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2021
ANNUAL
REPORT
maxar.com
A message from Maxar CEO, dan jablonsky
I would like to take this opportunity to
highlight Maxar’s performance in 2021 and
the road ahead, and to remind investors
of our commitment to value creation and
purpose. In brief, we generated solid financial
performance, continued to execute on our
strategy, bolstered talent in key positions,
and improved our financial flexibility during
the year – all of which set us up well for
the future.
As a global leader in Earth Intelligence,
Maxar provides the highest commercial
resolution satellite imagery and derived data
available. We own and operate the world’s
most sophisticated Earth imaging satellite
constellation, delivering diverse and actionable
insights that help governments and innovative
industries conserve resources, expedite
operations, improve compliance and save lives.
In Space Infrastructure, we design, build,
integrate and test solutions for government
and commercial customers across multiple
mission sets, including space-based
communications, robotics, power and
propulsion, Earth observation, exploration
and on-orbit servicing and assembly.
1
TRANSFER AGENT
Computershare Trust Company, N.A.
462 South 4th Street, Suite 1600
Louisville, KY 40202
investor relations contact
Jason Gursky, VP Investor Relations
303-684-7660
investor@maxar.com
Our commitment to customers and their
critical missions remained unwavering as
we managed through the second year of the
COVID-19 pandemic, and we look forward to
both serving and growing with them in the
years to come. Our team members remain
passionate about the work we do and believe
strongly that our Earth Intelligence and Space
Infrastructure capabilities have the power to
change how we navigate and understand our
changing world and explore what’s beyond it.
2021 | ANNUAL SHAREHOLDER LETTER
Maxar is a world leading space technology and intelligence company.
We unlock the promise of space to help customers solve problems
on Earth and beyond.
In space
With more than 60 years of experience,
we design and manufacture satellites and
spacecraft components for communications,
Earth observation, exploration and on-orbit
servicing and assembly. Since humans
first began exploring our solar system,
Maxar has been supporting commercial
and government missions with Space
Infrastructure capabilities.
On Earth
Maxar capabilities in Earth Intelligence help
customers map, detect and predict change
across the globe. Fueled largely by Maxar’s
own constellation of high-resolution imaging
satellites, we provide high-resolution imagery
and derived data layers, machine learning and
rich domain knowledge so organizations can
make decisions with confidence.
WorldView Legion satellite on factory floor in
Maxar’s San Jose, California, facility
groups of people waiting on tarmac
kabul airport | august 23, 2021 | worldview-3
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PERFORMANCE AND KEY HIGHLIGHTS
Revenue growth, Adjusted EBITDA margin
Solid customer adoption of 3D
expansion and positive free cash flow
and other Earth Intelligence products
We had a very solid year, generating topline growth,
Importantly, we continued to see increased government
margin expansion and positive free cash flow. Without
the effects of EV deferred1, revenues grew 8% and
margins expanded over 300 bps. Importantly, we
generated $60 million of free cash flow2 from continuing
operations and look forward to future growth in this
and enterprise adoption of our 3D and other advanced
geospatial products, which helped to drive 9% revenue
growth in the Earth Intelligence segment without the
effects of EV deferred1. This translates to roughly
$100 million of growth using existing datasets and
metric as we complete the WorldView Legion program.
constellation capacity, demonstrating the company’s
Diverse set of strategic wins
robust ability to sell products and data as a service, as
well as the strong demand we are seeing from a broad
set of customer verticals. I am very pleased with the
We garnered key wins across a diverse set of customers
foundation we have set with our product and enterprise
this year, including the National Reconnaissance Office
go-to-market strategies, and I expect both to be major
drivers of growth in the future.
(NRO), the National Geospatial-Intelligence Agency
(NGA), the U.S. Army, intelligence agencies, several
key U.S. allies and a multitude of enterprise customers
representing a number of large technology and
communications companies. Our business development
teams have been hard at work and we look forward to
growing the company’s backlog in the years ahead as we
focus on deploying complex solutions and technologies
to support our customer’s critical mission needs.
Maxar 3D data rendering of tokyo, japan.
1 Excludes EnhancedView deferred revenue and Adjusted EBITDA of $80M in 2020. Refer to the accompanying Form 10-K for more information.
2 We define Free Cash Flow as cash provided by operating activities from continuing operations adjusted for the purchase of property, plant
and equipment and development or purchase of software. Refer to the Appendix for non-GAAP financial measures.
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2021 | ANNUAL SHAREHOLDER LETTER
Key management team hires
During 2021, we also made key hires across the
organization. Chris Johnson is an experienced leader
now running our Space Infrastructure segment.
Dan Nord comes from the gaming industry and is now
driving our product and enterprise efforts in Earth
Intelligence. Colleen Campbell has a wealth of
expertise in global and digital marketing and is serving
as our Chief Marketing Officer. Tom Whayne, who is
a space industry veteran with more than 20 years of
experience, is serving as our Chief Strategy Officer.
All four of these executives have made an immediate
impact at the company and will help to drive our
growth strategy in the future.
Improved capital structure
and increased financial flexibility
Finally, we continued to improve our capital structure
and financial flexibility. Early in 2021, we issued
10 million shares and used the proceeds to repurchase
$350 million of expensive debt that was due in 2023.
This transaction, combined with the positive free cash
flow generation, strengthens our financial position and
sets us up for continued growth. We continue to see
significant cash generation in the years ahead, which
should drive debt and leverage levels lower.
Cumbre vieja lava flow | September 29, 2021
composite image, created by blending a daytime and nighttime image | WorldView-3
Key Financial Metrics ($ in millions)
Revenue, without EV Deferred
Adjusted EBITDA, without EV Deferred
Income (loss) from
continuing operations
Operating cash flow from
continuing operations
Backlog
Refer to the Appendix for non-GAAP financial measures.
2021
$1,770
$424
$46
$294
$1,893
2020
$1,643
$342
($46)
$243
$1,904
2019
$1,546
$296
$83
$258
$1,631
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innovation and the road AHEAD
In Earth Intelligence, we are focused on completing
improved Maxar’s competitive differentiation, expands
and launching the WorldView Legion satellites and on
addressable markets and accelerates our product
successfully winning an award on the Electro-Optical
offerings. Vricon’s products and technology are well
Commercial Layer (EOCL) program with the NRO.
aligned with our growth strategy, as well as the
We will also be focused on further developing our
National Defense Strategy of the United States.
product road maps and enterprise strategies. To that
end, we are investing back into the business in 2022
We continue to invest in innovation and recently
to improve our SaaS and DaaS offerings, double our
Precision3D coverage and accelerate our mission to be
established a partnership with radio frequency (RF)
data and analytics firm Aurora Insight. The company
the reference globe for the immersive 3D applications
observes the RF environment with both terrestrial
of the future.
and satellite-based sensors, using machine learning
algorithms to build continuously updated mapping
Recall: In 2020, we acquired the remaining 50%
products for government and commercial customers.
of Vricon, a global leader in 3D data for defense,
By combining Aurora Insight’s RF spectrum capabilities
intelligence and commercial markets, that we did
with high-resolution imagery, advanced artificial
not already own. Our full ownership of Vricon has
intelligence analytics and 3D capabilities, Maxar will
Artist’s rendering of Maxar’s Power and Propulsion Element, which is being developed for NASA’s Lunar Gateway
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be able to offer its public sector and enterprise
customers more comprehensive and accurate
geospatial solutions and insights.
In Space Infrastructure, we will be focused first and
foremost on execution. Our team members in California
will be busy in 2022 as they look to finish building
15 spacecraft, including the six WorldView Legion
satellites. We will also be focused on diversifying both
our products and our customer mix. In the product
area, we are making investments in proliferated low
Earth orbit (LEO) platforms and technologies, and on
the customer side we remain focused on civil and
national security pursuits as we look to further
diversify our revenue base. We have had demonstrated
success with civil programs like Artemis and continue
to believe we will be successful with national security
programs over time.
And lastly, financial flexibility. In the near-term,
we will be looking to address upcoming maturities,
maintaining sufficient liquidity to support our growth
initiatives and setting ourselves on a path to generate
cash to further reduce debt and leverage. Over time
and as we reach our longer term targets for leverage,
we will look to balance capital deployment between
organic investments, acquisitions and shareholders
depending on the return profiles of each.
2021 | ANNUAL SHAREHOLDER LETTER
COMMITMENT TO
VALUE CREATION
Since I was appointed President and CEO in
early 2019 through the end of 2021, Maxar’s
per share value has increased more than
four and a half times. We are proud of the
progress we have made as a company thus
far and believe our stock’s performance is
a signal of confidence from our investors as
we continue to execute on our plan. In each
of the last two years’ letters, I have shared
that we have aligned on what we believe
creates value in a business, and we remain
focused on this construct:
■ Our goal is to increase the “per share value”
of our stock, not to merely grow revenue or
the size of the company.
■ We take a straightforward approach to how
we measure our performance with a focus on
cash flow, growth and stockholder returns.
■ We believe in the careful deployment of
corporate resources and have an intense
focus on capital allocation, designed to
maximize stockholder returns.
■ We will divest non-core businesses and
assets to deploy capital in the most
productive manner for stockholders.
■ We believe the right capital structure
will enhance our ability to grow, provide
resiliency for risks in our business and
improve our valuation, and we are
working aggressively to further
reduce leverage.
Note: Please refer to the Cautionary Note Regarding Forward-Looking
Statements in the accompanying Form 10-K.
6
our purpose
We deliver on our purpose by
living six important values:
At Maxar, our purpose and values drive everything we do,
influencing our decisions and guiding our efforts to use our
extraordinary capabilities and people to improve and sustain
the world in which we live. Our commitment to responsible
corporate citizenship, environmental sustainability, and a
We put the mission first
positive, ethical culture help our business to be successful
We work better together
we stay curious
We act like owners
We do it right
You matter
and our various stakeholders to benefit from that success.
To that end, we have made a concerted effort over the past
two years to focus and build on our environmental, social and
governance (ESG) programs and practices and to continue
our commitment to responsible corporate citizenship. Every
Maxar team member, leader and Board member plays an
important role in fulfilling this responsibility.
More topically given the events going on in Ukraine, the
Maxar News Bureau partners with trusted and respected
media organizations to leverage technology for social good
and global transparency. Maxar provides electro-optical and
radar satellite imagery, analytics and expertise that are
powerful complements to good journalism, providing
indisputable truth at a time when credibility is critical.
I encourage you to visit maxar.com for more information
about how our purpose, ESG practices and partnerships help
to make the world a better place. We are a mission-driven
team, and we believe in utilizing the technologies we are
privileged to work with every day to work toward our
purpose. It is my sincere hope that these efforts are of
value to our stockholders as well.
Military convoy near Antonov Airport, Hostomel, Ukraine | February 28, 2022 | worldview-3
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IN CLOSING
The first two years of my tenure as CEO were focused
on resetting and stabilizing the business. We recovered
from the loss of a satellite and a cyclical downturn in
the geostationary communications satellite market,
and we sold assets to reduce indebtedness. I see 2021
and 2022 as the growth inflection period, and this
year’s results are a very positive proof point that we
are executing on our strategy. I am particularly
excited about the growth we were able to generate
in the Earth Intelligence business from our product
portfolio—demonstrating solid demand for the unique
capabilities we bring to both government and enterprise
customers. As we look to 2023 and beyond, we see
accelerating performance as WorldView Legion provides
more capacity and we benefit from the investments
we are making today in product and go-to-market
strategies across both Earth Intelligence and Space
Infrastructure. We expect this will all to lead to lower
capital intensity, a more optimized capital structure,
and better stockholder returns.
Our strength is in our people, and I would like to thank
all Maxar team members for another year of their
dedication, passion and determination. Each of our
team members makes a unique contribution to our
collective mission. We recognize and appreciate each
employee’s commitment—every day bringing your best
to work, living our values and fulfilling our Purpose.
I look forward to another successful year in 2022
for our employees, stockholders, customers and
other stakeholders.
Dan Jablonsky
2021 | ANNUAL SHAREHOLDER LETTER
Artist’s Rendering of a
WorldView Legion satellite
8
appendix
($ in millions)
Revenue
Adjusted EBITDA
2021
$1,770
$424
2020
$1,723
$422
2019
$1,666
$416
EnhancedView Deferred Revenue
-
$80
$120
Revenue, without EV Deferred
Adjusted EBITDA, without EV Deferred
$1,770
$424
Free Cash Flow:
Cash provided by operating activities from
continuing operations
$294
Purchase of property, plant and equipment
and developed or purchase of software
Free Cash Flow
($234)
$60
$1,643
$342
$243
($308)
($65)
$1,546
$296
$258
($314)
($56)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-38228
Maxar Technologies Inc.
Delaware
(State or Incorporation)
1300 W. 120th Avenue, Westminster, Colorado
(Address of principal executive offices)
83-2809420
(IRS Employer Identification Number)
80234
(Zip Code)
303-684-7660
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common Stock par value of $0.0001 per share
Trading Symbols
MAXR
Name of Each Exchange on Which Registered
New York Stock Exchange
Toronto Stock Exchange
Securities registered pursuant to section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and emerging growth company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
Smaller reporting company ☐ Emerging Growth Company ☐
Non-accelerated filer ☐
Accelerated filer ☐
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
At June 30, 2021, the aggregate market value of the registrant’s common stock, par value of $0.0001 per share, held by non-affiliates of the registrant was
approximately $2,890 million (based upon the closing sale price of the common stock on June 30, 2021 on The New York Stock Exchange).
As of February 16, 2022, there were 72,808,326 shares of the registrant’s common stock, par value of $0.0001 per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement relating to its 2022 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on
Form 10-K where indicated. The 2022 proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to
which this report relates.
Maxar Technologies Inc.
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 2021
Item
Number
Table of Contents
PART I
1.
1A.
1B.
2.
3.
4.
5.
6.
7.
7A.
8.
9.
9A.
9B.
9C.
10.
11.
12.
13.
14.
15.
16.
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
PART II
Market for Registrant’s Common Equity, Related Stockholders’ Matters and Issuer Purchases of Equity
Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions and Director Independence
Principal Accountant Fees and Services
PART IV
Exhibits and Financial Statement Schedules
Form 10-K Summary
Signatures
3
18
42
42
43
43
43
43
44
63
64
124
124
124
124
125
125
125
125
125
125
130
131
1
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K contains “forward-looking statements” as defined in Section 27A of the United States
Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Forward-looking statements usually relate to future events and anticipated revenues, earnings,
cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the
words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “may,” “estimate,”
“outlook” and similar expressions, including the negative thereof. The absence of these words, however, does not mean
that the statements are not forward-looking. These forward-looking statements are based on our current expectations,
beliefs and assumptions concerning future developments and business conditions and their potential effect on us. While
management believes that these forward-looking statements are reasonable as and when made, there can be no assurance
that future developments affecting us will be those that we anticipate.
All of our forward-looking statements involve risks and uncertainties (some of which are significant or beyond our
control) and assumptions that could cause actual results to differ materially from our historical experience and our
present expectations or projections. Known material factors that could cause actual results to differ materially from those
contemplated in the forward-looking statements include those set forth in Part I, Item 1A, “Risk Factors” and elsewhere
in this Annual Report on Form 10-K. We caution you not to place undue reliance on any forward-looking statements,
which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-
looking statements after the date they are made, whether as a result of new information, future events or otherwise,
except to the extent required by law.
*****
Unless stated otherwise or the context otherwise requires, references to the terms “Company,” “Maxar,” “we,” “us,” and
“our” to refer collectively to Maxar Technologies Inc. and its consolidated subsidiaries.
2
ITEM 1. BUSINESS
Maxar is a provider of comprehensive space solutions and secure, precise, geospatial intelligence. Maxar helps
government and commercial customers monitor, understand and navigate our changing planet; deliver global broadband
communications; and explore and advance the use of space. Our approach combines decades of deep mission
understanding and a proven commercial and defense foundation to deploy solutions and deliver insights with speed,
scale and cost effectiveness. Maxar’s stock trades on the New York Stock Exchange (“NYSE”) and Toronto Stock
Exchange (“TSX”) under the symbol “MAXR.”
Segments
We serve our customers and organize our businesses through the following two operating and reportable segments:
• Earth Intelligence—a global leader in high-resolution, high accuracy Earth imagery and other geospatial
data sourced from our own advanced satellite constellation and third-party providers to our public sector
and enterprise customers, as well as a provider of advanced geospatial information, applications and
analytic services for national security and commercial solutions.
• Space Infrastructure—a supplier of space-based infrastructure, robotics, subsystems and information
solutions to satellite operators and government agencies.
The following is a description of our reportable segments.
Earth Intelligence
Overview
In the Earth Intelligence segment, we are a global leader in high-resolution space-based Earth observation imagery
products and analytics. We launched the world’s first high-resolution commercial imaging satellite in 1999 and currently
operate a four-satellite imaging constellation, providing us with over two decades and approximately 137 petabytes of
imagery over our history (referred to as our “Image Library”) of the highest resolution, commercially available imagery.
Our imagery solutions provide customers with timely, accurate and mission-critical information about our changing
planet and support a wide variety of government and enterprise applications, including mission planning, mapping and
analysis, environmental monitoring, disaster management, crop management, oil and gas exploration and infrastructure
management. We continue to innovate as demands for new satellite technology and advanced analytic tools increase.
The U.S. government is the largest customer of our Earth Intelligence segment through the EnhancedView Follow On
contract (“EnhancedView Contract”), Global Enhanced GEOINT Delivery (“G-EGD”) and One World Terrain
(“OWT”) programs and various classified and unclassified contract vehicles. In the commercial satellite Earth
observation industry, we are a leader across U.S. government agencies, international government agencies and enterprise
customer verticals.
We also provide geospatial services that combine imagery, analytic expertise and innovative technology to deliver
intelligence solutions to customers. Our approximately 1,700 cleared personnel support analytic solutions that accurately
document change and enable geospatial modeling and analysis that help predict where events will occur. Our primary
customer of geospatial services is the U.S. government, but we also support intelligence requirements for other U.S.
allied governments, global development organizations and enterprise customers. Through our acquisition of Vricon, Inc.
(“Vricon”) in 2020, we are also a global leader in satellite-derived 3D data for defense and intelligence markets, with
software and products that enhance 3D mapping, Earth intelligence data, military simulation and training and precision-
guided munitions. See Note 5, “Business Combination” to the Consolidated Financial Statements in Part II, Item 8,
“Financial Statements and Supplementary Data” for additional detail on the Vricon acquisition.
3
Our Offerings
Customers can license our imagery and data archives or place custom orders to task our satellites for a specific area of
interest. We process our imagery to varying levels according to our customers’ specifications and deliver our products
using the distribution methods and subscription services that are designed to best suit our customers’ needs. We offer a
number of Earth Intelligence solutions, including:
• Satellite access—direct collection and access to our satellite constellation anywhere in the world. The
Direct Access Program (“DAP”) enables customers to directly task our satellites using the customer’s own
ground station for secure, real-time imagery acquisition and downlink. The Rapid Access Program
(“RAP”) allows customers to virtually control our constellation through priority tasking, predictable access
and imaging operations with a web interface, while we own and manage the ground infrastructure.
Additionally, we support the U.S. government with direct tasking utilizing our integrated imagery
production, distribution and operations with U.S. government systems. This offering is currently contracted
under our existing EnhancedView Contract. In November 2021, the National Reconnaissance Office
(“NRO”) announced the release of the Electro-Optical Commercial Layer (“EOCL”) contract Request for
Proposal (“RFP”), which is expected to replace the existing EnhancedView Contract. In December 2021,
we submitted our response to the EOCL RFP and we anticipate the NRO to award EOCL contracts prior to
the expiration of the EnhancedView Contract, including remaining option years.
• Geospatial foundation—highest quality foundational satellite imagery, basemaps and 3D data over any
location on Earth. This foundation allows our customers to fully understand, immerse and strategically plan
outcomes before setting foot in a specific location or to immediately use our robust imagery for their
artificial intelligence (“AI”) / machine learning (“ML”) models, real-world metaverse applications and/or
training purposes. Our Vivid imagery basemaps stitch high-resolution satellite imagery together into a
single cloudless global view that provides an accurate, consistent and actionable foundation to support the
leading mapping apps, global-scale environmental governance analytics and risk management decisions.
High-definition (“HD”) imagery leverages our proprietary HD technology to improve visual clarity of our
native 30cm imagery to 15cm, giving analysts and ML models cleaner and more accurate data to analyze
and deliver results. This technology allows us to provide best-in-class accuracy of the world’s terrain in
GPS-denied environments or when ground conditions are not ideal for human assessment or navigation.
Analysis-Ready Data (“ARD”) is preprocessed time-series stacks of imagery that are aligned and produced
at a set standard to provide templated imagery and associated meta data for change detection, mapping and
monitoring use cases. Our Precision3D offerings leverage our over two decades high-resolution Image
Library to construct an accurate, consistent and fully immersive 3D visualizations at global scale, including
3D surface models, 3D vectors, digital surface models and digital terrain models.
• Precision mapping—GIS-ready datasets for expedited analysis. These offerings include Persistent-Change
Monitoring (“PCM”), BaseVue and Human Landscape. PCM leverages our Image Library and ML models
running on our approximately 3.8 million square kilometer daily take to identify change indicators,
historical patterns of development and infrastructure changes and provide actionable insights to our
customers. BaseVue is the global standard for land classification, including for natural resource
management and environmental impact monitoring. Human Landscape utilizes key human geography
features to enable analysts to better understand and develop responses that reduce operating costs and
enable timely decision making.
• On-demand intelligence—industry-leading technology, data and expertise to help solve the most complex
geospatial challenges. We offer a variety of subscription-based services that maximize the value of our
imagery, information products and analytic outputs for a diverse set of customer needs. Our flexible
subscription options include cloud-based access to our global image archive, in-house tools to search,
exploit and share imagery and simplified integration for existing workflows. These offerings include
SecureWatch, Spatial On Demand, Crow’s Nest, WeatherDesk, SeaStar Information Service and our
analytic reports. SecureWatch is a subscription SaaS offering that provides customers a cloud-based source
4
of near real-time global imagery basemaps, optical and radar imagery and analytics on features (e.g. roads,
railways) and objects (e.g. cars, planes). This includes supporting the U.S. government with G-EGD.
• Geospatial services—We provide advanced geospatial information and analytic services to national
security and enterprise customers that combine Maxar imagery and other sources of geospatial data, such
as low-resolution satellite imagery, radar, weather and oceanographic data, elevation and social media, to
reveal insights that help our customers make better decisions. We also develop applications to support
global Intelligence, Surveillance and Reconnaissance (“ISR”) missions with constellation modeling,
simulation and mission management, secure ground systems, data analytics to automate object detection,
feature extraction, mission planning and predictive analytics. We deploy these services through various
cloud and on-premise computing platforms. Our intellectual property portfolio, including U.S. and foreign
patents, and Small Business Innovation Research (“SBIR”) Phase III data rights, supports the unique
technology we provide to our customers.
Additionally, we support people, organizations and initiatives dedicated to improving the health and sustainability of our
planet. Through our purpose partners, we contribute geospatial data and expertise to nonprofits that significantly benefit
from using our data to achieve their missions. These purpose partners include the Amazon Conservation Team, Jane
Goodall Institute, International Justice Mission, Team Rubicon and Humanitarian OpenStreetMap Team. With our open
data program, when crises occur, we support humanitarian organizations and communities with critical information to
assist response efforts. The Maxar News Bureau is a partnership program with trusted media organizations around the
world. We provide satellite imagery as visual evidence of ground truth to promote global transparency and expose
injustice. Access to our high-resolution satellite imagery has enabled journalists to accurately report on areas that are too
remote or dangerous to visit or are otherwise inaccessible.
Our Constellation
As of December 31, 2021, we operated a constellation of four in-orbit and fully commissioned satellites: GeoEye-1,
WorldView-1, WorldView-2 and WorldView-3. Our annual collection capacity is approximately 1.4 billion square
kilometers. We have collected, and have available for use, approximately 137 petabytes in our Image Library.
We re-evaluate the depreciable lives of our satellites annually based on established methodologies used for accounting
purposes. The lives we assign for depreciation purposes are typically shorter than the lives we use for planning purposes
and our history shows that in most cases the estimated useful lives of our satellites have increased from the initial lives
determined upon launch.
The following table summarizes the primary characteristics of the in-orbit and fully-commissioned satellites in our
constellation as of December 31, 2021:
Satellite
Launch Date
Expected End
of Depreciable
Life
WorldView-3 August 2014
Q1 2026
WorldView-2
WorldView-1
GeoEye-1
October
2009
September
2007
September
2008
Q4 2023
Q4 2023
Q3 2023
Best Ground Resolution
31-centimeters black and white, or color 1.24-meter
multi-spectral
46-centimeters black and white, or color 1.84-meter
multi-spectral
50-centimeters panchromatic
41-centimeters black and white, or color 1.64-meter
multi-spectral
Orbital Altitude
(kilometers)
618
770
496
681
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WorldView Legion will be a fleet of six high performing satellites for which our Space Infrastructure segment is acting
as prime contractor. With a first launch planned in June to July of 2022, we expect that WorldView Legion, in addition
to our current constellation, will revisit rapidly changing areas up to 15 times per day, an increase from four times per
day currently, which will more than triple both our capacity to collect 30 cm class imagery and our overall capacity in
high demand areas.
Our satellites have advanced technical capabilities, such as maneuverability, size of collection area, collection speed,
revisit time, resolution, accuracy and spectral diversity. Additionally, our satellites are designed, manufactured and
operated in the U.S. for assurance of U.S. national security missions and data protection.
We procure insurance to protect us from the risks associated with our satellite operations, including the partial or total
loss of the functional capacity of the satellite. We insure satellites in our constellation to the extent that insurance is
available at acceptable premiums. As of December 31, 2021, we maintained the following insurance coverage on our in-
orbit and fully-commissioned satellite constellation:
Satellite
WorldView-3
WorldView-2
WorldView-1
GeoEye-1
Policy Period
10/2021-10/2022
10/2021-10/2022
10/2021-10/2022
10/2021-10/2022
$
Coverage
(in millions)
255
220
220
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Additionally, as of December 31, 2021, we have procured insurance for our WorldView Legion satellite launches of
$520 million. These policies cover the launches plus the first year in orbit. Following the first year in orbit, we will seek
to obtain in-orbit coverage similar to the coverage we currently have on our in-orbit and fully-commissioned satellite
constellation noted in the table above.
Competitive Conditions and Trends in Industry Demands
Our Earth Intelligence business operates in a highly competitive and rapidly growing industry. Our major existing and
potential competitors for our Earth Intelligence business include commercial satellite imagery companies, state-owned
imagery providers, aerial imagery companies, free sources of imagery, unmanned aerial vehicles and companies that
provide geospatial analytic information and services to the U.S. government, including defense prime contractors.
We compete on the basis of several factors, including: the technical capabilities of our satellites, such as size of
collection area, collection speed, revisit time, resolution, accuracy and spectral diversity; satellite availability for tasked
orders; the size, comprehensiveness and relevance of our Image Library; on-demand platforms and tools that enable
customers to easily access and integrate imagery; value-added services, including harnessing advancements in ML by
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applying computer vision and pattern analysis technology to geospatial problems; and derivative products such as 3D
models and map vector data.
The Earth observation market includes the collection and processing of optical and non-optical imagery data of the
Earth. Specifically, the market is segmented into Data, Value-Added Services (“VAS”), Information Products and Big
Data Analytics. The Data segment consists of raw imagery transmitted from the satellite to the ground station and
products, such as stereo imaging and basic corrections (radiometric and geometric). VAS includes processing through
layering or data fusion (such as with traffic information and street names). Big Data Analytics includes statistical
analysis, change detection and predictive modeling using large quantities of imagery and meta-data overlays to provide
insights over a given period of time.
Our Earth Intelligence business provides Earth observation services to customers in a variety of sectors, including
defense and intelligence, energy and natural resources, industrials, social media, mapping, managed living resources
(such as agriculture and forestry), public authorities, services (such as finance, insurance, news and media) and weather.
Providers of imagery and data in this market generally compete on resolution, accuracy, revisit frequency, delivery
(cloud versus traditional) and pricing.
Euroconsult reports that the commercial market for Earth observation data was $1.6 billion in 2020 and is forecasted to
top $2.5 billion by 2030, a compound annual growth rate of 4%. According to Euroconsult, defense represents
approximately 70% of the Earth observation data, and sales to non-U.S. defense markets are forecasted to be the most
significant driver of revenue growth, driven by higher revisit constellations with higher resolutions. Euroconsult reports
the commercial market for Earth observation VAS was $2.5 billion in 2020 and is forecasted to top $5 billion by 2030, a
compound annual growth rate of 7%. We believe it is increasingly likely that value for the Earth observation services
will be driven by downstream services and AI-enabled data analytics.
In addition to the demands for commercial Earth observation data and VAS, we believe our Earth Intelligence offerings
address a number of multi-billion dollar military use-cases and sectors, including 3D mapping, precision guided
munitions and military simulation and virtual training. Additionally, as we further develop our 3D offerings, we see
additional commercial market opportunities for our data and services, particularly within the immersive 3D
environments of the augmented reality (“AR”)/virtual reality (“VR”) accessed metaverse. As consumers spend more
time in virtual or AR environments for education, gaming, entertainment, news, networking, shopping and more, our
global 3D models can help bridge the physical and digital worlds with increased accuracy and realism.
Space Infrastructure
Overview
In the Space Infrastructure segment, we provide solutions for communications, Earth observation, remote sensing, on-
orbit servicing, robotic assembly and space exploration. We address a broad spectrum of needs for our customers,
including mission systems engineering, product design, spacecraft manufacturing, assembly, integration and testing. Our
principal customers in the Space Infrastructure segment are commercial satellite operators and government agencies
worldwide. Our approach combines proven success gained over six decades in the industry with the nimbleness and
agility of a smaller space company.
Our Offerings
Our products, which are designed and manufactured in the U.S., include:
• Communications and imaging satellites and payloads;
• Platforms for space exploration and hosting instruments for Earth science;
• Space subsystems for power, propulsion and communication;
• Satellite ground systems and support services;
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• Space-based remote sensing-solutions;
• Space robotics; and
• Defense systems.
Spacecraft
Today, more than 287 custom Maxar-built spacecraft, including 81 low Earth orbit (“LEO”) satellites, have launched
with a combined 2,850 years of service, the majority of the spacecraft are highly complex Geosynchronous Equatorial
Orbit (“GEO”) satellites for global communications customers.
Maxar continues as a world leader in commercial GEO communication satellites and a global leader in commercial
satellite manufacturing. With three decades of on-orbit heritage, our 1300 spacecraft platform is the world’s most
popular GEO satellite; 90 spacecraft are currently in service, providing 99.9993% uptime availability for our customers.
We continue to provide a high level of value and partnership to communications customers around the globe. Key
platform features include a scalable, lightweight and high-strength structure, fuel-efficient attitude and station-keeping
subsystems, high-efficiency and reliable solar arrays and batteries and advanced command and control subsystems. A
growing application for commercial geostationary communication satellites is the delivery of data-centric applications
(such as consumer broadband, in-flight communication, maritime and 4G/5G cellular backhaul) via high-capacity spot
beam satellites commonly referred to as high throughput satellites (or “HTS”). We introduced the first HTS satellite in
2005, which used the 1300 bus, and believe it offers the highest capability for the cost. Maxar is building JUPITER 3, a
transformational Ultra High Density Satellite, for Hughes Network Systems (“Hughes”) to be designated EchoStar
XXIV. This satellite is expected to be the world’s largest commercial communications satellite when it launches, and
will power future generations of Hughes consumer, enterprise and aeronautical services across the Americas.
In addition to continued leadership in the commercial communications sector, we collaborate closely with customers to
design and deliver smaller satellites to address growing demand for LEO and medium Earth orbit (“MEO”)
constellations. We believe Maxar’s LEO capabilities will be effective for applications that require a multiple satellite
constellation of identical satellites produced in a cost-efficient manner.
The 1300 platform is key to our continued and growing partnership with NASA as well. The Psyche mission is a journey
to a unique metal asteroid, named 16 Psyche, that appears to be the exposed metal core of an early planet–a building
block of a solar system. The spacecraft bus leverages the 1300 platform and solar electric propulsion system, the highly
efficient SPT-140. In addition, Maxar is hosting NASA’s Tropospheric Emissions: Monitoring of Pollution
(“TEMPO”)— a commercially hosted pollution monitoring payload on a commercial communications satellite Maxar is
building for satellite operator Intelsat. By hosting payloads on its commercial satellites, Maxar can help government
agencies obtain access to space for instruments, sensors and other small missions without the cost of building a dedicated
spacecraft. Similarly, the hosted payload helps commercial customers share the cost of the satellite bus, launch and
operations.
Competitive Conditions and Trends in Industry Demands
Our principal customers in the Space Infrastructure segment are commercial satellite operators and government agencies
worldwide.
We sell our products and technologies in a highly competitive industry and we compete on the basis of cost, reliability,
design life and technological capabilities and efficiencies. Our primary competitors for satellite manufacturing contracts
are: The Boeing Company, Lockheed Martin Corporation and Northrop Grumman Corporation in the United States;
Thales S.A. and Airbus Defence and Space, a subsidiary of the Airbus Group, in Europe; and Mitsubishi Electric
Corporation in Japan. Additionally, we face competition from newer entrants. In addition, many of our competitors are
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larger and have greater resources than we do. We may also face competition in the future from emerging low-cost
competitors in India, Russia and China.
GEO satellites track with the rotation of the Earth and remain over a fixed point over the Earth’s surface. GEO satellites
cover more area from a higher vantage point to tend to carry more advanced sensor or communication suites, as used in
broad area communications and global-scale weather payloads. Due to this unique property of their orbit, GEO orbit
slots are limited, which motivates operators to maximize the use of their slot, leading to generally larger satellites to
support the required power and bandwidth, as well as a longer design life to maximize return on investment. Due to their
greater distance from earth; however, there is increased latency.
The satellite industry has undergone a significant change with the proliferation of LEO satellites, which have been
primarily used for both Earth observation and communications payloads. Typically, LEO constellation satellites are
cheaper to launch as they are significantly smaller and require less fuel to reach orbit. Additionally, due to the lower
orbital altitude, LEO observation satellites enable higher resolution imagery. This factor also enables LEO
communication satellites to reduce latency but require a much larger constellation to ensure coverage over a given area
as unlike GEO satellites, LEO satellites move in and out of view of ground locations as they complete their orbit. In
addition to altitude class, satellites are classified by functions, such as communications or Earth observation.
Euroconsult projects satellite demand will experience a four and half-fold increase over the next ten years. While LEO
and MEO are expected to account for the majority of the demand, Euroconsult expects an average of 13 GEO
commercial satellite orders per year over the next ten years, representing one-third of the total market value. According
to Euroconsult, the total market for manufacturing and launch services is expected to reach $320 billion over the next
decade, a 39% increase from the previous decade of $230 billion in revenue.
LEO proliferation is expected to greatly increase access to space, thus enabling new commercial customers across
diversified industries including oil & gas, insurance, agriculture and asset management firms, as well as nonprofit
organizations, to benefit from satellite imagery.
Discontinued Operations
On April 8, 2020, we completed the sale of our former Canadian subsidiary (“MDA Business”) to Neptune Acquisition
Inc., a corporation existing under the laws of the Province of British Columbia and an affiliate of Northern Private
Capital Ltd. See Note 4, “Discontinued Operations”, to the Consolidated Financial Statements in Part II, Item 8,
“Financial Statements and Supplementary Data” for additional information regarding our sale of the MDA Business.
Industry Overview
Large and Growing Addressable Market
We believe that there is potential for growth among three key components of our addressable market: the U.S.
government, other governments and commercial customers. For both the U.S. and other governments, drivers of growth
include persistent global security threats, defense budgets, demand for high-quality imagery and value-added services
and a focus on space as an investment. We believe that the U.S. government is interested in expanding the use of
commercial alternatives to owned assets and that other governments present an opportunity for growth. We seek to align
our products and services with the U.S. Department of Defense (“DoD”)’s National Defense Strategy needs, as well as
growing international defense and intelligence demand. For civil customers, in particular NASA, growth is being driven
by space exploration programs such as Artemis and Earth science projects. For commercial customers, drivers of growth
include strong demand for 3D imagery and more frequent imagery refreshes, as well as insights driven by AI and ML,
space-based remote sensing, GEO replacement demand and LEO communications programs.
Diverse Solutions for Diverse End-Market Users
While traditionally spending in space has been dominated by military defense programs and the communications
industry, the proliferation of technology and cheaper access to space has led to a diversification in end-market users.
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ML, AI and cloud computing have given rise to multiple use cases across industries, such as mobility and logistics,
insurance, finance, ESG, non-governmental organizations and emerging technologies in simulation, gaming, AR/VR and
the metaverse. Concurrently, geopolitical competition in space as a contested domain is leading to further investment by
global militaries. We have evolved with this changing environment to serve a multitude of customers.
Government Investment in Space Programs
With more than half of our revenues coming from U.S. government customers, we expect that our Space Infrastructure
and Earth Intelligence segments will benefit from growing defense and space infrastructure budgets. We expect the
proliferation of space-based intelligence, surveillance and reconnaissance and communications to drive increased
government investments in the sector through the mid-2020s.
Global
Euroconsult reports that government space budgets reached $92.5 billion in 2021, an 8% increase over 2020 figures.
Additionally, Euroconsult reports the gap between civil and defense space budgets is decreasing, with civil budgets
totaling $53.5 billion and defense space programs totaling $38.9 billion in 2021. Euroconsult expects world defense
spending to average over 2.5% growth per year until 2030, driven by increasing government defense budgets, an
emphasis on space security and a generalized trend of the militarization of space.
United States
In the U.S., there is a concerted effort by the government to accelerate space investment. According to the Congressional
Research Service, the President’s fiscal year (“FY”) 2022 budget requested $15.3 billion for the National Security Space
(“NSS”) programs, representing growth of 13% from the aggregate funding for NSS programs of $13.5 billion for FY
2021. On December 20, 2019, with the enactment of the FY 2020 National Defense Authorization Act, the U.S. Space
Force (“USSF”) was established. The mission of the USSF is to organize, train and equip space forces in order to protect
the U.S. and allied interests in space and to provide space capabilities to the joint force.
The NSS budget generally excludes funding for the NRO and NGA. Specific funding levels for these organizations,
which are long-term historical customers of our Earth Intelligence segment, are generally classified. However, the NRO
and NGA are included in the funding for the National Intelligence Program (“NIP”). The aggregate funding for the NIP
was $60.2 billion in FY 2019, $62.7 billion in FY 2020 and $60.8 billion in FY 2021. The NIP funding request for FY
2022 is $62.3 billion. Additionally, the aggregate funding for the Military Intelligence Program (“MIP”) was $21.5
billion in FY 2019, $23.1 billion in FY 2020 and $23.3 billion in FY 2021. The MIP funding request for FY 2022 is
$23.3 billion.
