Maxar Technologies Reports 2019 Year End Results

Adjusted EBITDA from the Space Infrastructure segment was a loss of $17 million compared to a loss of $75 million, or a change of $58 million, for the year ended December 31, 2019 compared to the same period in 2018. The decreased loss is primarily related to reduced research and development spend of $72 million and headcount reductions from restructuring initiatives resulting in cost reductions and the impact of no new liquidated damages being incurred compared to $28 million of liquidated damages in 2018. These increases were partially offset by decreases from the effects of lower revenues and higher estimated costs to complete on certain projects along with losses incurred on developmental builds.

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 increased to $26 million from $6 million, or by $20 million, for the three months ended December 31, 2019 compared to the same period in 2018. The increase was primarily driven by a shift of certain functions to corporate and other increases in selling, general and administrative expense and an increase in retention costs related to the Space Infrastructure segment of $7 million.

Corporate and other expenses increased to $86 million from $49 million, or by $37 million, for the year ended December 31, 2019 compared to the same period in 2018. The increase was primarily driven by an increase in retention costs related to the Space Infrastructure segment of $24 million and an increase as a result of a shift of certain functions to corporate and other increases in selling, general and administrative expense of approximately $12 million.

Intersegment eliminations

Intersegment eliminations are related to projects between our segments, including WorldView Legion. Intersegment eliminations have increased for the three months ended December 31, 2019 compared to the same period of 2018 primarily related to an increase in intersegment activity.

MAXAR TECHNOLOGIES INC.

Consolidated Statements of Operations

(In millions, except per share amounts)

 

 

 

Year Ended

 

 

December 31,

 

 

2019

 

2018

 

2017

Revenues:

 

 

 

 

 

 

 

 

 

Product

 

$

560

 

 

$

697

 

 

$

877

 

Service

 

 

1,106

 

 

 

1,107

 

 

 

380

 

Total revenues

 

$

1,666

 

 

$

1,804

 

 

$

1,257

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Product costs, excluding depreciation and amortization

 

$

593

 

 

$

775

 

 

$

764

 

Service costs, excluding depreciation and amortization

 

 

382

 

 

 

313

 

 

 

160

 

Selling, general and administrative

 

 

325

 

 

 

446

 

 

 

337

 

Depreciation and amortization

 

 

376

 

 

 

439

 

 

 

152

 

Impairment losses

 

 

14

 

 

 

586

 

 

 

 

Satellite insurance recovery

 

 

(183

)

 

 

 

 

 

 

Gain on sale of assets

 

 

(136

)

 

 

(33

)

 

 

 

Operating income (loss)

 

 

295

 

 

 

(722

)

 

 

(156

)

Interest expense, net

 

 

219

 

 

 

200

 

 

 

97

 

Other (income) expense, net

 

 

(1

)

 

 

1

 

 

 

(30

)

Income (loss) before taxes

 

 

77

 

 

 

(923

)

 

 

(223

)

Income tax expense (benefit)

 

 

5

 

 

 

(48

)

 

 

(168

)

Equity in (income) loss from joint ventures, net of tax

 

 

(11

)

 

 

(2

)

 

 

1

 

Income (loss) from continuing operations

 

 

83

 

 

 

(873

)

 

 

(56

)

Income (loss) from discontinued operations, net of tax

 

 

26

 

 

 

(377

)

 

 

116

 

Net income (loss)

 

$

109

 

 

$

(1,250

)

 

$

60

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share:

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

1.39

 

 

$

(15.03

)

 

$

(1.36

)

Income (loss) from discontinued operations, net of tax

 

 

0.44

 

 

 

(6.49

)

 

 

2.82

 

Basic income (loss) per common share

 

$

1.83

 

 

$

(21.52

)

 

$

1.46

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per common share:

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

1.38

 

 

$

(15.03

)

 

$

(1.36

)

Income (loss) from discontinued operations, net of tax

 

 

0.43

 

 

 

(6.49

)

 

 

2.82

 

Diluted income (loss) per common share

 

$

1.81

 

 

$

(21.52

)

 

$

1.46

 

 

MAXAR TECHNOLOGIES INC.

