Revenues from the Space Infrastructure segment decreased to $132 million from $210 million, or by $78 million, for the three months ended March 31, 2020 compared to the same period of 2019. Revenues decreased primarily as a result of the impact of reduced volumes on commercial programs of $114 million which were partially offset by an increase in volume related to U.S. government contracts of $46 million during the three months ended March 31, 2020 compared to the same period in 2019. There was COVID-19 related EAC growth of $18 million which negatively impacted revenue for the three months ended March 31, 2020. The changes in the EACs are due to increases in estimated program costs associated with the COVID-19 operating posture and the estimated impact of certain items such as supplier delays and increased labor hours. These costs are considered incremental and separable from normal operations. Additionally, revenues were negatively impacted by $14 million due to increases in estimated costs and an associated change in the EAC profit margin of a commercial satellite program due to the identification of a design anomaly in the final stage of a testing process. Estimated costs to complete directly impacts revenues, as revenues are recognized over time under the cost-to-cost method.
Adjusted EBITDA decreased to a loss of $39 million from a loss of $2 million, or by $37 million, for the three months ended March 31, 2020, compared to the same period of 2019. The decrease in the Space Infrastructure segment is primarily related to an $18 million negative impact related to our COVID-19 operating posture and a $14 million negative impact on the above-mentioned commercial satellite program.
Corporate and other expenses
Corporate and other expenses include items such as corporate office costs, regulatory costs, executive and director compensation, foreign exchange gains and losses, retention costs, and fees for legal and consulting services.
Corporate and other expenses decreased to $10 million from $20 million, or by $10 million, for the three months ended March 31, 2020 compared to the same period in 2019. The decrease was primarily driven by a $2 million foreign exchange gain for the three months ended March 31, 2020 compared to a foreign exchange loss of $5 million for the three months ended March 31, 2019. The decrease in corporate and other expenses was also driven by a $2 million decrease in selling, general and administrative expenses and a $1 million decrease in retention costs related to a 2019 program within the Space Infrastructure segment.
Intersegment eliminations
Intersegment eliminations are related to projects between our segments, including WorldView Legion. Intersegment eliminations have increased to $7 million from $4 million, or by $3 million, for the three months ended March 31, 2020 compared to the same period in 2019 primarily related to an increase in intersegment satellite construction activity.
MAXAR TECHNOLOGIES INC. Unaudited Condensed Consolidated Statements of Operations (In millions, except per share amounts) |
|||||||||||
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
||||||||
|
|
March 31, |
|
||||||||
|
|
2020 |
|
2019 |
|
||||||
Revenues: |
|
|
|
|
|
|
|
||||
Product |
|
$ |
|
107 |
|
|
$ |
|
166 |
|
|
Service |
|
|
274 |
|
|
|
265 |
|
|
||
Total revenues |
|
$ |
|
381 |
|
|
$ |
|
431 |
|
|
| Costs and expenses: |
|
|
|
|
|
|
|
||||
| Product costs, excluding depreciation and amortization |
|
$ |
|
145 |
|
|
$ |
|
171 |
|
|
| Service costs, excluding depreciation and amortization |
|
|
93 |
|
|
|
92 |
|
|
||
| Selling, general and administrative |
|
|
68 |
|
|
|
85 |
|
|
||
| Depreciation and amortization |
|
|
90 |
|
|
|
95 |
|
|
||
| Impairment loss |
|
|
14 |
|
|
|
— |
|
|
||
| Operating loss |