Furthermore, NASA requested $24.8 billion in FY 2022, an increase of 7% from FY 2021. The NASA budget further
highlights an effort by the government to invest in space exploration and development, with $8.3 billion of the total
allocated for deep space exploration systems and space technology. These include the key components of OSAM-1 and
the Artemis program that will send astronauts to the Moon and beyond, including the Lunar Gateway.
Growth Strategy
Our vision is to hold leading positions in each of the sectors we serve. We aim to achieve this by applying innovative
technologies and capabilities that provide value to our customers across their entire value chain, including components,
subsystems, systems, data and services. Specific elements of our strategy across our two segments include:
Earth Intelligence
Driving revenue growth through improvements in our products— we seek to improve and develop new Earth
intelligence products with WorldView Legion by productizing technologies and derivative content developed in support
of individual customer contracts, such as using more artificial intelligence and machine learning to extract features,
detect objects and detect change in our satellite imagery and complementary content. We believe we provide imagery
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with better than three times the accuracy of the nearest small-sat competitor and we believe that our accuracy advantage
is even greater in areas where we have leveraged our 3D and elevation capabilities. We believe we will be able to
provide even greater quality imagery and with higher revisit rates upon deployment of our WorldView Legion
constellation. The revisit rate and increase in capacity enables a clearer understanding of on ground conditions, allowing
for more real time, actionable analysis to deliver insights on rapidly changing environments and populations, while
providing for more frequent monitoring for defense and intelligence applications, enhanced emergency responsiveness
and maritime surveillance, among other applications. We have developed technology used to enhance the quality and
usability of imagery (e.g. eliminate atmospheric distortions, increase positional accuracy, improved interpretability, etc.),
create information derivatives (e.g. road vectors, material types, land classification, etc.), fuse multiple types of content
(e.g. Internet of Things, optical imagery, synthetic aperture radar imagery, radio frequency information, vectors, social
media, etc.), to detect change, understand patterns of life and gain early warning of trending events. We believe this type
of high resolution, highly accurate collection capacity will power wide-area, artificial intelligence and machine learning
modeling, sensor-to-shooter applications and a reference globe for AR/VR metaverse applications. Additionally, we
believe our resolution and accuracy are key enablers for deriving highly accurate and lifelike 3D models, which will
allow customers to transition from 2D to 3D capabilities that address critical missions such as GPS-denied navigation,
digital twin simulations, synthetic and real-world training environments, autonomous vehicle routing and telco network
planning. We believe that creating standard products using this technology will grow our product-based revenue with
customers in the technology, defense and intelligence, civil government and global development organization sectors.
Expanding our relationship with the U.S. government—the U.S. government is the largest customer of our Earth
Intelligence segment through the EnhancedView Contract, G-EGD and OWT programs and various classified and
unclassified contract vehicles. Demand for geospatial intelligence and services continues to grow given the geopolitical
environment and the confluence of high-performance computing and machine learning algorithms that allow for insights
to be extracted from ever greater levels of data being produced by Earth observation sensors and national and
commercial satellite assets. The U.S. government has expressed interest in increasingly relying on commercial partners
to harness the rapid pace of commercial innovation more effectively, including the continued use of geospatial data
given cost affordability and advances in technology that provide high quality imagery. We seek to grow our business
with the U.S. government by leveraging the investments we have made across our capability set, including in ML and AI
and our strong record of historic performance.
Growing our installed base and penetration of international defense and intelligence customers—we currently
provide service to U.S.-allied nations through our DAP, RAP, SecureWatch, Precision 3D products. These customers use
our imagery in their civil and intelligence related missions. Our imagery and services are either complementary to
national assets owned by these countries, or in some cases defer the need for a country to invest in owned and operated
national assets. We believe there are many prospective customers that have both the mission need and budget for our
services which we seek to add to our installed base. We also seek to further penetrate existing customers through the
provision of additional data and services. Lastly, we believe there are opportunities to provide our services to U.S. allied
nations who might seek a complement to national capabilities in geospatial analytics. Our strategy focuses on those
countries that currently have deep and longstanding relationships with our Earth Intelligence segment and other close
U.S. allies.
Growing with and expanding our installed base among enterprise customers—we have over 400 enterprise customers
that use our data in their products and applications across a variety of industries including technology, telecom,
transportation, mining, mapping, social media and oil and gas. The confluence of high-performance computing and ML
algorithms are allowing for insights to be extracted from ever greater quantities of imagery and meta data, which in turn
is driving innovation across our customer base. We expect this trend to continue, and we seek to grow with our existing
customers as well as to grow our install-base in new industry verticals by leveraging our sector leading imagery
capabilities. Furthermore, we believe our capabilities in ML, AI and Big Data Analytics products will position us to sell
additional solutions and services to our commercial customers.
Providing products that leverage machine learning and artificial intelligence— AI and ML enable us to extract greater
insight from our geospatial data to deliver actionable intelligence to our customers. We have continued to refine and
improve our approach to AI and ML, which benefit from our large volumes of historical training data and high quality
11
imagery. Productization of this capability will enable delivery of higher value, enriched geospatial data that we expect
will facilitate deeper penetration of the U.S. government, international governments and commercial markets.
Delivering 3D products to global defense, intelligence and commercial customers – through Maxar’s acquisition of
Vricon, we are expanding the demand for global scale 3D products. 3D products allow decision makers to understand
their operational environment in 3D – developing new insights that enable them to make better, faster decisions. We see
a growing opportunity to sell 3D data and software products to the military and intelligence community to support
virtual training environments and provide better information to the warfighter. U.S. and allied defense and intelligence
customers are seeking solutions to support intelligence fusion, maneuver and other mission requirements. We also see
significant opportunity with our commercial customers as they look for more accurate 3D geodata to deliver their
products through new mediums like AR and VR. Additionally, we have entered into license arrangements related to
certain consumer applications. The current investment in 5G networks and Internet of Things provides a unique
opportunity to deliver network operators a better data solution to improve their future networks. Additional use cases
continue to grow as 3D products and precision data sets become better understood.
Space Infrastructure
Driving revenue through improvement in our products and manufacturing and program capabilities— we are
developing differentiated capabilities that are designed for future space exploration, including propulsion, power and
robotics. We believe these elements will be critical to helping our customers operate in an increasingly contested space
environment and in achieving successful space exploration missions. We are also developing our satellite architectures
and manufacturing capabilities as we strive to assure that we can successfully fulfill both government and commercial
customer requirements on future programs, including high volume / low mix and variable volume / high mix programs.
We plan to team with providers of digital payload technology to enhance our offering if our customers express interest in
it. We are also developing relationships across the supply chain to assure that we can seamlessly provide a broad-breadth
of mission sets to our customers. Finally, we are working to transform our operations (e.g. location strategy, workforce
shaping, technology and systems investment and CAS / FAR compliance) so that we can address a larger set of
opportunities across our government and commercial customers.
Growing our U.S. and international civil exposure—we have a long history with civil space programs dating back to
the Apollo missions. Current NASA programs include the Power Propulsion Element for the Lunar Gateway, OSAM-1,
Psyche and TEMPO. We have also built robotic arms on six of NASA’s Mars rovers and landers. We seek to leverage
our investments and expertise in propulsion, power and robotics, as well as our strong legacy of performance, when
pursuing further civil work in the U.S. and abroad.
Deepening our penetration of U.S. national programs—to date, we have won several classified and unclassified study
contracts with U.S. defense and intelligence customers. We seek to further penetrate these markets by utilizing our
flexible satellite architectures, design and engineering capabilities and commercial business practices—all of which we
believe can create compelling value propositions.
Providing flexible platforms to our commercial customers—we currently provide components, subsystems and system
architectures to our customers for communications and Earth observation satellites in LEO, MEO and GEO orbits. In
communications, we offer flexible platforms across various architecture platforms and mission payloads from standard
analog to high throughput, and we are investing in digital solutions. In Earth observation, we also offer flexible solutions
across various architecture platforms and mission payloads, including electro-optic. Our goal is to be positioned well to
compete for future single satellite or full constellation build orders from our customers, across a wide range of the
architectures, payloads or Earth orbit chosen to fulfill mission requirements.
Government Contracts and Compliance with Government Regulations
Our operations are heavily regulated under various federal, state, local and international laws. Our operations in the U.S.
government market are subject to significant government regulation. We contract with numerous U.S. government
agencies and entities, including branches of the U.S. military and NASA. We must comply with, and are affected by,
laws and regulations relating to the formation, administration and performance of U.S. government and other
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governments’ contracts, including foreign governments. Compliance with legislation or regulations promulgated by
these authorities could result in material adverse effects on our capital expenditures, earnings and competitive position.
In addition, noncompliance with legislation or regulations promulgated by these authorities could result in limitations on,
or the suspension or revocation of, our licenses or registrations, the termination or loss of contracts or the imposition of
contractual damages, civil fines or criminal penalties, any of which could have a material adverse effect on our business,
financial condition and results of operations. Furthermore, any government policy changes, which may be substantial,
could increase regulatory uncertainty. The adoption or modification of laws or regulations relating to our business could
limit or otherwise adversely affect the manner in which we currently conduct our business. In addition, the manner in
which regulations or legislation in these areas may be interpreted and enforced cannot be precisely determined, which in
turn could have an adverse effect on our business, financial condition and results of operations. Additional information
about the government regulations affecting our business and the risks relating to government contracts and regulations
appears in "Risk Factors" in Item 1A of this Annual Report on Form 10-K.
U.S. Government Contracts
All of our reportable segments have contracts with various governmental entities, which are concentrated in a small
number of primary contracts. The U.S. government may terminate or suspend our contracts, including the
EnhancedView Contract with the U.S. government in our Earth Intelligence segment, at any time with or without cause.
The EnhancedView Contract includes three option years that commenced on September 1, 2020. The second option year
was exercised on July 15, 2021 for a one-year term ending on August 31, 2022. The final option year, if exercised by the
U.S. government, has a term from September 1, 2022 through July 12, 2023. In November 2021, the NRO announced
the release of the EOCL RFP, which is expected to replace the existing EnhancedView Contract. In December 2021, we
submitted our response to the EOCL RFP and anticipate the NRO to award EOCL contracts prior to the expiration of the
EnhancedView Contract, including remaining option years. Any changes in the size, scope or term of the EnhancedView
Contract, or any award we receive for the EOCL, could impact our satellite replenishment strategy and our ability to
repay or refinance our long-term debt. Although our U.S. government contracts generally involve fixed annual minimum
commitments, such commitments, along with all other contracts with the U.S. government, are subject to annual
Congressional appropriations and the federal budget process and as a result, the U.S. government may not continue to
fund these contracts at current or anticipated levels. The loss or reduction in scope of any one of our primary U.S.
government contracts would materially reduce our revenue and adversely impact our operating results and competitive
position.
Foreign Operations
Our international contracts may include industrial cooperation agreements requiring specific in-country purchases,
investments, manufacturing agreements or other financial obligations, known as offset obligations, and provide for
penalties in the event we fail to meet such requirements.
Environmental Regulations
Our operations are regulated under various federal, state, local and international laws governing the environment,
including laws governing the discharge of pollutants into the soil, air and water, the management and disposal of
hazardous substances and wastes and the cleanup of contaminated sites. We have infrastructure in place to ensure that
our operations are in compliance with all applicable environmental regulations. We do not believe that the costs of
compliance with these laws and regulations will have a material adverse effect on our capital expenditures, operating
results or competitive position. The imposition of more stringent standards or requirements under environmental laws or
regulations or a determination that we are responsible for the release of hazardous substances at our sites could result in
expenditures in excess of amounts currently estimated to be required for such matters. We have been designated, along
with numerous other companies, as a potentially responsible party for the clean-up of several hazardous waste sites.
Based on available information, we do not believe that any costs incurred in connection with such sites will have a
material adverse effect on our financial condition, results of operations, capital expenditures or competitive position.
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There can be no assurance that additional environmental matters will not arise in the future, or that costs will not be
incurred with respect to sites at which no problem is currently known.
Resources
Intellectual Property
We own a substantial intellectual property portfolio that includes many U.S. and foreign patents, as well as many U.S.
and international trademarks, service marks, domain names and copyrights. We actively pursue internal development of
intellectual property. In addition to our patent portfolio, we own other intellectual property such as unpatented trade
secrets, know-how, data and software. Additionally, we rely on licenses of certain intellectual property to conduct our
business operations, including certain proprietary rights to and from third parties. While our intellectual property rights
in the aggregate are important to our operations, we do not believe that any particular trade secret, patent, trademark,
copyright, license or other intellectual property right is of such importance that its loss, expiration or termination would
have a material effect on our business.
Raw Materials
Our businesses are generally engaged in limited manufacturing activities and have minimal near-term exposure to
fluctuations in the supply of raw materials. For those businesses that manufacture and sell products and systems, most of
the value that we provide is labor oriented, such as design, engineering, assembly and test activities. In manufacturing
our products, we use our own production capabilities as well as third-party suppliers and subcontractors. Certain aspects
of our manufacturing activities require relatively scarce raw materials or specialty component parts; occasionally, we
have experienced difficulty in our ability to procure raw materials, components, sub-assemblies and other supplies
required in our manufacturing processes. Recent supply shortages related to electronic chips is an example of some of
the challenges we face with materials. As we have several firm fixed price contracts, we bear some risk to supply chain
delivery issues and price increases.
Research and Development
We have a history of investing in development of technological advancements in our field of aerospace. We have both
internally and externally funded research and development projects. Our current and future business is dependent on
developing new enhancements and technology that go into our existing and future products and services. Our annual
research and development expenses from continuing operations were $27 million in 2021, $15 million in 2020 and $10
million in 2019. We intend to continue our focus on research and development and product and service enhancements as
a key strategy for innovation and growth. One of our current areas of focus is our development of the WorldView Legion
program, a capital project, and other new offerings within our Earth Intelligence segment, including 3D technology. In
our Space Infrastructure segment, we are also focused on the further development of components to be used in a variety
of our products. Our efforts will continue to be directed into fields that we believe offer the greatest opportunities for
long-term growth and profitability.
Human Capital
We endeavor to cultivate a positive employee experience as we deliver on Maxar and customer missions by attracting,
engaging and growing current and future Maxar team members; creating strong partnerships across the business;
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championing culture and fostering an inclusive and diverse environment; and impacting the broader community. We
take great pride in our values:
Behind the words are leaders, managers and team members who believe in our values and live by them. As of December
31, 2021, we employed 4,400 team members globally of which 96% are U.S. based and 4% are international. Within the
U.S., no team members are unionized, while in Europe a small number of team members are represented by a trade
union. Additionally, Maxar employs a highly technical workforce, with 77% of our employees working in engineering or
operations functions and the remainder in our sales and general and administrative functions.
Attracting Talent
The success of Maxar’s business depends largely on our ability to attract, engage and grow a diverse population of
talented technical and skilled team members at all levels. To succeed in highly competitive labor markets and for skill
sets that are scarce in the market, we have developed talent acquisition, team member engagement and total rewards
strategies, to achieve and maintain a competitive position.
Total Rewards
Our employee rewards programs are designed to provide an innovative, competitive, sustainable and scalable package
that allows us to compete for and retain top talent in our industry and markets, aligned with Maxar’s business and
strategic objectives.
We strive to offer comprehensive benefits at a highly competitive cost-share to U.S. team members, including health
insurance, direct round-the-clock access to doctors virtually and on-site, an array of targeted wellbeing programs, paid
and unpaid leave, parental leave for all new parents for birth or adoption, retirement, life and disability programs,
voluntary benefit options flexible to individual team member and family needs, tuition reimbursement, student loan
forgiveness, adoption reimbursement, pet insurance and enhanced mental and emotional health support.
In order to encourage our value “We Act Like Owners”, we offer an Employee Stock Purchase Plan with a discount for
team members in countries where it is practical to offer the program. We also offer short- and long-term incentive
programs to eligible team members.
Outside of the U.S., we provide benefits, retirement and time-off in countries where we have a meaningful population of
team members, designed based upon, among other things, market-specific practices and culture alignment.
Engaging Talent
We are driving a listening culture at Maxar through programs that regularly seek to engage team members in an ongoing
dialogue through town-halls, surveys, quarterly check-ins and listening sessions. We focus on topics including Maxar
strategy and business updates, understanding leadership effectiveness, communications clarity and other areas for
improvements. In 2021, we devoted special attention to our continued response to the pandemic and how team members
were faring. For both ongoing and targeted pulse surveys the results are shared with leaders and team members, and our
executive team analyzes areas for future focus and prioritization in response to the feedback to drive meaningful
improvement in team member engagement.
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In 2021, we launched a major leadership development initiative focused on upskilling leadership competencies tied to
our Maxar leadership framework. Our outreach included a leader learning series focused on timely leadership topics,
entry level manager development and a senior leadership and networking program, Catalyst.
Diversity, Inclusion and Belonging
As a purpose-driven organization built on our values, our Diversity, Inclusion and Belonging (“DIB”) strategy is to
foster a culture of inclusion and belonging. We know that our greatest strength comes from our team members. When
our team members feel like they belong and their opinions are respected, everyone can perform to their greatest
potential.
We are committed to this journey and will stay curious and focused on cultivating an inclusive environment that
promotes and values diversity, inclusion and belonging. Maxar, as a values-based company, makes this a priority, not
just because it’s the right thing to do, but because it makes Maxar stronger.
The DIB strategy is a three-pronged approach that informs and guides us in this journey to:
1.
2.
3.
Build a diverse, high-performing workforce by focusing on increasing diverse candidates in early
career roles and in technical positions.
Foster a culture of inclusion and belonging by growing inclusive leaders and increasing cultural
awareness.
Make an impact in the community and marketplace through together the efforts of the Maxar Better
World Foundation.
We are committed to transparency along this journey and our 2021 data of our U.S. workforce is below:
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COVID-19 Response
Team member health and safety is core to our successful operations across all areas of our business including
manufacturing and satellite operations environments and our work at customer sites. We have taken significant actions
over the past two years to address risk factors associated with COVID-19 and business continuity:
• Our COVID-19 Response Team comprised of facilities, safety, security, HR, IT and business leaders, meets
regularly and will continue as the pandemic evolves.
• We conducted several pulse surveys of our team members, with special focus on our COVID-19 response and
opportunities for improvement to ensure we understood team member concerns and could proactively address
those concerns.
• We focused on continuous communication and resources for team members, including open question and
answer forums, health & safety updates, benefits and mental health, exposure notifications and travel
information.
• To provide for the health and safety of our workforce and business continuity, we have implemented a
Vaccination Policy which requires that Maxar employees are vaccinated for COVID-19 unless they have an
approved accommodation. As an interim step to implementing this policy, we provided free daily on-site testing
for our unvaccinated population for a portion of 2021.
• All of our facilities are open and operational to support business operations. We continually monitor and assess
the locations and team member status to ensure we continue to operate safely for all stakeholders.
Available Information
Our website can be accessed at http://www.maxar.com. The website contains information about us and our operations.
Through a link on the Investor Relations section of our website, copies of our filings with the U.S. Securities and
Exchange Commission (“SEC”), including any Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, Proxy Statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers
and amendments to each of those reports and statements can be viewed and downloaded free of charge as soon as
reasonably practicable after the reports have been filed or furnished with the SEC. The information on our website is not
incorporated by reference and is not a part of this Annual Report on Form 10-K. Additionally, our reports, proxy and
information statements and other information filed with the SEC are available on the SEC’s website at
http://www.sec.gov. Our reports, proxy and information statements and other information filed can also be found under
our SEDAR profile at www.sedar.com.
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ITEM 1A. RISK FACTORS
We operate in a changing global environment that involves numerous known and unknown risks and uncertainties that
could materially adversely affect our business, financial condition and results of operations. The occurrence of any of the
following risks could materially and adversely affect our business, financial condition, prospects, results of operations
and cash flows. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial
may also materially adversely affect our business, prospects, financial condition, results of operations and cash flows.
Risk Factors Summary
Below is a summary of the principal risk factors that could adversely affect our business. This summary does not address
all the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks, can
be found after this summary in Item 1A of this Annual Report on Form 10-K.
• We are unable to predict the extent to which the global COVID-19 pandemic may adversely impact our business
operations, financial performance, results of operations and stock price.
• The future revenue and operating results of the Space Infrastructure segment are dependent on our ability to
generate a sustainable order rate for the satellite and space manufacturing operations and develop new
technologies to meet the needs of our customers or potential new customers.
• Our business with various governmental entities is subject to the policies, priorities, regulations, mandates and
funding levels of such governmental entities and may be negatively or positively impacted by any change
thereto.
• Our revenue, results of operations and reputation may be negatively impacted if our programs fail to meet
contractual requirements or our products contain defects or fail to operate in the expected manner.
• Any significant disruption in or unauthorized access to our computer systems or those of third parties that we
utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, and security
threats could result in a loss or degradation of service, unauthorized disclosure of data, or theft or tampering of
intellectual property, any of which could materially adversely impact our business.
• Satellites are subject to construction and launch delays, launch failures, damage or destruction during launch,
the occurrence of which can materially and adversely affect our operations.
•
If our satellites fail to operate as intended, it could have a material adverse effect on our business, financial
condition and results of operations.
• Loss of, or damage to, a satellite and the failure to obtain data or alternate sources of data for our products may
have an adverse impact on our results of operations and financial condition.
•
Interruption or failure of our infrastructure or national infrastructure could hurt our ability to effectively perform
our daily operations and provide and produce our products and services, which could damage our reputation and
harm our operating results.
• Our business with various governmental entities is concentrated in a small number of primary contracts. The loss
or reduction in scope of any one of our primary contracts would materially reduce our revenue.
• We operate in highly competitive industries and in various jurisdictions across the world, which may cause us to
have to reduce our prices or to lose market share.
• We are a party to legal proceedings, investigations and other claims or disputes, which are costly to defend and,
if determined adversely to us, could require us to pay fines or damages, undertake remedial measures or prevent
us from taking certain actions, any of which could adversely affect our business.
• Acquisitions or divestitures could result in adverse impacts on our operations.
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• Disruptions in U.S. government operations and funding could have a material adverse effect on our revenues,
earnings and cash flows and otherwise adversely affect our financial condition.
• Changes in U.S. government policy regarding use of commercial data or space infrastructure providers, or
material delay or cancellation of certain U.S. government programs, may have a material adverse effect on our
revenue and our ability to achieve our growth objectives.
• Uncertain global macro-economic and political conditions could materially adversely affect our results of
operations and financial condition.
• Our business involves significant risks and uncertainties that may not be covered by insurance.
• We often rely on a single vendor or a limited number of vendors to provide certain key products or services and
the inability of these key vendors to meet our needs could have a material adverse effect on our business.
• Disruptions in the supply of key raw materials or components and difficulties in the supplier qualification
process, as well as increases in prices of raw materials, could adversely impact us.
• We are dependent on our ability to attract, train and retain employees. Our inability to do so, or the loss of key
personnel, would cause serious harm to our business.
• Changes in our accounting estimates and assumptions could negatively affect our financial position and results
of operations.
• We may be required to recognize impairment charges.
• Our business is capital intensive, and we may not be able to raise adequate capital to finance our business
strategies, including funding future satellites, or we may be able to do so only on terms that significantly restrict
our ability to operate our business.
• Our ability to obtain additional debt or equity financing or government grants to finance operating working
capital requirements and growth initiatives may be limited or difficult to obtain, which could adversely affect
our operations and financial condition.
• Our indebtedness and other contractual obligations could adversely affect our financial condition, our ability to
raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes
in the economy or our industry and our ability to pay our debts and could divert our cash flow from operations
for debt payments.
• Our current financing arrangements contain certain restrictive covenants that impact our future operating and
financial flexibility.
• Our actual operating results may differ significantly from our guidance.
• We could be adversely impacted by actions of activist stockholders, and such activism could impact the value
of our securities.
• The price of our common stock has been volatile and may fluctuate substantially.
• Our operations in the U.S. government market are subject to significant regulatory risk.
• Failure to comply with the requirements of the National Industrial Security Program Operating Manual could
result in interruption, delay or suspension of our ability to provide our products and services, and could result in
loss of current and future business with the U.S. government.
• Our business is subject to various regulatory risks that could adversely affect our operations.
• Changes in tax law, in our tax rates or in exposure to additional income tax liabilities or assessments may
materially and adversely affect our financial condition, results of operations and cash flows.
• Our ability to use our U.S. federal and state net operating loss carryforwards and certain other tax attributes may
be limited.
• Our operations are subject to governmental law and regulations relating to environmental matters, which may
expose us to significant costs and liabilities that could negatively impact our financial condition.
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Risks Related to Our Business
We are unable to predict the extent to which the global COVID-19 pandemic may adversely impact our business
operations, financial performance, results of operations and stock price.
The COVID-19 outbreak, declared a pandemic by the World Health Organization, has impacted nearly all regions of the
world. Preventative measures taken to contain or mitigate the outbreak and their impact on the global supply chain have
affected, and continue to affect, the global economy and the U.S. economy and have created periods of significant
volatility in the global financial markets, the effects of which have adversely impacted our business and the businesses of
our customers, including the U.S. and foreign governments and suppliers.
Our supply chain is under stress inside and outside of the U.S., and we continue to monitor and assess the actual and
potential COVID-19 or related force majeure impacts on the supply chain, our operations and customer
commitments. There is a risk that these schedule delays could result in obligations for material liquidated damages owed
to our customers. We have received some force majeure claims from suppliers related to COVID-19; however, at this
time we do not expect the claims to result in a material financial impact.
From time to time, we have experienced a variation in the consumption of access minutes by our customers as a result of
COVID-19 and the preventative measures instituted by governments and businesses to mitigate its spread, which have
resulted in periods of business slowdown. This impact could be more significant in the future, which could negatively
impact revenue. In many instances, COVID-19 represents a force majeure event and as such, we have notified certain
customers that we will be exercising our contractual legal rights, and in some instances we have made claims exercising
such rights, given the uncertain nature of the current pandemic and its near and long-term impacts on the cost and
schedule of the numerous programs in our existing backlog. Additionally, our customers may slow down their
development of new projects or may experience financial difficulties impacting their ability to fund projects already in
backlog.
Changes in our operations in response to COVID-19 and employee illnesses resulting from the pandemic have resulted
in inefficiencies and delays of our projects, impacts to service level contracts, including in sales and product
development efforts and additional costs related to business continuity initiatives, that cannot be fully mitigated through
succession planning or employees working remotely. We have delayed transition of our employees back into Maxar
worksites due to increases in COVID-19 cases in the broad population. Additionally, to provide for the health and safety
of our workforce and business continuity, we have implemented a Vaccination Policy which requires that Maxar
employees are vaccinated for COVID-19 unless they have an approved accommodation. As of January 4, 2022, 99% of
our U.S. based employees were in compliance with this policy and have either been vaccinated or received an
accommodation.
We cannot predict the degree to which, or the time period that, global economic conditions, the global supply chain and
our sales and operations will continue to be affected by COVID-19 and preventative measures imposed from time to
time by governments and businesses to prevent its spread. The degree to which COVID-19 will continue to impact us
will depend on numerous factors and future developments, including, but not limited to, the unknown duration of the
pandemic, the impact of potential future resurgences and new virus variants and any actions that may be taken by
governmental authorities to minimize the spread of the pandemic or to stimulate the economy. We also cannot predict
the degree to which the disruption of global financial markets could have a negative impact on our ability to raise capital
in the future. The long-term impacts of COVID-19 on government budgets and funding priorities that impact demand for
our products and services are difficult to predict.
Even after the COVID-19 pandemic has subsided, we may experience an impact to our business as a result of any
economic downturn, recession or depression that has occurred or may occur in the future. The effects of these risks on
our business, sales, financial condition, liquidity and results of operations could be material.
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The future revenue and operating results of the Space Infrastructure segment are dependent on our ability to
generate a sustainable order rate for the satellite and space manufacturing operations and develop new technologies
to meet the needs of our customers or potential new customers.
The Space Infrastructure segment’s financial performance is dependent on its ability to generate a sustainable order rate
for its satellite and space manufacturing operations. This can be challenging and may fluctuate on an annual basis as the
number of satellite construction contracts awarded varies and in 2018 there was a substantial step down in the total
number and dollar value of geostationary communication satellite contracts awarded compared to such historical
averages prior to 2015. Many satellite operators in the communications industry have continued to defer new satellite
construction awards to evaluate geostationary and other competing satellite system architectures and other market
factors. If we are unable to win new awards or execute existing contracts as expected, our business, results of operations
and financial position could be further adversely affected.
The cyclical nature of the commercial satellite market could negatively impact our ability to accurately forecast
customer demand. The markets that we serve may not grow in the future and we may not be able to maintain adequate
gross margins or profits in these markets. Specifically, sales of the 1300 bus have historically been important to our
results and there is no assurance that this market will continue to grow or demand levels will increase, nor is there
assurance that the market for the smaller bus, which spans a range from 500kg to 1300kg, will offset any decreases in the
market for the 1300 bus or provide future growth. Our growth is dependent on the growth in the sales of services
provided by our customers, our customers’ ability to anticipate market trends and our ability to anticipate changes in the
businesses of our customers and to successfully identify and enter new markets. If we fail to anticipate such changes in
demand, our business, results of operations and financial position could be adversely affected.
On January 1, 2019, we completed a reorganization of our corporate structure pursuant to which we directly acquired all
of the issued and outstanding shares of Maxar Technologies Ltd. (“Maxar Canada”) and we replaced Maxar Canada as
the publicly-held parent company of the Maxar group (“U.S. Domestication”). As part of our U.S. Domestication we
believe that we will continue to capitalize on projected benefits within the Space Infrastructure segment. These benefits
include anticipated growth within our U.S. government customer base as well as diversifying into national and civil
missions. The failure to do so may have a material adverse effect on our business, results of operations and financial
condition.
The satellite manufacturing industry is driven by continued investment in technologies to meet changing customer
demand for complex and reliable services. Our satellite systems embody complex technologies and may not always be
compatible with current and evolving technical standards and systems developed by others. Other satellite manufacturers
have developed or are developing digital payloads which increase flexibility for geostationary satellites in circumstances
with unpredictable demand. We plan to team with providers of this technology to enhance our offering if our customers
express interest in it.
Failure or delays to develop technologies or team with providers to obtain technologies to meet the requisite and
evolving industry or user standards could have a material adverse effect on our business, results of operations and
financial condition. Failure of suppliers to deliver against end customer requirements could lead to a material adverse
effect on our financial results within the Space Infrastructure segment.
Our business with various governmental entities is subject to the policies, priorities, regulations, mandates and
funding levels of such governmental entities and may be negatively or positively impacted by any change thereto.
Changes in government policies, priorities, regulations, use of commercial data providers to meet U.S. government
imagery needs, government agency mandates, funding levels through agency budget reductions, the imposition of
budgetary constraints or a decline in government support or deferment of funding for programs in which we or our
customers participate could result in contract terminations, delays in contract awards, reduction in contract scope,
performance penalties or breaches of our contracts, the failure to exercise contract options, the cancellation of planned
procurements and fewer new business opportunities, all of which could negatively impact our business, financial
condition, results of operations and cash flows.
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We are subject to the procurement policies and procedures set forth in the Federal Acquisition Regulation (“FAR”). FAR
governs all aspects of government contracting, including contractor qualifications and acquisition procedures. The FAR
provisions in U.S. government contracts must be complied with in order for the contract to be awarded and provides for
audits and reviews of contract procurement, performance and administration. Failure to comply with the provisions of
the FAR could result in contract termination.
In addition, contracts with any government, including the U.S. government, may be terminated or suspended by the
government at any time and could result in significant liability obligations for us. We seek to have in place as standard
provisions, termination for convenience language which reimburses us for reasonable costs incurred, subcontractor and
employee termination and wind-down costs plus a reasonable amount of profit thereon. However, reparations for
termination may fall short of the financial benefit associated with full completion and operation of a contract. In
addition, we may not be able to procure new contracts to offset the revenue or backlog lost as a result of any termination
of government contracts. The loss of one or more large contracts could have a material adverse impact on our business,
financial condition, results of operations and cash flows. See also “Our business with various governmental entities is
concentrated in a small number of primary contracts. The loss or reduction in scope of any one of our primary contracts
would materially reduce our revenue” below.
Our revenue, results of operations and reputation may be negatively impacted if our programs fail to meet
contractual requirements or our products contain defects or fail to operate in the expected manner.
We sell complex and technologically advanced systems, including satellites, products, hardware and software.
Sophisticated software, including software developed by us, may contain defects that can unexpectedly interfere with the
software’s intended operation. Defects may also occur in components and products that we manufacture or purchase
from third parties. Most of the satellites and systems we have developed must function under demanding and
unpredictable operating conditions and in harsh and potentially destructive environments. In addition, we may agree to
the in-orbit delivery of a satellite, adding further risks to our ability to perform under a contract. Failure to achieve
successful in-orbit delivery could result in significant penalties and other obligations on us.
We employ sophisticated design and testing processes and practices, which include a range of stringent factory and on-
site acceptance tests with criteria and requirements that are jointly developed with customers. Our systems may not be
successfully implemented, pass required acceptance criteria, or operate or give the desired output, or we may not be able
to detect and fix all defects in the satellites, products, hardware and software we sell or resolve any delays or availability
issues in the launch services we procure. Failure to do so could result in increased costs, lost revenue and damage to our
reputation and may adversely affect our ability to win new contract awards. We manufacture satellites with the intention
of receiving full contractual value for builds; however, due to the inherent complexity, a number of adverse variables
could negatively impact our ability to collect on the full amount of contractual consideration including circumstances
where we may work in advance of customer funding. Such variables include, among others, schedule delays, including
those caused by suppliers or major subcontractors, contractual disputes, failure to meet technological requirements and
customer solvency concerns. These variables could lead to termination for convenience or default on our contracts which
could have a material adverse effect on our financial results. Historically, we have experienced significant delays in the
building of certain satellites. The schedule delays we from time to time experience in our satellite builds, some of which
are significant, are due to a number of factors, inclusive of COVID-19 delays, subcontractor issues and technological
requirements and we work closely with our customers to address these delays. We have, where appropriate, asserted
force majeure provisions in our contracts but these can be subject to dispute.
Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize
in our operations, including those relating to cybersecurity or arising from cyber-attacks, and security threats could
result in a loss or degradation of service, unauthorized disclosure of data, or theft or tampering of intellectual
property, any of which could materially adversely impact our business.
Our operations, products, solutions, analysis and intellectual property are inherently at risk of loss, unauthorized access,
tampering by both insider threats and external bad actors, or disruption due to inadvertent misconfiguration of our
computers and networks. In particular, our operations face various cyber and other security threats, including those
caused by physical or electronic break-ins, computer viruses, malware, worms, attacks by hackers or foreign
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governments, disruptions from unauthorized access and tampering, including through social engineering such as
phishing attacks, coordinated denial-of-service attacks and similar incidents. These cyber and other security threats could
result in attempts to gain unauthorized access to sensitive information, intellectual property, mission operations and
networks. Our systems (internal, customer and partner systems) and assets may also be subject to damage or interruption
from natural and other disaster events or disruptions including tsunamis, floods, earthquakes, fires, water shortages,
other extreme weather conditions, epidemics or pandemics, acts of domestic or foreign terrorism, workplace violence,
power shortages and blackouts, aging infrastructures and telecommunications failures. In addition, threats to the safety
of our directors and employees, threats to the security of our facilities, infrastructure and supply chain, or the release of
misleading or deceptive information by criminal, terrorist, or other bad actors, could have a material adverse impact on
our business.
Our products, solutions and analysis that we develop or deliver to our customers are also at risk of disruption, loss, or
tampering. The integrity of the data (e.g., pixels), information, and analysis in our products and services is at risk of
being manipulated either before or after delivery to a customer. Our products with derived information characteristics are
also at risk of being incorrect due to errors of deceptive practices by others.
Our customers and partners (including our supply chain and joint ventures) face similar threats. Customer or partner
proprietary, classified, or sensitive information stored on our networks is at risk. Assets and intellectual property and
products in customer or partner environments are also inherently at risk. We also have risk where we have access to
customer and partner networks and face risks of breach, disruption or loss as well. Our supply chain for products and
services also is becoming more diverse and therefore the risk is growing.
We have implemented certain systems and processes to help thwart bad actors and protect our data and our systems and
assets. The techniques used to gain unauthorized access are constantly evolving, however, and we may be unable to
prevent or mitigate all unauthorized access, disruption, loss, or harm. Because of our highly desired intellectual property
and our support of the U.S. government and other governments, we (and/or partners we use) may be a particularly
attractive target for such attacks by advanced, persistent and highly organized adversaries, including nation states and
hostile foreign governments. From time to time, we have experienced attacks on our systems from bad actors that, to
date, have not had a material adverse effect on our business. We cannot offer assurances, however, that future attacks
will not materially adversely affect our business.
A security event or other significant disruption of our systems, assets, products or solutions could:
•
•
disrupt the proper functioning of our networks, applications and systems and therefore our operations and/or
those of certain of our customers, or partners;
result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, our or our
customers’ proprietary, confidential, sensitive or otherwise valuable information, including trade secrets, which
others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and
outcomes;
destroy or degrade assets including space, ground and intellectual property assets;
•
• manipulate or tamper with our products, solutions, analysis, or other systems delivered to our customers or
•
•
partners;
compromise other sensitive government functions; and
damage our reputation with our customers (particularly agencies of various governments) and the public
generally.
A security event that involves classified or other sensitive government information or certain controlled technical
information, could subject us to civil or criminal penalties and could result in loss of our secure facility clearance and
other accreditations, loss of our government contracts, loss of access to classified information, loss of export privileges
or debarment as a government contractor. The risk that these types of events could seriously harm our business is likely
to increase as we expand the number of web-based products and services we offer as well as increase the number of
countries within which we do business.
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Satellites are subject to construction and launch delays, launch failures, damage or destruction during launch,
the occurrence of which can materially and adversely affect our operations.
Delays in the construction of satellites and the procurement of requisite components and launch vehicles, limited
availability of appropriate launch windows, possible delays in obtaining regulatory approvals, satellite damage or
destruction during launch, launch failures, or incorrect orbital placement could have a material adverse effect on our
business, financial condition and results of operations. The loss of, or damage to, a satellite due to a launch failure could
result in significant delays in anticipated revenue to be generated by that satellite. Any significant delay in the
commencement of service of a satellite would delay or potentially permanently reduce the revenue anticipated to be
generated by that satellite. In addition, if the loss of a satellite were to occur, such as with our loss of WorldView-4, we
may not be able to accommodate affected customers with our other satellites or data from another source until a
replacement satellite is available, and we may not have on hand, or be able to obtain in a timely manner, the necessary
funds to cover the cost of any necessary satellite replacement. We may also dispute with customers the extent and
consequences of any loss or delay. Any launch delay, launch failure, underperformance, delay or perceived delay could
have a material adverse effect on our results of operations, business prospects and financial condition.
