Revenues from the Space Infrastructure segment increased to $224 million from $153 million, or by $71 million, for the three months ended December 31, 2020, compared to the same period in 2019. Revenues increased primarily as a result of the impact of increased volumes on commercial programs of $47 million during the three months ended December 31, 2020, compared to the same period in 2019. The increase was also driven by an increase in volume related to U.S. government contracts of $24 million, compared to the same period in 2019.
Revenues increased to $721 million from $706 million, or by $15 million, for the year ended December 31, 2020, compared to the same period in 2019. Revenues increased primarily as a result of an increase in volume related to U.S. government contracts of $137 million during the year ended December 31, 2020, compared to the same period in 2019. This increase in revenue was partially offset by the impact of reduced volumes on commercial programs of $122 million including a $9 million impact 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. Revenues were also negatively impacted by $27 million of estimated COVID-19 related EAC growth during the period and are included in the above-mentioned results. 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. These costs are considered incremental and separable from normal operations.
Adjusted EBITDA for the Space Infrastructure segment increased to $13 million of income from a loss of $19 million, or by $32 million, for the three months ended December 31, 2020, compared to the same period in 2019. The increase in the Space Infrastructure segment is primarily related to higher margins on commercial programs of $36 million driven by a change in program mix related to the completion of less profitable programs offset by new, more profitable programs. The increase was partially offset by an increase in labor of $4 million and a $2 million increase in stock compensation.
Adjusted EBITDA changed to a loss of $3 million from a loss of $17 million, or by $14 million, for the year ended December 31, 2020, compared to the same period in 2019. The increase in the Space Infrastructure segment is primarily related to higher margins and favorable EACs outside of the estimated COVID-19 impacts discussed below, on commercial programs of $68 million. This has been driven by a change in program mix related to the completion of less profitable programs offset by new, more profitable programs along with $8 million less of program losses on a developmental program for the year ended December 31, 2020, compared to the same period in 2019. The increase in commercial programs are partially offset by an estimated $27 million negative impact related to our COVID-19 operating posture. The increase is also partially offset by a $16 million increase in costs due to a change in the compensation structure from retention payments to bonuses which were not included in segment Adjusted EBITDA in 2019, a $9 million negative impact on the above-mentioned commercial satellite program with a design anomaly and a recovery of a previously reserved amount of $7 million in 2019 which did not reoccur in 2020. The remainder of the change was related to a decrease in cost of product and services and 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 decreased to $18 million from $26 million, or by $8 million, for the three months ended December 31, 2020, compared to the same period in 2019. The decrease was primarily driven by a $6 million decrease in retention costs related to a 2019 program within the Space Infrastructure segment and a decrease in selling, general and administrative costs of $2 million for the three months ended December 31, 2020, compared to the same period in 2019.
Corporate and other expenses decreased to $61 million from $86 million, or by $25 million, for the year ended December 31, 2020, compared to the same period in 2019. The decrease was primarily driven by a $24 million decrease in retention costs related to a 2019 program within the Space Infrastructure segment. The decrease was also driven by a $5 million foreign exchange gain for the year ended December 31, 2020, compared to a $2 million foreign exchange loss for the year ended December 31, 2019. These decreases were partially offset by a $13 million increase in stock-based compensation expense primarily driven by a higher stock price.
Intersegment eliminations
Intersegment eliminations are related to projects between our segments, including WorldView Legion. Intersegment eliminations have decreased to $6 million from $9 million, or by $3 million, for the three months ended December 31, 2020 compared to the same period in 2019, primarily related to a decrease in intersegment satellite construction activity.