|
|
(29 |
) |
|
|
(12 |
) |
|
||
| Interest expense, net |
|
|
49 |
|
|
|
49 |
|
|
||
| Other (income) expense, net |
|
|
(3 |
) |
|
|
5 |
|
|
||
| Loss before taxes |
|
|
(75 |
) |
|
|
(66 |
) |
|
||
| Income tax expense |
|
|
2 |
|
|
|
1 |
|
|
||
| Equity in loss from joint ventures, net of tax |
|
|
1 |
|
|
|
1 |
|
|
||
| Loss from continuing operations |
|
|
(78 |
) |
|
|
(68 |
) |
|
||
| Income from discontinued operations, net of tax |
|
|
30 |
|
|
|
11 |
|
|
||
| Net loss |
|
$ |
|
(48 |
) |
|
$ |
|
(57 |
) |
|
|
|
|
|
|
|
|
|
|
||||
| Basic income (loss) per common share: |
|
|
|
|
|
|
|
||||
| Loss from continuing operations |
|
$ |
|
(1.30 |
) |
|
$ |
|
(1.14 |
) |
|
| Income from discontinued operations, net of tax |
|
|
0.50 |
|
|
|
0.18 |
|
|
||
| Basic loss per common share |
|
$ |
|
(0.80 |
) |
|
$ |
|
(0.96 |
) |
|
|
|
|
|
|
|
|
|
|
||||
| Diluted income (loss) per common share: |
|
|
|
|
|
|
|
||||
| Loss from continuing operations |
|
$ |
|
(1.30 |
) |
|
$ |
|
(1.14 |
) |
|
| Income from discontinued operations, net of tax |
|
|
0.50 |
|
|
|
0.18 |
|
|
||
| Diluted loss per common share |
|
$ |
|
(0.80 |
) |
|
$ |
|
(0.96 |
) |
|
| MAXAR TECHNOLOGIES INC. Unaudited Condensed Consolidated Balance Sheets (In millions, except per share amounts) |
||||||||||
|
|
|
|
|
|
|
|
||||
|
|
|
March 31, |
|
December 31, |
||||||
|
|
|
2020 |
|
2019 |
||||||
| Assets |
|
|
|
|
|
|
||||
| Current assets: |
|
|
|
|
|
|
||||
| Cash and cash equivalents |
|
$ |
|
12 |
|
|
$ |
|
59 |
|
| Trade and other receivables, net |
|
|
305 |
|
|
|
357 |
|
||
| Inventory |
|
|
25 |
|
|
|
20 |
|
||
| Advances to suppliers |
|
|
34 |
|
|
|
42 |
|
||
| Prepaid and other current assets |
|
|
40 |
|
|
|
32 |
|
||
| Current assets held for sale |
|
|
627 |
|
|
|
751 |
|
||
| Total current assets |
|
|
1,043 |
|
|
|
1,261 |
|
||
| Non-current assets: |
|
|
|
|
|
|
||||
| Orbital receivables, net |
|
|
363 |
|
|
|
382 |
|
||
| Property, plant and equipment, net |
|
|
782 |
|
|
|
758 |
|
||
| Intangible assets, net |
|
|
943 |
|
|
|
991 |
|
||
| Non-current operating lease assets |
|
|
176 |
|
|
|
176 |
|
||
| Goodwill |
|
|
1,455 |
|
|
|
1,455 |
|
||
| Other non-current assets |
|
|
127 |
|
|
|
134 |
|
||
| Total assets |
|
$ |
|
4,889 |
|
|
$ |
|
5,157 |
|
| Liabilities and stockholders’ equity |
|
|
|
|
|
|
||||
| Current liabilities: |
|
|
|
|
|
|
||||
| Accounts payable |
|
$ |
|
128 |
|
|
$ |
|
153 |
|
| Accrued liabilities |
|
|
91 |
|
|
|
130 |
|
||
| Accrued compensation and benefits |
|
|
74 |
|
|
|
93 |
|
||
| Contract liabilities |
|
|
220 |
|
|
|
271 |
|
||
| Current portion of long-term debt |
|
|
29 |
|
|
|
30 |
|
||
| Current operating lease liabilities |
|
|
41 |
|
|
|
40 |
|
||
| Other current liabilities |
|
|
70 |
|
|
|
49 |
|
||
| Current liabilities held for sale |
|
|
175 |
|
|
|
230 |
|
||
| Total current liabilities |
|
|
828 |
|
|
|
996 |
|
||
| Non-current liabilities: |
|
|
|
|
|
|
||||
| Pension and other postretirement benefits |
|
|
193 |
|
|
|
197 |
|
||
| Contract liabilities |
|
|
3 |
|
|
|
4 |
|
||
| Operating lease liabilities |
|
|
172 |
|
|
|
173 |
|
||
| Long-term debt |
|
|
2,926 |
|
|
|
2,915 |
|
||
| Other non-current liabilities |
|
|
110 |
|
|
|
110 |
|
||
| Total liabilities |
|
|
4,232 |
|
|
|
4,395 |
|
||
| Commitments and contingencies |
|
|
|
|
|
|
||||
| Stockholders’ equity: |
|
|
|
|
|
|
||||
| Common stock ($0.0001 par value, 240 million common shares authorized and 60.1 million outstanding at March 31, 2020; $0.0001 par value, 240 million common shares authorized and 59.9 million outstanding at December 31, 2019) |
|
|
— |
|
|
|
— |
|
||
| Additional paid-in capital |
|
|
1,790 |
|
|
|
1,784 |
|
||
| Accumulated deficit |
|
|
(1,130 |
) |
|
|
(1,082 |
) |
||
| Accumulated other comprehensive (loss) income |
