Space Systems
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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($ millions) |
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Revenues |
$ |
220 |
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$ |
263 |
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$ |
751 |
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$ |
886 |
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Adjusted EBITDA |
$ |
11 |
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$ |
(7) |
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$ |
49 |
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$ |
34 |
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Adjusted EBITDA margin percentage |
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5.0 |
% |
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(2.7) |
% |
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6.5 |
% |
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3.8 |
% |
Revenues from the Space Systems segment decreased to $220 million from $263 million, or by $43 million, for the three months ended September 30, 2019, compared to the same period of 2018. Revenues decreased primarily as a result of the impact of reduced volume in our geostationary satellite manufacturing business (“GeoComm”), lower revenues on the RCM program in Canada which launched in the second quarter of 2019, lower volumes on other programs and increases in estimated costs to complete programs during the three months ended September 30, 2019 compared to the same period in 2018. An increase in estimated costs to complete directly impacts revenues, as revenues are recognized over time under the cost-to-cost method.
Adjusted EBITDA increased to $11 million from a loss of $7 million, or by $18 million, for the three months ended September 30, 2019, compared to the same period of 2018. The increase in the Space Systems segment is primarily related to reduced research and development spend of $26 million and headcount reductions from restructuring initiatives resulting in cost reductions. These increases were partially offset by decreases from the effects of lower revenues and higher estimated costs to complete on certain projects within the Space Systems segment.