Consolidated Balance Sheets

(In millions, except per share amounts)

 

 

December 31,

 

December 31,

 

 

2019

 

2018

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

59

 

 

$

19

 

Trade and other receivables, net

 

 

357

 

 

 

350

 

Inventory

 

 

20

 

 

 

29

 

Advances to suppliers

 

 

42

 

 

 

42

 

Prepaid and other current assets

 

 

32

 

 

 

35

 

Current assets held for sale

 

 

751

 

 

 

203

 

Total current assets

 

 

1,261

 

 

 

678

 

Non-current assets:

 

 

 

 

 

 

Orbital receivables

 

 

382

 

 

 

407

 

Property, plant and equipment, net

 

 

758

 

 

 

725

 

Intangible assets, net

 

 

991

 

 

 

1,204

 

Non-current operating lease assets

 

 

176

 

 

 

 

Goodwill

 

 

1,455

 

 

 

1,455

 

Other non-current assets

 

 

134

 

 

 

107

 

Non-current assets held for sale

 

 

 

 

 

482

 

Total assets

 

$

5,157

 

 

$

5,058

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

153

 

 

$

149

 

Accrued liabilities

 

 

130

 

 

 

124

 

Accrued compensation and benefits

 

 

93

 

 

 

80

 

Contract liabilities

 

 

271

 

 

 

332

 

Current portion of long-term debt

 

 

30

 

 

 

16

 

Current operating lease liabilities

 

 

40

 

 

 

 

Other current liabilities

 

 

49

 

 

 

27

 

Current liabilities held for sale

 

 

230

 

 

 

154

 

Total current liabilities

 

 

996

 

 

 

882

 

Non-current liabilities:

 

 

 

 

 

 

Pension and other postretirement benefits

 

 

197

 

 

 

178

 

Contract liabilities

 

 

4

 

 

 

60

 

Operating lease liabilities

 

 

173

 

 

 

 

Long-term debt

 

 

2,915

 

 

 

3,027

 

Other non-current liabilities

 

 

110

 

 

 

186

 

Non-current liabilities held for sale

 

 

 

 

 

58

 

Total liabilities

 

 

4,395

 

 

 

4,391

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock ($0.0001 par value, 240 million common shares authorized and 59.9 million outstanding at December 31, 2019; nil par value, unlimited authorized common shares and 59.4 million outstanding at December 31, 2018)

 

 

 

 

 

1,713

 

Additional paid-in capital

 

 

1,784

 

 

 

59

 

Accumulated deficit

 

 

(1,082

)

 

 

(1,188

)

Accumulated other comprehensive income

 

 

59

 

 

 

82

 

Total Maxar stockholders' equity

 

 

761

 

 

 

666

 

Noncontrolling interest

 

 

1

 

 

 

1

 

Total stockholders' equity

 

 

762

 

 

 

667

 

Total liabilities and stockholders' equity

 

$

5,157

 

 

$

5,058

 

 

MAXAR TECHNOLOGIES INC.

Consolidated Statements of Cash Flows

(In millions)

 

 

Year Ended December 31,

 

 

2019

 

2018

 

2017

Cash flows provided by (used in):

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

109

 

 

$

(1,250

)

 

$

60

 

Net (income) loss from discontinued operations

 

 

(26

)

 

 

377

 

 

 

(116

)

Net income (loss) from continuing operations

 

 

83

 

 

 

(873

)

 

 

(56

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

Impairment losses including inventory

 

 

17

 

 

 

651

 

 

 

 

Depreciation and amortization

 

 

376

 

 

 

439

 

 

 

152

 

Amortization of debt issuance costs and other noncash interest expense

 

 

11

 

 

 

9

 

 

 

3

 

Stock-based compensation expense

 

 

20

 

 

 

20

 

 

 

23

 

Loss from early extinguishment of debt

 

 

22

 

 

 

 

 

 

23

 

Gain on sale of assets

 

 