If our satellites fail to operate as intended, it could have a material adverse effect on our business, financial condition
and results of operations.
The manufacturing, testing, launching and operation of satellites involves complex processes and technology. Our
satellites employ advanced technologies and sensors that are exposed to severe environmental stresses in space that have
and could affect the performance of our satellites. Hardware component problems in space could lead to deterioration in
performance or loss of functionality of a satellite. In addition, human operators may execute improper implementation
commands that may negatively impact a satellite’s performance. Exposure of our satellites to an unanticipated
catastrophic event, such as a meteor shower or a collision with space debris, could reduce the performance of, or
completely destroy, the affected satellite. In December 2018, our WorldView-4 satellite experienced a failure in its
control moment gyros, preventing the satellite from collecting imagery.
We cannot provide assurances that our satellites will continue to operate successfully in space throughout their expected
operational lives. Even if a satellite is operated properly, technical flaws in that satellite’s sensors or other technical
deficiencies or anomalies could significantly hinder its performance, which could materially affect our ability to collect
imagery and market our products and services successfully. While some anomalies are covered by insurance policies,
others are not or may not be covered, or may be subject to large deductibles.
If we suffer a partial or total loss of a deployed satellite, such as the failure of WorldView-4, we would need a significant
amount of time and would incur substantial expense to replace that satellite. We may experience other problems with our
satellites that may reduce their performance. During any period of time in which a satellite is not fully operational, we
may lose most or all of the revenue that otherwise would have been derived from that satellite. Our inability to repair or
replace a defective satellite or correct any other technical problem in a timely manner could result in a significant loss of
revenue. If a satellite experiences a significant anomaly such that it becomes impaired or is no longer functional, it
would significantly impact our business, prospects and profitability. Additionally, our review of satellite lives could
extend or shorten the depreciable lives of our satellites, which would have an impact on the depreciation we recognize.
Loss of, or damage to, a satellite and the failure to obtain data or alternate sources of data for our products may have
an adverse impact on our results of operations and financial condition.
In the Earth Intelligence segment, we rely on data collected from a number of sources including data obtained from
satellites. We may become unable or limited in our ability to collect such data. For example, satellites can temporarily go
out of service and be recovered, or cease to function for reasons beyond our control, including the quality of design and
construction, the supply of fuel, the expected gradual environmental degradation of solar panels, the durability of various
satellite components and the orbits and space environments in which the satellites are placed and operated. Electrostatic
storms, collisions with other objects or actions by malicious actors, including cyber related, could also damage the
satellites. Our satellites may be subject to an increased risk of collision with other space objects due to growth in the
number of commercial and government satellites, along with potential adversarial actions that may create more space
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debris. Additionally, in certain instances, governments may discontinue for periods of time the access to or operation of
a satellite for any particular area on the Earth and for various reasons may not permit transmission of certain data,
whether from a satellite owned by the government or not.
We cannot offer assurances that each of our satellites will remain in operation. Our satellites have certain redundant
systems which can fail partially or in their entirety and accordingly satellites may operate for extended periods without
all redundant systems in operation, but with single points of failure. The failure of satellite components could cause
damage to or loss of the use of a satellite before the end of its expected operational life. Certain of our satellites are
nearing the end of their expected operational lives and we can offer no assurance that our satellites will maintain their
prescribed orbits or remain operational and we may not have replacement satellites that are immediately available.
Interruption or failure of our infrastructure or national infrastructure could hurt our ability to effectively perform
our daily operations and provide and produce our products and services, which could damage our reputation and
harm our operating results.
We are vulnerable to natural disasters and significant disruptions including tsunamis, floods, earthquakes, fires, water
shortages, other extreme weather conditions, epidemics or pandemics, acts of domestic or foreign terrorism, workplace
violence, power shortages and blackouts, aging infrastructures and telecommunications failures. Furthermore, climate
change has increased, and may continue to increase, the rate, size and scope of these natural disasters. In the event of
such a natural disaster or other disruption, we could experience: disruptions to our operations or the operations of
suppliers, subcontractors, distributors or customers; destruction of facilities; and/or loss of life.
The availability of many of our products and services depends on the continuing operation of our satellite operations
infrastructure, satellite manufacturing operations, information technology, communications systems and national
infrastructure. Any downtime, damage to or failure of our systems could result in interruptions in our service, which
could reduce our revenue and profits. Our systems are vulnerable to damage or interruption from floods, fires, power
loss, aging infrastructure, telecommunications failures, computer viruses, computer denial of service attacks or other
attempts to harm our systems. We do not currently maintain a fully comprehensive back-up production facility from
which we can continue to collect, process and deliver imagery in the event of the loss of our primary facility. In the
event we are unable to collect, process and deliver imagery from our facility, our daily operations and operating results
would be materially and adversely affected. In addition, our ground terminal centers are vulnerable to damage or
interruption from human error, intentional bad acts, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power
losses, hardware failures, systems failures, aging infrastructure, telecommunications failures and similar events. Our
satellite manufacturing operations are located in California in proximity to the San Andreas fault line, one of the longest
and most heavily populated earthquake-prone rifts in the world. Our satellite manufacturing facilities are also subject to
risks associated with an aging infrastructure. An infrastructure failure could result in the destruction of satellites under
construction or inventory, manufacturing delays or additional costs incurred. We do not maintain back-up manufacturing
facilities or operations. The occurrence of any of the foregoing could result in lengthy interruptions in our services
and/or damage our reputation, which could have a material adverse effect on our financial condition and results of
operations.
Our business with various governmental entities is concentrated in a small number of primary contracts. The loss
or reduction in scope of any one of our primary contracts would materially reduce our revenue.
Our business with various governmental entities is concentrated in a small number of primary contracts. We recognize
significant revenue from U.S. government agencies and a significant amount of our U.S. government revenue is
currently generated from a single contract, the EnhancedView Contract. The EnhancedView Contract is a service level
agreement to provide image-tasking capacity on our satellites, and other imagery-derived products and services to the
U.S. government. Our ability to service other customers could be negatively impacted if we are unable to maintain our
current collection capacity. In addition, any inability on our part to meet the performance requirements of the
EnhancedView Contract, or replacement contract, could result in a performance penalty or breach of that contract. A
breach of our contract with government customers or reduction in service to our other customers could have a material
adverse effect on our business, financial condition and results of operations. The U.S. government may also terminate or
suspend our contracts, including the EnhancedView Contract, at any time with or without cause. In November 2021, the
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NRO announced the release of the EOCL contract RFP. The EOCL contract is expected to replace the existing
EnhancedView Contract. In December 2021, we submitted our response to the EOCL RFP and we anticipate the NRO to
award EOCL contracts prior to the expiration of the EnhancedView Contract, including remaining option years. Any
changes in the size, scope or term of the EnhancedView Contract, or any award we receive for the EOCL Contract, could
impact our satellite replenishment strategy and our ability to repay or refinance our long-term debt. Although our
contracts generally involve fixed annual minimum commitments, such commitments, along with all other contracts with
the U.S. government, are subject to annual Congressional appropriations and the federal budget process, and as a result,
the U.S. government may not continue to fund these contracts at current or anticipated levels. Similarly, our contracts in
other jurisdictions are also subject to government procurement policies and procedures.
We face competition that may cause us to have to either reduce our prices for imagery and related services or to lose
market share.
Our services compete with satellite and aerial imagery and related services offered by a range of private and government
providers. Our current or future competitors may have superior technologies or greater financial, personnel and other
resources than we have. The value of our imagery may also be diluted by Earth imagery that is available free of charge.
The U.S. government and foreign governments may develop, construct, launch and operate their own imagery satellites,
which could reduce their need to rely on us and other commercial suppliers. In addition, such governments could sell or
provide free of charge Earth imagery from their satellites and thereby compete with our imagery and related services.
Also, governments may at times make our imagery freely available for humanitarian purposes, which could impair our
revenue growth with non-governmental organizations. These governments could also subsidize the development, launch
and operation of imagery satellites by our current or future competitors.
Our competitors or potential competitors could, in the future, offer satellite-based imagery or other services with more
attractive features than our services. The emergence of new remote imaging technologies or the continued growth of
low-cost imaging satellites, could negatively affect our marketing efforts. More importantly, if competitors develop and
launch satellites or other imagery-content sources with more advanced capabilities and technologies than ours, or offer
services at lower prices than ours, our business and results of operations could be harmed. Due to competitive pricing
pressures, such as new product introductions by us or our competitors or other factors, the selling price of our services
may further decrease. If we are unable to offset decreases in our average selling prices by increasing our sales volumes
or by adjusting our service mix, our revenue and operating margins may decline and our financial position may be
harmed.
We operate in highly competitive industries and in various jurisdictions across the world, which may cause us to have
to reduce our prices.
We operate in highly competitive industries and many of our competitors are larger and have substantially greater
resources than we have. Our primary competitors for satellite manufacturing contracts include the Boeing Company,
Lockheed Martin Corporation and Northrop Grumman Corporation in the United States and Thales S.A. and Airbus
Defence and Space, a subsidiary of the Airbus Group, in Europe. We may also face competition in the future from more
emerging low-cost competitors, some of which could be subsidized or well-funded. Competition in our Earth
Intelligence segment is highly diverse, and while our competitors offer different products, there is often competition for
contracts that are part of governmental budgets. Our major existing and potential competitors for our Earth Intelligence
segment include commercial satellite imagery companies, state-owned imagery providers, aerial imagery companies,
free sources of imagery and unmanned aerial vehicles. Our Earth Intelligence segment faces competition from
companies that provide geospatial analytic information and services to the U.S. government, including defense prime
contractors such as L3Harris and Booz Allen Hamilton.
In addition, some of our foreign competitors currently benefit from, and others may benefit in the future from, protective
measures by their home countries where governments are providing financial support, including significant investments
in the development of new technologies. Government support of this nature greatly reduces the commercial risks
associated with satellite development activities for these competitors. This market environment may result in increased
pressures on our pricing and other competitive factors.
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We are a party to legal proceedings, investigations and other claims or disputes, which are costly to defend and,
if determined adversely to us, could require us to pay fines or damages, undertake remedial measures or prevent us
from taking certain actions, any of which could adversely affect our business.
We are, and in the future may be, a party to legal proceedings, investigations and other claims or disputes, which may
relate to subjects including commercial transactions, intellectual property, securities, employee relations, or compliance
with applicable laws and regulations.
For instance, in January 2019, a Maxar stockholder filed a putative class action lawsuit in the Federal District Court of
Colorado, naming Maxar and members of management as defendants alleging, among other things, that our public
disclosures were false or misleading in violation of the Securities Exchange Act of 1934 and seeking monetary damages.
An amended consolidated complaint was filed in that case in October 2019. On September 11, 2020, the court granted in
part, and denied in part, Maxar’s motion to dismiss. On July 16, 2021, the Federal District Court of Colorado certified a
class consisting of investors who purchased or acquired Maxar stock between May 9, 2018 and October 30, 2018,
inclusive. Also, in January 2019, a Maxar stockholder resident in Canada issued a putative class action lawsuit in the
Ontario Superior Court of Justice against Maxar and members of management claiming misrepresentations in our public
disclosures and seeking monetary damages under Canadian securities laws. In November 2019, a second putative class
action lawsuit was issued by the same Maxar stockholder resident in Canada, adding a second representative plaintiff
and three additional defendants, including Maxar’s auditor KPMG LLP. The action against KPMG LLP was later
discontinued. The second claim expands the proposed class period and the breadth of the allegations against us. In
February 2020, the January 2019 Canadian lawsuit was discontinued. In October 2019, a Maxar stockholder filed a
putative class action lawsuit in California state court, naming Maxar and certain members of management and the board
of directors as defendants. The lawsuit is based upon many of the same underlying factual allegations as the federal class
action but asserts claims under the Securities Act of 1933. An amended complaint was filed in April 2020. In November
2020, defendants filed a demurrer to the operative complaint, and in January 2021, the court largely overruled the
demurrer. On August 20, 2021, the court certified a class consisting of investors who acquired Maxar stock in exchange
for DigitalGlobe stock pursuant to the Company’s June 2, 2017 Registration Statement and Prospectus issued in
connection with Maxar’s October 2017 acquisition of DigitalGlobe. In November 2019, a purported derivative
complaint was filed against Maxar, certain current and former members of management and the board of directors in the
Federal District Court of Delaware, also based on the same factual allegations as the federal putative class action. On
September 18, 2020, a second purported derivative case was filed in the Federal District Court of Delaware, based on the
same allegations as the earlier derivative case. The two derivative cases pending in the Federal District Court of
Delaware have been consolidated and are stayed. On September 15, 2021, a third purported derivative complaint was
filed against Maxar, certain current and former members of management and the board of directors in the Court of
Chancery of the State of Delaware, also based on the same factual allegations as the federal class action. In November
2021, the parties stipulated to a stay of this action.
These legal proceedings could result in substantial costs and diversion of management’s attention and resources and
could harm our stock price, business, prospects, results of operations and financial condition. These and other legal
proceedings and investigations are inherently uncertain and we cannot predict their duration, scope, outcome or
consequences. There can be no assurance that these or any such matters that have been or may in the future be brought
against us will be resolved favorably. In connection with any government investigations, in the event the government
takes action against us or the parties resolve or settle the matter, we may be required to pay substantial fines or civil and
criminal penalties and/or be subject to equitable remedies, including disgorgement or injunctive relief. Other legal or
regulatory proceedings, including lawsuits filed by private litigants, may also follow as a consequence. These matters are
likely to be expensive and time-consuming to defend, settle and/or resolve and may require us to implement certain
remedial measures that could prove costly or disruptive to our business and operations. They may also cause damage to
our business reputation. The unfavorable resolution of one or more of these matters could have a material adverse effect
on our business, results of operations, financial condition or cash flows.
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Acquisitions or divestitures could result in adverse impacts on our operations.
In order to grow our business, we may acquire additional assets or companies, including for example, our recent Vricon
Acquisition completed on July 1, 2020. In connection with the Vricon Acquisition or any future acquisitions, there can
be no assurance that we will be able to identify, acquire, or obtain the required regulatory approvals, or profitably
manage the additional businesses or successfully integrate any acquired businesses, products or technologies without
substantial expenses, delays or other operational, regulatory, or financial problems. In addition, any acquired businesses,
products or technologies may not achieve anticipated revenues and income growth.
Further, acquisitions may involve a number of additional risks, including diversion of management’s attention, failure to
retain key personnel, or failure to attract the necessary talent to manage organizational growth. We may become
responsible for unexpected liabilities that were not discovered or disclosed in the course of due diligence in connection
with historical acquisitions and any future acquisitions. Additionally, acquisitions with international operations such as
the Vricon Acquisition with operations in Sweden, expose us to greater international business risks. If we do not realize
the expected benefits or synergies of an acquisition, such as revenue gains or cost reductions, there could be a material
adverse effect on our business, results of operations and financial condition.
We may also seek to divest portions of our businesses which may no longer be aligned with our strategic initiatives and
long-term objectives. Various factors could materially affect our ability to successfully do so, including the availability
of buyers willing to purchase the assets on terms acceptable to us, difficulties in the separation of operations, the
diversion of management's attention from other business concerns, the disruption of our business, the potential loss of
key employees and the retention of uncertain contingent liabilities related to the divested business. We cannot assure that
we will be successful in managing these or any other significant risks that we encounter in divesting a business or
product line, and any divestiture we undertake could materially and adversely affect our business, financial condition,
results of operations and cash flows.
Disruptions in U.S. government operations and funding could have a material adverse effect on our revenues,
earnings and cash flows and otherwise adversely affect our financial condition.
Any disruptions in federal government operations could have a material adverse effect on our revenues, earnings and
cash flows. A prolonged failure to maintain significant U.S. government operations, particularly those pertaining to our
business, could have a material adverse effect on our revenues, earnings and cash flows. Continued uncertainty related to
recent and future U.S. federal government shutdowns, the U.S. budget and/or failure of the U.S. government to enact
annual appropriations, such as long-term funding under a continuing resolution, could have a material adverse effect on
our revenues, earnings and cash flows. Additionally, disruptions in federal government operations may negatively
impact regulatory approvals and guidance that are important to our operations.
Changes in U.S. government policy regarding use of commercial data or space infrastructure providers, or material
delay or cancellation of certain U.S. government programs, may have a material adverse effect on our revenue and
our ability to achieve our growth objectives.
Current U.S. government policy encourages the U.S. government’s use of commercial data and Space Infrastructure
providers to support U.S. national security objectives. Under the EnhancedView Contract, our contractual counterparty
acquires imagery and imagery-derived products on behalf of our customers within the U.S. government. We are
considered by the U.S. government to be a commercial data provider. U.S. government policy is subject to change and
any change in policy away from supporting the use of commercial data and Space Infrastructure providers to meet U.S.
government imagery and Space Infrastructure needs, or any material delay or cancellation of planned U.S. government
programs, including the EnhancedView Contract, could materially adversely affect our revenue and our ability to
achieve our growth objectives.
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Uncertain global macro-economic and political conditions could materially adversely affect our results of operations
and financial condition.
Our results of operations are materially affected by economic and political conditions in the United States and
internationally, including inflation, deflation, interest rates, availability of capital, energy and commodity prices, trade
laws and the effects of governmental initiatives to manage economic conditions. Current or potential customers may
delay or decrease spending on our products and services as their business and/or budgets are impacted by economic
conditions. The inability of current and potential customers to pay us for our products and services may adversely affect
our earnings and cash flows.
Our business involves significant risks and uncertainties that may not be covered by insurance.
A significant portion of our business relates to designing, developing and manufacturing advanced space technology
products and systems. New technologies may be untested or unproven. Failure of some of these products and services
could result in extensive property damage. Accordingly, we may incur liabilities that are unique to our products and
services.
We endeavor to obtain insurance coverage from established insurance carriers to cover these risks and liabilities.
However, the amount of insurance coverage that we maintain may not be adequate to cover all claims or liabilities.
Existing coverage may be canceled while we remain exposed to the risk and it is not possible to obtain insurance to
protect against all operational risks, natural hazards and liabilities.
We have historically insured satellites in our constellation to the extent that insurance was available on acceptable
premiums and other terms. The insurance proceeds received in connection with a partial or total loss of the functional
capacity of any of our satellites would not be sufficient to cover the replacement cost, if we choose to do so, of an
equivalent high-resolution satellite. In addition, this insurance will not protect us against all losses to our satellites due to
specified exclusions, deductibles and material change limitations customary in the industry and it may be difficult or
impossible to insure against certain risks, including a partial deterioration in satellite performance and satellite re-entry.
The price and availability of insurance fluctuate significantly. Although we have historically been able to obtain
insurance coverage for in-orbit satellites, we cannot guarantee that we will be able to do so in the future. We intend to
maintain insurance for our operating satellites, but any determination we make as to whether to obtain insurance
coverage will depend on a variety of factors, including the availability of insurance in the market, the cost of available
insurance and the redundancy of our operating satellites. Insurance market conditions or factors outside our control at the
time we are in the market for the required insurance, such as failure of a satellite using similar components, could cause
premiums to be significantly higher than current estimates and could reduce amounts of available coverage. The cost of
our insurance has been increasing and may continue to increase. Higher premiums on insurance policies will reduce our
operating income by the amount of such increased premiums. If the terms of in-orbit insurance policies become less
favorable than those currently available, there may be limits on the amount of coverage that we can obtain, or we may
not be able to obtain insurance at all.
In addition, even though we carry business interruption insurance policies, any business interruption losses could exceed
the coverage available or be excluded from our insurance policies. Any disruption of our ability to operate our business
could result in a material decrease in our revenues or significant additional costs to replace, repair or insure our assets,
which could have a material adverse impact on our financial condition and results of operations.
We often rely on a single vendor or a limited number of vendors to provide certain key products or services and the
inability of these key vendors to meet our needs could have a material adverse effect on our business.
Historically, we have contracted with a single vendor or a limited number of vendors to provide certain key products or
services, such as construction of satellites and launch vehicles and management of certain remote ground terminals and
direct access facilities. In addition, our manufacturing operations depend on specific technologies and companies for
which there may be a limited number of vendors. We are increasingly dependent upon subcontractors and suppliers
which subjects our business and results of operations to risks of supplier interruption. If these vendors are unable to meet
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our needs because they fail to perform adequately, are unable to match new technological requirements or opportunities,
or are unable to dedicate engineering and other resources necessary to provide the services contracted for, our business,
financial position and results of operations may be adversely affected. While alternative sources for these products,
services and technologies may exist, we may not be able to develop these alternative sources quickly and cost-
effectively, which could materially impair our ability to operate our business. Furthermore, these vendors may request
changes in pricing, payment terms or other contractual obligations, which could cause us to make substantial additional
investments.
Additionally, some of our suppliers’ employees are represented by labor unions. Labor union actions at suppliers can
also affect us. Work stoppages and instability in our relationships with labor unions could delay the production and/or
development of our products, which could strain relationships with customers, cause a loss of revenues and adversely
affect our operations.
Disruptions in the supply of key raw materials or components and difficulties in the supplier qualification process, as
well as increases in prices of raw materials, could adversely impact us.
Many raw materials, major components and product equipment items, particularly in our Space Infrastructure segment,
are procured or subcontracted on a single or sole-source basis. Although we maintain a qualification and performance
surveillance process and we believe that near-term sources of supply for raw materials and components are generally
adequate, it is difficult to predict what effects shortages or price increases may have in the future. Supply shortages
related to electronic chips is an example of some of the challenges we may face with materials. Our ability to manage
inventory and meet delivery requirements may be constrained by our suppliers’ inability to scale production and adjust
delivery of long-lead time products during times of volatile demand. Our inability to fill our supply needs would
jeopardize our ability to fulfill obligations under commercial and government contracts, which could, in turn, result in
reduced sales and profits, contract penalties or terminations and damage to customer relationships and could have a
material adverse effect on our operating results, financial condition, or cash flows.
Key raw materials used in our operations include metals such as aluminum and titanium, which are usually procured by
our suppliers who manufacture parts in accordance with our drawings. We also purchase materials such as chemicals;
composites; electronic, electro-mechanical and mechanical components; subassemblies; and subsystems that are
integrated with the manufactured parts for final assembly into finished products and systems. We are impacted by
increases in the prices of raw materials used in production on fixed-price business.
We monitor sources of supply to attempt to assure that adequate raw materials and other supplies needed in
manufacturing processes are available.
Although we have not experienced significant difficulty in our ability to procure raw materials, components, sub-
assemblies and other supplies required in our manufacturing processes, prolonged disruptions in the supply of any of our
key raw materials or components, difficulty completing qualification of new sources of supply, implementing use of
replacement materials, components or new sources of supply, or a continuing increase in the prices of raw materials,
energy or components could have a material adverse effect on our operating results, financial condition, or cash flows.
We are dependent on resellers of our services for a portion of our revenue. If these resellers fail to market or sell our
services successfully, our business could be harmed.
The Earth Intelligence segment has historically generated a portion of its revenue from foreign and domestic resellers. In
the Earth Intelligence segment, we rely on foreign resellers and partners to market and sell the majority of our services in
the international market. Our foreign resellers and partners may not have the skill or experience to develop regional
commercial markets for our services, or may have competing interests that negatively affect their sales of our services. If
we fail to enter into reseller agreements on a timely basis or if our resellers and partners fail to market and sell our
services successfully, these failures could negatively impact our business, financial condition and results of operations.
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We may not be successful in developing new technology and the technology we are successful in developing may not
meet the needs of our customers or potential new customers.
The markets in which we operate are characterized by changing technology and evolving industry standards.
Despite years of experience in meeting customer systems requirements with the latest in technological solutions, we may
not be successful in identifying, developing and marketing products or systems that respond to rapid technological
change, evolving technical standards and systems developed by others. Our competitors may develop technology that
better meets the needs of our customers. If we do not continue to develop, manufacture and market innovative
technologies or applications that meet customers’ requirements, sales may suffer and our business may not continue to
grow in line with historical rates or at all. If we are unable to achieve sustained growth, we may be unable to execute our
business strategy, expand our business or fund other liquidity needs and our business prospects, financial condition and
results of operations could be materially and adversely affected.
Our technology may violate the proprietary rights of third parties and our intellectual property may be
misappropriated or infringed upon by third parties, each of which could have a negative impact on our operations.
If any of our technology violates proprietary rights, including copyrights and patents, third parties may assert
infringement claims against us. Certain software modules and other intellectual property used by us or in our satellites,
systems and products make use of or incorporate licensed software components and other licensed technology. These
components are developed by third parties over whom we have no control. Any claims brought against us may result in
limitations on our ability to use the intellectual property subject to these claims. We may be required to redesign our
satellites, systems or products or to obtain licenses from third parties to continue offering our satellites, systems or
products without substantially re-engineering such products or systems.
Our intellectual property rights may be invalidated, circumvented, challenged, infringed or required to be licensed to
others. An infringement or misappropriation could harm any competitive advantage we currently derive or may derive
from our proprietary rights.
To protect our proprietary rights, we rely on a combination of patent protections, copyrights, trade secrets, trademark
laws, confidentiality agreements with employees and third parties and protective contractual provisions such as those
contained in license agreements with consultants, subcontractors, vendors and customers. Although we apply rigorous
standards, documents and processes to protect our intellectual property, there is no absolute assurance that the steps
taken to protect our technology will prevent misappropriation or infringement. Litigation may be necessary to enforce or
protect our intellectual property rights, our trade secrets or determine the validity and scope of the proprietary rights of
others. Such litigation may be time-consuming and expensive to prosecute or defend and could result in the diversion of
our time and resources. In addition, competitors may design around our technology or develop competing technologies.
The acceptance of our imagery services may not continue and our historic growth rates should not be relied upon
as an indicator of future growth.
We cannot accurately predict the extent of the market acceptance of our services or whether there will continue to be a
market for our services on terms we find acceptable. Market acceptance of our commercial high-resolution Earth
imagery and related services depends on a number of factors, including the quality, scope, timeliness, sophistication,
price and the availability of substitute services. Changes in the market acceptance of our offerings, or other services that
utilize our imagery, failure of new markets to develop, the impact of competitive conditions, or our need to make
significant investments to achieve acceptance by the market would negatively affect our business, financial condition
and results of operations. We may not continue to grow in line with historical rates or at all. If we are unable to achieve
sustained growth, we may be unable to execute our business strategy, expand our business or fund other liquidity needs
and our business prospects, financial condition and results of operations could be materially and adversely affected.
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We are dependent on our ability to attract, train and retain employees. Our inability to do so, or the loss of key
personnel, would cause serious harm to our business.
Our success is largely dependent on the abilities and experience of our executive officers and other key personnel to
oversee all aspects of our operations and to deliver on our corporate strategies. Competition for highly skilled
management, technical, research and development and other personnel is intense in our industry. In order to maintain our
ability to compete, we must continuously retain the services of a core group of specialists in a wide variety of
disciplines. To the extent that the demand for qualified personnel exceeds supply, we could experience higher labor,
recruiting or training costs in order to attract and retain such employees, or could experience difficulties in performing
under contracts if our need for such employees is unmet. We may not be able to retain our current executive officers or
key personnel or attract and retain additional executive officers or key personnel as needed to deliver on our corporate
strategy. Furthermore, the recent volatility in our stock price may undermine the use of our equity as a retention tool and
may make it more difficult to retain key personnel.
Changes in our accounting estimates and assumptions could negatively affect our financial position and results
of operations.
We prepare our Consolidated Financial Statements in accordance with U.S. GAAP. These accounting principles require
us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of our financial statements. We are also required to make certain judgments
that affect the reported amounts of revenues and expenses during each reporting period. We periodically evaluate our
estimates and assumptions including, but not limited to, those relating our critical accounting policies of revenue
recognition, including our long-term contracts accounted for utilizing the cost-to-cost method and income taxes in
addition to other estimates related to restructuring costs, recoverability of assets including customer receivables,
valuation of goodwill and intangibles, contingencies and stock-based compensation. We base our estimates on historical
experience and various assumptions that we believe to be reasonable based on specific circumstances. These
assumptions and estimates involve the exercise of judgment and discretion, which may evolve over time in light of
operational experience, regulatory direction, developments in accounting principles and other factors. Actual results
could differ from these estimates as a result of changes in circumstances, assumptions, policies or developments in the
business, which could materially affect our Consolidated Financial Statements.
We may be required to recognize impairment charges.
Long-lived assets, including goodwill and intangible assets, are tested annually for impairment in the fourth quarter or
whenever there is an indication that an asset may be impaired. In the past, we have recognized significant impairment
losses related to goodwill, intangible assets, property, plant and equipment, inventory and orbital receivables.
Disruptions to our business, unexpected significant declines in our operating results, adverse technological events or
changes in the regulatory markets in which we operate, and significant declines in our stock price have resulted and may
result in further impairment charges to our tangible and intangible assets. Any future impairment charges could
substantially affect our reported results.
Pension and other postretirement benefit obligations may materially impact our earnings, stockholders’ equity and
cash flows from operations, and could have significant adverse impacts in future periods.
We maintain defined benefit pension and other postretirement benefits plans for some of our employees. Potential
pension contributions include discretionary contributions to improve the plans’ funded status. The extent of future
contributions depends heavily on market factors such as the discount rate and the actual return on plan assets. We
estimate future contributions to these plans using assumptions with respect to these and other items. Changes to those
assumptions could have a significant effect on future contributions, annual pension and other postretirement costs, the
value of plan assets and our benefit obligations.
Significant changes in actual return on pension assets, discount rates and other factors could adversely affect our results
of operations and require cash pension contributions in future periods. Changes in discount rates and actual asset returns
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different than our expected asset returns can result in significant non-cash actuarial gains or losses which we record in
the fourth quarter of each fiscal year and, if applicable, in any quarter in which an interim re-measurement is triggered.
With regard to cash pension contributions, funding requirements for our pension plans are largely dependent upon
interest rates, actual investment returns on pension assets and the impact of legislative or regulatory changes related to
pension funding obligations.
We also provide other postretirement benefits to certain of our employees, consisting principally of health care, dental
and life insurance for eligible retirees and qualifying dependents. Our estimates of future costs associated with these
benefits are also subject to assumptions, including estimates of the level of medical cost increases and discount rates.
Fluctuations in foreign exchange rates could have a negative impact on our business.
Our revenues, expenses, assets and liabilities denominated in currencies other than the U.S. dollar are translated into
U.S. dollars for the purposes of compiling our Consolidated Financial Statements. We have in the past and may in the
future, use hedging strategies to manage and minimize the impact of exchange rate fluctuations on our cash flow and
economic profits. There are complexities inherent in determining whether and when foreign exchange exposures will
materialize, in particular given the possibility of unpredictable revenue variations arising from schedule delays and
contract postponements. Furthermore, if we use hedging strategies in the future, we could be exposed to the risk of non-
performance of our hedging counterparties. We may also have difficulty with our hedging strategy in the future
depending on the willingness of hedging counterparties to extend credit. Accordingly, no assurances may be given that
our exchange rate hedging strategy would protect us from significant changes or fluctuations in revenues and expenses
denominated in U.S. dollars.
Our restructuring activities and cost saving initiatives may not achieve the results we anticipate.
We have previously and may in the future undertake cost reduction initiatives and organizational restructurings to
improve operating efficiencies, optimize our asset base and generate cost savings. We cannot be certain that these
initiatives have been or will be completed as planned or without business interruption, that these initiatives will not
generate additional costs, such as severance or other charges, or that the estimated operating efficiencies or cost savings
from such activities will be fully realized or maintained over time.
Risks Related to Our Indebtedness and Our Common Stock
Our business is capital intensive, and we may not be able to raise adequate capital to finance our business strategies,
including funding future satellites, or we may be able to do so only on terms that significantly restrict our ability to
operate our business.
The implementation of our business strategies, such as expanding our satellite constellation and our products and
services offerings, requires a substantial outlay of capital. As we pursue our business strategies and seek to respond to
opportunities and trends in our industry, our actual capital expenditures may differ from our expected capital
expenditures, and there can be no assurance that we will be able to satisfy our capital requirements in the future. We are
highly leveraged, but we currently expect that our ongoing liquidity requirements for sustaining our operations will be
satisfied by cash on hand and cash generated from our existing and future operations supplemented, where necessary, by
available credit. However, we cannot provide assurances that our businesses will generate sufficient cash flow from
operations in the future or that additional capital will be available in amounts sufficient to enable us to execute our
business strategies. Our ability to increase our debt financing and/or renew existing credit facilities may be limited by
our existing financial and non-financial covenants, credit objectives, or the conditions of the debt capital market
generally. Furthermore, our current financing arrangements contain certain restrictive financial and non-financial
covenants (e.g., the achievement or maintenance of stated financial ratios) that may impact our access to those facilities
and significantly limit future operating and financial flexibility.
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Our ability to obtain additional debt or equity financing or government grants to finance operating working capital
requirements and growth initiatives may be limited or difficult to obtain, which could adversely affect our operations
and financial condition.
We need capital to finance operating working capital requirements and growth initiatives and to pay our outstanding debt
obligations as they become due for payment. If the cash generated from our businesses, together with the credit available
under existing bank facilities, is not sufficient to fund future capital requirements, we will require additional debt or
equity financing. Our ability to access capital markets on terms that are acceptable to us will be dependent on prevailing
market conditions, as well as our future financial condition. Further, our ability to increase our debt financing and/or
renew existing facilities may be limited by our existing leverage, financial and non-financial covenants, credit objectives
and debt capital market conditions.
We have in the past, and may continue in the future to, receive government grants for research and development
activities and other business initiatives. Any agreement or grant of this nature with government may be accompanied by
contractual obligations applicable to us, which may result in the grant money becoming repayable if certain requirements
are not met. A failure to meet contractual obligations under such agreements and grants and a consequent requirement to
repay money received could negatively impact our results of operations and financial condition.
Our indebtedness and other contractual obligations could adversely affect our financial condition, our ability to raise
additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the
economy or our industry and our ability to pay our debts and could divert our cash flow from operations for debt
payments.
We have a significant amount of indebtedness and leverage. Our level of indebtedness increases the possibility that we
may be unable to generate cash sufficient to pay the principal of, interest on, or other amounts due with respect to our
indebtedness. Our long-term debt under our Syndicated Credit Facility bears interest at floating rates related to U.S.
LIBOR (for U.S. dollar borrowings), plus a margin. As a result, our interest payment obligations on such indebtedness
will increase if such interest rates increase to the extent these changes are not mitigated by our interest rate swaps. Our
leverage and debt service obligations could adversely impact our business, including by:
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impairing our ability to meet one or more of the financial ratios contained in our credit facilities or to generate
cash sufficient to pay interest or principal, including periodic principal payments;
increasing our vulnerability to general adverse economic and industry conditions;
limiting our ability to obtain additional debt or equity financing on favorable terms, if at all;
requiring the dedication of a portion of our cash flow from operations to service our debt, thereby reducing the
amount of our cash flow available for other purposes, including capital expenditures, dividends to stockholders
or to pursue future business opportunities;
requiring us to sell debt or equity securities or to sell some of our core assets, possibly on unfavorable terms, to
meet payment obligations;
limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we
compete; and
placing us at a possible competitive disadvantage with less leveraged competitors and competitors that may
have better access to capital resources.
Any of the forgoing factors could have negative consequences on our financial condition and results of operation.
Our current financing arrangements contain certain restrictive covenants that impact our future operating and
financial flexibility.
Our current financing arrangements contain certain restrictive covenants that may impact our future operating and
financial flexibility. Our debt funding is provided under our financing agreements, which contains a series of positive
and negative covenants with which we must comply, including financial and non-financial covenants. If we fail to
comply with any covenants and are unable to obtain a waiver or other cure thereof, the lenders under the Syndicated
Credit Facility or the holders of the 2023 Notes or 2027 Notes may be able to take certain actions with respect to the
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amounts owing under such agreements or notes, as applicable, including requiring early payment thereof. Any such
actions could have a material adverse effect on our financial condition. These covenants could also have the effect of
limiting our flexibility in planning for or reacting to changes in our business and the markets in which we compete.
Our actual operating results may differ significantly from our guidance.
From time to time, we release guidance regarding our future performance that represents our management’s estimates as
of the date of release. This guidance, which consists of forward-looking statements, is prepared by our management and
is qualified by, and subject to, the assumptions and the other information contained or referred to in the release. Our
guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified
Public Accountants, and neither any independent registered public accounting firm nor any other independent expert or
outside party compiles, examines or reviews the guidance and, accordingly, no such person expresses any opinion or any
other form of assurance with respect thereto.
Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, is
inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are
beyond our control and are based upon specific assumptions with respect to future business decisions, some of which
will change. We generally state possible outcomes as high and low ranges which are intended to provide a sensitivity
analysis as variables are changed but are not intended to represent that actual results could not fall outside of these
ranges. The principal reason that we release this data is to provide a basis for our management to discuss our business
outlook with analysts and investors. We do not accept any responsibility for any projections or reports published by any
such persons.
Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance
furnished by us will not materialize or will vary significantly from actual results, particularly any guidance relating to the
results of operations of acquired businesses or companies as our management will be less familiar with their business,
procedures and operations. Accordingly, our guidance is only an estimate of what management believes is realizable as
of the date of release. Actual results will vary from the guidance and the variations may be material. Investors should
also recognize that the reliability of any forecasted financial data will diminish the farther in the future that the data are
forecast. In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on it.
Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set
forth in this Annual Report on Form 10-K could result in the actual operating results being different than the guidance,
and such differences may be adverse and material.
We could be adversely impacted by actions of activist stockholders, and such activism could impact the value
of our securities.
We value constructive input from our stockholders and the investment community. However, there is no assurance that
the actions taken by our Board of Directors and management in seeking to maintain constructive engagement with our
stockholders will be successful. Certain of our stockholders have expressed views with respect to the operation of our
business, our business strategy, corporate governance considerations or other matters. Responding to actions by activist
stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of management and
our employees. The perceived uncertainties as to our future direction due to activist actions could affect the market price
of our stock, result in the loss of potential business opportunities and make it more difficult to attract and retain qualified
personnel, board members and business partners.
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The price of our common stock has been volatile and may fluctuate substantially.
Our common stock is listed on the NYSE and the TSX and the price for our common stock has historically been volatile.
The market price of our common stock may continue to be highly volatile and may fluctuate substantially due to the
following factors (in addition to the other risk factors described in this section):
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general economic conditions;
fluctuations in our operating results;
variance in our financial performance from the expectations of equity and/or debt research analysts;
techniques employed by short sellers to drive down the market price of our common stock;
conditions and trends in the markets we serve;
additions of or changes to key employees;
changes in market valuations or earnings of our competitors;
trading volumes of our common stock;
future sales of our equity securities and/or future issuances of indebtedness;
changes in the estimation of the future sizes and growth rates of our markets; and
legislation or regulatory policies, practices or actions.
In addition, the stock markets in general have experienced extreme price and volume fluctuations that have at times been
unrelated or disproportionate to the operating performance of the particular companies affected. Technical factors in the
public trading market for our common stock may produce price movements that may or may not comport with macro,
industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as
may be expressed on financial trading and other social media sites), the amount and status of short interest in our
common stock, access to margin debt and trading in options and other derivatives on our common stock. These market
and industry factors may materially harm the market price of our common stock irrespective of our operating
performance.