Intersegment eliminations have decreased to $27 million from $29 million, or by $2 million, for the year ended December 31, 2020 compared to the same period in 2019, primarily related to a decrease in intersegment satellite construction activity
MAXAR TECHNOLOGIES INC. Consolidated Statements of Operations (In millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|||
|
|
Year Ended |
||||||||||
|
|
December 31, |
||||||||||
|
|
2020 |
|
2019 |
|
|
2018 |
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|||
| Product |
|
$ |
633 |
|
|
$ |
560 |
|
|
$ |
697 |
|
| Service |
|
|
1,090 |
|
|
|
1,106 |
|
|
|
1,107 |
|
| Total revenues |
|
|
1,723 |
|
|
|
1,666 |
|
|
|
1,804 |
|
| Costs and expenses: |
|
|
|
|
|
|
|
|
|
|||
| Product costs, excluding depreciation and amortization |
|
|
615 |
|
|
|
593 |
|
|
|
775 |
|
| Service costs, excluding depreciation and amortization |
|
|
378 |
|
|
|
382 |
|
|
|
313 |
|
| Selling, general and administrative |
|
|
332 |
|
|
|
325 |
|
|
|
446 |
|
| Depreciation and amortization |
|
|
348 |
|
|
|
376 |
|
|
|
439 |
|
| Impairment losses |
|
|
47 |
|
|
|
14 |
|
|
|
586 |
|
| Satellite insurance recovery |
|
|
— |
|
|
|
(183 |
) |
|
|
— |
|
| Loss (gain) on sale of assets |
|
|
1 |
|
|
|
(136 |
) |
|
|
(33 |
) |
| Operating income (loss) |
|
|
2 |
|
|
|
295 |
|
|
|
(722 |
) |
| Interest expense, net |
|
|
175 |
|
|
|
219 |
|
|
|
200 |
|
| Other (income) expense, net |
|
|
(104 |
) |
|
|
(1 |
) |
|
|
1 |
|
| (Loss) income before taxes |
|
|
(69 |
) |
|
|
77 |
|
|
|
(923 |
) |
| Income tax (benefit) expense |
|
|
(22 |
) |
|
|
5 |
|
|
|
(48 |
) |
| Equity in income from joint ventures, net of tax |
|
|
(1 |
) |
|
|
(11 |
) |
|
|
(2 |
) |
| (Loss) income from continuing operations |
|
|
(46 |
) |
|
|
83 |
|
|
|
(873 |
) |
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|||
| Income (loss) from operations of discontinued operations, net of tax |
|
|
32 |
|
|
|
26 |
|
|
|
(377 |
) |
| Gain on disposal of discontinued operations, net of tax |
|
|
317 |
|
|
|
— |
|
|
|
— |
|
| Income (loss) from discontinued operations, net of tax |
|
|
349 |
|
|
|
26 |
|
|
|
(377 |
) |
| Net income (loss) |
|
$ |
303 |
|
|
$ |
109 |
|
|
$ |
(1,250 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
| Basic net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|||
| (Loss) income from continuing operations |
|
$ |
(0.76 |
) |
|
$ |
1.39 |
|
|
$ |
(15.03 |
) |
| Income (loss) from discontinued operations, net of tax |
|
|
5.75 |
|
|
|
0.44 |
|
|
|
(6.49 |
) |
| Basic net income (loss) per common share |
|
$ |
4.99 |
|
|
$ |
1.83 |
|
|
$ |
(21.52 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
| Diluted net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|||
| (Loss) income from continuing operations |
|
$ |
(0.76 |
) |
|
$ |
1.38 |
|
|
$ |
(15.03 |
) |
| Income (loss) from discontinued operations, net of tax |
|
|
5.75 |
|
|
|
0.43 |
|
|
|
(6.49 |
) |
| Diluted net income (loss) per common share |
|
$ |
4.99 |
|
|
$ |
1.81 |
|
|
$ |
(21.52 |
) |
| MAXAR TECHNOLOGIES INC. Consolidated Balance Sheets (In millions, except per share amounts) |
|
|
|
|
|
|
||
|
|
|
December 31, |
|
December 31, |
||||
|
|
|
2020 |
|
2019 |
||||
| Assets |
|
|
|
|
|
|
||
| Current assets: |
|
|
|
|
|
|
||
| Cash and cash equivalents |
|
$ |
27 |
|
|
$ |
59 |
|
| Trade and other receivables, net |
|
|
327 |
|
|
|
357 |
|
| Inventory |
|
|
31 |
|
|
|
20 |
|
| Advances to suppliers |
|
|
24 |
|
|
|
42 |
|
| Prepaid and other current assets |
