Revenues from the Space Infrastructure segment increased to $181 million from $162 million, or by $19 million, for the three months ended September 30, 2020, compared to the same period of 2019. Revenues increased primarily as a result of the impact of an increase in volume related to U.S. government contracts of $27 million during the three months ended September 30, 2020, compared to the same period in 2019. The increase was partially offset by reduced volumes on commercial programs of $6 million and COVID-19 EAC growth of $3 million which negatively impacted revenue for the three months ended September 30, 2020. The increases 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.
Adjusted EBITDA increased to $12 million of income from a loss of $3 million, or by $15 million, for the three months ended September 30, 2020, compared to the same period of 2019. The increase was primarily driven by a decrease in significant losses of $16 million on a commercial satellite program which includes significant development efforts in 2020 as compared to the same period in 2019. The increase was also impacted by increased margins on certain programs partially offset by a $3 million negative impact related to our COVID-19 operating posture and higher selling, general and administrative expenses.
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 for the three months ended September 30, 2020 and September 30, 2019 were $21 million. There was a $12 million increase in selling, general and administrative expenses for the three months ended September 30, 2020, compared to the same period in 2019 driven by an increase in employee compensation and stock-based compensation expense. The increase was partially offset by an $11 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 decreased to $7 million from $12 million, or by $5 million, for the three months ended September 30, 2020 compared to the same period in 2019, primarily related to a decrease in intersegment satellite construction activity.
MAXAR TECHNOLOGIES INC. Unaudited Condensed Consolidated Statements of Operations (In millions, except per share amounts) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||||||
|
|
September 30, |
|
September 30, |
|
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product |
|
$ |
161 |
|
|
$ |
129 |
|
|
$ |
425 |
|
|
$ |
439 |
|
|
| Service |
|
|
275 |
|
|
|
284 |
|
|
|
831 |
|
|
|
817 |
|
|
| Total revenues |
|
|
436 |
|
|
|
413 |
|
|
|
1,256 |
|
|
|
1,256 |
|
|
| Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
| Product costs, excluding depreciation and amortization |
|
|
145 |
|
|
|
140 |
|
|
|
434 |
|
|
|
452 |
|
|
| Service costs, excluding depreciation and amortization |
|
|
95 |
|
|
|
89 |
|
|
|
275 |
|
|
|
284 |
|
|
| Selling, general and administrative |
|
|
90 |
|
|
|
81 |
|
|
|
237 |
|
|
|
232 |
|
|
| Depreciation and amortization |
|
|
95 |
|
|
|
93 |
|
|
|
274 |
|
|
|
284 |
|
|
| Impairment loss |
|
|
— |
|
|
|
— |
|
|
|
14 |
|
|
|
— |
|
|
| Satellite insurance recovery |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(183 |
) |
|
| Reduction of gain on sale leaseback |
|
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
| Operating income |
|
|
7 |
|
|
|
10 |
|
|
|
18 |
|
|
|
187 |
|
|
| Interest expense, net |
|
|
36 |
|
|
|
50 |
|
|
|
133 |
|
|
|
148 |
|
|
| Other (income) expense, net |
|
|
(91 |
) |
|
|
(1 |
) |
|
|
(98 |
) |
|
|
2 |
|
|
| Income (loss) before taxes |
|
|
62 |
|
|
|
(39 |
) |
|
|
(17 |
) |
|
|
37 |
|
|
| Income tax (benefit) expense |
|
|
(22 |
) |
|
|
1 |
|
|
|
(22 |
) |
|
|
3 |
|
|
| Equity in loss (income) from joint ventures, net of tax |
|
|
— |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
4 |
|
|
| Income (loss) from continuing operations |
|
|
84 |
|
|
|
(41 |
) |
|
|
6 |
|
|
|
30 |
|
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