A significant or prolonged decrease in our market capitalization, including a decline in stock price, or a negative long-
term performance outlook, could result in an impairment of our assets which results when the carrying value of our
assets exceed their fair value.
In the past several years, our securities have been the subject of short selling. Reports and information have been
published about us that we believe are mischaracterized or incorrect, and which have in the past been followed by a
decline in our stock price. If there are short seller allegations in the future, we may have to expend a significant amount
of resources to investigate such allegations and/or defend ourselves.
In addition, in the first quarter of 2019, we became subject to certain securities class action litigation as a result of
volatility in the price of our common stock, which could result in substantial costs and diversion of management’s
attention and resources and could harm our stock price, business, prospects, results of operations and financial condition.
See Part I, Item 3, “Legal Proceedings” in this Annual Report on Form 10-K for additional information.
Uncertainty with respect to the cessation of the London Interbank Offered Rate (“LIBOR”) at the end of 2021 could
impact our cost of borrowing and interest rate risk.
We have outstanding debt and interest rate swaps with variable interest rates using LIBOR as a factor to determine the
interest rates. In July 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop
persuading or compelling banks to submit LIBOR rates after 2021. In addition, on March 5, 2021, the ICE Benchmark
Administration confirmed its intention to cease publication of (i) one week and two month USD LIBOR settings after
December 31, 2021 and (ii) the remaining USD LIBOR settings after June 30, 2023. It is unclear if at that time whether
or not LIBOR will cease. Recent proposals for alternative overnight and term rates may result in the establishment of
new methods of calculating one or more alternative benchmark rates.
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In the United States, the Alternative Reference Rate Committee ("ARRC"), a group of diverse private-market
participants assembled by the Federal Reserve Board and the Federal Reserve Bank of New York, has begun publishing
a Secured Overnight Financing Rate (“SOFR”), and has proposed a paced market transition to SOFR from LIBOR.
SOFR is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities in the repurchase
agreement market. Since the initial publication of SOFR, daily changes in the rate have, on occasion, been more volatile
than daily changes in comparable benchmark or market rates, and SOFR over time may bear little or no relation to the
historical actual or historical indicative data. At this time, it is not possible to predict how markets will respond to SOFR
or the effect of any changes to LIBOR or the discontinuation of LIBOR.
The cessation of LIBOR, including the exact timing of its cessation, as well as its transition to another benchmark rate,
or rates, could have adverse impacts on our outstanding interest rate swaps maturing in 2022 and 2023 and our
Syndicated Credit Facility maturing in 2023 and 2024. This change may necessitate updates to our swaps and Syndicated
Credit Facility, and ultimately, adversely affect our financial condition and results of operations. For example, if future
rates based upon a successor reference rate such as SOFR (or a new method of calculating LIBOR) are higher or more
volatile than LIBOR rates as currently determined or if our lenders have increased costs due to changes in LIBOR, we
may experience increases in interest rates on our variable rate debt, which could adversely impact our interest expense,
results of operations and cash flows.
If securities or industry analysts discontinue publishing research or reports about our business, or publish negative
reports about our business, our stock price and trading volume could decline.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts
publish about us, our business, our market and our competitors. We do not have any control over these analysts. If one or
more of the analysts who cover us downgrade our stock or change their opinion of our stock, our stock price would
likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us,
we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
Our amended and restated certificate of incorporation and our amended and restated bylaws may impede or
discourage a takeover, changes in management or changes in the Board of Directors, which could reduce the market
price of our common stock.
Certain provisions in our amended and restated certificate of incorporation and our amended and restated bylaws may
delay or prevent a third-party from acquiring control of us, even if a change in control would be beneficial to our
existing stockholders. These provisions include:
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no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect
director candidates;
the exclusive right of the Board of Directors to elect a director to fill a vacancy created by the expansion of the
Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being
able to fill vacancies on the Board of Directors;
the ability of the Board of Directors to issue shares of preferred stock and to determine the price and other terms
of those shares, including preferences and voting rights, without stockholder approval, which could be used to
significantly dilute the ownership of a hostile acquirer;
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual
or special meeting of stockholders;
the requirement that a special meeting of stockholders may be called only by the chairman of the Board of
Directors or two or more stockholders who hold, in the aggregate, at least ten percent (10%) of the voting
power of our outstanding shares, which may delay the ability of our stockholders to force consideration of a
proposal or to take action, including the removal of directors;
a supermajority vote of our stockholders to amend our amended and restated bylaws and certain provisions of
our amended and restated certificate of incorporation; and
advance notice procedures that stockholders must comply with in order to nominate candidates to the Board of
Directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a
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potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or
otherwise attempting to obtain control of our business.
These provisions could impede a merger, takeover or other business combination involving us or discourage a potential
acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market
price of our common stock.
In addition, our amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that
derivative actions brought in our name, actions against our directors, officers and employees for breach of fiduciary duty
and other similar actions may be brought only in the Court of Chancery in the State of Delaware (the “Delaware
Exclusive Forum Provision”). Our amended and restated bylaws further provide that the federal district courts of the
United States of America will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint
asserting a cause of action under the Securities Act of 1933, as amended (the “Federal Forum Provision”).
The Delaware Exclusive Forum Provision is intended to apply to claims arising under Delaware state law and would not
apply to claims brought pursuant to the Exchange Act or the Securities Act or any other claim for which the federal
courts have exclusive jurisdiction. In addition, the Federal Forum Provision is intended to apply to claims arising under
the Securities Act and would not apply to claims brought pursuant to the Exchange Act. These exclusive forum
provisions will not relieve us of our duties to comply with the federal securities laws and the rules and regulations
thereunder and, accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or
the rules and regulations thereunder must be brought in federal courts.
These exclusive forum provisions may limit a stockholders’ ability to bring a claim in a judicial forum of its choosing
for disputes with the company or its directors, officers or other employees, which may discourage lawsuits against the
Company and its directors, officers and other employees. In addition, stockholders who do bring a claim in the Court of
Chancery of the State of Delaware pursuant to the Delaware Exclusive Forum Provision could face additional litigation
costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The court in the designated
forum under our exclusive forum provisions may also reach different judgments on results than would other courts,
including courts where a stockholder would otherwise choose to bring the action, and such judgments or results may be
more favorable to the Company than to our stockholders. Further, the enforceability of similar exclusive forum
provisions in other companies’ organizational documents has been challenged in legal proceedings, and it is possible that
a court could find any of our exclusive forum provisions to be inapplicable to, or unenforceable in respect of, one or
more of the specified types of actions or proceedings. If a court were to find all or any part of our exclusive forum
provisions to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving
such action in other jurisdictions.
There can be no assurance that we will continue to pay dividends on our common stock.
Our Board of Directors significantly reduced our dividends in the first quarter of 2019. Although our Board of Directors
has historically declared a quarterly cash dividend which we have paid, the payment of future dividends is subject to a
number of risks and uncertainties, and we may not pay quarterly dividends in the same amounts or at all in the future.
The declaration, amount and timing of cash dividends are subject to capital availability and determinations by our Board
of Directors that such dividends are in the best interest of our stockholders and are in compliance with all respective laws
and applicable agreements. Our ability to pay dividends will depend upon, among other factors, our cash balances and
potential future capital requirements for strategic transactions, including acquisitions, debt service requirements, results
of operations, financial condition and other factors that our Board of Directors may deem relevant. The elimination of
our dividend payments and/or our dividend program could have a negative effect on our stock price.
Risks Related to Legal and Regulatory Matters
Our operations in the U.S. government market are subject to significant regulatory risk.
Our operations in the U.S. government market are subject to significant government regulation. A failure by us to
maintain the relevant clearances and approvals could limit our ability to operate in the U.S. market. Further, there can be
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no assurance that we will continue to be awarded contracts by the U.S. government. In addition, a failure by us to keep
current and compliant with relevant U.S. regulations could result in fines, penalties, repayments, or suspension or
debarment from U.S. government contracting or subcontracting for a period of time and could have an adverse effect on
our standing and eligibility for future U.S. government contracts.
Failure to comply with the requirements of the National Industrial Security Program Operating Manual could result
in interruption, delay or suspension of our ability to provide our products and services, and could result in loss of
current and future business with the U.S. government.
We and our subsidiaries are parties to certain contracts with various departments and agencies of the U.S. government,
including the U.S. Department of Defense, which require that certain of our legal entities be issued facility security
clearances under the National Industrial Security Program. The National Industrial Security Program requires that a
corporation maintaining a facility security clearance be effectively insulated from foreign ownership, control or
influence (“FOCI”). Prior to the U.S. Domestication, we were incorporated under the laws of Canada, and had entered
into a Security Control Agreement, dated January 26, 2017, by and among us, our wholly owned subsidiary, Maxar
Technologies Holdings Inc. and the U.S. Department of Defense (“SCA”), as a suitable FOCI mitigation arrangement
under the National Industrial Security Program Operating Manual. Upon U.S. Domestication, the SCA was dissolved
and we entered into a Board Resolution to mitigate remaining FOCI risks as seen by the U.S. government. Failure to
maintain an agreement with the U.S. Department of Defense regarding the appropriate FOCI mitigation arrangement
could result in invalidation or termination of the facility security clearances, which in turn would mean that our U.S.
subsidiaries would not be able to enter into future contracts with the U.S. government requiring facility security
clearances, and may result in the loss of the ability of those subsidiaries to complete existing contracts with the U.S.
government.
Our business is subject to various regulatory risks that could adversely affect our operations.
The environment in which we operate is highly regulated due to the sensitive nature of our complex and technologically
advanced systems, including satellites, products, hardware and software, in addition to those regulations broadly
applicable to publicly listed corporations. There are numerous regulatory risks that could adversely affect operations,
including but not limited to:
• Changes in laws and regulations. It is possible that the laws and regulations governing our business and
operations will change in the future. A substantial portion of our revenue is generated from customers outside
of the U.S. There may be a material adverse effect on our financial condition and results of operations if we are
required to alter our business to comply with changes in both domestic and foreign regulations,
telecommunications standards, foreign policy, tariffs or taxes and other trade barriers that reduce or restrict our
ability to sell our products and services on a global basis, or by political and economic instability in the
countries in which we conduct business. Any failure to comply with such regulatory requirements could also
subject us to various fines, penalties or sanctions.
• Export Restrictions. Certain of our businesses and satellites, systems, products, services or technologies we
have developed require the implementation or acquisition of products or technologies from third parties,
including those in other jurisdictions. In addition, certain of our satellites, systems, products or technologies
may be required to be forwarded or exported to other jurisdictions. In certain cases, if the use of the
technologies can be viewed by the jurisdiction in which that supplier or subcontractor resides as being subject
to export constraints or restrictions relating to national security, we may not be able to obtain the technologies
and products that we require from suppliers or subcontractors who would otherwise be our preferred choice or
may not be able to obtain the export permits necessary to transfer or export our technology. To the extent that
we are able, we obtain pre-authorization for re-export prior to signing contracts which oblige us to export
subject technologies, including specific foreign government approval as needed. In the event of export
restrictions, we may have the ability through contract force majeure provisions to be excused from our
obligations. Notwithstanding these provisions, the inability to obtain export approvals, export restrictions or
changes during contract execution or non-compliance by our customers could have an adverse effect on our
revenues and margins.
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• U.S. Government Approval Requirements. For certain aspects of our business operations, we are required to
obtain U.S. government licenses and approvals to enter into agreements or engage in commercial transactions
with various end users (including government bodies) in order to export satellites and related equipment,
disclose technical data or provide defense services to foreign persons. The delayed receipt of or the failure to
obtain the necessary U.S. government licenses, approvals and agreements may prohibit entry into or interrupt
the completion of contracts which could lead to a customer’s termination of a contract for default, monetary
penalties and/or the loss of incentive payments.
• Competitive Impact of U.S. Regulations on Satellite Sales. Some of our customers and potential customers,
along with insurance underwriters and brokers, have asserted that U.S. export control laws and regulations
governing disclosures to foreign persons excessively restrict their access to information about the satellite
during construction and on-orbit. Office of Foreign Assets Control (“OFAC”) sanctions and requirements may
also limit certain business opportunities or delay or restrict our ability to contract with potential foreign
customers or operators. To the extent that our non-U.S. competitors are not subject to OFAC or similar export
control or economic sanctions laws and regulations, they may enjoy a competitive advantage with foreign
customers, and it could become increasingly difficult for the U.S. satellite manufacturing industry, including us,
to recapture this lost market share. Customers concerned over the possibility that the U.S. government may
deny the export license necessary for us to deliver their purchased satellite to them, or the restrictions or delays
imposed by the U.S. government licensing requirements, even where an export license is granted, may elect to
choose a satellite that is purportedly free of International Traffic in Arms Regulations (“ITAR”) offered by a
non-U.S. supplier. We are further disadvantaged by the fact that a purportedly “ITAR-free” satellite may be
launched less expensively in China on the Chinese Long March rocket, a launch vehicle that, because of ITAR
restrictions, is not available to us.
• Anti-Corruption Laws. As part of the regulatory and legal environments in which we operate, we are subject to
global anti-corruption laws that prohibit improper payments directly or indirectly to government officials,
authorities or persons defined in those anti-corruption laws in order to obtain or retain business or other
improper advantages in the conduct of business. Our policies mandate compliance with anti-corruption laws.
Failure by our employees, agents, subcontractors, suppliers and/or partners to comply with anti-corruption laws
could impact us in various ways that include, but are not limited to, criminal, civil and administrative fines
and/or legal sanctions and the inability to bid for or enter into contracts with certain entities, all of which could
have a significant adverse effect on our reputation, operations and financial results.
Changes in tax law, in our tax rates or in exposure to additional income tax liabilities or assessments may materially
and adversely affect our financial condition, results of operations and cash flows.
Changes in law and policy relating to taxes, including those with retroactive effect, may materially and adversely affect
our financial condition, results of operations and cash flows. For example, the Administration and Congress could make
changes to existing tax law, such as increasing the corporate tax rate and enacting a minimum tax on worldwide book
income. We continue to monitor tax law developments and assess the impact on the Company.
The U.S. enacted the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) on December 22, 2017, which significantly
changed the U.S. federal income taxation of U.S. corporations. The 2017 Tax Act remains unclear in many respects and
has been, and may continue to be, the subject of amendments and technical corrections, as well as interpretations and
implementing regulations by the Treasury and IRS, which have mitigated or increased certain adverse impacts of the
2017 Tax Act and may continue to do so in the future.
Our ability to use our U.S. federal and state net operating loss carryforwards and certain other tax attributes may be
limited.
As of December 31, 2021, we had approximately $520 million, $874 million and $12 million of federal, state and
foreign net operating loss (“NOL”) carryforwards and $83 million of U.S. tax credit carryforwards primarily related to
research and development expenditures, net of unrecognized tax benefits.
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Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (“Code”), if a corporation undergoes an
“ownership change,” the corporation’s ability to use its pre-change U.S. federal NOL carryforwards and other tax
attributes (such as research tax credits) to offset its post-change income and taxes may be limited. In general, an
“ownership change” occurs if there is a greater than 50 percentage point change (by value) in a corporation’s equity
ownership by certain stockholders over a rolling three-year period. Similar provisions of state tax law may also apply to
limit our use of accumulated state tax attributes. While we do not believe that we have experienced ownership changes
in the past that would materially limit our ability to utilize our NOL carryforwards, the Section 382 rules are complex
and there is no assurance our view is correct. In the event that we experience ownership changes in the future, our ability
to use pre-change NOL carryforwards and other tax attributes to offset post-change taxable income will be subject to
limitations. As a result, we may be unable to use a material portion of our NOL carryforwards and other tax attributes,
which could adversely affect our future cash flows.
Our operations are subject to governmental law and regulations relating to environmental matters, which may expose
us to significant costs and liabilities that could negatively impact our financial condition.
We are subject to various federal, state, provincial and local environmental laws and regulations relating to the operation
of our businesses, including those governing pollution, the handling, storage, disposal and transportation of hazardous
substances and the ownership and operation of real property. In addition, we could be affected by future regulations
imposed in response to concerns over climate change, other aspects of the environment or natural resources. We have
been designated, along with other companies, as a named discharger potentially responsible for the cleanup of
groundwater contamination at certain sites in California where we operate and there can be no assurance that the
previous owners of those properties strictly complied with such environmental laws and regulations. Such laws and
regulations may result in significant liabilities and costs to us due to the actions or inactions of the previous owners. In
addition, new laws and regulations, more stringent enforcement of existing laws and regulations or the discovery of
previously unknown contamination could result in additional costs.
We have incurred and will continue to incur increased costs and demands in order to comply with laws and
regulations applicable to public companies.
In January 2019, we became a “domestic issuer” for SEC reporting purposes and a reporting issuer in each of the
jurisdictions in Canada in which Maxar Canada was a reporting issuer. The obligations of being a public company in the
U.S. and Canada require significant expenditures and will place significant demands on our management and other
personnel, including costs resulting from public company reporting obligations under the U.S. Securities Exchange Act
of 1934, as amended, applicable Canadian securities laws, and the rules and regulations regarding corporate governance
practices, including those under the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer
Protection Act, and the listing requirements of the NYSE and the TSX. These rules require that we maintain effective
disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate
governance practices, among many other complex rules that are often difficult to monitor and maintain compliance with.
Additionally, new standards, as well as investor expectations are developing around environmental, social and
governance matters (“ESG”) and other emerging socioeconomic trends and matters, which require continual monitoring
and compliance. Our management and other personnel will continue to devote a substantial amount of time to ensure
compliance with all of these requirements and to keep pace with new regulations, otherwise we may fall out of
compliance and risk becoming subject to reputational damage, litigation or being delisted, among other potential
problems.
Our international business exposes us to risks relating to regulation, currency fluctuations and political or economic
instability in foreign markets, which could adversely affect our revenue, earnings, cash flows and our financial
condition.
A significant portion of our revenue is derived from non-U.S. sales, and we intend to continue to pursue international
contracts. International operations are subject to certain risks, such as: changes in domestic and foreign governmental
regulations and licensing requirements; deterioration of relations between the U.S. and/or a particular foreign country;
increases in tariffs and taxes and other trade barriers; foreign currency fluctuations; changes in political and economic
stability both in the U.S. and internationally; effects of austerity programs or similar significant budget reduction
41
programs; potential preferences by prospective customers to purchase from local (non-U.S.) sources; difficulties in
obtaining or enforcing judgments in foreign jurisdictions; and unforeseen developments and conditions, including war,
epidemics and pandemics and international tensions and conflicts.
In addition, our international contracts may include industrial cooperation agreements requiring specific in-country
purchases, investments, manufacturing agreements or other financial obligations, known as offset obligations, and
provide for penalties if we fail to meet such requirements. The impact of these factors is difficult to predict, but one or
more of them could adversely affect our financial position, results of operations, or cash flows.
Exposure to United Kingdom political developments, including the effect of its withdrawal from the European Union,
could be costly and difficult to comply with and could harm our business.
In June 2016, a referendum was passed in the United Kingdom to leave the European Union, commonly referred to as
“Brexit.” This decision created an uncertain political and economic environment in the United Kingdom and other
European Union countries. The United Kingdom formally left the European Union on January 31, 2020 and the
transition period provided for in the withdrawal agreement entered by the United Kingdom and the European Union
ended on December 31, 2020. In December 2020, the United Kingdom and the European Union agreed on a trade and
cooperation agreement that will apply provisionally after the end of the transition period until it is ratified by the parties
to the agreement. On December 31, 2020, the United Kingdom passed legislation giving effect to the trade and
cooperation agreement, with the European Union formally adopting the agreement in April 2021. The trade and
cooperation agreement covers the general objectives and framework of the relationship between the United Kingdom
and the European Union. Depending on the application of the terms of the trade and cooperation agreement, we could
face new regulatory costs and challenges.
Our United Kingdom operations service customers in the United Kingdom as well as in other countries in the EU, and
these operations could be disrupted by Brexit. The political and economic instability created by Brexit has caused and
may continue to cause significant volatility in global financial markets and uncertainty regarding the regulation of data
protection in the United Kingdom. In particular, the United Kingdom enacted a Data Protection Act in May 2018 that is
consistent with the EU General Data Protection Regulation. In June 2021, the European Union determined that the
United Kingdom’s Data Protection Act was adequate to permit the flow of certain data between the European Union and
the United Kingdom without additional restrictions for a period of up to four years. This decision temporarily reduces
the uncertainty surrounding how data transfers between the European Union and the United Kingdom will be regulated.
Brexit could also have the effect of disrupting the free movement of goods, services, capital and people between the
United Kingdom, the European Union and elsewhere including, for example, the United Kingdom’s documentation
requirements on goods imported from the European Union.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our corporate headquarters are located at a leased facility in Westminster, Colorado. As of December 31, 2021, we had
approximately two million square feet of total leased floor space at multiple locations in the United States, Europe, the
Middle East and Asia, used for manufacturing, warehousing, research and testing, administrative and various other uses.
As of December 31, 2021, we had major operations in the following locations:
Space Infrastructure
Our Space Infrastructure segment primarily operates out of multiple locations in California. We lease approximately one
million square feet of manufacturing and office space.
42
Earth Intelligence
Our Earth Intelligence segment primarily operates out of our U.S. locations in Colorado, Virginia, Michigan, Florida and
Missouri, our Sweden location and small sales offices located internationally. We lease approximately one million
square feet of office and operations space.
We maintain our properties in good operating condition and believe that the productive capacity of our properties is
adequate to meet our current requirements and those for the foreseeable future. See Note 10, “Leases”, to the
Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” for additional
information regarding our lease commitments.
ITEM 3. LEGAL PROCEEDINGS
Currently, we are involved in a number of legal proceedings. For a discussion of material legal proceedings, see Note 23,
“Commitments and Contingencies” to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements
and Supplementary Data” in this Annual Report on Form 10-K, which is hereby incorporated by reference.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Maxar’s common stock trades on the NYSE and TSX under the ticker “MAXR”. As of February 16, 2022, there were
approximately 92 stockholders of record of our common stock. This stockholder figure does not include a substantially
greater number of "street name" holders or beneficial holders of our common stock whose shares are held of record by
banks, brokers and other financial institutions.
Dividends
Dividends are declared at the discretion of our board of directors and will depend on our financial position, results of
operations, cash flows, capital requirements, credit facility and other indebtedness covenants (which include limits on
distributions by us), applicable law and other factors as our board of directors deems relevant. Holders of our common
stock receive dividends when and as declared by our board of directors. We may modify, suspend, or cancel our cash
dividends in any manner and at any time. We declared and paid dividends of $0.04 per share of common stock during
2021 and 2020.
ITEM 6. [RESERVED]
43
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
We are a provider of comprehensive space solutions and secure, precise, geospatial intelligence. We help government
and commercial customers monitor, understand and navigate our changing planet; deliver global broadband
communications; and explore and advance the use of space. Our approach combines decades of deep mission
understanding and a proven commercial and defense foundation to deploy solutions and deliver insights with speed,
scale and cost effectiveness. Our businesses are organized and managed in two reportable segments: Earth Intelligence
and Space Infrastructure, as described below under “Segment Results”.
RECENT DEVELOPMENTS
Common stock offering
On March 22, 2021, we completed an underwritten public offering of 10 million shares of our common stock at a public
offering price of $40 per share (“Offering”). We received proceeds of $380 million, net of $20 million of transaction
fees. The underwriters did not exercise the option to purchase an additional 1.5 million shares of our common stock prior
to the expiration of the option.
On March 26, 2021, we redeemed $350 million aggregate principal amount of our 9.75% Senior Secured Notes due
2023 (“2023 Notes”) using a portion of the net proceeds from the Offering. Additionally, we paid premiums of
approximately $34 million related to the early redemption.
COVID-19 operational posture and current impact
We continue to monitor and adapt our pandemic crisis response plan, while maintaining a focus on the protection of the
health and safety of our employees, families, customers and communities. All our locations continue to operate through
a combination of work from home and personnel working on-site, though in some cases capacity utilization and
productivity are below normalized levels. We are observing stress in our supplier base inside and outside the U.S. and
will continue to monitor and assess the actual and potential COVID-19 impacts on employees, customers, suppliers and
the productivity of the work being done, all of which to some extent will affect revenues, estimated costs to complete
projects, earnings and cash flow. Our results of operations for the year ended December 31, 2021, were not materially
impacted by COVID-19.
Changes in our operations in response to COVID-19 and employee illnesses resulting from the pandemic have resulted
in inefficiencies and delays of our projects, impacts to service level contracts, including in sales and product
development efforts and additional costs related to business continuity initiatives that cannot be fully mitigated through
succession planning or employees working remotely. We have delayed transition of our employees back into Maxar
worksites due to increases in COVID-19 cases in the broad population. Additionally, to provide for the health and safety
of our workforce and business continuity, we have implemented a Vaccination Policy which requires that Maxar
employees are vaccinated for COVID-19 unless they have an approved accommodation. As of January 4, 2022, 99% of
our U.S. based employees were in compliance with this policy and have either been vaccinated or received an
accommodation.
WorldView Legion satellites update
We continue to make progress during the test and integration phase. During January 2022, we experienced delays related
to COVID-19 protocols and now, assuming no major issues arise, anticipate the first launch of the WorldView Legion
satellites in the June to July, 2022 timeframe. We plan on having three launches in total and expect the second and third
launches to be within three and six months, respectively, after the first launch.
44
SEGMENT RESULTS
Our Chief Operating Decision Maker measures performance of our reportable segments based on revenue and Adjusted
EBITDA. Our operating and reportable segments are: Earth Intelligence and Space Infrastructure.
Earth Intelligence
In the Earth Intelligence segment, we are a global leader in high-resolution space-based Earth observation imagery
products and analytics. We launched the world’s first high-resolution commercial imaging satellite in 1999 and currently
operate a four-satellite imaging constellation, providing us with over two decades and approximately 137 petabytes of
imagery over our history (referred to as our “Image Library”) of the highest-resolution, commercially available imagery.
Our imagery solutions provide customers with timely, accurate and mission-critical information about our changing
planet and support a wide variety of government and enterprise applications, including mission planning, mapping and
analysis, environmental monitoring, disaster management, crop management, oil and gas exploration and infrastructure
management. We continue to innovate as demands for new satellite technology and advanced analytic tools increase. We
are a leader in commercial satellite imagery, and our commitment to accuracy, clarity and recency of foundational
mapping enables us to provide the highest quality imagery basemaps for our customers. The high-quality satellite also
enables us to provide advanced 3D modeling for augmented reality (“AR”), virtual reality (“VR”) and interactive
engagement through our Precision3D Suite of tools. The U.S. government is the largest customer of our Earth
Intelligence segment through the EnhancedView Contract, G-EGD and OWT programs and various classified and
unclassified contract vehicles. In the commercial satellite Earth observation industry, we are a leader across U.S.
government agencies, international government agencies and enterprise customer verticals.
We also provide geospatial services that combine imagery, analytic expertise and innovative technology to deliver
intelligence solutions to customers. Our approximately 1,700 cleared personnel support analytic solutions that accurately
document change and enable geospatial modeling and analysis that help predict where events will occur. Our primary
customer of geospatial services is the U.S. government, but we also support intelligence requirements for other U.S.
allied governments, global development organizations and enterprise customers.
Space Infrastructure
In the Space Infrastructure segment, we provide solutions for communications, Earth observation, remote sensing, on-
orbit servicing, robotic assembly and space exploration. We address a broad spectrum of needs for our customers,
including mission systems engineering, product design, spacecraft manufacturing, assembly, integration and testing. Our
principal customers in the Space Infrastructure segment are commercial satellite operators and government agencies
worldwide. Our approach combines proven success gained over six decades in the industry with the nimbleness and
agility of a smaller space company.
45
RESULTS OF OPERATIONS
The following table provides selected annual financial information for the years ended December 31, 2021, 2020 and
2019.
Year Ended December 31,
2020
2019
2021
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
($ millions)
Revenues:
Product
Service
Total revenues
Costs and expenses:
$
678
1,092
$ 1,770
$
633
1,090
$ 1,723
$
560
1,106
$ 1,666
$
$
45
2
47
7 % $
0
3 % $
73
(16)
57
13 %
(1)
3 %
Product costs, excluding depreciation and
amortization
Service costs, excluding depreciation and
amortization
Selling, general and administrative
Depreciation and amortization
(Gain) loss on orbital receivables
allowance
Impairment loss
Satellite insurance recovery
Loss (gain) on sale of assets
Operating income
Interest expense, net
Other income, net
Income (loss) before taxes
$
$
Income tax (benefit) expense
Equity in income from joint ventures, net
of tax
Income (loss) from continuing operations
Discontinued operations:
$
Income from operations of discontinued
operations, net of tax
Gain on disposal of discontinued
operations, net of tax
Income from discontinued operations, net
of tax
Net income
* Not meaningful.
$
Product and service revenues
601
383
369
290
(49)
—
—
—
176
151
(8)
33
(13)
—
46
—
—
—
46
$
$
$
$
615
378
332
348
14
33
—
1
2
175
(104)
(69) $
(22)
$
593
382
325
376
14
—
(183)
(136)
295
219
(1)
77
5
(1)
(46) $
(11)
83
$
$
$
(14)
5
37
(58)
(63)
(33)
—
(1)
174
(24)
96
102
9
1
92
(2)
22
1
11
(17)
(4)
7
(28)
*
(100)
*
(100)
-
33
183
137
* % $ (293)
(44)
(14)
(103)
(92)
(148)% $ (146)
(27)
(41)
(100)
10
(200)% $ (129)
4
(1)
2
(7)
-
*
(100)
(101)
(99)%
(20)
*
(190)%
*
(91)
(155)%
23
*
32
317
349
303
26
—
(32)
(100)
6
(317)
(100)
317
26
109
(349)
$ (257)
$
(100)
323
(85)% $ 194
*
178 %
Year Ended December 31,
2020
2019
2021
($ millions)
Product revenues
Service revenues
Total revenues
$
678
1,092
$ 1,770
$
633 $
1,090
$ 1,723
560
1,106
$ 1,666
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
$
$
45
2
47
7 %$
0
3 %$
73
(16)
57
13 %
(1)
3 %
Total revenues increased to $1,770 million from $1,723 million, or by $47 million, for the year ended December 31,
2021 compared to 2020. The increase was primarily driven by an increase in revenues in our Space Infrastructure and
Earth Intelligence segments.
46
Total revenues increased to $1,723 million from $1,666 million, or by $57 million, for the year ended December 31,
2020 compared to 2019. The increase was primarily driven by an increase in revenue in our Space Infrastructure
segment partially offset by a decrease in revenue in our Earth Intelligence segment. The revenue decrease in our Earth
Intelligence segment was primarily driven by a $40 million decrease in the recognition of deferred revenue related to the
EnhancedView Contract. We recognized $120 million of deferred revenue from the EnhancedView Contract for the year
ended December 31, 2019, compared to $80 million for the year ended December 31, 2020, as it was fully recognized as
of August 31, 2020.
Further discussion of the drivers behind the increase in revenues is included within the “Results by Segment” section
below.
See Note 16, “Revenues” to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and
Supplementary Data” for product and service revenues by segment.
Product and service costs
($ millions)
Product costs, excluding
depreciation and amortization
Service costs, excluding
depreciation and amortization
Total costs
Year Ended December 31,
$ Change % Change $ Change % Change
2021
2020
2019
2020 to 2021
2019 to 2020
$
601
$
615
$
593
$
(14)
(2)% $
22
$
383
984
$
378
993
$
382
975
$
5
(9)
1
(1)% $
(4)
18
4 %
(1)
2 %
Total cost of product and services decreased to $984 million from $993 million, or by $9 million, for the year ended
December 31, 2021 compared to 2020. The decrease in costs was driven by a decrease in product costs within our Space
Infrastructure segment partially offset by an increase in service costs within our Earth Intelligence segment.
Total cost of product and services increased to $993 million from $975 million, or by $18 million, for the year ended
December 31, 2020 compared to 2019. The increase in costs was primarily driven by an increase in costs within our
Earth Intelligence segment partially offset by a decrease within our Space Infrastructure segment.
Selling, general and administrative
Year Ended December 31,
2020
2019
2021
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
($ millions)
Selling, general and administrative $ 369
$ 332 $
325
$
37
11 % $
7
2 %
Selling, general and administrative costs increased to $369 million from $332 million, or by $37 million, for the year
ended December 31, 2021 compared to 2020. The increase was primarily due to an increase in labor related expenses of
$28 million, an increase in research and development expenses within the Space Infrastructure segment of $11 million
and an increase in other expenses of $4 million. The increase in labor related expenses was primarily driven by an
increase in headcount, employee compensation and fringe benefits. These increases were partially offset by a $6 million
decrease in transaction and integration related expenses.
Selling, general and administrative costs increased to $332 million from $325 million, or by $7 million, for the year
ended December 31, 2020 compared to 2019. The increase was primarily due to an increase in stock-based
compensation expense of $23 million. Stock-based compensation expense increased primarily due to a higher stock
price. The increase was also due to an increase in labor related expenses of $16 million driven primarily by an increase
in headcount and employee compensation. These increases were partially offset by a $15 million decrease in
restructuring expenses, a $9 million decrease in transaction and integration related expenses and a $7 million decrease in
travel related expenses driven by our COVID-19 operating posture.
47
Depreciation and amortization
Year Ended December 31,
$ Change % Change $ Change % Change
2021
2020
2019
2020 to 2021
2019 to 2020
($ millions)
Property, plant and equipment
Intangible assets
Depreciation and amortization expense
$
$
86 $
204
290 $
93 $ 107 $
255
348 $ 376 $
269
(7)
(51)
(58)
(8)%$ (14)
(20)
(14)
(17)%$ (28)
(13)%
(5)
(7)%
Depreciation and amortization expense decreased to $290 million from $348 million, or by $58 million, for the year
ended December 31, 2021 compared to 2020. The decrease was primarily driven by a decrease in amortization expense
for backlog acquired as part of the acquisition of DigitalGlobe, Inc. on October 5, 2017. We recognized ten months of
amortization expense for the year ended December 30, 2020, compared to none for the year ended December 31, 2021,
as all of the U.S. government acquired backlog was fully amortized as of October 2020. The decrease was also driven by
a decrease in depreciation expense related to the extension of the useful lives of two satellites in the fourth quarter of
2020 and three satellites in the fourth quarter of 2021. These decreases were partially offset by the inclusion of a full
year of depreciation and amortization expense from property, plant and equipment and intangible assets acquired as part
of the Vricon Acquisition on July 1, 2020, compared to two quarters of expense in 2020.
Depreciation and amortization expense decreased to $348 million from $376 million, or by $28 million, for the year
ended December 31, 2020 compared to 2019. The decrease was primarily driven by a decrease in amortization expense
for backlog acquired as part of the DigitalGlobe acquisition. We recognized a full year of amortization expense for the
year ended December 31, 2019, compared to approximately nine months for the year ended December 31, 2020, as all of
the U.S. government acquired backlog was fully amortized in October 2020. The decrease was also driven by a decrease
in depreciation expense related to asset retirements made in the second half of 2019 and in the first quarter of 2020, the
extension of the useful life of one satellite in the fourth quarter of 2019 and two satellites in the fourth quarter of 2020
and the sale of our owned properties in Palo Alto in December 2019. These decreases were partially offset due to the
inclusion of depreciation and amortization expense from property, plant and equipment and intangible assets acquired as
part of the Vricon Acquisition on July 1, 2020, compared to no such expense in 2019.
(Gain) loss on orbital receivables allowance
Year ended December 31,
2019
2020
2021
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
($ millions)
(Gain) loss on orbital receivables allowance $ (49) $ 14
* Not meaningful.
$
14
$
(63)
* % $
—
— %
During the year ended December 31, 2021, as a result of an increased certainty of collections of the outstanding orbital
receivables from our largest customer, due to their emergence from bankruptcy, we recognized a $49 million reversal of
our orbital receivables allowance.
During each of the years ended December 31, 2020 and 2019, we recognized a $14 million loss on our orbital
receivables allowance within the Space Infrastructure segment. The losses were primarily due to a decrease in the credit
rating associated with our largest orbital receivables customer.
48
Impairment loss
($ millions)
Impairment loss
* Not meaningful.
Year Ended December 31,
2020
2019
2021
$ Change % Change $ Change
% Change
2020 to 2021
2019 to 2020
$
— $
33 $
— $
(33)
(100)% $
33
* %
During the year ended December 31, 2020, we recognized an impairment loss of $33 million related to the write-off of a
$33 million prepaid asset with a commercial provider of ground station services under a contract which was above
current market value. In December 2020, we executed a new multi-year contract with the provider for services at
reduced cost. As a result of the prior contract being terminated and the new contract being at market value, we concluded
the remaining prepaid asset from the prior contract with the provider had no continuing value. There were no impairment
losses recorded for the year ended December 31, 2021 or 2019.
Satellite insurance recovery
During the year ended December 31, 2019, we received a satellite insurance recovery of $183 million related to the loss
of imaging capability of our WorldView-4 satellite in December 2018. There was no satellite insurance recovery during
the year ended December 31, 2021 or 2020.
Loss (gain) on sale of assets
($ millions)
Loss (gain) on sale of assets
Year ended December 31,
2021 2020 2019
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
$ — $
1
$ (136) $
(1)
(100) %$ 137
(101)%
During the year ended December 31, 2021, we recognized no loss (gain) on sale of assets. During the year ended
December 31, 2020, we recognized a $1 million loss on sale of assets. During the year ended December 31, 2019, we
recorded a gain of $136 million related to the sale and subsequent leaseback of our owned properties in Palo Alto,
California.
49
Interest expense, net
($ millions)
Interest expense:
Interest on long-term debt
Loss on debt extinguishment
Interest on orbital securitization liability
Imputed interest and other
Interest expense on advance payments
from customers1
Capitalized interest
Interest expense, net
* Not meaningful.
$
$
Year Ended December 31,
2020
2021
2019
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
144 $
41
4
2
—
(40)
151 $
191 $
7
5
2
3
(33)
175 $
194 $
22
7
—
15
(19)
219 $
(47)
34
(1)
—
(3)
(7)
(24)
(25)%$
*
(20)
—
(3)
(15)
(2)
2
(100)
21
(14)%$
(12)
(14)
(44)
(2)%
(68)
(29)
*
(80)
74
(20)%
1 Under the EnhancedView Contract, we received advanced payments from the U.S. government during the construction phase of
the WorldView-1 satellite, which was more than one year before capacity was made available to them. The effect of imputing
interest on these advanced payments was to increase contract liabilities with an offsetting charge to interest expense. As capacity
was provided to the customer, revenue was recognized and the contract liabilities balance decreased. The remaining revenue was
fully recognized as of August 31, 2020.
