Maxar Technologies Reports Second Quarter 2020 Results

NON-GAAP FINANCIAL MEASURES

In addition to results reported in accordance with U.S. GAAP, we use certain non-GAAP financial measures as supplemental indicators of our financial and operating performance. These non-GAAP financial measures include EBITDA and Adjusted EBITDA.

We define EBITDA as earnings before interest, taxes, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for certain items affecting comparability as specified in the calculation. Certain items affecting comparability include restructuring, impairments, satellite insurance recovery, CEO severance and transaction and integration related expense. Transaction and integration related expense includes costs associated with de-leveraging activities, acquisitions and dispositions and the integration of acquisitions. Management believes that exclusion of these items assists in providing a more complete understanding of our underlying results and trends, and management uses these measures along with the corresponding U.S. GAAP financial measures to manage our business, evaluate our performance compared to prior periods and the marketplace, and to establish operational goals. Adjusted EBITDA is a measure being used as a key element of our incentive compensation plan. The Syndicated Credit Facility also uses Adjusted EBITDA in the determination of our debt leverage covenant ratio. The definition of Adjusted EBITDA in the Syndicated Credit Facility includes a more comprehensive set of adjustments.

We believe that these non-GAAP measures, when read in conjunction with our U.S. GAAP results, provide useful information to investors by facilitating the comparability of our ongoing operating results over the periods presented, the ability to identify trends in our underlying business, and the comparison of our operating results against analyst financial models and operating results of other public companies.

EBITDA and Adjusted EBITDA are not recognized terms under U.S. GAAP and may not be defined similarly by other companies. EBITDA and Adjusted EBITDA should not be considered alternatives to net (loss) income as indications of financial performance or as alternate to cash flows from operations as measures of liquidity. EBITDA and Adjusted EBITDA have limitations as an analytical tool and should not be considered in isolation or as a substitute for our results reported under U.S. GAAP. The table below reconciles our net (loss) income to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2020 and 2019.

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

($ millions)

 

 

 

 

 

 

 

 

Net income

 

$

306

 

 

$

148

 

 

$

258

 

 

$

91

 

Income tax (benefit) expense

 

 

(2

)

 

 

1

 

 

 

 

 

 

2

 

Interest expense, net

 

 

48

 

 

 

49

 

 

 

97

 

 

 

98

 

Interest income

 

 

 

 

 

 

 

 

(1

)

 

 

 

Depreciation and amortization

 

 

89

 

 

 

96

 

 

 

179

 

 

 

191

 

EBITDA

 

$

441

 

 

$

294

 

 

$

533

 

 

$

382

 

Income from discontinued operations, net of tax

 

 

(306

)

 

 

(9

)

 

 

(336

)

 

 

(20

)

Restructuring

 

 

 

 

 

4

 

 

 

 

 

 

15

 

Transaction and integration related expense

 

 

3

 

 

 

2

 

 

 

4

 

 

 

7

 

Impairment loss, including inventory

 

 

 

 

 

 

 

 

14

 

 

 

3

 

Satellite insurance recovery

 

 

 

 

 

(183

)

 

 

 

 

 

(183

)

CEO severance

 

 

 

 

 

 

 

 

 

 

 

3

 

Adjusted EBITDA

 

$

138

 

 

$

108

 

 

$

215

 

 

$

207

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

Earth Intelligence

 

 

146

 

 

 

124

 

 

 

279

 

 

 

249

 

Space Infrastructure

 

 

11

 

 

 

7

 

 

 

(28

)

 

 

5

 

Intersegment eliminations

 

 

(7

)

 

 

(4

)

 

 

(14

)

 

 

(8

)

Corporate and other expenses

 

 

(12

)

 

 

(19

)

 

 

(22

)

 

 

(39

)

Adjusted EBITDA

 

$

138

 

 

$

108

 

 

$

215

 

 

$

207

 


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