|
|
59 |
|
|
|
32 |
|
| Current assets held for sale |
|
|
— |
|
|
|
751 |
|
| Total current assets |
|
|
468 |
|
|
|
1,261 |
|
| Non-current assets: |
|
|
|
|
|
|
||
| Orbital receivables, net |
|
|
361 |
|
|
|
382 |
|
| Property, plant and equipment, net |
|
|
883 |
|
|
|
758 |
|
| Intangible assets, net |
|
|
895 |
|
|
|
991 |
|
| Non-current operating lease assets |
|
|
163 |
|
|
|
176 |
|
| Goodwill |
|
|
1,627 |
|
|
|
1,455 |
|
| Other non-current assets |
|
|
86 |
|
|
|
134 |
|
| Total assets |
|
$ |
4,483 |
|
|
$ |
5,157 |
|
| Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
| Current liabilities: |
|
|
|
|
|
|
||
| Accounts payable |
|
$ |
115 |
|
|
$ |
153 |
|
| Accrued liabilities |
|
|
65 |
|
|
|
130 |
|
| Accrued compensation and benefits |
|
|
105 |
|
|
|
93 |
|
| Contract liabilities |
|
|
278 |
|
|
|
271 |
|
| Current portion of long-term debt |
|
|
8 |
|
|
|
30 |
|
| Current operating lease liabilities |
|
|
41 |
|
|
|
40 |
|
| Other current liabilities |
|
|
51 |
|
|
|
49 |
|
| Current liabilities held for sale |
|
|
— |
|
|
|
230 |
|
| Total current liabilities |
|
|
663 |
|
|
|
996 |
|
| Non-current liabilities: |
|
|
|
|
|
|
||
| Pension and other postretirement benefits |
|
|
192 |
|
|
|
191 |
|
| Contract liabilities |
|
|
1 |
|
|
|
4 |
|
| Operating lease liabilities |
|
|
158 |
|
|
|
173 |
|
| Long-term debt |
|
|
2,414 |
|
|
|
2,915 |
|
| Other non-current liabilities |
|
|
119 |
|
|
|
116 |
|
| Total liabilities |
|
|
3,547 |
|
|
|
4,395 |
|
| Commitments and contingencies |
|
|
|
|
|
|
||
| Stockholders’ equity: |
|
|
|
|
|
|
||
| Common stock ($0.0001 par value, 240 million common shares authorized; 61.2 million and 59.9 million outstanding at December 31, 2020 and 2019, respectively) |
|
|
— |
|
|
|
— |
|
| Additional paid-in capital |
|
|
1,818 |
|
|
|
1,784 |
|
| Accumulated deficit |
|
|
(763 |
) |
|
|
(1,064 |
) |
| Accumulated other comprehensive (loss) income |
|
|
(120 |
) |
|
|
41 |
|
| Total Maxar stockholders' equity |
|
|
935 |
|
|
|
761 |
|
| Noncontrolling interest |
|
|
1 |
|
|
|
1 |
|
| Total stockholders' equity |
|
|
936 |
|
|
|
762 |
|
| Total liabilities and stockholders' equity |
|
$ |
4,483 |
|
|
$ |
5,157 |
|
| MAXAR TECHNOLOGIES INC. Consolidated Statements of Cash Flows (In millions) |
|
|
|
|
|
|
|
|
|
|||
|
|
|
Year Ended |
||||||||||
|
|
|
December 31, |
||||||||||
|
|
|
2020 |
|
2019 |
|
2018 |
||||||
| Cash flows (used in) provided by: |
|
|
|
|
|
|
|
|
|
|||
| Operating activities: |
|
|
|
|
|
|
|
|
|
|||
| Net income (loss) |
|
$ |
303 |
|
|
$ |
109 |
|
|
$ |
(1,250 |
) |
| (Income) loss from operations of discontinued operations, net of tax |
|
|
(32 |
) |
|
|
(26 |
) |
|
|
377 |
|
| Gain on disposal of discontinued operations, net of tax |
|
|
(317 |
) |
|
|
— |
|
|
|
— |
|
| (Loss) income from continuing operations |
|
|
(46 |
) |
|
|
83 |
|
|
|
(873 |
) |
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
|
|
|||
| Impairment losses including inventory |
|
|
47 |
|
|
|
17 |
|
|
|
651 |
|
| Depreciation and amortization |
|
|
348 |
|
|
|
376 |
|
|
|
439 |
|
| Gain from remeasurement of equity interest in acquiree |
|
|
(85 |
) |
|
|
— |
|
|
|
— |
|
| Amortization of debt issuance costs and other non-cash interest expense |
|
|
16 |
|
|
|
11 |
|
|
|
9 |
|
| Stock-based compensation expense |
|
|
43 |
|
|
|
20 |
|
|
|
20 |
|
| Loss from early extinguishment of debt |
|
|
7 |
|
|
|
22 |
|
|
|
— |
|
| Loss (gain) on sale of assets |
|
|
1 |
|
|
|
(136 |
) |
|
|
(33 |
) |