Interest expense, net decreased to $151 million from $175 million, or by $24 million, for the year ended December 31,
2021 compared to 2020. The decrease was primarily due to a $47 million decrease in interest on long-term debt
primarily driven by lower principal balances on the 2023 Notes and Term Loan B (as defined below) due to a repurchase
of a portion of the 2023 Notes in the second quarter of 2020, a partial redemption of the 2023 Notes in the first quarter of
2021 and a repayment made on Term Loan B in the second quarter of 2020. These decreases in interest on long-term
debt were partially offset by an increase in interest expense following our issuance of the 2027 Notes (as defined below).
There was also an increase in capitalized interest of $7 million related to the building of our WorldView Legion
satellites. These decreases were partially offset by a $41 million loss on debt extinguishment from the partial redemption
of our 2023 Notes using proceeds from the Offering for the year ended December 31, 2021, compared to a $7 million
loss on debt extinguishment for 2020.
Interest expense, net decreased to $175 million from $219 million, or by $44 million, for the year ended December 31,
2020 compared to 2019. The decrease was primarily due to a $15 million increase in the loss on debt extinguishment for
the year ended December 31, 2019 compared to 2020, an increase in capitalized interest of $14 million related to the
building of our WorldView Legion satellites and a $12 million decrease in interest on advance payments from
customers.
Other income, net
($ millions)
Other income, net
* Not meaningful.
Year Ended December 31,
2019
2020
2021
$ Change % Change
2020 to 2021
$ Change % Change
2019 to 2020
$
(8) $ (104) $
(1) $
96
(92)%$
(103)
* %
Other income, net decreased to $8 million from $104 million, or by $96 million, for the year ended December 31, 2021
compared to 2020. The decrease was primarily driven by a gain of $85 million recorded as a result of the remeasurement
of our previously held equity interest in Vricon due to the Vricon Acquisition for the year ended December 31, 2020
which did not recur in 2021. In addition, the decrease was driven by a $3 million foreign exchange loss for the year
ended December 31, 2021 compared to a $5 million foreign exchange gain for the year ended December 31, 2020.
Other income, net increased to $104 million from $1 million, or by $103 million, for the year ended December 31, 2020
compared to 2019. The increase was primarily driven by a gain of $85 million recorded as a result of the remeasurement
50
of our previously held equity interest in Vricon due to the Vricon Acquisition. In addition, the increase was driven by a
$5 million foreign exchange gain for the year ended December 31, 2020, compared to a $2 million foreign exchange loss
for the year ended December 31, 2019.
Income tax (benefit) expense
($ millions)
Income tax (benefit) expense
* Not meaningful.
Year Ended December 31, $ Change % Change $ Change % Change
2021
2019 to 2020
2020 to 2021
2020
2019
$ (13) $ (22) $
5 $
9
(41)%$ (27)
* %
Income tax benefit decreased to $13 million from $22 million, or by $9 million, for the year ended December 31, 2021,
compared to 2020. This change was primarily due to a $13 million reduction in the December 31, 2020 estimated federal
Base Erosion and Anti-Abuse Tax (“BEAT”) driven by a change in tax strategy enabled by a reduction in forecasted
interest expense.
Income tax (benefit) expense changed to a benefit of $22 million from an expense of $5 million, or by $27 million, for
the year ended December 31, 2020, compared to 2019. This change was primarily due to the release of a $17 million
valuation allowance related to the deferred tax liability recorded in connection with the Vricon Acquisition and the
reduction of BEAT estimated at December 31, 2019.
Equity in income from joint ventures, net of tax
($ millions)
Equity in income from joint ventures, net of tax
$ — $
(1) $ (11) $
1
(100)% $
10
(91)%
Year Ended December 31,
2021 2020 2019
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
There was no equity in income from joint ventures, net of tax for the year ended December 31, 2021 compared to $1
million for 2020. As we acquired Vricon effective July 1, 2020, Vricon’s results were included in our consolidated
results from that date forward and are no longer presented in equity in income from joint ventures, net of tax. See Note 5,
“Business Combination” to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and
Supplementary Data” for additional detail on the Vricon Acquisition.
Equity in income from joint ventures, net of tax for the year ended December 31, 2019, was primarily related to our
Vricon joint venture of which we owned an approximately 50% interest prior to completion of the Vricon Acquisition in
2020.
Income (loss) from discontinued operations, net of tax
Year Ended December 31, $ Change % Change
2019
2021
2020 to 2021
2020
$ Change % Change
2019 to 2020
($ millions)
Discontinued operations:
Income from operations of discontinued
operations, net of tax
Gain on disposal of discontinued operations, net
of tax
Income from discontinued operations, net of tax
* Not meaningful.
$ — $ 32 $ 26 $
(32)
(100)% $
6
23 %
— 317 —
(317)
$ — $ 349 $ 26 $ (349)
317
(100)
(100)% $ 323
*
* %
51
There was no income from discontinued operations, net of tax for the year ended December 30, 2021 as the sale of our
MDA Business was completed in the second quarter of 2020.
Income (loss) from discontinued operations, net of tax increased to $349 million from $26 million, or by $323 million,
for the year ended December 31, 2020, compared to 2019. The increase is primarily driven by the after-tax gain on
disposal of the MDA Business of $317 million. The increase was also impacted by a $39 million recovery of a
previously recorded liability in relation to the Company’s dispute with a Ukrainian customer for the year ended
December 31, 2020.
RESULTS BY SEGMENT
We analyze financial performance by segments, which group related activities within our business. We report our
financial performance based on two reportable segments: Earth Intelligence and Space Infrastructure. Intrasegment
transactions have been eliminated from the segmented financial information discussed below.
Year Ended December 31,
2020
2019
2021
$ Change % Change
2020 to 2021
$ Change % Change
2019 to 2020
($ millions)
Revenues:
Earth Intelligence
Space Infrastructure
Intersegment eliminations
Total revenues
$
$
1,093 $
740
(63)
1,770 $
1,081
721
(79)
1,723
Adjusted EBITDA:
Earth Intelligence
Space Infrastructure
Intersegment eliminations
Corporate and other expenses
Total Adjusted EBITDA
* Not meaningful.
$
$
492 $
46
(25)
(89)
424 $
513
(3)
(27)
(61)
422
$
$
$
$
1,085 $
706
(125)
1,666 $
548 $
(17)
(29)
(86)
416 $
12
19
16
47
(21)
49
2
(28)
2
1 %$
3
(20)
3 %$
(4)
15
46
57
(4) %$
*
(7)
46
0 %$
(35)
14
2
25
6
(0)%
2
(37)
3 %
(6)%
(82)
(7)
(29)
1 %
Adjusted EBITDA disclosures throughout this section, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” are non-GAAP measures. See “Non-GAAP Financial Measures” below for further
discussion of Adjusted EBITDA disclosures.
Earth Intelligence
The following table provides selected financial information for the Earth Intelligence segment.
Year Ended December 31,
2020
2019
2021
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
($ millions)
Total revenues
Adjusted EBITDA
Adjusted EBITDA margin
(as a % of total revenues)
$ 1,093
$ 1,081
$ 1,085
$
492
$
513
$
548
$
$
12
1 %$
(4)
(0)%
(21)
(4)%$
(35)
(6)%
45.0 %
47.5 %
50.5 %
Revenues from the Earth Intelligence segment increased to $1,093 million from $1,081 million, or by $12 million, for
the year ended December 31, 2021, compared to 2020. The increase was primarily driven by a $48 million increase in
revenue from international defense and intelligence customers, a $36 million increase in new and expanded commercial
programs and a $7 million increase in revenue from new contracts with the U.S. government. These increases were
52
partially offset by an $80 million decrease in the recognition of deferred revenue related to the EnhancedView Contract.
We recognized $80 million of deferred revenue from the EnhancedView Contract for the year ended December 31,
2020, compared to none for the year ended December 31, 2021, as it was fully recognized as of August 31, 2020.
Revenues from the Earth Intelligence segment revenues decreased to $1,081 million from $1,085 million, or by $4
million, for the year ended December 31, 2020, compared to 2019. The decrease was primarily driven by a $40 million
decrease in the recognition of deferred revenue related to the EnhancedView Contract. We recognized $120 million of
deferred revenue from the EnhancedView Contract for the year ended December 31, 2019, compared to $80 million for
the year ended December 31, 2020, as it was fully recognized as of August 31, 2020. These decreases were partially
offset by a $15 million increase in revenue from new contracts with the U.S. government, an $11 million increase in
revenue from international defense and intelligence customers and a $10 million increase in revenue driven by the
inclusion of Vricon’s revenue for two quarters in 2020 compared to none in 2019 as it was accounted for as an equity
method investment. Revenue from international defense and intelligence customers increased primarily due to the usage
of new direct access facilities which became operational and contracts that signed in the second half of 2019.
Adjusted EBITDA decreased to $492 million from $513 million, or by $21 million, for the year ended December 31,
2021, compared to 2020. The decrease was primarily driven by a decrease in the recognition of deferred revenue related
to the EnhancedView Contract as mentioned above. The decrease was also driven by an increase in selling, general and
administrative costs due to an increase in labor related expenses driven by an increase in headcount, employee
compensation and fringe benefits for the year ended December 31, 2021, compared to 2020. These decreases were
partially offset by the expansion of contracts with existing commercial and international defense and intelligence
customers contributing to positive program margin growth.
Adjusted EBITDA decreased to $513 million from $548 million, or by $35 million, for the year ended December 31,
2020, compared to 2019. The decrease was primarily driven by a $40 million decrease in the recognition of revenue
related to the EnhancedView Contract and a $10 million decrease related to equity in income from our Vricon joint
venture which was acquired and consolidated in our results in 2020. These decreases were partially offset by an increase
in revenue from new contracts with the U.S. government.
Space Infrastructure
The following table provides selected financial information for the Space Infrastructure segment.
($ millions)
Total revenues
Adjusted EBITDA
Adjusted EBITDA margin
(as a % of total revenues)
* Not meaningful.
Year Ended December 31,
2019
2020
2021
$ Change % Change $ Change % Change
2020 to 2021
2019 to 2020
$ 740
$ 721
$ 706
$
$ 46
$
(3)
$ (17) $
6.2 % (0.4)% (2.4)%
19
49
3 %$
15
2 %
* $
14
(82)%
Changes in revenues from year to year are influenced by the size, timing and number of satellite contracts awarded in the
current and preceding years and the length of the construction period for satellite contracts awarded. Revenues on
satellite contracts are recognized using the cost-to-cost method to determine the percentage of completion over the
construction period, which typically ranges between 20 to 36 months, and up to 48 months in certain situations. Adjusted
EBITDA margins can vary from quarter to quarter due to the mix of our revenues and changes in our estimated total
costs at completion (“EAC”) as our risks are retired and as our EACs are increased or decreased based on contract
performance. Adjusted EBITDA margins are also impacted by estimated contractual consideration.
Revenues from the Space Infrastructure segment increased to $740 million from $721 million, or by $19 million, for the
year ended December 31, 2021, compared to 2020. Revenues increased primarily as a result of an increase in revenues
from commercial programs of $87 million due to higher volumes and lower EAC growth primarily due to no COVID-19
53
program impacts for the year ended December 31, 2021. Revenues were negatively impacted by a $19 million decrease
year over year related to our contract with Sirius XM Holdings Inc. (“Sirius XM”). The year ended December 31, 2021,
included a $30 million cumulative adjustment to revenue primarily related to the loss of final milestone and expected
orbital payments from Sirius XM due to the non-performance of the SXM-7 satellite and other adjustments that were
recorded in 2021. After exhausting efforts to fully recover the SXM-7 satellite and further discussions with Sirius XM,
in April 2021, we made the determination to record the cumulative adjustment to revenue. In addition, there were $3
million of costs incurred in the first quarter of 2021 related to attempts to repair and fully recover the SXM-7 satellite.
The aggregate impact for the year ended December 30, 2021, was $33 million. The $33 million decrease was partially
offset by the non-reoccurrence of a $14 million adjustment to revenue due to the identification of a design anomaly on
the commercial satellite program, which was recorded for the year ended December 31, 2020. In addition, the total
increase in revenues from the Space Infrastructure segment was partially offset by a $49 million decrease in revenues
from U.S. government contracts.
Revenues from the Space Infrastructure segment increased to $721 million from $706 million, or by $15 million, for the
year ended December 31, 2020, compared 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 increased to $46 million from a loss of $3 million, or by $49 million, for the year ended December
31, 2021, compared to 2020. The increase in the Space Infrastructure segment was primarily related to a $92 million
increase driven by increased volumes on commercial programs which resulted in increased margins and fewer negative
EAC impacts during the year as compared to the year ended December 31, 2020, which included negative EAC impacts
due to COVID-19. The increase in commercial program margins has been driven by a change in program mix related to
the completion of less profitable programs offset by new, more profitable programs. These increases were partially offset
by the $19 million reduction in revenue related to the above-mentioned SXM-7 satellite impacts and a $19 million
increase in indirect costs and selling, general and administrative costs which was primarily driven by an $11 million
increase in research and development expenses.
Adjusted EBITDA was a loss of $3 million compared to a loss of $17 million, or an increase of $14 million, for the year
ended December 31, 2020, compared to 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.
54
Corporate and other expenses for the year ended December 31, 2021 increased to $89 million from $61 million, or by
$28 million, compared to 2020. The increase was primarily driven by a $14 million increase in selling, general and
administrative costs primarily due to an increase in labor related expenses driven by an increase in employee
compensation and fringe benefits. There was also an increase in stock-based compensation expense of $5 million
primarily due to a higher fair market value of equity awards granted. The increase was also driven by a $3 million
foreign exchange loss for the year ended December 31, 2021, compared to a $5 million foreign exchange gain for the
year ended December 31, 2020.
Corporate and other expenses for the year ended December 31, 2020 decreased to $61 million from $86 million, or by
$25 million, compared to 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 $13 million increase in stock-based compensation
expense primarily driven by a higher stock price.
Intersegment eliminations
Intersegment eliminations are related to projects between our segments, primarily WorldView Legion. Intersegment
eliminations decreased for the year ended December 31, 2021 compared to 2020, primarily related to a decrease in
satellite construction activity.
Intersegment eliminations decreased for the year ended December 31, 2020 compared to 2019, primarily related to a
decrease in satellite construction activity.
BACKLOG
Our backlog by segment from continuing operations is as follows:
($ millions)
Earth Intelligence
Space Infrastructure
Total backlog
Unfunded contract options
Total
December 31,
2021
December 31,
2020
$
$
1,028 $
865
1,893
650
2,543
$
880
1,024
1,904
856
2,760
Order backlog, representing the estimated dollar value of firm contracts for which work has not yet been performed (also
known as the remaining performance obligations on a contract), was $1,893 million as of December 31, 2021 compared
to $1,904 million as of December 31, 2020. Order backlog generally does not include unexercised contract options and
potential orders under indefinite delivery/indefinite quantity contracts. Approximately 66% of the total $1,893 million
backlog as of December 31, 2021 is expected to be converted into revenue in 2022.
Backlog in the Space Infrastructure segment is primarily comprised of multi-year awards, such as satellite builds.
Fluctuations in backlog are driven primarily by the timing of large program wins. Backlog in the Earth Intelligence
segment consists of both multi-year and annual contracts, which renew at various times throughout the year. As a result,
the timing of when contracts are awarded and when option years are exercised may cause backlog to fluctuate
significantly from period to period.
Although backlog reflects business that is considered to be firm, terminations, amendments or cancellations may occur,
which could result in a reduction in our total backlog.
Our unfunded contract options totaled $650 million and $856 million as of December 31, 2021 and 2020, respectively.
Unfunded contract options represent estimated amounts of revenue to be earned in the future from negotiated contracts
55
with unexercised contract options and indefinite delivery/indefinite quantity contracts. Unfunded contract options as of
December 31, 2021 were primarily comprised of the option year in the EnhancedView Contract (September 1, 2022
through July 12, 2023) and other U.S. government and commercial customer contracts. In November 2021, the National
Reconnaissance Office (“NRO”) announced the release of the Electro-Optical Commercial Layer (“EOCL”) contract
Request for Proposal (“RFP”) which is expected to replace the existing EnhancedView Contract. In December 2021, we
submitted our response to the EOCL RFP and anticipate the NRO to award EOCL contracts prior to the expiration of the
EnhancedView Contract, including remaining option years.
LIQUIDITY & CAPITAL RESOURCES
Our sources of liquidity include cash provided by operations, access to existing credit facilities, collection or
securitization of orbital receivables and, when available and efficient, access to the capital markets. We generally
maintain limited cash on hand and use available cash to pay down borrowings on our Syndicated Credit Facility (as
defined below). Our primary short-term cash requirements are to fund working capital, including requirements on long-
term construction contracts (including our geostationary satellite contracts), fixed overhead costs and to fund increased
capital expenditures, including the construction of our WorldView Legion satellites. Working capital requirements can
vary significantly from period to period, particularly as a result of the timing of receipts and disbursements related to
long-term construction contracts.
Our medium-term to long-term cash requirements are to service and repay debt and make investments, including in
facilities, equipment, technologies and research and development for growth initiatives. These capital investments
include investments to replace the capability or capacity of satellites which have or will go out of service in the future.
Over the near-term to medium-term, it is also possible that our customers may fully or partially fund the construction of
additional Legion satellites. Cash is also used to pay dividends and finance other long-term strategic business initiatives.
Our first maturity of long-term debt is in the fourth quarter of 2023 and relates to the 2023 Notes and Revolving Credit
Facility. We had a significant partial debt redemption of the 2023 Notes in the first quarter of 2021 using proceeds from
our Offering. On March 26, 2021, we redeemed $350 million aggregate principal amount of our 2023 Notes using a
portion of the net proceeds from the Offering.
We have significant purchase obligations in the normal course of business for goods and services, under agreements with
defined terms as to quantity, price and timing of delivery. Purchase obligations represent open purchase orders and other
commitments for the purchase or construction of property, plant and equipment or intangible assets, operational
commitments related to remote ground terminals, or with subcontractors on long-term construction contracts that we
have with customers in the normal course of business. As of the year ended December 31, 2021, we had total short-term
purchase obligations of $324 million and total long-term purchase obligations of $127 million. These amounts are based
on volumes consistent with anticipated requirements to fulfill purchase orders or contracts for product deliveries
received, or expected to be received, from customers.
We also have short and long-term requirements to fund our pension plans within the Space Infrastructure segment.
Funding requirements under applicable laws and regulations are a major consideration in making contributions to our
pension plans. Failure to satisfy the minimum funding thresholds with respect to appropriate laws and regulations could
result in restrictions on our ability to amend the plans or make benefit payments. With respect to our qualified pension
plan, we intend to contribute annually not less than the required minimum funding thresholds. In December 2020, we
prefunded $16 million related to our qualified pension plan. Due to the December 2020 prefunding, there were no
required contributions for our qualified pension plan for the year ended December 31, 2021. In addition, the American
Rescue Plan Act of 2021 includes provisions for pension funding relief in future periods. We have elected to take
advantage of these provisions and anticipate lower required contributions for our qualified pension plan in the upcoming
years. The Company has no further required contributions on its qualified pension plan for the year ended December 31,
2022.
Our ability to fund our cash needs will depend, in part, on our ability to generate cash in the future, which depends on
our future financial results. Our future results are subject to general economic, financial, competitive, legislative and
56
regulatory factors that may be outside of our control. Our future access to, and the availability of credit on acceptable
terms and conditions is impacted by many factors, including capital market liquidity and overall economic conditions.
We believe that our cash from operating activities generated from continuing operations, together with available
borrowings under our Revolving Credit Facility, will be adequate for the next twelve months and the foreseeable future
to meet our anticipated uses of cash flow, including working capital, capital expenditure, debt service costs, dividend and
other commitments. While we intend to reduce debt over time using cash provided by operations, we may also seek to
meet long-term debt obligations, if necessary, and fund future capital investments by obtaining capital from a variety of
additional sources or by refinancing existing obligations. These sources include public or private capital markets, bank
financings, proceeds from dispositions or other third-party sources.
Summary of cash flows
($ millions)
Cash provided by operating activities - continuing operations
Cash (used in) provided by operating activities - discontinued operations
Cash provided by operating activities
Cash used in investing activities - continuing operations
Cash provided by (used in) investing activities - discontinued operations
Cash (used in) provided by investing activities
Cash used in financing activities - continuing operations
Cash used in financing activities - discontinued operations
Cash used in financing activities
Effect of foreign exchange on cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, beginning of year
Cash, cash equivalents, and restricted cash, end of period
Operating activities
Year Ended December 31,
2020
2019
2021
$
$
294 $
(13)
281
(234)
—
(234)
(31)
—
(31)
—
31
47 $
243 $
(54)
189
(406)
723
317
(555)
(24)
(579)
(5)
109
31 $
258
59
317
(6)
(7)
(13)
(208)
(30)
(238)
—
43
109
Cash flows from operating activities can vary significantly from period to period as a result of our working capital
requirements, given our portfolio of large construction programs and the timing of milestone receipts and payments with
customers and suppliers in the ordinary course of business. Investment in working capital is also necessary to build our
business and manage lead times in construction activities. We expect working capital account balances to continue to
vary from period to period. We efficiently fund our working capital requirements with the Revolving Credit Facility (as
defined below).
Cash provided by operating activities related to continuing operations increased to $294 million from $243 million, or by
$51 million, for the year ended December 31, 2021 compared to 2020. This change was primarily driven by favorable
changes in working capital for the year ended December 31, 2021, compared to 2020.
Cash provided by operating activities related to continuing operations decreased to $243 million from $258 million, or
by $15 million, for the year ended December 31, 2020 compared to 2019. This change was primarily driven by favorable
changes in working capital for the year ended December 31, 2020, compared to 2019, offset by the insurance proceeds
of $183 million related to the loss of the WorldView-4 satellite received in the year ended December 31, 2019.
Investing activities
Cash used in investing activities related to continuing operations decreased to $234 million from $406 million, or by
$172 million, in the year ended December 31, 2021 compared to 2020. The primary investing activities included
expenditures on property, plant and equipment of $135 million and $221 million, for the years ended December 31, 2021
and 2020, respectively, and investments in software of $99 million and $87 million, for the years ended December 31,
2021 and 2020, respectively. Property, plant and equipment expenditures in 2021 and 2020 primarily related to the build
57
of our WorldView Legion satellites. During the year ended December 31, 2020, we also used cash of $120 million, net
of cash received, to acquire the remaining interest in Vricon
Cash used in investing activities related to continuing operations increased to $406 million from $6 million, or by $400
million, for the year ended December 31, 2020 compared to 2019. The primary investing activities included expenditures
on property, plant and equipment of $221 million and $257 million, for the years ended December 31, 2020 and 2019,
respectively, and investments in software of $87 million and $57 million, for the years ended December 31, 2020 and
2019, respectively. Property, plant and equipment expenditures in 2020 and 2019 primarily related to the build of our
WorldView Legion satellites. During the year ended December 31, 2020, we also used cash of $120 million, net of cash
received, to acquire the remaining interest in Vricon. In 2019, these expenditures were partially offset by net proceeds of
$280 million from the sale and subsequent leaseback of our properties in Palo Alto, California. California. Cash used in
investing activities was also partially offset by a return of capital from discontinued operations of $20 million and $28
million, for the years ended December 31, 2020 and 2019, respectively.
Financing activities
Cash used in financing activities related to continuing operations decreased to $31 million from $555 million, or by $524
million, for the year ended December 31, 2021 compared to 2020. During the year ended December 31, 2021, cash used
in financing activities from continuing operations included a repurchase of the 2023 Notes of $384 million, settlement of
a securitization liability of $13 million and debt repayments of $10 million, partially offset by proceeds from issuance of
common stock of $380 million. During the year ended December 31, 2020, cash used in financing activities from
continuing operations included debt repayments of $525 million, a repurchase of the 2023 Notes of $169 million and
settlement of securitization liability of $11 million, partially offset by net proceeds from bank borrowings of $147
million.
Cash used in financing activities related to continuing operations increased to $555 million from $208 million, or by
$347 million, for the year ended December 31, 2020 compared to 2019. During the year ended December 31, 2020, cash
used in financing activities from continuing operations included debt repayments of $525 million, a repurchase of the
2023 Notes of $169 million, and settlement of securitization liability of $11 million, partially offset by net proceeds from
the issuance of the 2027 Notes of $147 million. During the year ended December 31, 2019, cash used in financing
activities from continuing operations included net proceeds from bank borrowings of $980 million offset by debt
repayments of $1,115 million, debt issuance costs and fees paid to creditors of $24 million, repurchases of orbital
receivables of $24 million and settlement of securitization liability of $20 million.
Long-term debt
The following table summarizes our long-term debt:
($ millions)
Syndicated Credit Facility:
Term Loan B
2023 Notes
2027 Notes
Deferred financing
Debt discount and issuance costs
Obligations under finance leases and other
Total long-term debt
Syndicated Credit Facility
December 31,
2021
December 31,
2020
$
$
1,444
500
150
26
(39)
5
2,086 $
1,444
850
150
32
(57)
3
2,422
As of December 31, 2021, the senior secured syndicated credit facility (“Syndicated Credit Facility”) is composed of: (i)
a senior secured first lien revolving credit facility in an aggregate capacity of up to $500 million maturing in December
58
2023 (“Revolving Credit Facility”) and (ii) a senior secured first lien term B facility in an original aggregate principal
amount of $2.0 billion maturing in October 2024 (“Term Loan B”). The Revolving Credit Facility includes an aggregate
$200 million sub limit under which letters of credit can be issued. As of December 31, 2021 and December 31, 2020, we
had $28 million and $31 million, respectively, of issued and undrawn letters of credit outstanding under the Revolving
Credit Facility.
Senior Secured Notes due 2023
In December 2019, we issued $1.0 billion in aggregate principal amount of 2023 Notes in a private placement to
institutional buyers. The 2023 Notes were issued at a price of 98% and are recorded as long-term debt in our
Consolidated Financial Statements. The 2023 Notes bear interest at the rate of 9.75% per year, payable semi-annually in
cash in arrears, for which interest payments commenced in June 2020. The 2023 Notes are guaranteed on a senior
secured basis by each of the Company’s existing and future subsidiaries that guarantee the Syndicated Credit Facility.
Senior Secured Notes due 2027
In June 2020, we issued $150 million in aggregate principal amount of 7.54% Senior Secured Notes due 2027 (“2027
Notes”) in a private placement to institutional buyers. The 2027 Notes were issued at a price of 98.25% and are recorded
as long-term debt in our Consolidated Financial Statements. The 2027 Notes bear interest at the rate of 7.54% per year,
payable semi-annually in cash in arrears, for which interest payments commenced in December 2020. The 2027 Notes
are guaranteed on a senior secured basis by each of the Company’s existing and future subsidiaries that guarantee the
Syndicated Credit Facility and the 2023 Notes.
Leaseback Deferred Financing
In December 2019, we completed the sale and subsequent leaseback of our owned properties in Palo Alto, California for
proceeds of $291 million. We determined that the leaseback terms were off-market. In accordance with Accounting
Standards Codification 842 – Leases, we accounted for the excess of the leaseback payments over the present value of
market rental payments as additional financing, separate from the lease liability. This resulted in recognition of a
deferred financing liability of $33 million which is repayable over the 10-year leaseback term.
See Note 12, “Long-term debt and interest expense, net” to the Consolidated Financial Statements in Part II, Item 8,
“Financial Statements and Supplementary Data” for further details on our long-term debt.
Securitization liability
We have in place a revolving securitization facility agreement with an international financial institution. Under the terms
of the Syndicated Credit Facility, we may offer to sell eligible orbital receivables from time to time with terms of seven
years or less, discounted to face value using prevailing market rates. During the years ended December 31, 2021 and
2020, we did not sell or repurchase any orbital receivables. During the year ended December 31, 2019, we did not sell
any eligible receivables and repurchased $24 million of specifically identified orbital receivables. The orbital receivables
were repurchased as a result of our customer transferring the obligation to another entity which did not meet the credit
criteria of our lenders.
The orbital receivables that were securitized remain on our balance sheet as the accounting criteria for surrendering
control of the orbital receivables were not met. The net proceeds received have been recognized as a securitization
liability that has been subsequently measured at amortized cost using the effective interest rate method. The securitized
orbital receivables and the securitization liabilities are being drawn down as payments are received from customers and
passed on to the international financial institution. We continue to recognize orbital revenue on the orbital receivables
that are subject to the securitization transactions and recognize interest expense to accrete the securitization liability.
59
Off-balance sheet arrangements
As of December 31, 2021, we had no outstanding foreign exchange sales contracts. As of December 31, 2021, we had
certain letters of credit of $28 million guaranteed by the Syndicated Credit Facility, while indemnified by us. Such
arrangements are not expected to have a material effect on our liquidity or capital resources, financial position or results
of operations.
We use, from time to time, derivative financial instruments to manage existing foreign currency exposures. We consider
the management of financial risks to be an important part of our overall corporate risk management policy. Foreign
exchange forward contracts are used to hedge our exposure to currency risk on sales, purchases, cash, net investments
and loans denominated in a currency other than the functional currency of our domestic and foreign operations.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our Consolidated
Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial
statements requires management to make judgments, assumptions and estimates that affect the amounts reported in the
Consolidated Financial Statements and accompanying notes. For a summary of our significant accounting policies, see
Note 2, “Summary of significant accounting policies” to the Consolidated Financial Statements in Part II, Item 8,
“Financial Statements and Supplementary Data”.
We consider the following accounting policies to be critical to an understanding of our financial condition and results of
operations because these policies require the most difficult, subjective or complex judgments on the part of management
in their application. Actual results could differ from our estimates and assumptions, and any such differences could be
material to our Consolidated Financial Statements.
Revenue recognition
The recognition and measurement of revenue requires the use of judgments and estimates. Specifically, judgment is used
in interpreting complex arrangements with nonstandard terms and conditions and determining when all criteria for
revenue recognition have been met.
Space Infrastructure
Revenue in the Space Infrastructure segment is primarily generated from long-term construction contracts. Due to the
long-term nature of these contracts, we generally recognize revenue over time using the cost-to-cost method to measure
progress. Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred to EAC.
Revenue recognition is also contingent on estimated contractual consideration. An EAC includes all direct costs and
indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates
regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in
determining the EAC. Changes to an EAC or estimated contractual consideration are recorded as a cumulative
adjustment to revenue.
Our cost estimation process is based on the professional knowledge of our engineering, program management and
financial professionals and draws on their significant experience and judgment. We prepare EACs for our contracts and
calculate estimated revenues and costs over the life of our contracts. Since our contracts typically span a period of
several years, estimation of revenue, cost and progress toward completion requires the use of judgment. Judgments and
estimates are re-assessed at least quarterly with most estimates being updated on a monthly basis. Adjustments in
estimates could have a material impact on revenue recognition based on the significance of the adjustments. Factors
considered in these estimates include our historical performance, the availability, productivity and cost of labor, the
nature and complexity of work to be performed, availability and cost of materials, components and subcontracts, the risk
and impact of delayed performance and the level of indirect cost allocations.
60
Earth Intelligence
Revenue in the Earth Intelligence segment is generated from imagery and geospatial intelligence service contracts.
Revenue from imagery service contracts is recognized based on satellite capacity made available to the customer in a
particular period, when imagery is delivered to the customer, or ratably over the subscription period. Many of our
imagery service contracts relate to the transfer of a series of distinct goods or services over time for which management
has determined are a single performance obligation. Revenue from our geospatial intelligence service contracts is
recognized from the rendering of services that compensate us at a cost-plus-fixed-fee, firm fixed price, or on a time and
materials basis.
Some of our contracts contain multiple performance obligations, which requires us to estimate the standalone selling
price of each performance obligation in order to allocate consideration transferred from the customer. We have not
historically been able to use third-party evidence for determining standalone selling price due to the unique nature of our
products and services and lack of visibility into competitor pricing. Standalone selling prices are determined based on
management estimates that involve significant judgment. Multiple factors are considered based on the nature of the
deliverables included within the contract, which include market conditions, competitive landscape, geographic or
regional specific factors, internal costs, profit margin objectives and pricing practices used by us.
Income Taxes
We are subject to income taxes in the United States, Sweden and other foreign jurisdictions. We compute the provision
for income taxes using the asset and liability method, under which deferred tax assets and liabilities are determined
based on the temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred tax
assets and liabilities are measured at the currently enacted tax rates that are expected to apply in years in which they are
expected to be paid for or realized. All deferred income taxes are classified as non-current on our Consolidated Balance
Sheets. Significant judgments are required in order to determine the realizability of tax assets. In assessing the need for a
valuation allowance, we evaluate all significant available positive and negative evidence, including historical operating
results, estimates of future sources of taxable income, carry-forward periods available, the existence of prudent and
feasible tax planning strategies and other relevant factors.
For further information regarding our deferred tax assets and liabilities see Note 2, “Summary of significant accounting
policies” and Note 21, “Income taxes” to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements
and Supplementary Data.”
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 3, “New standards and interpretations not yet adopted” to the Consolidated Financial Statements in Part II,
Item 8, “Financial Statements and Supplementary Data” for a discussion of recent accounting pronouncements.
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, Adjusted EBITDA and Adjusted EBITDA margin.
We define EBITDA as earnings before interest, taxes, depreciation and amortization, Adjusted EBITDA as EBITDA
adjusted for certain items affecting the comparability of our ongoing operating results as specified in the calculation and
Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. Certain items affecting the comparability of our
ongoing operating results between periods include restructuring, impairments, insurance recoveries, gain (loss) on sale of
assets, CEO severance, (gain) loss on orbital receivables allowance 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
61
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 that may result in a different calculation therein.
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, Adjusted EBITDA and Adjusted EBITDA margin 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 income (loss) to EBITDA and Adjusted EBITDA for the years ended December 31,
2021, 2020 and 2019:
($ millions)
Net income
Income tax (benefit) expense
Interest expense, net
Interest income
Depreciation and amortization
EBITDA
Income from discontinued operations, net of tax
Restructuring
Transaction and integration related expense
(Gain) loss on orbital receivables allowance
Impairment losses, including inventory
Insurance recoveries
Loss (gain) on sale of assets
CEO severance
Gain on remeasurement of Vricon equity interest
Total Adjusted EBITDA
Adjusted EBITDA:
Earth Intelligence
Space Infrastructure
Intersegment eliminations
Corporate and other expenses
Total Adjusted EBITDA
Net income margin
Total Adjusted EBITDA margin
$
$
$
$
Year Ended December 31,
2020
2021
2019
46
(13)
151
(3)
290
471
—
2
1
(49)
—
(1)
—
—
—
424
492
46
(25)
(89)
424
$
$
$
$
303 $
(22)
175
(3)
348
801 $
(349)
—
7
14
33
—
1
—
(85)
422 $
513
(3)
(27)
(61)
422 $
109
5
219
(2)
376
707
(26)
18
16
14
3
(183)
(136)
3
—
416
548
(17)
(29)
(86)
416
2.6 %
24.0 %
17.6 %
24.5 %
6.5 %
25.0 %
62
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
We are exposed to interest rate risk on our variable-rate borrowings under our Syndicated Credit Facility, which is
comprised of the Revolving Credit Facility and Term Loan B. We use interest rate swap agreements to manage interest
rate risk associated with cash outflows from long-term debt.
There was $1.44 billion outstanding under our Syndicated Credit Facility as of December 31, 2021 and 2020,
respectively. Term Loan B bears interest equal to, at our option, either (i) U.S. dollar LIBOR plus 275 basis points per
annum, or (ii) adjusted base rate, plus a margin of 175 basis points per annum. In April 2018, we entered into interest
rate swap agreements in order to fix the base interest rate to be paid over an aggregate amount of $1 billion of our
variable rate long-term debt, at an average rate of 2.56% (excluding the margin specified in the Syndicated Credit
Facility). In April 2021, $500 million of these interest rate swaps matured and on June 15, 2021, we entered into new
interest rate swap agreements at a notional value of $500 million. As of December 31, 2021, an aggregate amount of $1
billion of our variable rate long-term debt is fixed at an average rate of 1.43% plus the applicable margin described
below.
The Revolving Credit Facility bears interest at a rate equal to, at our option, either (i) U.S. dollar LIBOR, plus a margin
of 120 - 425 basis points per annum, based on our total leverage ratio, or (ii) adjusted base rate, plus a margin of 20 - 325
basis points per annum, based on our total leverage ratio.
Based upon the amounts outstanding under the Syndicated Credit Facility, net of the interest rate swaps and assuming
the amounts were outstanding for a full calendar year, a 50 basis point increase in interest rates would increase interest
expense under the Syndicated Credit Facility by approximately $2 million for both the years ended December 31, 2021
and 2020. We may decide in future periods to engage in hedging transactions to further mitigate the interest rate risk
under our Syndicated Credit Facility.
Foreign Currency Risk
Although the majority of our transactions are denominated in U.S. dollars, some of our transactions are denominated in
foreign currencies. Certain contractual relationships with customers and vendors mitigate risks from currency exchange
rate changes that arise from normal purchasing and normal sales activities. Our revenue and purchase contracts are
primarily denominated in U.S. dollars. However, fluctuations in the value of foreign currencies may make payments in
U.S. dollars, as provided for under our existing contracts, more difficult for foreign customers. In addition, fluctuations
in foreign currencies could introduce volatility into our financial statements for contracts denominated in a foreign
currency.
63
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Reports of Independent Registered Public Accounting Firm (Auditor Firm ID: 185)
Consolidated Statements of Operations
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Change in Stockholders’ Equity
Notes to Consolidated Financial Statements
Page
65
69
70
71
72
73
74
64
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
Maxar Technologies Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Maxar Technologies Inc. and subsidiaries (the
Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income,
cash flows, and changes in stockholders’ equity for each of the years in the three-year period ended December 31, 2021,
and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and
2020, and the results of its operations and its cash flows for each of the years in the three-year period ended
December 31, 2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission, and our report dated February 22, 2022 expressed an unqualified opinion on the
effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2 to the consolidated financial statements, the Company has elected to change its method of
accounting for income taxes due to the adoption of Accounting Standards Update No. 2019-12, Simplifying the
Accounting for Income Taxes (Topic 740) as of January 1, 2020.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates
to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way
our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
65
Revenue recognition for certain long-term fixed-price contracts in the Space Infrastructure segment
As discussed in Notes 2 and 16 to the consolidated financial statements, the Company generally recognizes revenue over
time using the cost-to-cost method to measure progress. Under the cost-to-cost method, revenue is recognized based on
the proportion of total costs incurred to estimated total costs-at-completion (EAC). An EAC includes all direct costs and
indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates
regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in
determining the EAC. Changes to an EAC are recorded as a cumulative adjustment to revenue.