|
|
(4 |
) |
|
|
59 |
|
||
| Total Maxar stockholders' equity |
|
|
656 |
|
|
|
761 |
|
||
| Noncontrolling interest |
|
|
1 |
|
|
|
1 |
|
||
| Total stockholders' equity |
|
|
657 |
|
|
|
762 |
|
||
| Total liabilities and stockholders' equity |
|
$ |
|
4,889 |
|
|
$ |
|
5,157 |
|
|
|
|
|
|
|
|
|
||||
| MAXAR TECHNOLOGIES INC. Unaudited Condensed Consolidated Statements of Cash Flows (In millions) |
|||||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
Three Months Ended |
|
||||||||
|
|
|
March 31, |
|
||||||||
|
|
|
|
2020 |
|
2019 |
|
|||||
| Cash flows (used in) provided by: |
|
|
|
|
|
|
|
||||
| Operating activities: |
|
|
|
|
|
|
|
||||
| Net loss |
|
$ |
|
(48 |
) |
|
$ |
|
(57 |
) |
|
| Net income from discontinued operations |
|
|
30 |
|
|
|
11 |
|
|
||
| Net loss from continuing operations |
|
|
(78 |
) |
|
|
(68 |
) |
|
||
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
||||
| Impairment losses including inventory |
|
|
14 |
|
|
|
3 |
|
|
||
| Depreciation and amortization |
|
|
90 |
|
|
|
95 |
|
|
||
| Amortization of debt issuance costs and other noncash interest expense |
|
|
4 |
|
|
|
2 |
|
|
||
| Stock-based compensation expense |
|
|
3 |
|
|
|
1 |
|
|
||
| Other |
|
|
(1 |
) |
|
|
8 |
|
|
||
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||
| Trade and other receivables |
|
|
42 |
|
|
|
17 |
|
|
||
| Accounts payables and accrued liabilities |
|
|
(47 |
) |
|
|
(85 |
) |
|
||
| Contract liabilities |
|
|
(52 |
) |
|
|
(77 |
) |
|
||
| Other |
|
|
12 |
|
|
|
16 |
|
|
||
| Cash used in operating activities - continuing operations |
|
|
(13 |
) |
|
|
(88 |
) |
|
||
| Cash (used in) provided by operating activities - discontinued operations |
|
|
(2 |
) |
|
|
30 |
|
|
||
| Cash used in operating activities |
|
|
(15 |
) |
|
|
(58 |
) |
|
||
| Investing activities: |
|
|
|
|
|
|
|
||||
| Purchase of property, plant and equipment and development or purchase of software |
|
|
(60 |
) |
|
|
(70 |
) |
|
||
| Return of capital from discontinued operations |
|
|
11 |
|
|
|
— |
|
|
||
| Cash used in investing activities - continuing operations |
|
|
(49 |
) |
|
|
(70 |
) |
|
||
| Cash used in investing activities - discontinued operations |
|
|
(3 |
) |
|
|
(3 |
) |
|
||
| Cash used in investing activities |
|
|
(52 |
) |
|
|
(73 |
) |
|
||
| Financing activities: |
|
|
|
|
|
|
|
||||
| Net proceeds of revolving credit facility |
|
|
15 |
|
|
|
139 |
|
|
||
| Repayments of long-term debt |
|
|
(5 |
) |
|
|
(4 |
) |
|
||
| Settlement of securitization liability |
|
|
(4 |
) |
|
|
(4 |
) |
|
||
| Payment of dividends |
|
|
(1 |
) |
|
|
(1 |
) |
|
||
| Payment of finance leases |
|
|
(2 |
) |
|
|
(2 |
) |
|
||
| Other |
|
|
1 |
|
|
|
— |
|
|
||
| Cash provided by financing activities - continuing operations |
|
|
4 |
|
|
|
128 |
|
|
||
| Cash (used in) provided by financing activities - discontinued operations |
|
|
(15 |
) |
|
|
11 |
|
|
||
| Cash (used in) provided by financing activities |
|
|
(11 |
) |
|
|
139 |
|
|
||
| (Decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(78 |
) |
|
|
8 |
|
|
||
| Effect of foreign exchange on cash, cash equivalents, and restricted cash |
|
|
— |
|
|
|
1 |
|
|
||
| Cash, cash equivalents, and restricted cash, beginning of year |
|
|
109 |
|
|
|
43 |
|
|
||
| Cash, cash equivalents, and restricted cash, end of period |
|
$ |
|
31 |
|
|
$ |
|
52 |
|
|
|
|
|
|
|
|
|
|
|
||||
| Reconciliation of cash flow information: |
|
|
|
|
|
|
|
||||
| Cash and cash equivalents |
|
$ |
|
27 |
|
|
$ |
|
45 |
|
|
| Restricted cash included in prepaid and other current assets |
|
|
1 |
|
|
|
6 |
|
|
||
| Restricted cash included in other non-current assets |
|
|
3 |
|
|
|
1 |
|
|
||
| Total cash, cash equivalents, and restricted cash |
|
$ |
|
31 |
|
|
$ |
|
52 |
|
|