| Income from operations of discontinued operations, net of tax |
|
|
— |
|
|
|
16 |
|
|
|
32 |
|
|
|
36 |
|
|
| Gain on disposal of discontinued operations, net of tax |
|
|
1 |
|
|
|
— |
|
|
|
305 |
|
|
|
— |
|
|
| Income from discontinued operations, net of tax |
|
|
1 |
|
|
|
16 |
|
|
|
337 |
|
|
|
36 |
|
|
| Net income (loss) |
|
$ |
85 |
|
|
$ |
(25 |
) |
|
$ |
343 |
|
|
$ |
66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
| Basic net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
| Income (loss) from continuing operations |
|
$ |
1.38 |
|
|
$ |
(0.69 |
) |
|
$ |
0.10 |
|
|
$ |
0.50 |
|
|
| Income from discontinued operations, net of tax |
|
|
0.02 |
|
|
|
0.27 |
|
|
|
5.56 |
|
|
|
0.60 |
|
|
| Basic net income (loss) per common share |
|
$ |
1.40 |
|
|
$ |
(0.42 |
) |
|
$ |
5.66 |
|
|
$ |
1.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
| Diluted net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
| Income (loss) from continuing operations |
|
$ |
1.32 |
|
|
$ |
(0.69 |
) |
|
$ |
0.10 |
|
|
$ |
0.50 |
|
|
| Income from discontinued operations, net of tax |
|
|
0.02 |
|
|
|
0.27 |
|
|
|
5.39 |
|
|
|
0.60 |
|
|
| Diluted net income (loss) per common share |
|
$ |
1.34 |
|
|
$ |
(0.42 |
) |
|
$ |
5.49 |
|
|
$ |
1.10 |
|
|
| MAXAR TECHNOLOGIES INC. Unaudited Condensed Consolidated Balance Sheets (In millions, except per share amounts) |
||||||||
|
|
|
|
|
|
|
|
||
|
|
|
September 30, |
|
December 31, |
||||
|
|
|
2020 |
|
2019 |
||||
| Assets |
|
|
|
|
|
|
||
| Current assets: |
|
|
|
|
|
|
||
| Cash and cash equivalents |
|
$ |
60 |
|
|
$ |
59 |
|
| Trade and other receivables, net |
|
|
361 |
|
|
|
357 |
|
| Inventory |
|
|
27 |
|
|
|
20 |
|
| Advances to suppliers |
|
|
49 |
|
|
|
42 |
|
| Prepaid and other current assets |
|
|
46 |
|
|
|
32 |
|
| Current assets held for sale |
|
|
— |
|
|
|
751 |
|
| Total current assets |
|
|
543 |
|
|
|
1,261 |
|
| Non-current assets: |
|
|
|
|
|
|
||
| Orbital receivables, net |
|
|
358 |
|
|
|
382 |
|
| Property, plant and equipment, net |
|
|
844 |
|
|
|
758 |
|
| Intangible assets, net |
|
|
926 |
|
|
|
991 |
|
| Non-current operating lease assets |
|
|
170 |
|
|
|
176 |
|
| Goodwill |
|
|
1,632 |
|
|
|
1,455 |
|
| Other non-current assets |
|
|
92 |
|
|
|
134 |
|
| Total assets |
|
$ |
4,565 |
|
|
$ |
5,157 |
|
| Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
| Current liabilities: |
|
|
|
|
|
|
||
| Accounts payable |
|
$ |
124 |
|
|
$ |
153 |
|
| Accrued liabilities |
|
|
78 |
|
|
|
130 |
|
| Accrued compensation and benefits |
|
|
87 |
|
|
|
93 |
|
| Contract liabilities |
|
|
275 |
|
|
|
271 |
|
| Current portion of long-term debt |
|
|
9 |
|
|
|
30 |
|
| Current operating lease liabilities |
|
|
41 |
|
|
|
40 |
|
| Other current liabilities |
|
|
59 |
|
|
|
49 |
|
| Current liabilities held for sale |
|
|
— |
|
|
|
230 |
|
| Total current liabilities |
|
|
673 |
|
|
|
996 |
|
| Non-current liabilities: |
|
|
|
|
|
|
||
| Pension and other postretirement benefits |
|
|
191 |
|
|
|
197 |
|
| Contract liabilities |
|
|
2 |
|
|
|
4 |
|
| Operating lease liabilities |
|
|
166 |
|
|
|
173 |
|
| Long-term debt |
|
|
2,413 |
|
|
|
2,915 |
|
| Other non-current liabilities |
|
|
122 |
|
|
|
110 |
|
| Total liabilities |
|
|
3,567 |
|
|
|
4,395 |
|
| Commitments and contingencies |
|
|
|
|
|
|
||
| Stockholders’ equity: |
|
|
|
|
|
|
||
| Common stock ($0.0001 par value, 240 million common shares authorized; 61.0 million and 59.9 million outstanding at September 30, 2020 and December 31, 2019, respectively) |
|
|
— |
|
|
|
— |
|
| Additional paid-in capital |
|
|
1,800 |
|
|
|
1,784 |
|
| Accumulated deficit |
|
|
(741 |
) |
|
|
(1,082 |
) |
| Accumulated other comprehensive (loss) income |
|
|
(61 |
) |
|
|
59 |
|
| Total Maxar stockholders' equity |
|
|
998 |
|
|
|
761 |
|
| Noncontrolling interest |
|
|
— |
|
|
|
1 |
|
| Total stockholders' equity |