We identified the evaluation of revenue recognition for certain long-term fixed-price contracts in the Space
Infrastructure segment as a critical audit matter. In particular, evaluating the Company’s estimated costs to complete,
specifically estimated labor and subcontractor costs, required a high degree of subjective auditor judgment given the
nature and complexity of the work to be performed. The determination of, and changes to, those estimates may have a
significant impact on revenue recorded.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design
and tested the operating effectiveness of certain internal controls over the Company’s process to estimate costs to
complete for fixed-price, long-term contracts. This included controls over estimated labor and subcontractor costs. For
certain contracts, we compared the Company’s original or prior period estimate of total contract costs to be incurred to
changes in total actual and estimated future contract costs to be incurred to assess the Company’s ability to estimate
costs. We inquired of financial and operational personnel of the Company and inspected supporting documents to
identify factors that should be considered within the cost to complete estimates for indications of possible management
bias. We evaluated the Company’s estimated costs to complete by:
•
•
•
•
•
•
reading the underlying contracts and related amendments to obtain an understanding of the contractual
requirements and related performance obligations
considering costs incurred to-date and the relative progress towards completion of the contracts
considering, if relevant, the estimated costs to complete on similar or historical contracts
considering, if relevant, the estimated reserves on specific contracts that include estimation uncertainty based on
the nature of the contract
inspecting correspondence, if any, between the Company and the customer regarding actual cost to date and
expected performance remaining
evaluating the Company’s assessment of contract performance risks included within the estimated costs to
complete.
/s/ KPMG LLP
We have served as the Company’s auditor since 2018.
Denver, Colorado
February 22, 2022
66
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
Maxar Technologies Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Maxar Technologies Inc. and subsidiaries’ (the Company) internal control over financial reporting as of
December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related
consolidated statements of operations, comprehensive income, cash flows, and changes in stockholders’ equity for each
of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the consolidated
financial statements), and our report dated February 22, 2022 expressed an unqualified opinion on those consolidated
financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
67
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ KPMG LLP
Denver, Colorado
February 22, 2022
68
MAXAR TECHNOLOGIES INC.
Consolidated Statements of Operations
(In millions, except per share amounts)
Revenues:
Product
Service
Total revenues
Costs and expenses:
Product costs, excluding depreciation and amortization
Service costs, excluding depreciation and amortization
Selling, general and administrative
Depreciation and amortization
(Gain) loss on orbital receivables allowance
Impairment loss
Satellite insurance recovery
Loss (gain) on sale of assets
Operating income
Interest expense, net
Other income, net
Income (loss) before taxes
Income tax (benefit) expense
Equity in income from joint ventures, net of tax
Income (loss) from continuing operations
Discontinued operations:
Income from operations of discontinued operations, net of tax
Gain on disposal of discontinued operations, net of tax
Income from discontinued operations, net of tax
Net income
Basic net income per common share:
Income (loss) from continuing operations
Income from discontinued operations, net of tax
Basic net income per common share
Diluted net income per common share:
Income (loss) from continuing operations
Income from discontinued operations, net of tax
Diluted net income per common share
Year Ended
December 31,
2020
2021
$
678 $
1,092
1,770
$
633
1,090
1,723
2019
560
1,106
1,666
601
383
369
290
(49)
—
—
—
176
151
(8)
33
(13)
—
46
—
—
—
46 $
615
378
332
348
14
33
—
1
2
175
(104)
(69)
(22)
(1)
(46)
32
317
349
303
0.65 $
—
0.65 $
(0.76)
5.75
4.99
0.63 $
—
0.63 $
(0.76)
5.75
4.99
$
$
$
$
$
593
382
325
376
14
—
(183)
(136)
295
219
(1)
77
5
(11)
83
26
—
26
109
1.39
0.44
1.83
1.38
0.43
1.81
$
$
$
$
$
See accompanying notes to the Consolidated Financial Statements.
69
MAXAR TECHNOLOGIES INC.
Consolidated Statements of Comprehensive Income
(In millions)
Net income
Other comprehensive (income) loss, net of tax:
Foreign currency translation adjustments
Reclassification of currency translation adjustment to gain on disposal of
discontinued operations
Unrealized gain (loss) on interest rate swaps
Gain (loss) on pension and other postretirement benefit plans
Other comprehensive income (loss), net of tax
Comprehensive income, net of tax
Year Ended
December 31,
2020
2021
2019
$
46
$
303
$
109
(2)
—
19
50
67
$
113 $
(47)
(68)
(3)
(43)
(161)
142
$
15
—
(12)
(26)
(23)
86
1
Included within Foreign currency translation adjustments is a net gain on hedge of net investment in foreign operations of $47
million and $5 million for the years ended December 31, 2020 and 2019.
See accompanying notes to the Consolidated Financial Statements.
70
MAXAR TECHNOLOGIES INC.
Consolidated Balance Sheets
(In millions)
Assets
Current assets:
Cash and cash equivalents
Trade and other receivables, net
Inventory, net
Advances to suppliers
Prepaid assets
Other current assets
Total current assets
Non-current assets:
Orbital receivables, net
Property, plant and equipment, net
Intangible assets, net
Non-current operating lease assets
Goodwill
Other non-current assets
Total assets
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
Accrued liabilities
Accrued compensation and benefits
Contract liabilities
Current portion of long-term debt
Current operating lease liabilities
Other current liabilities
Total current liabilities
Non-current liabilities:
Pension and other postretirement benefits
Operating lease liabilities
Long-term debt
Other non-current liabilities
Total liabilities
Commitments and contingencies
Stockholders’ equity:
Common stock ($0.0001 par value, 240 million common shares authorized; 72.7 million and
61.2 million issued and outstanding at December 31, 2021 and 2020, respectively)
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive loss
Total Maxar stockholders' equity
Noncontrolling interest
Total stockholders' equity
Total liabilities and stockholders' equity
December 31, December 31,
2021
2020
$
$
$
$
47
355
39
31
35
22
529
368
940
787
145
1,627
102
4,498
75
43
111
289
24
42
38
622
134
138
2,062
79
3,035
—
2,235
(720)
(53)
1,462
1
1,463
4,498
$
$
$
$
27
327
31
24
38
21
468
361
883
895
163
1,627
86
4,483
115
65
105
278
8
41
51
663
192
158
2,414
120
3,547
—
1,818
(763)
(120)
935
1
936
4,483
See accompanying notes to the Consolidated Financial Statements.
71
MAXAR TECHNOLOGIES INC.
Consolidated Statements of Cash Flows
(In millions)
Cash flows (used in) provided by:
Operating activities:
Net income
Income from operations of discontinued operations, net of tax
Gain on disposal of discontinued operations, net of tax
Income (loss) from continuing operations
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
$
Depreciation and amortization
Stock-based compensation expense
Amortization of debt issuance costs and other non-cash interest expense
Gain on remeasurement of Vricon equity interest
Loss from early extinguishment of debt
(Gain) loss on orbital receivables allowance
Cumulative adjustment to SXM-7 revenue
Impairment losses, including inventory
Deferred income tax benefit
Loss (gain) on sale of assets
Other
Changes in operating assets and liabilities:
Trade and other receivables, net
Accounts payable and liabilities
Contract liabilities
Prepaid and other assets
Other
Cash provided by operating activities - continuing operations
Cash (used in) provided by operating activities - discontinued operations
Cash provided by operating activities
Investing activities:
Purchase of property, plant and equipment and development or purchase of software
Acquisition, net of cash acquired
Return of capital from discontinued operations
Sale of assets
Other
Cash used in investing activities - continuing operations
Cash provided by (used in) investing activities - discontinued operations
Cash (used in) provided by investing activities
Financing activities:
Repurchase of 2023 Notes, including premium
Net proceeds from issuance of common stock
Net proceeds from issuance of 2027 Notes and 2023 Notes
Net payment from Revolving Credit Facility
Settlement of securitization liability
Repurchase of orbital receivables
Refinancing fees paid to creditors
Repayments of long-term debt
Other
Cash used in financing activities - continuing operations
Cash used in financing activities - discontinued operations
Cash used in financing activities
Increase (decrease) in cash, cash equivalents, and restricted cash
Effect of foreign exchange on cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, beginning of year
Cash, cash equivalents, and restricted cash, end of period
Reconciliation of cash flow information:
Cash and cash equivalents
Restricted cash included in prepaid and other current assets
Restricted cash included in other non-current assets
Total cash, cash equivalents, and restricted cash
$
$
$
Year Ended
December 31,
2020
2021
2019
46
—
—
46
290
45
15
—
41
(49)
30
—
—
—
15
(20)
(95)
10
(18)
(16)
294
(13)
281
(234)
—
—
—
—
(234)
—
(234)
(384)
380
—
—
(13)
—
—
(10)
(4)
(31)
—
(31)
16
—
31
47
47
—
—
47
$
$
303
(32)
(317)
(46)
348
43
16
(85)
7
14
—
33
(17)
1
1
33
(84)
5
(19)
(7)
243
(54)
189
(308)
(120)
20
—
2
(406)
723
317
(169)
—
147
—
(11)
—
—
(525)
3
(555)
(24)
(579)
(73)
(5)
109
31
27
4
—
31
$
$
$
$
$
$
109
(26)
—
83
376
20
11
—
22
14
—
3
—
(136)
(4)
(20)
17
(117)
(21)
10
258
59
317
(314)
—
28
280
—
(6)
(7)
(13)
—
—
980
(595)
(20)
(24)
(20)
(523)
(6)
(208)
(30)
(238)
66
—
43
109
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S
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements
(Tabular amounts in millions of dollars, unless otherwise noted)
1. GENERAL BUSINESS DESCRIPTION
Maxar Technologies Inc. (the “Company” or “Maxar”) is a provider of comprehensive space solutions and secure,
precise, geospatial intelligence. Maxar helps government and commercial customers monitor, understand and navigate
our changing planet; deliver global broadband communications; and explore and advance the use of space. The
Company’s approach combines decades of deep mission understanding and a proven commercial and defense foundation
to deploy solutions and deliver insights with speed, scale and cost effectiveness. Maxar’s stock trades on the New York
Stock Exchange and Toronto Stock Exchange under the symbol “MAXR.”
On January 1, 2019, the Company completed a reorganization of its corporate structure pursuant to which the Company
directly acquired all of the issued and outstanding shares of Maxar Technologies Ltd. (“Maxar Canada”), and the
Company replaced Maxar Canada as the publicly-held parent company of the Maxar group (“U.S. Domestication”).
Completion of the sale of MDA
On April 8, 2020, the Company completed the sale of its former Canadian subsidiary (“MDA Business”), to Neptune
Acquisition Inc. (“MDA Purchaser”), a corporation existing under the laws of the Province of British Columbia and an
affiliate of Northern Private Capital Ltd. (“MDA Transaction”). This divestiture represented a strategic shift in the
Company’s business and, in accordance with U.S. GAAP, the MDA Business qualified as a discontinued operation. As a
result, the operating results and cash flows related to the MDA Business have been reflected as discontinued operations
in the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows. The assets and liabilities
sold met the requirements to be classified within the Consolidated Balance Sheets under a held for sale designation as of
December 31, 2019. See Note 4 for details.
Acquisition of Vricon
On July 1, 2020, the Company closed the acquisition of Vricon, Inc. (“Vricon”) by purchasing the remaining 50%
ownership interest in Vricon (“Vricon Acquisition”). See Note 5 for details.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all consolidated subsidiary
entities. The Company’s Consolidated Financial Statements have been prepared in accordance with generally accepted
accounting principles in the United States (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and
Exchange Commission. All intercompany balances and transactions are eliminated on consolidation.
The Company's Consolidated Financial Statements are presented in U.S. dollars and have been prepared on a historical
cost basis, except for certain financial assets and liabilities including derivative financial instruments which are stated at
fair value.
Unless otherwise indicated, amounts provided in the Notes to the Consolidated Financial Statements pertain to
continuing operations (See Note 4 for information on discontinued operations).
Use of estimates, assumptions and judgments
The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires the Company to
make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of
contingencies at the reporting date, as well as the reported amounts of revenues and expenses during the reporting
74
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
period. Estimates have been prepared using the most current and best available information; however, actual results
could differ materially from those estimates.
Leases
The Company has both operating and finance leases. The majority of the Company’s leases are operating leases related
to buildings. The Company’s finance leases are primarily related to furniture and equipment.
The Company determines if a contract is or contains a lease at inception based on whether it conveys the right to control
the use of an identified asset. The Company recognizes lease liabilities and right-of-use assets based on the present value
of the future minimum lease payments over the lease term at the commencement date. Right-of-use assets are adjusted
for any prepayments, lease incentives received and initial direct costs incurred. If the rate implicit in the lease is not
readily determinable, the Company’s incremental borrowing rate with a similar term to the lease term is used to
determine the present value of future payments and appropriate lease classification. The lease term includes renewal
options that are reasonably certain to be exercised. The Company elected the practical expedient not to separate lease
and non-lease components. The Company also elected to include in minimum lease payments any executory costs that
are part of the fixed lease payment.
Some of the Company’s building lease agreements contain incentives for leasehold improvements. If the leasehold
improvement has been determined to be owned by the lessee, the Company generally recognizes the incentive as a
reduction to the right-of-use asset. The Company uses the date of initial possession as the commencement date, which is
generally when the Company has been given rights to access the space.
Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets and are
recognized as lease expense on a straight-line basis in the Consolidated Statements of Operations. Certain leasing
arrangements require variable payments, such as insurance and tax payments. Variable lease payments that do not
depend on an index or rate are excluded from lease payments in the measurement of the right-of-use asset and lease
liability and are recognized as expense in the period in which the payment occurs.
The Company does not have any material restrictions or covenants in our lease agreements, sale leaseback transactions
or residual value guarantees. The Company recognizes fixed lease expense for operating leases on a straight-line basis
over the lease term. The Company recognizes amortization expense on finance lease right-of-use assets and interest
expense on finance lease liabilities over the lease term.
Business combinations and divestitures
Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured
at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date.
The excess of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill.
Transaction costs that are incurred in connection with a business combination, other than costs associated with the
issuance of debt or equity securities, are expensed as incurred.
The Company reports the results of operations of a business as discontinued operations if a disposal represents a
strategic shift that has (or will have) a major effect on the Company’s operations and financial results when the business
is classified as held for sale. The results of discontinued operations are reported in Income from discontinued operations,
net of tax in the Consolidated Statements of Operations for current and prior periods, including any gain or loss
recognized on closing or adjustment of the carrying amount to fair value less cost to sell. Assets and liabilities of a
discontinued operation are reported separately in the Consolidated Balance Sheets as held for sale and classified as either
current or non-current in the prior periods. If it is probable that the sale will occur and proceeds will be collected within
75
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
one year of meeting the held for sale criteria both assets and liabilities classified as held for sale are reported in the
current period Consolidated Balance Sheet as current.
Foreign currency
Assets and liabilities of non-U.S. subsidiaries that operate in local currencies are translated to U.S. dollars at exchange
rates in effect at the balance sheet date, with the resulting translation adjustments, net of tax, recorded in Accumulated
other comprehensive income (loss) within the Stockholders’ equity section of the Consolidated Balance Sheets. Income
and expense accounts are translated at average monthly exchange rates during the year.
Revenue recognition
Revenue is recognized in accordance with the five-step model set forth by Accounting Standards Codification (“ASC”)
606, which involves identification of the contract(s), identification of performance obligations in the contract,
determination of the transaction price, allocation of the transaction price to the previously identified performance
obligations and recognition of revenue as the performance obligations are satisfied.
Revenue is measured at the fair value of consideration received or receivable, net of discounts as of the date of the
transaction. When consideration received from customers includes advance payments that contain a financing element,
the Company imputes interest on such advance payments and recognizes such amounts as a component of revenue.
Contract costs generally include direct costs such as materials, labor and subcontract costs. Costs are expensed as
incurred except for incremental costs incurred to obtain or fulfill a contract, which are capitalized and amortized on a
systematic basis consistent with the transfer of goods or services to the customer to which the capitalized costs relate. As
of December 31, 2021 and 2020, current costs to obtain or fulfill a contract were $8 million and $6 million, respectively,
and are included in Other current assets within the Consolidated Balance Sheets. As of December 31, 2021 and 2020,
non-current costs to obtain or fulfill a contract were $47 million and $41 million, respectively, and are included in Other
non-current assets within the Consolidated Balance Sheets.
Space Infrastructure
Revenue in the Space Infrastructure segment is primarily generated from long-term construction contracts. Due to the
long-term nature of these contracts, the Company generally recognizes revenue over time using the cost-to-cost method
to measure progress. Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred
to estimated total costs at completion ("EAC"). Revenue recognition is also contingent on estimated contractual
consideration. An EAC includes all direct costs and indirect costs directly attributable to a program or allocable based on
program cost pooling arrangements. Estimates regarding the Company’s cost associated with the design, manufacture
and delivery of products and services are used in determining the EAC. Changes to an EAC or estimated contractual
consideration are recorded as a cumulative adjustment to revenue.
Satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price
is contingent upon in-orbit performance of the satellite. These performance incentives are structured in two forms. As a
warranty payback, the customer pays the entire amount of the performance incentive during the period of the satellite
construction and such incentives are subject to refund if satellite performance does not achieve certain predefined
operating specifications. As an orbital receivable, the customer makes payment of performance incentives over the in-
orbit life of the satellite. Performance incentives, whether warranty payback or orbital receivables, are included in
revenue during the construction period to the extent it is probable that a significant reversal in the amount of cumulative
revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently
resolved. In addition to the in-orbit performance incentives, satellite construction contracts may include liquidated
damages clauses. Liquidated damages can be incurred on programs as a result of delays due to slippage or for programs
76
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
which fail to meet all milestone requirements as outlined within the contractual arrangements with customers. Losses
related to liquidated damages result in a reduction of revenue recognized and are recorded in the period in which, based
on available facts and circumstances, management believes it is probable that liquidated damages will be incurred and
enforced.
Construction contracts have termination clauses. If a contract is terminated for convenience by a customer, the Company
is typically entitled to costs incurred plus a reasonable profit.
Earth Intelligence
Revenue in the Earth Intelligence segment is generated from imagery and geospatial intelligence service contracts.
Revenue from imagery service contracts is recognized based on satellite capacity made available to the customer in a
particular period, when imagery is delivered to the customer, or ratably over the subscription period. Many of our
imagery service contracts relate to the transfer of a series of distinct goods or services over time for which management
has determined are a single performance obligation.
EnhancedView Follow-On Contract – The EnhancedView Follow-On contract (“EnhancedView Contract”) includes one
performance obligation to deliver a certain amount of capacity to the U.S. government over the 10-year contractual term
that ended on August 31, 2020. While other promised goods or services exist in the EnhancedView Contract, none are
considered distinct and, thus, do not represent separate performance obligations. Revenue is recognized as capacity is
provided to the customer. As a consistent amount of capacity is being made available, revenue is recognized on a ratable
basis. In 2018, the Company signed an agreement that added three option years to the EnhancedView Contract extending
the term to August 21, 2023. The Company determined that these option years do not provide a material right to the
customer, and therefore do not give rise to additional performance obligations. As each option year is exercised, the
consideration payable by the U.S. government will be recognized as revenue as capacity is provided over that option
year. The second option year was exercised on July 15, 2021, for a one-year term ending on August 31, 2022. In
November 2021, the National Reconnaissance Office (“NRO”) announced the release of the Electro-Optical Commercial
Layer (“EOCL”) contract Request for Proposal (“RFP”) which is expected to replace the existing EnhancedView
Contract. In December 2021, the Company submitted a response to the EOCL RFP and anticipates the NRO to award
EOCL contracts prior to expiration of the EnhancedView Contract, including remaining option years.
Direct Access Program – Direct Access Program arrangements generally include construction of the direct access
facility, access to the satellites to task and download imagery and facility maintenance services. The facility is generally
delivered at the beginning of the contractual period of performance with access and maintenance services delivered over
the duration of the contractual term. Under ASC 606, the Company has determined that two performance obligations
exist; the access and related non-distinct promised goods and services are included together as a combined performance
obligation with maintenance services representing a standalone performance obligation. Where a direct access facility is
to be constructed under a new Direct Access Program or upgraded to maintain an existing level of service, the access and
the facility are considered a single combined performance obligation as the customer cannot benefit from the facility on
its own or with other readily available resources. The transaction price allocated to the combined performance obligation
is recognized as access minutes are consumed during the contractual period. The remaining transaction price allocated to
the maintenance services is recognized ratably over the maintenance period.
Other Imagery Arrangements – Revenue is recognized for imagery licenses when the imagery is delivered to the
customer. Revenues related to online imagery subscriptions are generally recognized ratably over the subscription
period. Other imagery arrangements transfer a series of distinct goods or services over time for which management has
determined are a single performance obligation or include multiple performance obligations.
Revenue from geospatial intelligence service contracts is recognized from the rendering of services that compensate the
Company at a cost-plus-fixed-fee, firm fixed price, or on a time and materials basis. Revenue is typically recognized for
77
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
these contracts over time based on the stage of services completed to date as a percentage of total services to be
performed, or on the basis of time plus reimbursable costs incurred during the period. As the customer typically controls
the related work-in-progress, an input measure is the most appropriate basis with which to measure progress. Finally, as
cost of labor is the predominant measure by which these contracts are structured, the Company recognizes revenue using
a cost-incurred approach.
Contract liabilities
Contract liabilities primarily consist of advance payments from customers and deferred revenue. Changes in contract
liabilities are primarily due to the timing difference between the Company’s performance of services and payments from
customers. To determine revenue recognized from contract liabilities during the reporting periods, the Company
allocates revenue to individual contract liability balances and applies revenue recognized during the reporting periods
first to the beginning balances of contract liabilities until the revenue exceeds the balances.
Net income (loss) per common share
Net income (loss) per common share is computed by dividing net income (loss) by the sum of the weighted average
number of common shares outstanding during the period.
Diluted income per common share is computed by adjusting the basic income per common share calculation, as
described above, for the effects of all potentially dilutive shares. The Company calculates the effects of all potentially
dilutive shares using the treasury stock method unless they are anti-dilutive.
Research and development
Research and development costs are expensed in the period incurred. For the years ended December 31, 2021, 2020 and
2019, the Company expensed research and development costs of $27 million, $15 million, and $10 million, respectively,
in Selling, general and administrative expense within the Consolidated Statements of Operations.
Implementation costs incurred in cloud computing arrangements
Deferred implementation costs for hosted cloud computing service arrangements are stated at historical cost and
amortized on a straight-line basis over the term of the hosting arrangement to which the implementation costs relate to,
including any probable renewals. Deferred implementation costs for these arrangements are included in Prepaid assets
and Other non-current assets in the Consolidated Balance Sheets and amortized to the same line item as the related
hosting fees in the Consolidated Statements of Operations. There was no amortization for the years ended December 31,
2021, 2020 or 2019. The cash flows for deferred implementation costs and fees for the associated hosting arrangements
are reporting in the same line within operating activities in the Consolidated Statements of Cash Flows. As of December
31, 2021 and 2020, deferred implementation costs for cloud computing arrangements were $20 million and $2 million,
respectively.
Interest expense, net
Interest expense, net is comprised of borrowing cost on debt, interest expense on advance payments from customers and
other liabilities, interest expense on the orbital securitization liability and losses incurred on the extinguishment of debt,
net of capitalized interest.
Debt issuance costs related to the Company’s revolving line of credit are recorded in Prepaid assets and in Other non-
current assets in the Consolidated Balance Sheets. Debt issuance costs and debt discount related to the Company’s term
loan and senior secured notes are recorded as a direct deduction from the carrying amount of the related debt.
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MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Derivative financial instruments and hedging activities
Derivative financial instruments used by the Company consist of foreign currency forward contracts and interest rate
swap agreements. The Company uses foreign currency forward contracts to manage foreign exchange risk associated
with the cash flows from long-term construction contracts where some portion of the cash flows are denominated in
foreign currencies as part of the normal course of business. The Company uses interest rate swap agreements to manage
interest rate risk associated with cash outflows from long-term debt. Derivative financial instruments are measured at fair
value and are included as components of Other current liabilities and Other non-current liabilities in the Consolidated
Balance Sheets. When derivative financial instruments are designated in a qualifying hedging relationship and hedge
accounting is applied, the effectiveness of the hedges is measured at the end of each reporting period and the effective
portion of changes in fair value are deferred in Accumulated other comprehensive income (loss). Amounts deferred
in Accumulated other comprehensive income (loss) are reclassified to income when the hedged transaction has occurred.
The ineffective portion of the change in the fair value of the derivative is recorded in income in each period. Cash
transactions related to the Company’s derivative contracts accounted for as hedges are classified in the same category as
the item being hedged in the Consolidated Statements of Cash Flows. For foreign exchange contracts not in a qualifying
hedging relationship, changes in fair value are recognized immediately as a foreign exchange gain or loss in Other
(income) expense, net within the Consolidated Statements of Operations.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer
qualifies for hedge accounting. At that time, if the forecasted transaction within a cash flow hedge remains probable, any
cumulative gain or loss on the hedging instrument recognized in Other comprehensive income (loss) is retained in equity
until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the net cumulative
gain or loss previously recognized in other comprehensive income is transferred to income. As of January 1, 2019, the
Company discontinued hedge accounting on foreign exchange forward contracts related to its manufacturing and service
programs.
The Company does not offset the fair value amounts recognized with derivative instruments against the change in fair
value of assets, liabilities or firm commitments executed with the same counterparty under a master netting agreement.
Cash, cash equivalents and restricted cash
Cash and cash equivalents is comprised of cash on hand, cash balances with banks and similar institutions and term
deposits redeemable within three months or less from date of acquisition with banks and similar institutions. Restricted
cash is excluded from cash and cash equivalents and is included in Other current assets or Other non-current assets in the
Consolidated Balance Sheets.
Trade and other receivables, net
Trade and other receivables include amounts billed to customers, unbilled receivables in which the Company’s right to
consideration is unconditional and current portion of orbital receivables, net of allowance for expected credit losses. The
Company bills customers as work progresses in accordance with agreed-upon contractual terms, either at periodic
intervals, upon achievement of contractual milestones or upon deliveries.
The Company maintains an allowance for expected credit losses for estimated losses resulting from the inability of its
customers to make required payments, which results in bad debt expense. The Company periodically determines the
adequacy of this allowance by evaluating the comprehensive risk profiles of all individual customer receivable balances
including, but not limited to, the customer’s financial condition, credit agency reports, financial statements, credit limit
and overall current economic conditions.
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MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Orbital Receivables
Orbital receivables relate to performance incentives due under certain satellite construction contracts that are paid over
the in-orbit life of the satellite. Orbital receivables are recognized as revenue when measuring progress under the cost-to-
cost method during the construction period. The interest portion of the in-orbit payments is recognized as orbital
revenue. Current orbital receivables are included in Trade and other receivables, net and long-term orbital receivables
are included in Non-current assets, net of allowances in the Consolidated Balance Sheets.
The Company records an allowance on its orbital receivables when, based on current events and circumstances, it
believes it is probable that the outstanding amounts will not be collected. The Company utilizes customer credit ratings,
expected credit loss and other credit quality indicators, as well as contractual terms to evaluate the collectability of
orbital receivables on a quarterly basis. When qualitative factors indicate that all or a portion of an outstanding orbital
receivable is uncollectable, a fair value assessment is performed using a discounted cash flow model as an indicator to
determine whether an increase in the allowance is necessary. Increases and decreases in the orbital receivables allowance
are included in (Gain) loss on orbital receivables allowance in the Consolidated Statements of Operations.
If the Company does not fulfill its performance obligation associated with its orbital receivables, a write-off of those
orbital receivables will occur resulting in a reduction in the contractual value and revenue recognition associated with the
performance obligation.
The Company has a revolving securitization facility agreement with an international financial institution. Under the
terms of the agreement, the Company may offer to sell eligible orbital receivables from time to time with terms of seven
years or less, discounted to face value using prevailing market rates.
The Company has sold certain orbital receivables in tranches that span multiple years and include longer-term maturities.
The orbital receivables that have been securitized remain recognized on the Consolidated Balance Sheets as the
Company does not meet the accounting criteria for surrendering control of the receivables. The net proceeds received on
the orbital receivables have been recognized as securitization liabilities and are subsequently measured at amortized cost
using the effective interest rate method. Securitization liabilities are presented in Other current liabilities and Other non-
current liabilities on the Consolidated Balance Sheets. The securitized orbital receivables and the securitization liabilities
are being drawn down as payments are received from the customers and passed on to the purchaser of the tranche. The
Company continues to recognize orbital revenue on the orbital receivables that are subject to the securitization
transactions and recognizes interest expense to accrete the securitization liability.
Investments
Short-term investments consist of mutual funds and financial instruments purchased with a term to maturity at inception
between three months and one year. Short-term investments are measured at fair value through net income. Short-term
investments are included within Other current assets in the Consolidated Balance Sheets.
The Company has investments in joint ventures where it does not have a controlling financial interest but has the ability
to exercise significant influence. These investments are accounted for under the equity method and are included within
Other non-current assets in the Consolidated Balance Sheets. The Company’s share of the joint venture’s net income or
loss is included within Equity in (income) loss from joint ventures, net of tax in the Consolidated Statements of
Operations.
The Company’s most significant joint venture was Vricon, a joint venture with Saab AB, specializing in the production
of 3D models using high resolution imagery. On July 1, 2020, the Company closed the acquisition of Vricon by
purchasing the remaining 50% ownership interest in Vricon. The operating results of Vricon are included in the
Company’s Consolidated Statement of Operations beginning July 1, 2020. The following table presents summarized
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MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
financial information for Vricon for the year ended December 31, 2019. Equity method investments are insignificant for
the years ended December 31, 2021 and 2020.
Summarized Consolidated Statement of Operations
Revenues
Gross profit
Income from operations
Net income
Inventory
December 31,
2019
54
51
32
24
$
$
$
$
Inventories are measured at the lower of cost or net realizable value and consist primarily of parts and sub-assemblies
used in the manufacturing of satellites. The cost of inventories is determined on a first-in-first-out basis or weighted
average cost basis, depending on the nature of the inventory. Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion and selling expense. Inventory is impaired when it is
probable inventory values exceed their net realizable value.
Property, plant and equipment
Property, plant and equipment is measured at cost less accumulated depreciation. Cost for satellite assets includes
amounts related to design, construction, launch and commissioning. Cost for ground system assets include amounts
related to construction and testing. Interest expense is capitalized on certain qualifying assets that take a substantial
period of time to prepare for their intended use. When the costs of certain components of an item of property, plant and
equipment are significant in relation to the total cost of the item and the components have different useful lives, they are
accounted for and depreciated separately. Property, plant and equipment under construction are measured at cost less any
impairment losses.
Depreciation expense is recognized in income on a straight-line basis over the estimated useful life of the related asset to
its residual value. Expected useful lives are reviewed at least annually. Land is not depreciated.
The estimated useful lives are as follows:
Land improvements
Buildings
Leasehold improvements
Equipment
Satellites 1
Furniture and fixtures
Computer hardware
Estimated useful life
20 years
7 - 45 years
lesser of useful life
or term of lease
2 - 40 years
11.5 - 16 years
2 - 10 years
2 - 13 years
1 The estimated useful life over which the Company depreciates its satellites is determined once a satellite has been placed into
orbit. The initial determination of a satellites useful life involves an analysis that considers design life, random part failure
probabilities, expected component degradation and cycle life, predicted fuel consumption and experience with satellite parts,
vendors and similar assets.
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MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Intangible assets
Intangible assets consist of customer relationships, backlog, acquired technologies and software, image library, trade
names, licenses and non-compete agreements. Intangible assets are generally amortized on a straight-line basis over their
estimated useful lives and are recorded at fair value at the time of acquisition, or in the case of internally developed
software, at cost. Image library intangibles assets are amortized using the double declining balance method. Intangible
assets are currently amortized over the following estimated useful lives:
Customer relationships
Backlog
Technologies
Software
Image library
Trade names and other
Non-compete agreements
Impairment
Estimated useful life
9 - 21 years
2 - 5 years
5 - 13 years
2 - 10 years
5 years
1 - 20 years
2 years
Intangible assets and property, plant and equipment and other long-lived assets
Finite-lived intangible assets, property, plant and equipment and other long-lived assets are tested for impairment at least
annually on October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable.
Finite-lived intangible assets and property, plant and equipment and other long-lived assets are reviewed for impairment
at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an
asset (or group of assets) are less than the asset’s carrying value. Any required impairment loss is measured as the
amount by which the asset’s carrying value exceeds its fair value and recorded as a reduction in the carrying value of the
related asset.
If an owned satellite were to fail during launch or while in-orbit, the resulting loss would be charged to expense in the
period it is determined the satellite is not recoverable. The amount of loss would be reduced to the extent of insurance
proceeds received. The timing of the loss and the insurance recovery will likely differ, as an insurance recovery
generally cannot be recognized until final settlement with the insurance company is reached.
In December 2018, the Company experienced a loss of the WorldView-4 satellite and in 2019, the Company received
insurance recoveries of $183 million. The insurance proceeds are included in operating cash flows as they are considered
business interruption insurance and represent the Company’s satellite’s loss of capacity to produce imagery for sale to
the Company’s customers.
Goodwill
Goodwill is tested for impairment at least annually on October 1, or whenever events or changes in circumstances
indicate that its carrying amount may be less than its recoverable amount.
Goodwill is tested for impairment at the reporting unit level. The Company may use either a qualitative or quantitative
approach when testing a reporting unit’s goodwill for impairment. Where a qualitative approach is used, an evaluation of
events and circumstances impacting the reporting unit is performed to determine the likelihood of goodwill impairment.
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MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Based on that qualitative evaluation if it is determined that it is more likely than not that the fair value of a reporting unit
exceeds its carrying amount, no further evaluation is necessary. Otherwise, a quantitative impairment test is performed.
Where a quantitative approach is used, management typically uses an income approach to estimate the fair value of a
reporting unit, which requires the use of significant judgments and estimates, including future cash flows, terminal
growth rates and discount rates. Any changes to these inputs could have a material impact on the impairment calculation.
An impairment loss is recognized to the extent that the carrying value of a reporting unit exceeds its fair value.
Management assesses the reasonableness of the results by reconciling the sum of the estimated fair values of the
reporting units, including the Company’s Corporate balance sheet, to the Company’s market capitalization and market
value of invested capital as of the date of our annual impairment test.
The Company used a qualitative approach for its goodwill impairment assessment as of October 1, 2021 and 2020 and
determined that no impairment existed.
Warranty and after-sale service costs
A liability for warranty and after-sale service costs is recognized when the underlying product or service is sold.
Warranty and after-sale service provisions are based on management’s best estimate of the expected obligation using
historical warranty data and experience. Warranty and after-sale service liabilities related to products and services
delivered under construction contracts are included in the EAC for revenue recognition. Warranty and after-sale service
liabilities are presented in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets.
Warranty and after-sale service costs are recognized within Product and Service costs, excluding depreciation and
amortization in the Consolidated Statement of Operations.
Restructuring costs
A liability for restructuring costs is recognized when the Company has approved a detailed and formal restructuring plan
and the restructuring either has commenced or has been announced publicly. Restructuring liabilities are presented in
Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets. Restructuring costs are
recognized within Selling, general and administrative expense and within Product costs and Service costs, excluding
depreciation and amortization in the Consolidated Statements of Operations.
Employee benefits
Defined benefit pension and other postretirement benefit plans
The Company maintains defined benefit pension and other postretirement benefit plans for certain employees within its
Space Infrastructure segment. The pension and other postretirement plan benefits were frozen on December 31, 2013.
The Company recognizes the funded status of each pension and other postretirement benefit plan in the Consolidated
Balance Sheets. The calculation of pension and other postretirement benefit obligations is performed annually by
qualified actuaries using the projected unit credit actuarial cost method. The projected benefit obligation is the sum of
the actuarial present value of all pension benefits attributed to benefit service completed to the determination date.
Pension and other postretirement plan liabilities are revalued annually, or when an event occurs that requires
remeasurement, based on updated assumptions and information about the individuals covered by the plan. The
Company’s net obligation in respect of the pension and other postretirement benefit plans is calculated separately for
each plan by estimating the amount of future benefit that employees have earned in the prior periods, discounting that
amount and deducting the fair value of associated plan assets.
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MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
The Company uses the net asset value (“NAV”) practical expedient to measure the fair value of the plan’s commingled
fund investments. These commingled fund investments for which the fair value is measured using the NAV practical
expedient are excluded from the fair value hierarchy.
The Company recognizes the amortization of prior service costs as a component of Selling, general and administrative
expense. All other costs are recognized outside of operating income within Other (income) expense, net. The Company
recognizes administrative expenses related to frozen plans outside of Operating income (loss) within Other (income)
expense, net.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in the net benefit liability that
relates to past service or the gain or loss on curtailment is recognized immediately in Accumulated other comprehensive
income (loss). The Company recognizes gains or losses on the settlement of a defined benefit plan when settlement
occurs.
For the Company’s pension and other postretirement benefit plans, accumulated actuarial gains and losses in excess of a
10 percent corridor and the prior service cost are amortized on a straight-line basis from the date recognized over the
average remaining service period of active participants or over the average life expectancy for plans with significant
inactive participants.
Defined contribution plans
The Company also maintains defined contribution plans for some of its employees whereby the Company pays
contributions based on a percentage of the employees’ annual salary. Obligations for contributions to defined
contribution pension plans are recognized as an employee benefit expense in Operating income (loss) as the services are
provided.
Stock-based compensation plans
The Company maintains a number of stock-based compensation plans for certain employees and directors that may be
settled with cash and/or equity. For certain stock-based compensation plans, the Company has the ability to mandate
equity settlement by issuing reserved shares. Stock-based compensation plans are measured at fair value using either the
Black-Scholes option pricing model, the closing price of the Company’s common stock on the grant date or Monte Carlo
simulation model and the fair value is expensed on a graded vesting schedule over the vesting period. Management uses
judgment to determine the inputs to the models including the expected plan lives, underlying stock price volatility and
forfeiture rates. Volatility is estimated by considering the Company’s historic stock price volatility over similar periods
to the expected life of the awards under consideration. Changes in these assumptions will impact the calculation of fair
value and the amount of compensation expense recognized within Selling, general and administrative expense in the
Consolidated Statements of Operations.
The fair value of liability classified awards is recognized as a liability within Accrued compensation and benefits and
Pension and other postretirement benefit liabilities in the Consolidated Balance Sheets. The Company classifies stock-
based compensation awards as liability when the expectation is the awards will be settled in cash. The liability is re-
measured and charged to income at each reporting date until the award is settled.
The fair value of equity-settled plans is recognized in Additional paid-in capital in the Consolidated Balance Sheets.
Equity-settled plans are measured based on the grant date fair value of the award including the impact of estimated
forfeitures and are not re-measured. The Company classifies stock-based compensation awards as equity when the
expectation is the awards will be settled in equity.
84
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Income taxes
The Company is subject to income taxes in the United States, Sweden and other foreign jurisdictions. The Company
computes its provision for income taxes using the asset and liability method, under which deferred tax assets and
liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and
liabilities. Deferred tax assets and liabilities are measured at the currently enacted tax rates that are expected to apply in
years in which they are expected to be paid for or realized. All deferred income taxes are classified as non-current in the
Company's Consolidated Balance Sheets. Significant judgments are required in order to determine the realizability of
deferred tax assets. In assessing the need for a valuation allowance, the Company's management evaluates all significant
available positive and negative evidence, including historical operating results, estimates of future sources of taxable
income, carry-forward periods available, the existence of prudent and feasible tax planning strategies and other relevant
factors.
