Maxar Technologies Reports First Quarter 2019 Results

Services segment revenues remained relatively unchanged in the first quarter of 2019 compared to the same period in 2018. Adjusted EBITDA increased for the first quarter of 2019 compared to the same period of 2018 primarily as a result of the loss on the sale of a subsidiary recognized in the first quarter of 2018 and did not recur in 2019.


MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Statements of Operations
(In millions of United States dollars, except per share amounts)

	Three Months Ended
	March 31,
	2019			2018
Revenues:
Product	$	194		$	228
Service		310			329
Total revenues		504			557
Costs and expenses:
Product costs, excluding depreciation and amortization		197			187
Service costs, excluding depreciation and amortization		110			119
Selling, general and administrative		103			103
Depreciation and amortization		98			111
Operating (loss) income		(4	)		37
Interest expense, net		49			53
Other expense, net		6			1
(Loss) before taxes		(59	)		(17	)
Income tax benefit		(1	)		(32	)
Equity in loss from joint ventures, net of tax		1			—
Net (loss) income	$	(59	)	$	15

(Loss) earnings per common share:
Basic	$	(0.99	)	$	0.27
Diluted	$	(0.99	)	$	0.26

MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Balance Sheets
(In millions of United States dollars, except per share amounts)

	March 31,			December 31,
	2019			2018
Assets
Current assets:
Cash and cash equivalents	$	45		$	35
Trade and other receivables, net		467			464
Inventory		26			31
Advances to suppliers		17			42
Income taxes receivable		16			14
Prepaid and other current assets		61			51
Total current assets		632			637
Non-current assets:
Orbital receivables		400			407
Deferred tax assets		108			103
Property, plant and equipment, net		768			747
Intangible assets, net		1,175			1,232
Non-current operating lease assets		129			—
Goodwill		1,751			1,751
Other assets		115			124
Total assets	$	5,078		$	5,001
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	190		$	209
Accrued liabilities		62			116
Accrued compensation and benefits		101			100
Contract liabilities		309			361
Current portion of long-term debt		19			17
Current operating lease liabilities		33			—
Other current liabilities		52			46
Total current liabilities		766			849
Non-current liabilities:
Pension and other postretirement benefits		194			196
Contract liabilities		43			60
Operating lease liabilities		137			—
Long-term debt		3,174			3,030
Other non-current liabilities		184			222
Total liabilities		4,498			4,357
Stockholders’ equity:
Common stock ($0.0001 par value, 240 million common shares authorized and 59.6 million outstanding at March 31, 2019; nil par value, unlimited authorized common shares and 59.4 million outstanding at December 31, 2018)		—			1,713
Additional paid-in capital		1,774			59
Accumulated deficit		(1,271	)		(1,211	)
Accumulated other comprehensive income		76			82
Total Maxar stockholders' equity		579			643
Noncontrolling interest		1			1
Total stockholders' equity		580			644
Total liabilities and stockholders' equity	$	5,078		$	5,001

MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(In millions of United States dollars)

	Three Months Ended
	March 31,
	2019			2018
Cash flows provided by (used in):
Operating activities:
Net (loss) income	$	(59	)	$	15
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation of property, plant and equipment		30			37
Amortization of intangible assets		68			74
Stock-based compensation expense (recovery)		1			(1	)
Amortization of debt issuance costs and other noncash interest expense		2			2
Inventory impairment		3			—
Foreign exchange losses		6			1
Deferred income tax (benefit)		—			(24	)
Other		4			2
Changes in operating assets and liabilities:
Trade and other receivables		6			(35	)
Accrued compensation and benefits		1			(26	)
Trade and other payables		(11	)		(47	)
Accrued liabilities		(56	)		22
Contract liabilities		(71	)		(26	)
Advances to suppliers		25			15
Deferred tax assets		(5	)		(18	)
Deferred tax liabilities		2			31
Other liabilities		4			(28	)
Other		(8	)		(7	)
Cash used in operating activities		(58	)		(13	)

Investing activities:
Purchase of property, plant and equipment		(59	)		(43	)
Purchase or development of intangible assets		(14	)		(17	)
Disposal of subsidiary and short-term investments		—			5
Cash used in investing activities		(73	)		(55	)

Financing activities:
Net proceeds from revolving credit facility		150			90
Repayments of long-term debt		(6	)		(5	)
Settlement of securitization liability		(4	)		(4	)
Payment of dividends		(1	)		(16	)
Change in overdraft balance		—			2
Cash provided by financing activities		139			67
Increase (decrease) in cash, cash equivalents, and restricted cash		8			(1	)
Effect of foreign exchange on cash, cash equivalents, and restricted cash		1			—
Cash, cash equivalents, and restricted cash, beginning of year		43			42
Cash, cash equivalents, and restricted cash, end of period	$	52		$	41

Reconciliation of cash flow information:
Cash and cash equivalents		45			25
Restricted cash included in prepaid and other current assets		6			7
Restricted cash included in other assets		1			9
Total cash, cash equivalents, and restricted cash	$	52		$	41

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