia Space France | |||||||
Line of Credit Facility [Line Items] | |||||||
Extinguishment of the Thales bills of exchange | $ 44,400,000 | ||||||
Aireon LLC | Line of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Hosting fees required to be placed in restricted account | 200,000,000 | ||||||
Cash and cash equivalents balance required for company for repayment of credit facility with hosting fees received | $ 140,000,000 | ||||||
Percent of hosting fees required to be used for repayment of credit facility if certain terms are met | 50.00% | ||||||
Hosting fees required to be used for repayment of credit facility if certain terms are met | $ 200,000,000 |
Commitments and Contingencies27
Commitments and Contingencies - Credit Facility Future Principal Repayments(Details) $ in Thousands | Mar. 31, 2018USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,018 | $ 72,000 |
2,019 | 126,000 |
2,020 | 216,000 |
2,021 | 306,000 |
2,022 | 306,000 |
Thereafter | 774,000 |
Total credit facility commitments | 1,800,000 |
Deferred financing costs | 100,451 |
Short-term credit facility | 72,000 |
Long-term credit facility, net | $ 1,627,549 |
Boeing Insourcing Agreement (De
Boeing Insourcing Agreement (Details) - USD ($) | Jan. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 | Mar. 31, 2017 |
Boeing Insourcing Agreement [Line Items] | |||||
Gain from derecognition of purchase accounting liability | $ 0 | $ 14,189,000 | |||
Boeing | |||||
Boeing Insourcing Agreement [Line Items] | |||||
Gain from derecognition of purchase accounting liability | $ 14,189,000 | ||||
Boeing | Assembled Workforce | |||||
Boeing Insourcing Agreement [Line Items] | |||||
Definite-lived intangible asset | 7 years | ||||
Insourcing Agreement | Boeing | |||||
Boeing Insourcing Agreement [Line Items] | |||||
Agreed costs associated with hiring of employees | $ 5,500,000 | ||||
Agreed costs paid associated with hiring of employees | $ 2,750,000 | $ 2,750,000 | |||
Development Services Agreement | Boeing | |||||
Boeing Insourcing Agreement [Line Items] | |||||
Annual commitment amount | $ 6,000,000 | ||||
Annual commitment term | 2,021 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
May 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, number of additional shares authorized (in shares) | 5,199,239 | ||
Share-based compensation, number of shares authorized (in shares) | 28,402,248 | ||
Share-based compensation, number of shares available for grant | 13,281,967 | ||
Share-based compensation, reduction in shares available for issuance by shares issued pursuant to any appreciation award | 1 | ||
Share-based compensation, strike price of the fair market value of the underlying stock on the date of grant | 100.00% | ||
Share-based compensation, reduction in shares available for issuance by shares issued pursuant to any stock award that is not an appreciation award (in shares) | 1.8 | ||
Employee Stock Option | Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, terms of award | 10 years | 10 years | |
Share-based compensation, vesting period | 4 years | 4 years | |
Share-based compensation, options granted (in shares) | 161,000 | 40,000 | |
Share-based compensation, grant date fair value of stock options | $ 0.8 | $ 0.2 | |
Employee Stock Option | Employee | Vesting on first anniversary of grant date | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, vesting percentage | 25.00% | 25.00% | |
Employee Stock Option | Employee | Vesting on the last day of each calendar quarter | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, vesting percentage | 6.25% | 6.25% | |
Service Based RSU | Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, vesting period | 4 years | 4 years | |
Share-based compensation, restricted stock units granted (in shares) | 900,000 | 964,000 | |
Share-based compensation, fair value of restricted stock units | $ 10.7 | $ 8.5 | |
Service Based RSU | Employee | Vesting on first anniversary of grant date | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation, percentage of shares that ratably vest after | 25.00% | ||
Share-based compensation, vesting percentage | 25.00% | ||
Service Based RSU | Employee | Vesting on the last day of each calendar quarter | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, vesting percentage | 6.25% | 6.25% | |
Service Based RSU | Director | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, restricted stock units granted (in shares) | 110,000 | 96,000 | |
Share-based compensation, fair value of restricted stock units | $ 1.3 | $ 1 | |
Bonus RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, vesting period | 1 year | 1 year | |
Share-based compensation, restricted stock units granted (in shares) | 474,000 | 1,190,000 | |
Share-based compensation, fair value of restricted stock units | $ 5.6 | $ 10.5 | |
Performance Based RSU | Executives | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, vesting period | 2 years | 2 years | |