The recognition of uncertain tax positions is evaluated based on whether it is considered more likely than not that the
position taken, or expected to be taken, on a tax return will be sustained upon examination through litigation or appeal.
For those positions that meet the recognition criteria, they are measured as the largest amount that is more than 50
percent likely to be realized upon ultimate settlement. The Company believes that the reserves for unrecognized tax
benefits are adequate to cover all open tax years based on its assessment. If the expected outcome of the matter changes,
the Company will adjust income tax expense (benefit) or the deferred tax asset accordingly in the period in which the
expected outcome has changed. The Company classifies interest and penalties related to income taxes as income tax
expense.
Reclassifications
Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation.
Recently Adopted Accounting Pronouncements
Financial Instruments
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-
13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU
2016-13”) which together with subsequent amendments is included in ASC 326 – Financial Instruments – Credit Losses.
ASC 326, as amended, significantly changes the impairment model for most financial assets and certain other
instruments. ASC 326, as amended, requires immediate recognition of estimated credit losses expected to occur over the
remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses
on loans and other financial instruments. These updates were effective for annual and interim financial statement periods
beginning after December 15, 2019, with early adoption permitted for financial statement periods beginning after
December 15, 2018. The Company adopted this standard and related amendments effective January 1, 2020, using the
modified retrospective approach. The adoption of this standard resulted in additional disclosures related to the
Company’s orbital receivables. Refer to Note 6 for details. There were no impacts to the Consolidated Financial
Statements as a result of adoption.
Simplifying the Accounting for Income Taxes
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income
Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the
general principles in Topic 740. ASU 2019-12 also simplifies aspects of accounting for franchise taxes and clarifies the
accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and
interim financial statement periods beginning after December 15, 2020, with early adoption permitted. The Company
85
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
early adopted this standard and related amendments effective January 1, 2020 on a prospective basis, in order to utilize
the simplifying provision that removes the exception to the incremental approach for intraperiod tax allocation when a
loss is incurred from continuing operations and income or a gain results from another item such as discontinued
operations. There were no additional material impacts to the Consolidated Financial Statements as a result of adoption.
3. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
Reference Rate Reform
In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of
Reference Rate Reform on Financial Reporting (“ASU 2020-04”) which together with subsequent amendments is
intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications
and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London
Interbank Offered Rate and other interbank offered rates to alternative reference rates. This guidance was effective
beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December
31, 2022. The Company expects that it will elect to apply some of the expedients and exceptions in ASU 2020-04.
However, the Company is still evaluating the guidance and the impact that adoption of ASU 2020-04 will have on the
Company's financial statements.
4. DISCONTINUED OPERATIONS
On April 8, 2020, the Company completed the sale of the MDA Business to MDA Purchaser for an aggregate purchase
price of $729 million ($1.0 billion Canadian dollars). The Company recognized an after-tax gain on disposal of
discontinued operations of $317 million, net of $12 million in taxes, on the MDA Transaction for the year ended
December 31, 2020. The tax on the MDA Transaction was primarily due to the estimated U.S. federal Base Erosion and
Anti-Abuse Tax and California legislation suspending the use of net operating loss (“NOL”) carryforwards. The gain on
the MDA Transaction includes a reclassification primarily related to the foreign currency translation adjustment balance
of $68 million from Accumulated other comprehensive (loss) income. See Note 12 for details on the use of proceeds
from the MDA Transaction.
In addition, the Company and the MDA Purchaser entered into a Transition Services Agreement pursuant to which the
MDA Purchaser received certain services (“Services”). The Services were provided based on an agreed upon fee
arrangement that ended on April 8, 2021.
The Company determined that as of December 29, 2019, the MDA Business met the criteria to be classified as held for
sale. The MDA Business was a separate reportable segment prior to the announcement of the MDA Transaction and
constituted all the Company’s Canadian operations. As the MDA Transaction represented a strategic shift that had a
major effect on the Company’s operations, the MDA Business results met the criteria to be reported as discontinued
operations in accordance with ASC 205-20 – Discontinued Operations.
The results of MDA are classified as discontinued operations in the Consolidated Statements of Operations and the
Consolidated Statements of Cash Flows for all periods presented. For the year ended December 31, 2020, the Company
reported the operating results and cash flows related to the MDA Business through April 7, 2020. There was no activity
within discontinued operations in the Consolidated Statements of Operations for the year ended December 31, 2021. For
the year ended December 31, 2021, the Company made $13 million in payments on a previously recorded liability in
relation to the Company’s dispute with a Ukrainian customer that is reflected within discontinued operations in the
Consolidated Statements of Cash Flows.
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MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Income from discontinued operations, net of tax for the MDA Business in the Consolidated Statements of Operations
consists of the following:
Revenues:
Product
Service
Total revenues
Costs and expenses:
Product costs, excluding depreciation and amortization
Service costs, excluding depreciation and amortization
Selling, general and administrative
Depreciation and amortization
Impairment loss
Operating (loss) income
Interest expense, net
Other (income) expense, net2
Income before taxes
Income tax benefit
Income from operations of discontinued operations, net of tax
Gain on disposal of discontinued operations, net of tax
Income from discontinued operations, net of tax
Year Ended
December 31,
2020 1
2019
$
$
44
42
86
38
24
13
4
12
(5)
1
(34)
28
(4)
32
317
349
$
$
206
161
367
149
84
88
11
12
23
1
3
19
(7)
26
—
26
1 For the year ended December 31, 2020, MDA Business results are presented through April 7, 2020.
2 Other (income) expense, net includes the $39 million recovery of the previously recorded liability in relation to the Company’s
dispute with the Ukrainian Customer for the year ended December 31, 2020.
MDA held an investment in a privately held company in which it did not have significant influence and the fair value of
which could not be reliably measured through external indicators. The investment was evaluated quarterly for
impairment. In 2019, the Company noted an observable price change related to its investment and, as a result, recorded
an impairment loss of $12 million. There were no investment impairment losses recognized for the year ended December
31, 2020.
5. BUSINESS COMBINATION
The Company did not close any transactions qualifying as a business combination during the years ended December 31,
2021 or 2019.
On July 1, 2020, the Company closed the acquisition of Vricon by purchasing the remaining 50% ownership interest in
Vricon for $143 million or, excluding Vricon cash on hand of $23 million, for $120 million. Vricon is a global leader in
satellite-derived 3D data for defense and intelligence markets, with software and products that enhance 3D mapping,
Earth intelligence data, military simulation and training and precision-guided munitions. Vricon was formed as a joint
venture between Maxar and Saab AB in 2015 to combine patented Saab AB intellectual property with the Company’s
commercial satellite imagery to build highly accurate, immersive 3D products at scale. Prior to the closing of the Vricon
Acquisition, Vricon was the Company’s most significant joint venture.
To fund the Vricon Acquisition, the Company issued $150 million in aggregate principal amount of 7.54% senior
secured notes due 2027 (“2027 Notes”). See Note 12 for additional details on the issuance of the 2027 Notes. As part of
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MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
the Vricon Acquisition, Vricon’s stock-based awards vested upon the consummation of the Vricon Acquisition and were
settled in cash for $26 million. The unvested awards were forfeited.
The Vricon Acquisition was achieved in stages, which required the Company to remeasure its previously held equity
interest in Vricon at its acquisition date fair value. As no material control premium was determined to exist, the call
option purchase price of $117 million paid in the Vricon Acquisition was used to estimate the fair value of the
previously held equity interest. The Company performed a business enterprise valuation to corroborate the resulting total
implied purchase consideration. This remeasurement resulted in a gain of approximately $85 million which was recorded
in Other (income) expense within the Company’s Consolidated Statements of Operations for the year ended December
31, 2020.
The operating results of Vricon are included in the Company’s Consolidated Statements of Operations beginning July 1,
2020. Vricon results are consolidated within the Earth Intelligence Segment. See Note 2 for summarized financial
information for Vricon for periods prior to the date of acquisition.
The following table presents unaudited pro forma financial information as if Vricon had been included in the Company’s
financial results as of January 1, 2019, through the year ended December 31, 2020:
Revenues
Net income
Purchase Price Allocation
Year Ended
December 31,
2020
1,734 $
302 $
2019
1,706
119
$
$
The following table summarizes the fair value of the consideration transferred and the fair values of the major classes of
assets acquired and liabilities assumed at the acquisition date. The fair value of the intangible assets acquired has been
determined using valuation techniques that require significant judgment, including the amount and timing of future net
cash flows and discount rates. During the three months ended March 31, 2021, the Company finalized the purchase price
88
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
allocation related to the Vricon Acquisition. There were no adjustments from the preliminary purchase price allocation
determined as of December 31, 2020.
Call option purchase price
Fair value of existing equity interest
Cash settlement of equity awards
Purchase consideration
Assets
Cash and cash equivalents
Trade and other receivables, net
Property, plant and equipment, net
Intangible assets, net
Other assets
Total assets
Liabilities
Accounts payable
Accrued liabilities
Deferred income tax liability
Other current liabilities
Total liabilities
Fair value of net identifiable assets acquired
Goodwill
July 1, 2020
117
$
117
26
260
$
$
$
$
23
9
3
73
7
115
1
3
17
6
27
88
172
The following table summarizes the intangible assets acquired from the Vricon Acquisition by class and useful life:
Finite-lived intangible assets:
Backlog
Trademarks
Existing technology
Existing software
Total intangible assets
Carrying
value
Remaining useful
life
$
$
21
1
49
2
73
2 years
1 year
9 years
2 - 3 years
The goodwill of $172 million is attributable primarily to the synergies expected to be achieved from integrating Vricon
with the Company’s existing capabilities. Due to the nature of the Vricon Acquisition, the Company did not receive a
step-up in tax basis on the fixed assets, intangible assets or goodwill recorded in the purchase price allocation.
89
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
6. TRADE AND OTHER RECEIVABLES, NET
U.S. government receivables:
Billed
Unbilled
Other governments and commercial receivables:
Billed
Unbilled
Total trade receivables
Orbital receivables, current portion
Other
Allowance for doubtful accounts
Trade and other receivables, net
December 31,
2021
December 31,
2020
$
65 $
124
189
97
19
116
305
49
2
(1)
355 $
$
84
76
160
97
19
116
276
49
3
(1)
327
During the year ended December 31, 2021, the Company reduced its outstanding receivables related to the SXM-7
satellite for the final milestone and expected orbital payments by $15 million and $14 million, respectively. See Note 16
for additional details regarding the adjustment to revenue.
As of December 31, 2021 and 2020, non-current orbital receivables, net of allowances were $368 million and $361
million, respectively.
The Company has orbital receivables from 13 customers for which the largest customer’s value represents 30% and 19%
of the stated current and non-current balance sheet values for the years ended December 31, 2021 and 2020, respectively.
For the year ended December 31, 2021, as a result of an increased certainty of collections of the outstanding orbital
receivables from the Company’s largest customer, due to their emergence from bankruptcy, the Company reversed its
$49 million allowance for expected credit losses. The changes in allowance for expected credit losses related to non-
current orbital receivables for the years ended December 31, 2021 and 2020, consist of the following:
Allowance as of December 31, 2019
Additions
Allowance as of December 31, 2020
Reversals
Allowance as of December 31, 2021
Orbital Receivables Allowance
(35)
$
(14)
(49)
49
—
$
$
The expected timing of total contractual cash flows, including principal and interest payments for orbital receivables is
as follows:
Contractual cash flows from orbital receivables
2022
68
$
2023
74
$
2024
$ 73 $
2025
2026 Thereafter
309
70 $ 63 $
Total
$ 657
During the years ended December 31, 2021 and 2020, the Company did not sell any eligible orbital receivables or
repurchase any orbital receivables. The net proceeds received on previously sold orbital receivables have been
recognized as securitization liabilities.
90
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Securitization liabilities as of December 31, 2021 and 2020, are as follows:
Current portion
Non-current portion
Total securitization liabilities
7. INVENTORY, NET
Raw materials
Work in process
Total
Inventory reserve
Inventory, net
8. PROPERTY, PLANT AND EQUIPMENT, NET
Satellites
Equipment
Computer hardware
Leasehold improvements
Furniture and fixtures
Construction in process1
Property, plant and equipment, at cost
Accumulated depreciation
Property, plant and equipment, net
December 31, December 31,
2021
2020
$
$
16 $
32
48 $
14
47
61
December 31,
2021
December 31,
2020
$
$
$
34
6
40
(1)
39
$
$
$
22
9
31
—
31
December 31, December 31,
2021
2020
$
$
397
221
95
83
16
668
1,480
(540)
940
$
$
397
207
78
81
15
572
1,350
(467)
883
1 Construction in process is primarily related to the construction of the Company’s WorldView Legion satellites.
Depreciation expense for property, plant and equipment was $86 million, $93 million and $107 million for the years
ended December 31, 2021, 2020 and 2019, respectively.
Sale leaseback
During the fourth quarter of 2019, the Company completed the sale and subsequent leaseback of Company owned
properties in Palo Alto, California for net proceeds of $280 million. The Company recognized a gain on the sale of the
properties of $136 million, which was adjusted for off-market leaseback terms, and is included in Loss (gain) on sale of
assets in the Company’s Consolidated Statement of Operations. During 2020, the Company recognized a $4 million
reduction in the gain due to the extension of the lease term on one of the properties, which is included in Loss (gain) on
sale of assets in the Company’s Consolidated Statement of Operations.
91
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
9. INTANGIBLE ASSETS AND GOODWILL
Gross
carrying value
December 31, 2021
Accumulated
amortization
$
Net
carrying value
Gross
carrying value
$
December 31, 2020
Accumulated
amortization
Customer relationships
Software
Technologies
Backlog
Image library
Trade names and other
Intangible assets
$
$
615
379
367
107
80
37
1,585
(190) $
(152)
(278)
(89)
(71)
(18)
(798) $
425
227
89
18
9
19
787
$
$
Net
carrying value
469
173
158
50
22
23
895
(146) $
(125)
(211)
(79)
(58)
(15)
(634) $
615 $
298
369
129
80
38
1,529 $
The gross carrying value and accumulated amortization balances for fully amortized backlog were removed from the
Consolidated Balance Sheets and excluded from the table above as of December 31, 2021. Amortization expense related
to intangible assets was $204 million, $255 million and $269 million for the years ended December 31, 2021, 2020 and
2019, respectively.
The estimated annual amortization expense related to finite-lived intangible assets as of December 31, 2021, is as
follows:
Amortization expense
2022
185 $
$
2023
2024
99 $ 103 $
Goodwill balances for each reporting segment are as follows:
2025
2026
72 $ 70 $
2027 and thereafter
258
Balance as of December 31, 2019
Goodwill
Accumulated impairment losses
Acquisition of Vricon
Balance as of December 31, 2020
Goodwill
Accumulated impairment losses
Balance as of December 31, 2021
Goodwill
Accumulated impairment losses
Earth
Intelligence
Space
Infrastructure
Total
$
$
1,597
(142)
1,455
172
1,769
(142)
1,627
1,769
(142)
1,627
$
$
17 $
(17)
—
—
17
(17)
—
17
(17)
— $
1,614
(159)
1,455
172
1,786
(159)
1,627
1,786
(159)
1,627
92
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
10. LEASES
The Company’s leases have remaining lease terms up to 13 years, some of which include options to extend the lease
anywhere from six months to ten years.
Sale Leaseback
During the fourth quarter of 2019, the Company completed the sale and subsequent leaseback of Company owned
properties in Palo Alto, California. The Company determined the leaseback of both properties to be operating leases, as
the criteria to be classified as financing leases were not met. The Company recorded operating lease assets and liabilities
of $63 million, representing the fair value of the minimum lease payments associated with the agreements to lease the
assets back over a period of two to ten years. The Company also recorded a deferred financing liability representing the
off-market terms of the lease. See Note 12 for additional details. During the third quarter of 2020, the Company
recognized a reduction in the gain due to the extension of the lease term on one of the properties.
The Company recorded the current portions of the operating lease liabilities and the deferred financing liability in
Current lease liabilities and Current portion of long-term debt, respectively, in the Consolidated Balance Sheets. The
non-current portions of the operating lease assets, the operating lease liabilities and the deferred financing liability have
been recorded in Non-current operating lease assets, Non-current operating lease liabilities and Long-term debt,
respectively, in the Consolidated Balance Sheets. Interest expense on the financial liability has been recorded in Interest
expense, net in the Consolidated Statements of Operations.
Finance lease expense, variable lease expense, short-term lease expense and sublease income are not material. The
components of operating lease expense are as follows:
Operating lease expense
Classification
Selling, general, and administrative expense,
Product costs, and Service costs1
Year ended December 31,
2021
2020
2019
$
44 $
47 $
27
1 Excluding depreciation and amortization
Supplemental lease balance sheet information consists of the following:
Assets:
Operating
Finance
Total lease assets
Liabilities:
Current
Operating
Finance
Non-current
Operating
Finance
Total lease liabilities
Classification
Non-current operating lease assets
Property, plant, and equipment, net
Current operating lease liabilities
Current portion long-term debt
Operating lease liabilities
Long-term debt
December 31,
2021
December 31,
2020
$
$
$
$
145
5
150
42
3
138
2
185
$
$
$
$
163
4
167
41
2
158
1
202
93
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Supplemental lease cash flow information is as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
Loss on sale of assets
Right-of-use assets obtained in exchange for lease obligations:
$
Operating leases
Other supplemental lease information consists of the following:
Year ended December 31,
2021
2020
$
44
—
12
43
1
16
December 31,
2021
December 31,
2020
7
2
6.4%
3.2%
8
2
6.5%
4.1%
Weighted average remaining lease term (in years)
Operating leases
Finance leases
Weighted average discount rate
Operating leases
Finance leases
Maturities of lease liabilities are as follows:
Operating leases
Finance leases
$
2022
43
3
11. WARRANTY OBLIGATIONS
2023
2024
2025
2026
Thereafter
Less:
imputed
interest
$
34 $ 29 $ 26 $
2 — —
24 $
—
70 $
—
(46) $
—
Total
minimum
lease
payments
180
5
Changes to warranty obligations during the years ended December 31, 2021 and 2020, are as follows:
Balance as of December 31, 2019
Obligations incurred
Payments/uses
Balance as of December 31, 2020
Obligations incurred
Payments/uses
Balance as of December 31, 2021
Warranty and after-
sale service
$
$
$
41
1
(4)
38
2
(6)
34
94
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
12. LONG-TERM DEBT AND INTEREST EXPENSE, NET
Syndicated Credit Facility:
Term Loan B
2023 Notes
2027 Notes
Deferred financing
Debt discount and issuance costs
Obligations under finance leases and other
Total long-term debt
Current portion of long-term debt
Non-current portion of long-term debt
Syndicated Credit Facility
December 31,
2021
December 31,
2020
$
$
1,444
500
150
26
(39)
5
2,086
(24)
2,062
$
1,444
850
150
32
(57)
3
2,422
(8)
2,414
As of December 31, 2021, the Company’s senior secured syndicated credit facility (“Syndicated Credit Facility”) is
composed of: (i) a senior secured first lien revolving credit facility in an aggregate capacity of up to $500 million
maturing in December 2023 (“Revolving Credit Facility”) and (ii) a senior secured first lien term B facility in an original
aggregate principal amount of $2.0 billion maturing in October 2024 (“Term Loan B”).
In October 2017, in connection with the acquisition of DigitalGlobe, the Company entered into the Syndicated Credit
Facility in the aggregate principal amount of $3.75 billion, which was comprised of: (i) a four-year senior secured first
lien revolving credit facility, (ii) a four-year senior secured first lien operating facility, (iii) a senior secured first lien
term A facility (“Term Loan A”) and (iv) the Term Loan B. The net proceeds of the Syndicated Credit Facility were
used, along with cash on hand, to consummate the acquisition of DigitalGlobe, to refinance all amounts outstanding
under the Company’s existing syndicated credit facility and senior term loans, to repay DigitalGlobe’s outstanding
indebtedness, to pay transaction fees and expenses, to fund working capital and for general corporate purposes.
In December 2018, the Company amended the Syndicated Credit Facility (“Second Amending Agreement”). The
Second Amending Agreement provided that, so long as certain conditions were satisfied (the period during which such
conditions are satisfied, the “Covenant Relief Period”) the maximum consolidated debt leverage ratios permitted under
the Syndicated Credit Facility were increased and the interest rate incurred by the Company thereunder at certain
consolidated debt leverage ratios were increased. The Second Amending Agreement also adjusted the definition of
EBITDA for the purpose of calculating the financial ratios under U.S. GAAP. In addition to the above, during the
Covenant Relief Period, the Second Amending Agreement restricted the use of certain asset sale proceeds, limited the
type of new debt issuances and limited certain restricted payments and permitted acquisitions under the Syndicated
Credit Facility.
In November 2019, the Company further amended the Syndicated Credit Facility (“Third Amending Agreement”),
certain portions of which became effective immediately and certain portions of which became effective in December
2019 upon the issuance of the 2023 Notes. The Third Amending Agreement, during the Covenant Relief Period, (i)
modified the priority of the application of certain voluntary prepayments resulting from certain asset sales (but which did
not affect the prepayments owed to the Term Loan B), and (ii) restricted use of proceeds of future borrowings. In
addition, the Third Amending Agreement increased the maximum consolidated debt leverage ratios permitted under the
Syndicated Credit Facility to 7.25x at the end of the fiscal quarter ended December 31, 2019, 7.50x at the end of the
fiscal quarter ending March 31, 2020, 7.75x at the end of each fiscal quarter thereafter until the fiscal quarter ending
September 30, 2021, 7.50x at the end of each fiscal quarter thereafter until the quarter ending September 30, 2022, 6.50x
at the end of each fiscal quarter thereafter until the fiscal quarter ending March 31, 2023, and 5.75x for each fiscal
95
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
quarter thereafter (subject to a 0.25x reduction in each maximum level upon a disposition of a business line for greater
than $500 million). The Third Amending Agreement also extended the maturity of the Revolving Credit Facility by two
years to December 2023, updated the Interest Coverage Ratio to be less than 2.0x at the end of each fiscal quarter,
restricted investment capacity in certain permitted investments, restricted future increases in quarterly dividend payment
levels and modified certain margin and standby fee terms. In addition, the Company canceled the operating credit facility
and reduced committed borrowing capacity under the Revolving Credit Facility from $1.25 billion to $500 million. As of
December 31, 2021 and 2020, the Company was in compliance with its debt covenants.
The Syndicated Credit Facility is guaranteed by the Company and certain designated subsidiaries (“Subsidiary
Guarantors”) of the Company. The security for the Syndicated Credit Facility, subject to customary exceptions, includes
substantially all the tangible and intangible assets of the Company and its Subsidiary Guarantors. The Company is
required to make mandatory prepayments of the outstanding principal and accrued interest of the Syndicated Credit
Facility (i) upon the occurrence of certain events and (ii) to the extent of a specified percentage of annual excess cash
flow that is not reinvested or used for other specified purposes. The Syndicated Credit Facility is subject to customary
affirmative and negative covenants, default provisions, representations and warranties and other terms and conditions.
Term Loan A
The Company used the proceeds from the 2023 Notes and the previously announced closing of its Palo Alto real estate
sale leaseback transaction to repay the Syndicated Credit Facility borrowings under Term Loan A that were outstanding
as of September 30, 2019. This resulted in a loss on debt extinguishment of $22 million for the year ended December 31,
2019, which is included as part of Interest expense, net within the Consolidated Statements of Operations.
Term Loan B
The Term Loan B bears interest at the Company’s option, either (i) U.S. dollar LIBOR plus 275 basis points per annum
or (ii) adjusted base rate, plus a margin of 175 basis points per annum. The Company must make equal quarterly
installment payments in amounts equal to 0.25% of the original principal amount of the Term Loan B, after giving effect
to any Term Loan B prepayments under the Syndicated Credit Facility, with the final balance payable at maturity on
October 5, 2024. The Term Loan B may be repaid by the Company, in whole or in part, together with accrued interest,
without premium or penalty.
During the year ended December 31, 2020, the Company repaid $511 million of borrowings under Term Loan B using
proceeds from the MDA Transaction. The Company expensed $7 million of unamortized debt issuance costs attributed
to the partial pay down, which is included in Interest expense, net in the Consolidated Statements of Operations.
Revolving Credit Facility
The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued.
As of December 31, 2021 and December 31, 2020, the Company had $28 million and $31 million of issued and undrawn
letters of credit outstanding under the Revolving Credit Facility.
Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (i) U.S.
dollar LIBOR, plus a margin of 120 - 425 basis points per annum, based on the Company’s total leverage ratio, or (ii)
adjusted base rate, plus a margin of 20 - 325 basis points per annum, based on the Company’s total leverage ratio. The
Revolving Credit Facility is payable at maturity on December 10, 2023. The Revolving Credit Facility may be repaid by
the Company, in whole or in part, together with accrued interest, without premium or penalty.
96
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Senior Secured Notes due 2023
On December 2, 2019, the Company issued $1.0 billion in aggregate principal amount of 9.75% Senior Secured Notes
due 2023 (“2023 Notes”). The 2023 Notes were offered and sold to qualified institutional buyers in the U.S. pursuant to
Rule 144A and outside the U.S. pursuant to Regulation S under the Securities Act of 1933, as amended. The 2023 Notes
were issued at a price of 98% and are recorded as long-term debt in the Consolidated Financial Statements. The 2023
Notes bear interest at the rate of 9.75% per year, payable semi-annually in cash in arrears, which interest payments
commenced in June 2020.
On June 25, 2020, the Company repurchased $150 million aggregate principal amount of its 2023 Notes using proceeds
from the MDA Transaction. The 2023 Notes were repurchased (“2023 Notes Repurchase”) at a price of approximately
112.45% of the principal amount repurchased.
On March 26, 2021, the Company redeemed $350 million aggregate principal amount of its 2023 Notes using a portion
of the net proceeds from an underwritten offering of 10 million shares of its common stock (“Offering”). The Company
paid premiums of approximately $34 million related to the early redemption. This resulted in a loss on debt
extinguishment of $41 million that was recorded in the first quarter of 2021, which is included as part of Interest
expense, net within the Consolidated Statements of Operations for the year ended December 31, 2021.
The 2023 Notes are guaranteed (“Guarantees”) on a senior secured basis by each of the Company’s existing and future
subsidiaries that guarantees the Syndicated Credit Facility (“2023 Guarantors”). The 2023 Notes are secured, equally and
ratably with the Syndicated Credit Facility and any future first lien debt, by liens on the same assets that secure the
Revolving Credit Facility and the Term Loan B.
The 2023 Notes and the Guarantees are the Company’s general senior secured obligations and rank equally in right of
payment with all of the Company’s and the 2023 Guarantors’ existing and future unsubordinated debt (including the
Syndicated Credit Facility). The 2023 Notes and the Guarantees are effectively senior to all of the Company’s and the
2023 Guarantors’ existing and future unsecured debt as well as to all of any permitted junior lien debt that may be
incurred in the future, in each case to the extent of the value of the assets securing the 2023 Notes and the Guarantees.
The 2023 Notes and the Guarantees are effectively subordinated to any obligations that are secured by liens on assets
that do not constitute a part of the collateral securing the 2023 Notes or the Guarantees, are structurally subordinated to
all existing and future liabilities (including trade payables) of the Company’s subsidiaries that do not guarantee the 2023
Notes, and are senior in right of payment to all of the Company’s and the 2023 Guarantors’ existing and future
subordinated indebtedness.
The indenture governing the 2023 Notes limits, among other things, the Company and the Company’s restricted
subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay
dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt;
make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries;
sell or otherwise dispose of assets; enter into transactions with affiliates; reduce the Company’s satellite insurance; and
consolidate or merge with, or sell substantially all of the Company’s assets to, another person. The 2023 Notes are also
subject to compliance with a financial maintenance covenant in respect of the Company’s Consolidated Total Debt Ratio
which was 7.25x at the end of the fiscal quarter ended December 31, 2019, 7.50x at the end of the fiscal quarter ending
March 31, 2020, 7.75x at the end of each fiscal quarter thereafter until the fiscal quarter ending September 30, 2021,
7.50x at the end of each fiscal quarter thereafter until the quarter ending September 30, 2022, 6.50x at the end of each
fiscal quarter thereafter until the fiscal quarter ending March 31, 2023, and 5.75x for each fiscal quarter thereafter
(subject to a 0.25x reduction in each maximum level upon a disposition of a business line for greater than $500 million).
The 2023 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on December 15,
2021 at a redemption price of 107.313%, during the 12 months beginning on December 15, 2022 at a redemption price
97
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
of 103.656%, and at any time on or after December 15, 2023 at a redemption price of 100%, in each case plus accrued
and unpaid interest, if any, thereon to the redemption date.
In the event a change of control occurs (as defined in the indenture governing the 2023 Notes), each holder will have the
right to require us to repurchase all or any part of such holder’s 2023 Notes at a purchase price in cash equal to 101% of
the aggregate principal amount of the 2023 Notes repurchased, plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant
interest payment date).
Senior Secured Notes due 2027
On June 25, 2020, the Company issued $150 million in aggregate principal amount of the 2027 Notes. The 2027 Notes
were offered and sold to qualified institutional buyers in the U.S. pursuant to Rule 144A and outside the U.S. pursuant to
Regulation S under the Securities Act of 1933, as amended. The 2027 Notes were issued at a price of 98.25% and are
recorded as long-term debt in the Consolidated Financial Statements. The 2027 Notes bear interest at the rate of 7.54%
per year, payable semi-annually in cash in arrears, for which interest payments commenced in December 2020.
The Company accounted for the issuance of the 2027 Notes and 2023 Notes Repurchase as debt modifications. As a
result, the 12.45% premium paid on the repurchase of the $150 million aggregate principal amount of 2023 Notes is
accounted for as an incremental discount that is amortized over the life of the 2027 Notes. Separately, the previously
incurred unamortized debt discount and debt issuance costs are amortized over the remaining life of the outstanding
2023 Notes.
The 2027 Notes are guaranteed (“2027 Guarantees”) on a senior secured basis by each of the Company’s existing and
future subsidiaries that guarantees the 2023 Notes and the Syndicated Credit Facility (“2027 Guarantors”). The 2027
Notes are secured, equally and ratably with the 2023 Notes, the Syndicated Credit Facility and any future first lien debt,
by liens on the same assets that secure the Revolving Credit Facility and Term Loan B.
The 2027 Notes and the 2027 Guarantees are the Company’s general senior secured obligations and rank equally in right
of payment with all of the Company’s and the 2027 Guarantors’ existing and future unsubordinated debt (including the
2023 Notes and the Syndicated Credit Facility). The 2027 Notes and the 2027 Guarantees are effectively senior to all of
the Company’s and the 2027 Guarantors’ existing and future unsecured debt as well as to all of any permitted junior lien
debt that may be incurred in the future, in each case to the extent of the value of the assets securing the 2027 Notes and
the 2027 Guarantees. The 2027 Notes and the 2027 Guarantees are effectively subordinated to any obligations that are
secured by liens on assets that do not constitute a part of the collateral securing the 2027 Notes or the 2027 Guarantees,
are structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries
that do not guarantee the 2027 Notes, and are senior in right of payment to all of the Company’s and the Guarantors’
existing and future subordinated indebtedness.
The indenture governing the 2027 Notes limits, among other things, the Company’s and the Company’s restricted
subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay
dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt;
make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries;
sell or otherwise dispose of assets; enter into transactions with affiliates; reduce the Company’s satellite insurance; and
consolidate or merge with, or sell substantially all of the Company’s assets to, another person.
The 2027 Notes may be redeemed, in whole or in part, at any time during the 12 months beginning on June 25, 2024, at
a redemption price of 105.655%, during the 12 months beginning on June 25, 2025, at a redemption price of 103.770%,
and at any time on or after June 25, 2026, at a redemption price of 101.885%, in each case plus accrued and unpaid
interest, if any, thereon to the redemption date. The Company may also redeem the 2027 Notes, in whole or in part, at
98
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
the Company’s option at any time prior to June 25, 2024, at a price equal to 100% of the principal amount of such 2027
Notes plus a “make-whole” premium, together with accrued but unpaid interest, if any, to, but excluding, the date of
redemption. In addition, the Company may redeem up to 40% of the aggregate principal amount of the 2027 Notes at
any time before June 25, 2024, with the net cash proceeds from certain equity offerings at a specified redemption price,
plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.
In the event a change of control occurs (as defined in the indenture governing the 2027 Notes), each holder will have the
right to require us to repurchase all or any part of such holder’s 2027 Notes at a purchase price in cash equal to 101% of
the aggregate principal amount of the 2027 Notes repurchased, plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant
interest payment date).
Leaseback Deferred Financing
In December 2019, the Company completed the sale and subsequent leaseback of company owned properties in Palo
Alto, California for proceeds of $291 million. The Company determined that the leaseback terms were off-market. In
accordance with ASC 842 – Leases, the Company accounted for the excess of the leaseback payments over the present
value of market rental payments as additional financing, separate from the lease liability. This resulted in recognition of
a deferred financing liability of $33 million, which is repayable over the 10-year leaseback term. This liability was
calculated using a weighted average discount rate of 4.62%. The deferred financing liability is recorded as part of
Current portion of long-term debt and Long-term debt within the Consolidated Balance Sheets. Refer to Note 8 and 10
for additional information.
Interest expense, net on long-term debt and other obligations are as follows:
2021
Year Ended December 31,
2020
2019
Interest on long-term debt
Loss on debt extinguishment
Interest on orbital securitization liability
Imputed interest and other
Interest expense on advance payments from customers
Capitalized interest
Interest expense, net
$
$
144
41
4
2
—
(40)
151
$
$
Scheduled minimum debt repayments for the year ended December 31, 2021 are as follows:
$
191
7
5
2
3
(33)
175
$
194
22
7
—
15
(19)
219
Syndicated Credit Facility
2023 Notes
2027 Notes
Deferred financing
Finance leases and other
Debt discount and issuance costs
2022
2023
$ 15
—
—
7
3
(11)
$ 14
$ 20
500
—
2
2
(11)
$ 513
2024
$ 1,409
—
—
2
—
(7)
$ 1,404
99
2025 2026 Thereafter
$ — $ — $
— —
— —
2
3
— —
(3)
(3)
$ (1) $ — $
Total
— $ 1,444
500
—
150
150
26
10
5
—
(39)
(4)
$ 2,086
156
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
13. FINANCIAL INSTRUMENTS AND FAIR VALUE DISCLOSURES
Factors used in determining the fair value of financial assets and liabilities are summarized into three categories in
accordance with ASC 820 - Fair Value Measurements:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical,
unrestricted assets or liabilities
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Inputs for the asset or liability that are based on unobservable inputs
The following tables present assets and liabilities that are measured at fair value on a recurring basis (at least annually)
by level within the fair value hierarchy. A financial asset or liability’s classification within the hierarchy is determined
based on the lowest level input that is significant to the fair value measurement.
Recurring Fair Value Measurements as of December 31, 2021
Level 1
Level 3
Level 2
Total
Assets
Orbital receivables 1
Interest rate swaps
Liabilities
Interest rate swaps
Long-term debt 2
Assets
Orbital receivables 1
Liabilities
Interest rate swaps
Long-term debt 2
$
$
$
$
$
$
$
$
— $
—
— $
— $
—
— $
481
3
484
4
2,132
2,136
$
$
$
$
— $
—
— $
— $
—
— $
481
3
484
4
2,132
2,136
Recurring Fair Value Measurements as of December 31, 2020
Level 1
Level 3
Level 2
Total
— $
— $
— $
—
— $
410
410
20
2,556
2,576
$
$
$
$
— $
— $
— $
—
— $
410
410
20
2,556
2,576
1 The carrying value of orbital receivables was $417 million and $410 million at December 31, 2021 and December 31, 2020,
respectively. See Note 6 regarding the (Gain) loss on orbital receivables allowance.
2 Long-term debt excludes finance leases, deferred financing and other and is carried at amortized cost. The outstanding carrying
value was $2,055 million and $2,387 million at December 31, 2021 and 2020, respectively. The carrying value of borrowings
under the Revolving Credit Facility approximates their fair value.
The Company determines the fair value of its orbital receivables using a discounted cash flow model, based on stated
interest rates and observable market yield curves associated with the instruments.
The Company determines fair value of its derivative financial instruments based on internal valuation models, such as
discounted cash flow analysis, using management estimates and observable market-based inputs, as applicable.
Management estimates include assumptions concerning the amount and timing of estimated future cash flows and
100
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
application of appropriate discount rates. Observable market-based inputs are sourced from third parties and include
interest rates and yield curves, currency spot and forward rates and credit spreads, as applicable.
The Company determines fair value of long-term debt that is actively traded in the secondary market using external
pricing data, including any available quoted market prices and other observable inputs from available market
information. For debt that is not actively traded in the secondary market, the fair value is based on the Company’s
indicative borrowing cost derived from dealer quotes or discounted cash flows.
Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are all short-term in nature;
therefore, the carrying value of these items approximates their fair value.
There were no transfers into or out of each of the levels of the fair value hierarchy during the years ended December 31,
2021 or December 31, 2020.
14. DERIVATIVES AND HEDGING
Cash Flow Hedges
The Company is exposed to fluctuations in interest rates under the Syndicated Credit Facility. On April 5, 2018, the
Company entered into several interest rate swap agreements in order to fix the base interest rate to be paid over an
aggregate amount of the Company’s variable rate long-term debt. On April 30, 2021, $500 million of the Company’s
interest rate swaps matured. On June 15, 2021, the Company entered into interest rate swaps at a notional value of $500
million. In total, an aggregate amount of $1.0 billion of the Company’s variable rate long-term debt is fixed at an
average rate of 1.43% (excluding the margin specified in the Syndicated Credit Facility). In both April 2022 and June
2023, the Company will have interest rate swap maturities of $500 million.
The Company is also exposed to foreign exchange risks on certain sales and purchase contracts. The Company enters
into foreign exchange forward contracts to hedge the exposure arising from expected foreign currency denominated cash
flows on these sales and purchase contracts. As of January 1, 2019, the Company discontinued hedge accounting related
to these sales and purchase contracts. The Company continued to hedge foreign exchange exposure on sales and
purchase contracts for economic purposes. The Company had no foreign exchange forward contracts at December 31,
2021 or 2020.