|
|
998 |
|
|
|
762 |
|
| Total liabilities and stockholders' equity |
|
$ |
4,565 |
|
|
$ |
5,157 |
|
| MAXAR TECHNOLOGIES INC. Unaudited Condensed Consolidated Statements of Cash Flows (In millions) |
||||||||
|
|
|
|
|
|
|
|
||
|
|
|
Nine Months Ended |
||||||
|
|
|
September 30, |
||||||
|
|
|
2020 |
|
2019 |
||||
| Cash flows (used in) provided by: |
|
|
|
|
|
|
||
| Operating activities: |
|
|
|
|
|
|
||
| Net income |
|
$ |
343 |
|
|
$ |
66 |
|
| Income from operations of discontinued operations, net of tax |
|
|
(32 |
) |
|
|
(36 |
) |
| Gain on disposal of discontinued operations, net of tax |
|
|
(305 |
) |
|
|
— |
|
| Income from continuing operations |
|
|
6 |
|
|
|
30 |
|
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
||
| Impairment losses including inventory |
|
|
14 |
|
|
|
3 |
|
| Depreciation and amortization |
|
|
274 |
|
|
|
284 |
|
| Loss from extinguishment of debt |
|
|
7 |
|
|
|
— |
|
| Gain from remeasurement of equity interest in acquiree |
|
|
(85 |
) |
|
|
— |
|
| Amortization of debt issuance costs and other non-cash interest expense |
|
|
12 |
|
|
|
6 |
|
| Deferred income tax benefit |
|
|
(17 |
) |
|
|
— |
|
| Stock-based compensation expense |
|
|
24 |
|
|
|
9 |
|
| Other |
|
|
3 |
|
|
|
11 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
| Trade and other receivables |
|
|
(3 |
) |
|
|
(26 |
) |
| Advances to suppliers |
|
|
(7 |
) |
|
|
35 |
|
| Accounts payables and accrued liabilities |
|
|
(41 |
) |
|
|
(80 |
) |
| Contract liabilities |
|
|
1 |
|
|
|
(141 |
) |
| Other |
|
|
(7 |
) |
|
|
3 |
|
| Cash provided by operating activities - continuing operations |
|
|
181 |
|
|
|
134 |
|
| Cash (used in) provided by operating activities - discontinued operations |
|
|
(49 |
) |
|
|
12 |
|
| Cash provided by operating activities |
|
|
132 |
|
|
|
146 |
|
| Investing activities: |
|
|
|
|
|
|
||
| Purchase of property, plant and equipment and development or purchase of software |
|
|
(224 |
) |
|
|
(203 |
) |
| Acquisition, net of cash acquired |
|
|
(118 |
) |
|
|
— |
|
| Return of capital from discontinued operations |
|
|
20 |
|
|
|
— |
|
| Cash used in investing activities - continuing operations |
|
|
(322 |
) |
|
|
(203 |
) |
| Cash provided by (used in) investing activities - discontinued operations |
|
|
723 |
|
|
|
(4 |
) |
| Cash provided by (used in) investing activities |
|
|
401 |
|
|
|
(207 |
) |
| Financing activities: |
|
|
|
|
|
|
||
| Net proceeds of revolving credit facility |
|
|
— |
|
|
|
107 |
|
| Net proceeds from issuance of 2027 Notes |
|
|
147 |
|
|
|
— |
|
| Repurchase of 2023 Notes, including premium |
|
|
(169 |
) |
|
|
— |
|
| Repayments of long-term debt |
|
|
(523 |
) |
|
|
(21 |
) |
| Settlement of securitization liability |
|
|
(7 |
) |
|
|
(7 |
) |
| Payment of dividends |
|
|
(2 |
) |
|
|
(2 |
) |
| Other |
|
|
4 |
|
|
|
— |
|
| Cash (used in) provided by financing activities - continuing operations |
|
|
(550 |
) |
|
|
77 |
|
| Cash used in financing activities - discontinued operations |
|
|
(24 |
) |
|
|
(2 |
) |
| Cash (used in) provided by financing activities |
|
|
(574 |
) |
|
|
75 |
|
| (Decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(41 |
) |
|
|
14 |
|
| Effect of foreign exchange on cash, cash equivalents, and restricted cash |
|
|
(5 |
) |
|
|
— |
|
| Cash, cash equivalents, and restricted cash, beginning of year |
|
|
110 |
|
|
|
43 |
|
| Cash, cash equivalents, and restricted cash, end of period |
|
$ |
64 |
|
|
$ |
57 |
|
|
|
|
|
|
|
|
|
||
| Reconciliation of cash flow information: |
|
|
|
|
|
|
||
| Cash and cash equivalents |
|
$ |
60 |
|
|
$ |
52 |
|
| Restricted cash included in prepaid and other current assets |
|
|
4 |
|
|
|
1 |
|
| Restricted cash included in other non-current assets |
|
|
— |
|
|
|
4 |
|
| Total cash, cash equivalents, and restricted cash |
|
$ |
64 |
|
|
$ |
57 |
|