Share-based compensation, restricted stock units granted (in shares) | 134,000 | 173,000 | |
Share-based compensation, fair value of restricted stock units | $ 1.6 | $ 1.5 | |
Performance Based RSU | Executives | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, percentage of award that will vest based on achievement of performance goals | 0.00% | 0.00% | |
Performance Based RSU | Executives | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, percentage of award that will vest based on achievement of performance goals | 150.00% | 150.00% | |
Performance Based RSU | Executives | Vesting on the second anniversary of the grant date | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, vesting percentage | 50.00% | 50.00% | |
Performance Based RSU | Executives | Vesting on the third anniversary of the grant date | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, vesting percentage | 50.00% | 50.00% |
Equity Transactions (Details)
Equity Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||
May 31, 2014 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2012 | May 15, 2019 | Mar. 20, 2018 | Dec. 31, 2017 | Jun. 30, 2014 | |
Class of Stock [Line Items] | ||||||||
Preferred stock, shares authorized (in shares) | 2,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | |||||||
Preferred stock, shares issued (in shares) | 1,000,000 | 500,000 | ||||||
Shares of preferred stock, undesignated and unissued (in shares) | 500,000 | |||||||
Series A Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock, shares issued (in shares) | 1,000,000 | 1,000,000 | ||||||
Preferred stock dividends, total declared and paid | $ 7,000 | $ 1,750 | ||||||
Preferred stock, shares outstanding (in shares) | 0 | 1,000,000 | ||||||
Series A Preferred Stock | Private Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, shares issued (in shares) | 1,000,000 | 10,599,974 | ||||||
Annual rate of preferred stock, per share (in dollars per share) | $ 12.26 | |||||||
Preferred stock, number of consecutive trading days required for stock conversion | 20 days | |||||||
Preferred stock, total number of trading days in stock conversion agreement | 30 days | |||||||
Preferred stock dividends, total declared and paid | $ 7,000 | 1,800 | ||||||
Dividend rate on preferred stock | 7.00% | |||||||
Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock, shares issued (in shares) | 500,000 | 500,000 | ||||||
Preferred stock dividends, total declared and paid | $ 8,436 | 2,109 | ||||||
Preferred stock, shares outstanding (in shares) | 500,000 | 500,000 | ||||||
Temporary suspension of dividend payments, term | 15 months | |||||||
Dividend payment terms, minimum period of unpaid dividends resulting in loss of preferred stock voting rights | 18 months | |||||||
Series B Preferred Stock | Public Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, shares issued (in shares) | 500,000 | |||||||
Annual rate of preferred stock, per share (in dollars per share) | $ 16.875 | |||||||
Preferred stock dividends, total declared and paid | $ 8,400 | $ 2,100 | ||||||
Preferred stock, price per share (in dollars per share) | $ 250 | |||||||
Preferred stock, purchase price per share (in dollars per share) | 242.50 | |||||||
Underwriting discount price per share (in dollars per share) | $ 7.50 | |||||||
Proceeds from sale of preferred stock | $ 120,800 | |||||||
Payment of underwriter discount | 3,800 | |||||||
Aggregate discount and offering costs | $ 400 | |||||||
Preferred stock, shares outstanding (in shares) | 500,000 | |||||||
Dividend rate on preferred stock | 6.75% | 6.75% | ||||||
Preferred stock, liquidation preference per share (in dollars per share) | $ 250 | |||||||
Initial conversion price of common stock (in dollars per share) | $ 7.47 | |||||||
Shares of common stock converted at initial conversion (in shares) | 33.456 | |||||||
Scenario, Forecast | Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Shares of common stock converted at initial conversion (in shares) | 81.9672 |
Revenue - U.S. Government Contr
Revenue - U.S. Government Contract (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 - U.S. Government - USD ($) $ in Millions | Oct. 22, 2013 | Mar. 31, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract term | 5 years | |
U.S. Government contract annual minimum receivable | $ 88 | |
Revenue, remaining performance obligation, expected timing of satisfaction period | 6 years 9 months 6 days |
Revenue Revenue - Narrative (D
Revenue Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Liability, revenue recognized | $ 8,500 | $ 7,300 | ||
Deferred revenue | (19,357) | $ (38,390) | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Deferred revenue | $ (19,526) | $ (15,700) |
Revenue - Summary of Service Re
Revenue - Summary of Service Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Service Revenue | $ 89,742 | $ 81,773 |
Commercial voice and data services | ||
Disaggregation of Revenue [Line Items] | ||
