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 |
|