| Deferred income tax benefit |
|
|
(17 |
) |
|
|
— |
|
|
|
(48 |
) |
| Equity in income from joint ventures, net of tax |
|
|
(1 |
) |
|
|
(11 |
) |
|
|
(2 |
) |
| Other |
|
|
2 |
|
|
|
7 |
|
|
|
28 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|||
| Trade and other receivables |
|
|
33 |
|
|
|
(20 |
) |
|
|
(19 |
) |
| Accounts payables and liabilities |
|
|
(84 |
) |
|
|
17 |
|
|
|
86 |
|
| Contract liabilities |
|
|
5 |
|
|
|
(117 |
) |
|
|
(158 |
) |
| Other |
|
|
(26 |
) |
|
|
(11 |
) |
|
|
14 |
|
| Cash provided by operating activities - continuing operations |
|
|
243 |
|
|
|
258 |
|
|
|
114 |
|
| Cash (used in) provided operating activities - discontinued operations |
|
|
(54 |
) |
|
|
59 |
|
|
|
25 |
|
| Cash provided by operating activities |
|
|
189 |
|
|
|
317 |
|
|
|
139 |
|
| Investing activities: |
|
|
|
|
|
|
|
|
|
|||
| Purchase of property, plant and equipment and development or purchase of software |
|
|
(308 |
) |
|
|
(314 |
) |
|
|
(206 |
) |
| Acquisition, net of cash acquired |
|
|
(120 |
) |
|
|
— |
|
|
|
— |
|
| Sale of assets |
|
|
— |
|
|
|
280 |
|
|
|
68 |
|
| Return of capital from discontinued operations |
|
|
20 |
|
|
|
28 |
|
|
|
— |
|
| Other |
|
|
2 |
|
|
|
— |
|
|
|
9 |
|
| Cash used in investing activities - continuing operations |
|
|
(406 |
) |
|
|
(6 |
) |
|
|
(129 |
) |
| Cash provided by (used in) investing activities - discontinued operations |
|
|
723 |
|
|
|
(7 |
) |
|
|
(21 |
) |
| Cash provided by (used in) investing activities |
|
|
317 |
|
|
|
(13 |
) |
|
|
(150 |
) |
| Financing activities: |
|
|
|
|
|
|
|
|
|
|||
| Net payment of revolving credit facility |
|
|
— |
|
|
|
(595 |
) |
|
|
— |
|
| Net proceeds from issuance of 2023 Notes, 2027 Notes, and other long-term debt |
|
|
147 |
|
|
|
980 |
|
|
|
104 |
|
| Repurchase of 2023 Notes, including premium |
|
|
(169 |
) |
|
|
— |
|
|
|
— |
|
| Repayments of long-term debt |
|
|
(525 |
) |
|
|
(523 |
) |
|
|
(24 |
) |
| Refinancing fees paid to creditors |
|
|
— |
|
|
|
(20 |
) |
|
|
— |
|
| Repurchase of orbital receivables |
|
|
— |
|
|
|
(24 |
) |
|
|
— |
|
| Settlement of securitization liability |
|
|
(11 |
) |
|
|
(20 |
) |
|
|
(15 |
) |
| Proceeds from securitization of orbital receivables |
|
|
— |
|
|
|
— |
|
|
|
18 |
|
| Other |
|
|
3 |
|
|
|
(6 |
) |
|
|
(68 |
) |
| Cash (used in) provided by financing activities - continuing operations |
|
|
(555 |
) |
|
|
(208 |
) |
|
|
15 |
|
| Cash used in financing activities - discontinued operations |
|
|
(24 |
) |
|
|
(30 |
) |
|
|
(2 |
) |
| Cash (used in) provided by financing activities |
|
|
(579 |
) |
|
|
(238 |
) |
|
|
13 |
|
| (Decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(73 |
) |
|
|
66 |
|
|
|
2 |
|
| Effect of foreign exchange on cash, cash equivalents, and restricted cash |
|
|
(5 |
) |
|
|
— |
|
|
|
(1 |
) |
| Cash, cash equivalents, and restricted cash, beginning of year |
|
|
109 |
|
|
|
43 |
|
|
|
42 |
|
| Cash, cash equivalents, and restricted cash, end of year |
|
$ |
31 |
|
|
$ |
109 |
|
|
$ |
43 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
| Reconciliation of cash flow information: |
|
|
|
|
|
|
|
|
|
|||
| Cash and cash equivalents |
|
$ |
27 |
|
|
$ |
105 |
|
|
$ |
35 |
|
| Restricted cash included in prepaid and other current assets |
|
|
4 |
|
|
|
1 |
|
|
|
7 |
|
| Restricted cash included in other non-current assets |
|
|
— |
|
|
|
3 |
|
|
|
1 |
|
| Total cash, cash equivalents, and restricted cash |
|
$ |
31 |
|
|
$ |
109 |
|
|
$ |
43 |
|