Service Revenue | 43,730 | 41,646 |
Commercial IoT data services | ||
Disaggregation of Revenue [Line Items] | ||
Service Revenue | 19,783 | 16,930 |
Hosted payload and other data services | ||
Disaggregation of Revenue [Line Items] | ||
Service Revenue | 4,229 | 1,197 |
Government services | ||
Disaggregation of Revenue [Line Items] | ||
Service Revenue | 22,000 | 22,000 |
Engineering And Support Services | ||
Disaggregation of Revenue [Line Items] | ||
Service Revenue | 3,624 | 5,539 |
Commercial | Engineering And Support Services | ||
Disaggregation of Revenue [Line Items] | ||
Service Revenue | 81 | 471 |
Government | Engineering And Support Services | ||
Disaggregation of Revenue [Line Items] | ||
Service Revenue | $ 3,543 | $ 5,068 |
Revenue - Summary of Contract C
Revenue - Summary of Contract Costs (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Commissions | ||
Capitalized Contract Cost [Line Items] | ||
Contract Assets | $ 1,126 | $ 1,555 |
Other Contract Costs | ||
Capitalized Contract Cost [Line Items] | ||
Contract Assets | $ 3,883 | $ 3,753 |
Revenue - Summary of Impact of
Revenue - Summary of Impact of the Implementation of New Revenue Standard (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Prepaid expenses and other current assets | $ 26,040 | $ 25,347 | ||
Deferred revenue | 19,357 | 38,390 | ||
Deferred revenue, net of current portion | 54,564 | 47,612 | ||
Other long-term liabilities | 4,188 | 59,519 | ||
Retained earnings | 526,568 | $ 518,794 | ||
Income Statement Related Disclosures [Abstract] | ||||
Service revenue | 89,742 | $ 81,773 | ||
Cost of services | 18,952 | 16,958 | ||
Income before income taxes | 15,311 | 56,348 | ||
Income tax expense | (3,839) | (18,400) | ||
Net income | 11,472 | $ 37,948 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
Balance Sheet Related Disclosures [Abstract] | ||||
Prepaid expenses and other current assets | 483 | |||
Deferred revenue | 19,526 | $ 15,700 | ||
Deferred revenue, net of current portion | (2,914) | |||
Other long-term liabilities | (3,830) | |||
Retained earnings | (12,299) | |||
Income Statement Related Disclosures [Abstract] | ||||
Service revenue | (927) | |||
Cost of services | (100) | |||
Income before income taxes | (827) | |||
Income tax expense | 266 | |||
Net income | (561) | |||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
Balance Sheet Related Disclosures [Abstract] | ||||
Prepaid expenses and other current assets | 26,523 | |||
Deferred revenue | 38,883 | |||
Deferred revenue, net of current portion | 51,650 | |||
Other long-term liabilities | 358 | |||
Retained earnings | 514,269 | |||
Income Statement Related Disclosures [Abstract] | ||||
Service revenue | 88,815 | |||
Cost of services | 18,852 | |||
Income before income taxes | 14,484 | |||
Income tax expense | (3,573) | |||
Net income | $ 10,911 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Tax Cuts And Jobs Act Of 2017, provisional amount, income tax benefit | $ 150.9 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net income attributable to common stockholders (numerator for basic net income per share) | $ 7,613 | $ 34,089 |
Net income allocated to participating securities | (8) | (35) |
Numerator for basic net income per share | 7,605 | 34,054 |
Numerator for diluted net income per share | $ 7,605 | $ 37,913 |
Denominator: | ||
Denominator for basic net income per share - weighted average outstanding common shares (in shares) | 100,686 | 96,853 |
Dilutive effect of contingently issuable shares (in shares) | 1,487 | 1,051 |
Denominator for diluted net income per share (in shares) | 104,345 | 126,370 |
Net income per share attributable to common stockholders - basic (in dollars per share) | $ 0.08 | $ 0.35 |
Net income per share attributable to common stockholders - diluted (in dollars per share) | $ 0.07 | $ 0.30 |
Equity Option | ||
Denominator: | ||
Dilutive effect of stock options (in shares) | 2,172 | 1,136 |
Series A Preferred Stock | ||
Numerator: | ||
Preferred Stock Dividends, Anti-Dilutive, Excluded | $ 0 | |
Preferred stock dividends, excluding cumulative dividends | $ 1,750 | $ 1,750 |
Denominator: | ||
Dilutive effect of Preferred Stock (in shares) | 0 | 10,602 |
Series B Preferred Stock | ||
Numerator: | ||
Preferred Stock Dividends, Anti-Dilutive, Excluded | $ 0 | |
Preferred stock dividends, excluding cumulative dividends | $ 2,109 | $ 2,109 |
Denominator: | ||
Dilutive effect of Preferred Stock (in shares) | 0 | 16,728 |
Unvested Non-Performance-Based Restricted Stock Units | ||
Denominator: | ||
Antidilutive securities excluded from computation of diluted earnings per share | 1,400 | |
Unvested Performance Based Restricted Stock Units | ||
Denominator: | ||
Antidilutive securities excluded from computation of diluted earnings per share | 300 | 1,500 |
Employee Stock Option | ||
Denominator: | ||
Antidilutive securities excluded from computation of diluted earnings per share | 300 | 200 |