(136

)

 

 

(33

)

 

 

 

Deferred income tax expense (benefit)

 

 

 

 

 

(48

)

 

 

(169

)

Equity in (income) loss from joint ventures, net of tax

 

 

(11

)

 

 

(2

)

 

 

1

 

Other

 

 

7

 

 

 

28

 

 

 

(5

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

(20

)

 

 

(19

)

 

 

56

 

Accounts payables and accrued liabilities

 

 

7

 

 

 

113

 

 

 

(7

)

Contract liabilities

 

 

(117

)

 

 

(158

)

 

 

(15

)

Other

 

 

(1

)

 

 

(13

)

 

 

50

 

Cash provided by operating activities - continuing operations

 

 

258

 

 

 

114

 

 

 

56

 

Cash provided by operating activities - discontinued operations

 

 

59

 

 

 

25

 

 

 

49

 

Cash provided by operating activities

 

 

317

 

 

 

139

 

 

 

105

 

Investing activities:

 

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment and development or purchase of software

 

 

(314

)

 

 

(206

)

 

 

(59

)

Sale of assets

 

 

280

 

 

 

68

 

 

 

 

Cash collected on note receivable

 

 

 

 

 

5

 

 

 

 

Cash paid for acquisition, net of tax

 

 

 

 

 

 

 

 

(2,273

)

Disposal of subsidiary and short-term investments

 

 

 

 

 

4

 

 

 

 

Return of capital from discontinued operations

 

 

28

 

 

 

 

 

 

 

Cash used in investing activities - continuing operations

 

 

(6

)

 

 

(129

)

 

 

(2,332

)

Cash used in investing activities - discontinued operations

 

 

(7

)

 

 

(21

)

 

 

(9

)

Cash used in investing activities

 

 

(13

)

 

 

(150

)

 

 

(2,341

)

Financing activities:

 

 

 

 

 

 

 

 

 

Net (payment) proceeds of revolving credit facility

 

 

(595

)

 

 

 

 

 

3,160

 

Net proceeds from issuance of 2023 Notes and other long-term debt

 

 

980

 

 

 

104

 

 

 

 

Repayments of long-term debt

 

 

(520

)

 

 

(24

)

 

 

(779

)

Payment of debt issuance costs

 

 

(4

)

 

 

(3

)

 

 

 

Refinancing fees paid to creditors

 

 

(20

)

 

 

 

 

 

(63

)

Repurchase of orbital receivables

 

 

(24

)

 

 

 

 

 

 

Settlement of securitization liability

 

 

(20

)

 

 

(15

)

 

 

(15

)

Proceeds from securitization of orbital receivables

 

 

 

 

 

18

 

 

 

 

Payment of dividends

 

 

(2

)

 

 

(65

)

 

 

(47

)

Other

 

 

(3

)

 

 

 

 

 

1

 

Cash (used in) provided by financing activities - continuing operations

 

 

(208

)

 

 

15

 

 

 

2,257

 

Cash used in financing activities - discontinued operations

 

 

(30

)

 

 

(2

)

 

 

(22

)

Cash (used in) provided by financing activities

 

 

(238

)

 

 

13

 

 

 

2,235

 

Increase in cash, cash equivalents, and restricted cash

 

 

66

 

 

 

2

 

 

 

(1

)

Effect of foreign exchange on cash, cash equivalents, and restricted cash

 

 

 

 

(1

)

 

 

4

 

Cash, cash equivalents, and restricted cash, beginning of year

 

 

43

 

 

 

42

 

 

 

39

 

Cash, cash equivalents, and restricted cash, end of year

 

$

109

 

 

$

43

 

 

$

42

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash flow information:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

105

 

 

$

35

 

 

$

19

 

Restricted cash included in prepaid and other current assets

 

 

1

 

 

 

7

 

 

 

6

 

Restricted cash included in other non-current assets

 

 

3

 

 

 

1

 

 

 

17

 

Total cash, cash equivalents, and restricted cash

 

$

109

 

 

$

43

 

 

$

42

 

 

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