Derivatives designated as hedging instruments
Interest rate swaps
Derivatives designated as hedging instruments
Interest rate swaps
Notional amount
Maximum Contract term
December 31, 2021
1,000
1.5 years
Notional amount
Maximum Contract term
December 31, 2020
1,000
1.3 years
$
$
The effective portion of gains included in Other comprehensive income (loss), net of tax related to the Company’s
interest rate swaps was $19 million for the year ended December 31, 2021. The effective portion of losses included in
Other comprehensive income (loss), net of tax related to the Company’s interest rate swaps was $3 million and $13
million for the years ended December 31, 2020 and 2019, respectively. The gain (loss) from foreign exchange forward
contracts was not material for the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, the
estimated loss included in Accumulated other comprehensive income (loss) expected to be recognized in Net income
(loss) in the next twelve months is $3 million.
101
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
In implementing all its derivative financial instruments, the Company deals with counterparties and is therefore exposed
to credit related losses in the event of non-performance by these counterparties. However, the Company deals with
counterparties that are major financial institutions and does not expect any of the counterparties to fail to meet their
obligations.
Net Investment Hedge
At December 31, 2018, the Company had designated $271 million of its Term Loan B as a hedge of its investment in
certain U.S. subsidiaries. Foreign exchange gains and losses arising from the translation of the designated portion of the
Term Loan B were recognized in Other comprehensive income (loss), net of tax to the extent that the hedges were
effective and were recognized in the Consolidated Statements of Operations to the extent that the hedges were
ineffective. The fair value of the designated portion of Term Loan B was $256 million as of December 31, 2018. As a
result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent
company to a U.S. parent company, the Company’s Syndicated Credit Facility was changed to a U.S. dollar functional
currency entity. Due to this change, the net investment hedge was no longer necessary from the domestication date
onwards.
15. STOCKHOLDERS’ EQUITY
On March 22, 2021, the Company completed the Offering of 10 million shares of common stock at a public offering
price of $40 per share. The Company received proceeds of $380 million, net of $20 million of transaction fees.
As of December 31, 2020, the Company had 2.4 million shares authorized and no shares outstanding of the Series A
Preferred Stock. On May 17, 2021, the Company filed a Certificate of Elimination of Series A Junior Participating
Preferred Stock with the Delaware Secretary of State, thereby removing the Certificate of Designations of the Series A
Preferred Stock from the Company’s Amended and Restated Certificate of Incorporation. Therefore, as of December 31,
2021, the Company had no shares authorized and no shares outstanding of the Series A Preferred Stock.
Changes in the components of Accumulated other comprehensive income (loss) are as follows:
Unrealized Loss
on Interest Rate
Swaps2
Loss on Pension
and Other
Postretirement
Plans
Balance as of December 31, 2018
Other comprehensive income (loss)
Tax benefit
Balance as of December 31, 2019
Other comprehensive loss
Reclassification to gain on disposal of
discontinued operations3
Tax benefit (expense)
Balance as of December 31, 2020
Other comprehensive (loss) income
Tax benefit (expense)
Balance as of December 31, 2021
Foreign
Currency
Translation
Adjustments1
111
14
1
126
(47)
(78)
—
1
(2)
—
(1)
$
$
$
$
$
$
$
$
— $
(12)
—
(12)
(3)
$
(5)
—
(20)
19
—
(1)
$
$
Total
Accumulated
Other
Comprehensive
Income (Loss)
64
(24)
1
41
(93)
(47) $
(26)
—
(73) $
(43)
15
—
(101) $
50
—
(51) $
(68)
—
(120)
67
—
(53)
1 As a result of the Company’s U.S. Domestication on January 1, 2019, and the associated change from a Canadian parent company
to a U.S. parent company, the Company’s net investment hedge was no longer necessary from the domestication date onwards. As
102
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
of December 31, 2018, there was a $51 million net loss on hedge investments in foreign operations which is included in Foreign
Currency Translation Adjustments.
2 As of January 1, 2019, the Company discontinued hedge accounting related to the Company’s foreign exchange contracts. The
Company still applies hedge accounting to the interest rate swaps related to long-term debt. As of December 31, 2020 and 2021,
the balance consisted of unrecognized loss on the Company’s interest rate swaps.
Relates to the reclassification of foreign currency translation from Accumulated other comprehensive (loss) income to the gain on
disposal of discontinued operations due to the completion of the MDA Transaction. See Note 4 for details.
3
16. REVENUES
As of December 31, 2021, the Company had $1.9 billion of remaining performance obligations, which represents the
transaction price of firm orders less inception to date revenues recognized. Remaining performance obligations generally
exclude unexercised contract options and indefinite delivery/indefinite quantity contracts. The Company expects to
recognize revenues relating to existing performance obligations of approximately $1.3 billion, $0.5 billion, and $0.1
billion for the fiscal years 2022, 2023 and thereafter, respectively.
Contract liabilities by segment are as follows:
As of December 31, 2021
Contract liabilities
As of December 31, 2020
Contract liabilities
Earth Intelligence Space Infrastructure
$
$
257 $
32
Earth Intelligence Space Infrastructure
$
$
234 $
45
Total
289
Total
279
Contract liabilities increased to $289 million as of December 31, 2021 from $279 million as of December 31, 2020. The
increase in contract liabilities is primarily due to cash received on commercial contracts in the Space Infrastructure
segment in advance of services performed. The increase is partially offset by revenues recognized based upon the
satisfaction of performance obligations within the Earth Intelligence segment. The Company had an immaterial balance
of non-current contract liabilities as of December 31, 2021. The Company had $1 million of non-current contract
liabilities as of December 31, 2020. Non-current contract liabilities are included in Other non-current liabilities on the
Consolidated Balance Sheets.
103
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
The Company’s primary sources of revenues are as follows:
Earth
Space
Year Ended December 31, 2021
Product revenues
Service revenues
Intersegment
Year Ended December 31, 2020
Product revenues
Service revenues
Intersegment
Year Ended December 31, 2019
Product revenues
Service revenues
Intersegment
$
$
$
$
$
$
Intelligence
— $
678
Infrastructure Eliminations
$
—
62
740
— $
—
(63)
(63) $
$
$
1,092
1
1,093
Earth
Space
Intelligence
Infrastructure Eliminations
$
— $
1,081
—
1,081
$
1,085
—
1,085
$
633
9
79
721
560
21
125
706
$
$
— $
—
(79)
(79) $
— $
—
(125)
(125) $
Earth
Space
Intelligence
Infrastructure Eliminations
$
— $
Total
678
1,092
—
1,770
Total
633
1,090
—
1,723
Total
560
1,106
—
1,666
Certain of the Company’s contracts with customers in the Space Infrastructure segment include a significant financing
component since payments are received from the customer more than one year after delivery of the promised goods or
services. The Company recognized orbital interest revenue of $27 million, $30 million and $31 million for the years
ended December 31, 2021, 2020 and 2019, respectively, which is included in product revenues.
Revenue in the Space Infrastructure segment is primarily generated from long-term construction contracts. Due to the
long-term nature of these contracts, the Company generally recognizes revenue over time using the cost-to-cost method
to measure progress. Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred
to EAC. Revenue recognition is also contingent on estimated contractual consideration. An EAC includes all direct costs
and indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates
regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in
determining the EAC. Changes to an EAC or estimated contractual consideration are recorded as a cumulative
adjustment to revenue.
The Company recognized a cumulative adjustment to revenue of $30 million for the year ended December 31, 2021,
respectively, related to the Sirius XM contract with Sirius XM Holdings Inc. (“Sirius XM”). This resulted primarily from
adjusting the EAC transaction price for the amount of the final milestone and expected orbital payments from Sirius XM
due to the non-performance of the SXM-7 satellite and other adjustments. In addition to the cumulative adjustment
recognized for the year ended December 31, 2021, incremental costs of $3 million were incurred related to the SXM-7
recovery efforts during the first quarter of 2021. See Note 6 for additional details regarding the adjustment to trade and
other receivables.
The Company did not incur COVID-19 related EAC growth for the year ended December 31, 2021. The Company
incurred estimated COVID-19 related EAC growth of $27 million for the year ended December 31, 2020.
The Company has certain programs in the Space Infrastructure segment which contain significant development efforts
that have experienced delays and cost growth primarily due to the complexity of the programs resulting in an overall loss
position. The Company recorded $32 million in EAC adjustments on loss contracts for the year ended December 31,
104
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
2021. The Company recorded $42 million in EAC adjustments on a commercial satellite loss contract which included
significant development efforts further delayed by COVID-19 for the year ended December 31, 2020.
The approximate revenue based on geographic location of customers is as follows:
United States
Asia
Europe
Australia
Middle East
South America
Canada
Other
Total revenues
Revenues from significant customers is as follows:
Year Ended December 31,
2021
1,431 $
97
80
70
54
17
10
11
1,770 $
2020
1,406
96
84
37
54
25
10
11
1,723
2019
1,240
161
69
22
57
97
10
10
1,666
$
$
$
$
Year Ended December 31, 2021
U.S. federal government and agencies
Commercial and other
Total revenues
$
Earth Intelligence
$
701 $
392
1,093 $
Space Infrastructure
235
505
740
Year Ended December 31, 2020
U.S. federal government and agencies
Commercial and other
Total revenues
Year Ended December 31, 2019
U.S. federal government and agencies
Commercial and other
Total revenues
$
Earth Intelligence Space Infrastructure
288
$
433
721
774
307
1,081
$
$
$
Earth Intelligence
$
790 $
295
1,085 $
Space Infrastructure
151
555
706
Eliminations
Total
$
—
(63)
(63) $
936
834
1,770
Eliminations
Total
— $
(79)
(79) $
1,062
661
1,723
Eliminations
Total
(1) $
(124)
(125) $
940
726
1,666
$
$
$
$
$
$
The Company had revenues from a commercial customer in the Space Infrastructure segment that represented 19% and
11% of total revenues for the years ended December 31, 2021 and 2020, respectively. The revenues from this
commercial customer in the Space Infrastructure segment were less than 10% of the Company’s total revenues for the
year ended December 31, 2019.
17. SEGMENT INFORMATION
The Company’s business is organized into two reportable segments: Earth Intelligence and Space Infrastructure. The
Earth Intelligence reportable segment is a supplier of high-resolution, high accuracy Earth imagery and other geospatial
data sourced from the Company’s advanced satellite constellation and third-party providers, as well as a provider of
advanced geospatial information applications and analytic services for national security and commercial solutions. The
Space Infrastructure reportable segment is a supplier of space-based infrastructure, robotics, subsystems and information
solutions to satellite operators and government agencies.
The Company’s Chief Operating Decision Maker measures the performance of each segment based on revenue and
Adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization
105
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
(“EBITDA”) adjusted for certain items affecting comparability of our ongoing operating results as specified in the
calculation. Certain items affecting the comparability of our ongoing operating results between periods include
restructuring, impairments, insurance recoveries, gain (loss) on sale of assets, CEO severance, (gain) loss on orbital
receivables allowance 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.
Corporate and other expenses include items such as corporate office costs, regulatory costs, executive and director
compensation, foreign exchange gains and losses and fees for audit, legal and consulting services.
Intersegment sales are generally recorded at cost-plus a specified margin, which may differ from what the segment may
be able to obtain on sales to external customers.
The following table summarizes the operating performance of the Company’s segments:
Revenues:
Earth Intelligence
Space Infrastructure
Intersegment eliminations
Total revenues
Adjusted EBITDA:
Earth Intelligence
Space Infrastructure
Intersegment eliminations
Corporate and other expenses
Restructuring
Transaction and integration related expense
Gain (loss) on orbital receivables allowance
Impairment losses, including inventory
Insurance recoveries 1
(Loss) gain on sale of assets
CEO severance
Gain on remeasurement of Vricon equity interest 2
Depreciation and amortization
Interest expense, net
Interest income 3
Equity in income from joint ventures, net of tax
Income (loss) from continuing operations before taxes
Year Ended December 31,
2020
2021
2019
1,093 $
740
(63)
1,770 $
1,081
721
(79)
1,723
492 $
46
(25)
(89)
(2)
(1)
49
—
1
—
—
—
(290)
(151)
3
—
33 $
513
(3)
(27)
(61)
—
(7)
(14)
(33)
—
(1)
—
85
(348)
(175)
3
(1)
(69)
$
$
$
$
1,085
706
(125)
1,666
548
(17)
(29)
(86)
(18)
(16)
(14)
(3)
183
136
(3)
—
(376)
(219)
2
(11)
77
$
$
$
$
1
Insurance recoveries for the year ended December 31, 2021 are included in Other income, net on the Consolidated Statement of
Operations.
2 As a result of the Vricon Acquisition, the Company was required to remeasure its previously held equity interest in Vricon at its
acquisition date fair value which resulted in a gain of $85 million. The gain is included in Other (income) expense, net on the
Consolidated Statements of Operations.
Included in Other (income) expense, net on the Consolidated Statements of Operations.
3
106
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
The Company’s capital expenditures are as follows:
Year Ended December 31, 2021
Capital expenditures:
Property, plant and equipment
Intangible assets
Year Ended December 31, 2020
Capital expenditures:
Property, plant and equipment
Intangible assets
Year Ended December 31, 2019
Capital expenditures:
Property, plant and equipment
Intangible assets
Earth
Intelligence
Space
Infrastructure
Corporate and
eliminations
Total
79
87
166
$
$
$
16
—
$
16
40 $
12
52 $
135
99
234
Earth
Intelligence
Space
Infrastructure
Corporate and
eliminations
Total
147
79
226
$
$
21
1
22
$
$
53 $
7
60 $
221
87
308
Earth
Intelligence
Space
Infrastructure
Corporate and
eliminations
Total
237
56
293
$
$
16
3
19
$
$
4 $
(2)
2 $
257
57
314
$
$
$
$
$
$
Substantially all of the Company’s long-lived tangible assets were in the United States as of December 31, 2021, 2020
and 2019.
18. IMPAIRMENT LOSSES
Inventory impairment
There were no inventory impairment losses recognized for the years ended December 31, 2021 or 2020.
For the year ended December 31, 2019, the Company recognized inventory impairment losses of $3 million, which are
included in Product costs, excluding depreciation and amortization on the Consolidated Statements of Operations.
Other impairment
There were no impairment losses recognized for the year ended December 31, 2021.
For the year ended December 31, 2020, the Company recognized an impairment loss of $33 million within the Earth
Intelligence segment related to the write-off of a prepaid asset with a commercial provider of ground station services
under a contract which was above current market value. In December 2020, the Company executed a new multi-year
contract with the provider for services at reduced cost. As a result of the prior contract being terminated and the new
contract being at market value, the Company concluded the remaining prepaid asset from the prior contract with the
provider had no continuing value.
For each of the years ended December 31, 2020 and 2019, the Company recognized orbital receivable impairment losses
of $14 million, within the Space Infrastructure segment primarily due to a decrease in customer credit ratings. See Note
6 for details related to the reversal of the orbital receivables allowance.
107
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
19. EMPLOYEE BENEFIT PLANS
Defined contribution plan
The Company maintains a defined contribution plan for some of its employees in the U.S., whereby the Company pays
contributions based on a percentage of the employees’ annual salary. For the years ended December 31, 2021, 2020 and
2019, the Company recorded expense of $19 million, $16 million and $16 million, respectively, related to the plan.
Pension and other postretirement benefit plans
The Company maintains a defined benefit pension plan covering a portion of its employees within the Space
Infrastructure segment. The pension and other postretirement plan benefits were frozen on December 31, 2013. The
defined benefit plan provides pension benefits based on various factors including prior earnings and length of service.
The defined benefit plan is funded and the Company’s funding requirements are based on the plans’ actuarial
measurement framework as established by the plan agreements or applicable laws. The funded plans’ assets are legally
separated from the Company and are held by an independent trustee. The trustee is responsible for ensuring that the
funds are protected as per applicable laws.
The Company also provides for other postretirement benefits, comprised of life insurance covering a portion of its
employees within the Space Infrastructure segment. The cost of these benefits is primarily funded out of Operating
income.
The table below summarizes changes in the benefit obligation, the fair value of plan assets and funded status for the
Company’s pension and other postretirement benefit plans, as well as the aggregate balance sheet impact.
Change in benefit obligation:
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial (gains) losses
Benefits paid
Benefit obligation at end of year
Change in fair value of plan assets:
Fair value of plan assets at beginning of year
Actual return on assets
Employer contributions
Benefits paid
Expenses paid
Fair value of plan assets at end of year
Unfunded status at end of year
Liabilities recognized in the Consolidated Balance Sheets:
Accrued compensation and benefits
Pension and other postretirement benefits
Pension
2021
2020
Other Postretirement
2021
2020
624
3
14
(23)
(33)
585
$
$
$
444
51
1
(31)
(3)
462
(123) $
583 $
2
17
55
(33)
624 $
14
—
—
(1)
—
13
$
$
404 $
40
34
(31)
(3)
444
(180) $
— $
—
—
—
—
—
(13) $
(1) $
(122)
(123) $
(1) $
(179)
(180) $
(1) $
(12)
(13) $
14
—
—
—
—
14
—
—
—
—
—
—
(14)
(1)
(13)
(14)
$
$
$
$
$
$
108
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
The $39 million decrease in the pension benefit obligation from 2020 to 2021 was primarily due to the increase in the
discount rate. The $18 million increase in the fair value of plan assets from 2020 to 2021 was primarily due to the return
on assets.
The accumulated benefit obligation for the defined pension benefit plans was $585 million and $624 million at
December 31, 2021 and 2020, respectively.
The following table provides the net pension and other postretirement benefits recognized in Accumulated other
comprehensive (loss) income at December 31:
Net (loss) gain
Pension
2021
2020
Other Postretirement
2020
2021
$
(60) $
(110) $
9
$
9
The following table summarizes the weighted average assumptions used to determine the benefit obligations for the
Company’s pension and other postretirement plans at December 31:
Discount rate
Pension
Other Postretirement
2021
2.6 %
2020
2.2 %
2021
2.6 %
2020
2.2 %
The following table summarizes the components of net periodic benefit (credit) cost for the Company’s pension and
other postretirement benefit plans for the years ended December 31:
Interest cost
Expected return on plan assets
Amortization of net loss (gain)
Settlement gain
Expenses paid
Net periodic benefit credit
$
$
14 $
(29)
6
—
3
(6) $
17 $
(24)
1
—
2
(4) $
21 $
(24)
—
—
2
(1) $
1 $
—
(1)
—
—
— $
— $
—
—
(4)
—
2019
1
—
(1)
—
—
(4) $ —
2021
Pension
2020
2019
Other Postretirement
2020
2021
The following table summarizes the components recognized in Other comprehensive (income) loss for the Company’s
pension and other postretirement benefit plans for the years ended December 31:
2021
Pension
2020
40
(1)
39
(44) $
(6)
(50) $
(56) $
35
2019
25 $
—
25 $
2021
Other Postretirement
2020
4
—
4
(1) $
1
— $
2019
$ —
1
1
$
24 $
— $
— $
1
$
$
$
Net (gain) loss
Amortization of net (loss) gain
Total recognized in other comprehensive (income) loss
Total recognized in net periodic benefit credit and other
comprehensive (income) loss
$
$
$
109
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
The following table summarizes the weighted average assumptions used to determine the net periodic benefit (credit)
cost for the Company’s pension and other postretirement benefit plans for the years ended December 31:
Discount rate
Expected long-term return on plan assets
2021
2.2 %
6.5 %
Pension
2020
3.0 %
6.5 %
2019
2021
4.1 %
7.0 %
Other Postretirement
2020
3.0 %
N/A
2.2 %
N/A
2019
4.1 %
N/A
The expected long-term return on plan assets assumption represents the average rate that the Company expects to earn
over the long-term on the assets of the Company’s benefit plans, including those from dividends, interest income and
capital appreciation. The Company utilizes a third-party consultant to assist in the development of the expected long-
term return on plan assets, which is based on expectations regarding future long-term rates of return for the plans’
investment portfolio, with consideration given to the allocation of investments by asset class and historical rates of return
for each individual asset class.
Plan Assets. The Company’s Pension Committee (the “Committee”) has the responsibility to formulate the investment
policies and strategies for the plan assets. The Committee structures the investment of plan assets to maximize the plans
long-term rate of return for an acceptable level of risk and limit the volatility of investment returns. In the pursuit of
these goals, the Committee has formulated the following investment policies and objectives: (1) preserve the plan assets;
(2) maintain sufficient liquidity to fund benefit payments and pay plan expenses; and (3) achieve a minimum total rate of
return equal to the established benchmarks for each asset category.
The Committee has established a target allocation that the plan assets may be invested in for each major asset category
and has established guidelines regarding diversification within asset categories to limit risk and exposure to a single or
limited number of securities. The investment manager is required to rebalance the portfolio within two percentage points
for any individual asset or combination of assets defined within policy targets. Asset allocation targets are re-balanced
quarterly and re-assessed annually for the upcoming year. The investments of the plan include a diversified portfolio of
both equity and fixed income investments. Equity investments are further diversified across U.S. and international
stocks, small to large capitalization stocks and growth and value stocks. Fixed income assets are diversified across U.S.
and international issuers, corporate and governmental issuers and credit quality.
The following table presents a summary of target asset allocations for each major category of the plan assets as well as
the actual asset allocations at December 31, 2021:
Asset Allocation
Cash and cash equivalents
U.S. and global equity securities
Fixed income
Target
Actual
- %
71 %
29 %
100 %
1 %
71 %
28 %
100 %
Cash and cash equivalents consist of cash and short-term investments. U.S. and global equity securities, fixed income
and other investment assets are primarily commingled fund investments. The pension plans’ commingled fund
investments are managed by several fund managers and are valued at the net asset value per share for each fund.
Although the majority of the underlying assets in the funds consist of actively traded equity securities and bonds, the unit
of account is considered to be at the fund level. These funds are traded daily and settled the following day at the net asset
value per share.
110
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
The Committee regularly monitors the investment of plan assets to ensure that the actual asset allocation remains in
proximity to the target. The Committee also regularly measures and monitors investment risk through ongoing
performance reporting and investment manager reviews.
The following table presents the fair value of the Company’s pension plan assets by asset category segregated by level
within the fair value hierarchy, as described below:
Asset Category
Cash and cash equivalents
Commingled funds 1
Total assets at fair value
Level 1
3
$
December 31, 2021
Level 2
Level 3
$ — $ — $
Total
Level 1
3 $
459
3 $
Level 2
December 31, 2020
Level 3
— $ — $
Total
3
441
— $ — $ 444
$
3
$ — $ — $ 462 $
3 $
1
Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not
required to be classified in the fair value hierarchy table. The total fair value of these amounts are presented in this table to permit
reconciliation of the fair value hierarchy to the amounts presented for total defined benefit pension plan assets.
Contributions. The funding policy for the Company’s pension and postretirement benefit plans is to contribute at least
the minimum required by applicable laws and regulations or to directly make benefit payments where appropriate. At
December 31, 2021, all legal funding requirements had been met.
The American Rescue Plan Act of 2021 (“ARPA Act”) was enacted on March 11, 2021 in the United States. The ARPA
Act includes provisions for pension funding relief in future periods. The Company has elected to take advantage of these
provisions and anticipates lower required contributions for the qualified pension plan in the upcoming fiscal years. Due
to the Company’s election, there are no required contributions for the Company’s qualified pension plan for the year
ending December 31, 2022.
Estimated Future Benefit Payments. The following table presents expected pension and other postretirement benefit
payments which reflect expected future service, as appropriate.
Pension
Other postretirement
2022
32
1
33
$
$
2023
32
1
33
$
$
2024
32
1
33
$
$
20. STOCK-BASED COMPENSATION PLANS
2025
2026
$
$
32 $
1
33 $
2027 through 2031
159
4
163
32 $
1
33 $
The Company’s stock-based compensation plans were established to attract and retain key personnel by providing them
the opportunity to acquire an equity interest in the Company or other incentive compensation measured by reference to
the value of shares or other performance objectives and align the interests of key personnel with those of stockholders.
Long-Term Incentive Plans – The Company’s long-term incentive plans (“LTIP Plans”) include long-term incentive
plans initiated before 2017 (“Pre-2017 Plans”) and the 2017 Long-Term Incentive Plan (“2017 Plan”) pursuant to which
shares may be issued by the Company from treasury. Under the LTIP Plans, awards of stock appreciation rights
(“SARs”) may be granted to employees of the Company and its subsidiaries; however, no LTIP award may be issued to
any director of a subsidiary of the Company who is not an employee. An aggregate of 6,820,000 LTIP awards were
authorized under the Pre-2017 Plans and an aggregate of 1,900,000 LTIP awards were authorized under the 2017 Plan.
No further awards shall be granted under the LTIP Plans.
111
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Omnibus Equity Incentive Plan – The Company adopted the Omnibus Equity Incentive Plan (“Omnibus Plan”) in
February 2017 and the stockholders approved the Omnibus Plan in July 2017. The Omnibus Plan provides for grants to
eligible employees, officers, consultants or advisors of the Company and its subsidiaries of stock options, long-term
incentive units, restricted stock units (“RSUs”), SARs and performance stock units (“PSUs”) in order to provide a long-
term incentive compensation to such persons. No awards will be made under the Omnibus Plan to non-employee
directors. 1,100,000 shares were reserved for issuance under the Omnibus Plan. The Omnibus Plan has a term of ten
years and shares may be issued by the Company from treasury. As of December 31, 2019, no further awards shall be
granted under the Omnibus Plan.
2019 Incentive Award Plan – The Company adopted the 2019 Incentive Award Plan (“2019 Plan”) in March 2019 and
the stockholders approved the 2019 Plan in May 2019. The 2019 Plan provides for grants to eligible employees, officers,
consultants, directors or advisors of the Company and its subsidiaries of stock options, SARs, restricted stock award,
RSUs, deferred stock award and PSUs in order to provide a long-term incentive compensation to such persons.
2,525,000 shares were reserved for issuance under the 2019 Plan. In addition, any shares subject to a prior plan that are
forfeited, cancelled, or expired shall be available for future grants under the 2019 Plan. Only awards settled in equity
count against the share reserve. Awards are actively being granted out of the 2019 Plan as of December 31, 2021.
Deferred Stock Unit Plan – On October 1, 2003, the Company established a Deferred Share Unit (“DSU”) Plan (“DSU
Plan”) whereby the Company’s independent directors received some or all of their annual retainers in DSUs. DSUs are
granted at a price equal to the closing price of the common shares on the day before the date of grant. The DSUs are
settled in cash at retirement at the closing price of the common shares of the Company on the retirement date of the
director. Under the DSU Plan, 100,000 DSUs were reserved for issuance.
Legacy Employee Stock Purchase Plan – On October 1, 2001, the Company implemented an employee stock purchase
plan. Under this plan, the Company could issue 1,500,000 common shares to certain eligible employees. The maximum
number of common shares that could be issued under the plan in any one year was 300,000. Under the terms of the plan,
employees could purchase shares of the Company at 85% of the market value of the shares. Employees could allocate a
maximum of 10% of their salary to the plan to a maximum of $20,000 Canadian dollars per annum. During the year
ended December 31, 2019, 22,541 common shares were issued at an average price of $6.20 Canadian dollars under the
legacy employee stock purchase plan. As of December 31, 2019, the Legacy Employee Stock Purchase Plan was
discontinued.
Maxar Technologies Inc. Employee Stock Purchase Plan – On March 27, 2019, the Company implemented an employee
stock purchase plan. Under this plan, the Company may issue 5,000,000 common shares to certain eligible employees.
Under the terms of the plan, employees can purchase shares of the Company at 85% of the market value of the shares on
the lower closing price of either the first or last day of the purchase period. Employees can allocate a maximum of 10%
of their salary to the plan to a maximum of $25,000 per annum. During the years ended December 31, 2021, 2020 and
2019, 308,554, 543,184 and 89,398 common shares were issued, respectively, at an average price of $27.71, $9.75 and
$6.09, respectively, under the employee stock purchase plan.
DigitalGlobe Equity Plan – The Employee Stock Option Plan (“DigitalGlobe Equity Plan”) was assumed as a result of
the DigitalGlobe acquisition, effective as of October 5, 2017. As of December 31, 2017, no further awards shall be
granted under the DigitalGlobe Equity Plan.
Stock Appreciation Rights
Certain awards issued under the 2017 Plan and Omnibus Plan remain outstanding as of December 31, 2021. The SARs
issued under the 2017 Plan and Omnibus Plan vest over a period of four years, in the amount of one-quarter each year,
and expire ten years from their grant date.
112
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
SARs Accounted for as Liability and Equity Classified Awards
A summary of the SARs accounted for as liability and equity classified awards for the year ended December 31, 2021 is
presented below:
SARs outstanding at December 31, 2020
Exercised
Cancelled or expired
SARs outstanding at December 31, 2021
SARs vested and expected to vest at December 31, 2021
SARs exercisable at December 31, 2021
Number of
Awards
1,192,747
(20,450)
(251,161)
921,136
921,136
918,559
Weighted
Average
Remaining
Contractual
Term (in
years)
Aggregate
Intrinsic
Value
—
5.28 $
5.28 $
—
5.28 $ 76,246
Weighted
Average
Exercise
Price
$ 53.93
48.91
61.29
51.13
51.13
$ 51.18
No SARs were granted during the years ended December 31, 2021 or 2020. There were 20,450 SARs exercised during
the year ended December 31, 2021. There were no SARs exercised during the year ended December 31, 2020. There
were 44,370 liability and 876,766 equity classified awards outstanding as of December 31, 2021.
As of December 31, 2021, total unrecognized compensation expense related to nonvested SARs was not significant.
Restricted Share Units
The Company issues RSUs to certain employees under the 2019 Plan. The RSUs vest over a period of either three years,
in the amount of one-third each year, or one year, and are settled either in cash or equity on the vesting date.
RSUs Accounted for as Liability Classified Awards
There were no RSU liability classified awards granted during the year ended December 31, 2021. During the fourth
quarter of 2020, the Company modified its outstanding 532,365 RSUs accounted for as liability classified awards to be
equity settled on the vesting date. This modification resulted in an incremental share-based compensation expense of $3
million on the modification date and affected 37 employees. As a result of the modification, there were no remaining
outstanding nonvested RSU liability classified awards as of December 31, 2020.
For the year ended December 31, 2020, the Company paid $4 million for the vesting of RSUs accounted for as liability
classified awards. No liability classified RSU awards vested for the year ended December 31, 2019.
RSUs Accounted for as Equity Classified Awards
As part of the acquisition of DigitalGlobe, the Company provided replacement RSUs for a certain portion of the
unvested RSUs previously granted to DigitalGlobe employees under the DigitalGlobe Equity Plan. The remaining
replacement RSUs fully vested in 2021.
113
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
A summary of the status of the Company’s nonvested RSU awards under the 2019 Plan, Omnibus Plan and the
DigitalGlobe Equity Plan as of December 31, 2021 and changes for the year ended December 31, 2021 is presented
below:
Nonvested RSUs at December 31, 2020
Granted
Vested
Cancelled or expired
Nonvested RSUs at December 31, 2021
Number of
Awards 1
2,949,969
807,628
(1,129,781)
(328,683)
2,299,133
Weighted Average
Grant Date
Fair Value 1
$
$
15.33
43.53
15.90
21.03
24.15
1 RSUs under the 2019 Plan
2 RSUs under the Omnibus Plan
3 RSUs under the DigitalGlobe Equity Plan
Number of
Awards 2
70,373 $
—
(44,717)
(718)
24,938 $
Weighted Average
Grant Date
Fair Value 2
Number of
Awards 3
Weighted Average
Grant Date
Fair Value 3
12.41 26,316 $
—
—
16.98 (26,151)
(165)
23.10
3.99
- $
54.57
—
54.57
54.57
—
During the years ended December 31, 2021, 2020, and 2019, the total fair value of RSUs that vested was $20 million,
$14 million and $14 million, respectively. During the year ended December 31, 2021, there were 1,200,649 RSU awards
that vested.
As of December 31, 2021, total unrecognized compensation expense related to nonvested RSUs was $18 million and is
expected to be recognized over a weighted average remaining period of 0.8 years.
Performance Share Units
The Company issues PSUs to certain employees under the Omnibus Plan and 2019 Plan. The PSUs vest over a period of
three years from the beginning date of a pre-determined performance period to the extent the Company has met its
adjusted cash leverage (“ACL”) and total shareholder return (“TSR”) performance criteria during the performance
period. Each unit has the ability to earn up to two common shares and the total number of shares earned is based upon
both the ACL and TSR, which compares the Company's relative TSR performance against the total shareholder return of
the Russell 2000 index over the term of the award. Performance related to both the ACL and TSR can be 0-200%. The
total payout is the average of the ACL and TSR and the maximum payout percentage for all PSUs granted by the
Company is 200%. For PSUs granted in 2019, the payout for performance up to 100% will be in equity and any
performance greater than 100% will be paid in cash. For PSUs granted in 2020 and 2021, the payout for performance is
settled completely in equity.
A summary of the PSU awards for the year ended December 31, 2021 is presented below:
Nonvested PSUs at December 31, 2020
Granted
Vested
Cancelled or expired
Nonvested PSUs at December 31, 2021
Weighted Average
Number of
Awards
1,040,680 $
155,902
(223,053)
(69,964)
903,565 $
Grant Date
Fair Value
11.76
61.93
4.73
14.88
20.42
The Company paid $8 million and $3 million from the vesting of PSUs for the years ended December 31, 2021 and
2020, respectively. There were no vesting of PSU awards for the year ended December 31, 2019.
114
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
As of December 31, 2021, total unrecognized compensation expense related to nonvested PSUs was $7 million and is
expected to be recognized over a weighted average remaining period of 0.8 years.
Deferred Share Units
A summary of the DSU awards for the year ended December 31, 2021 is presented below:
DSUs outstanding at December 31, 2020
Issued
Redeemed
DSUs outstanding at December 31, 2021
1 References to “C$” refer to Canadian currency.
Number of
Awards
32,895 C$
—
—
32,895 C$
Weighted
Average
Issuance Price
56.01
—
—
56.01
There were no DSUs redeemed for the year ended December 31, 2021. The total intrinsic value of redeemed DSUs was
not material during the year ended December 31, 2020. There were 32,715 DSUs and 41,993 DSUs redeemed for the
years ended December 31, 2020 and 2019, respectively.
Expense related to DSUs is recognized fully as stock-based compensation expense at the time they are issued. There
were no DSUs issued for the years ended December 31, 2021 or 2020.
Stock-based compensation expense
The following table presents stock-based compensation expense (benefit) from continuing operations included in the
Company’s Consolidated Statements of Operations:
Classification
Year Ended December 31,
2020
2021
2019
Stock-based compensation
expense
Selling, general, and administrative
expense, Product costs, and Service costs
$
45
$
43
$
20
Valuation of stock-based compensation awards
Valuation of Liability Classified SARs
The fair value of the SARs were estimated at each reporting period using the Black-Scholes option pricing model with
the following weighted average assumptions:
Risk-free interest rate
Dividend yield
Volatility
Expected lives (in years)
1 No liability classified SARs were granted in 2021 or 2020.
115
2021 1
2019
Year Ended December 31,
2020 1
— % 1.7 - 1.9 %
0.5 %
— %
— % 57 - 130 %
—
— %
— %
— %
—
0.2 - 4.6
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Valuation of Equity Classified SARs and DSUs
The fair value of equity classified SARs and DSUs are estimated on the date of the grant or the date of accounting
reclassification using the Black-Scholes option pricing model. There were no equity classified SARs or DSUs granted
for the years ended December 31, 2021, 2020 and 2019.
Valuation of PSUs and RSUs
The fair value of PSUs not subject to a market condition (ACL) and equity classified RSUs is determined based on the
closing price of the Company’s common stock on the grant date.
PSUs that are subject to the market condition (TSR) are valued using a Monte Carlo simulation model, which requires
certain assumptions, including the risk-free interest rate, expected volatility and the expected term of the award. The
risk-free interest rate used in the Monte Carlo simulation model is based on zero-coupon yields implied by U.S. Treasury
issues with remaining terms similar to the performance period on the PSUs. The performance period of the PSUs
represents the period of time between the PSU grant date and the end of the performance period. Expected volatility is
based on historical data of the Company and peer companies over the most recent time period equal to the performance
period.
For PSU grants during the years ended December 31, 2021, 2020 and 2019 the assumptions used in the Monte Carlo
simulation are as follows:
Risk-free interest rate
Dividend yield
Volatility
Expected lives (in years)
Year Ended December 31,
2020
2019
2021
0.3 %
0.1 %
98 - 104 %
2.6 - 2.8
0.9 % 2.2 - 2.3 %
0.3 % 0.5 - 0.9 %
79 %
63 - 67 %
2.8
2.9 - 3.0
The risk-free interest rate for 2021, 2020 and 2019 is based on the U.S. Treasury yield with the remaining term equal to
the expected life assumed at the date of the grant. The dividend yield is based on the expected annual dividend yield at
date of grant. The expected lives are based on the Company’s actual historical exercise experience. Volatility is
calculated using a rate based upon the historical volatility of the Company’s common stock.
Forfeitures are estimated at the time of grant based upon historical information. Forfeitures will be revised, if necessary,
in subsequent periods if actual forfeitures differ from estimates.
21. INCOME TAXES
The amounts disclosed within the income tax footnote represent those attributable to continuing operations.
The components of income (loss) before income taxes were:
U.S.
Non-U.S.
Income (loss) before taxes
Year Ended December 31,
2020
2021
2019
$
$
25 $
8
33 $
(69) $
—
(69) $
77
—
77
116
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Income tax (benefit) expense is comprised of the following:
Current tax (benefit) expense
Federal
State
Non-U.S.
Deferred tax benefit
Federal
State
Non-U.S.
Income tax (benefit) expense
Year Ended December 31,
2020
2021
2019
$
$
(12) $
(1)
1
(12)
(1)
—
—
(1)
(13) $
(5) $
—
—
(5)
(17)
—
—
(17)
(22) $
5
—
—
5
—
—
—
—
5
A reconciliation of the U.S. federal tax rate to the Company’s effective income tax rate is as follows:
U.S. statutory income tax rate
Expected income tax (benefit) expense at statutory rate
State tax (net of federal benefit)
Non-deductible expenses
Tax on international operations
Change in valuation allowance
Base Erosion and Anti-Abuse Tax
Outside basis difference in assets held for sale
Tax credits
Stock-based compensation
Remeasurement of Vricon equity interest
Other
Income tax (benefit) expense
Effective income tax rate
Year Ended December 31,
2020
2019
2021
21 %
7
$
(1)
2
—
(10)
(13)
—
1
1
—
—
(13)
$
(39)%
21 %
(14) $
—
2
—
49
(5)
(39)
(3)
6
(18)
—
(22) $
32 %
21 %
16
—
12
(1)
(108)
5
78
(1)
3
—
1
5
6 %
$
$
117
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
Significant components of deferred tax assets and liabilities are as follows:
Tax benefit of losses carried forward
Interest expense carried forward
Tax credits
Construction contract liabilities
Trade and other payables
Employee benefits
Unrealized gains and losses
Leasing transactions
Other
Deferred tax assets
Valuation allowance
Deferred tax assets, net of valuation allowance
Construction contract liabilities
Property, plant and equipment
Goodwill and intangibles
Outside basis difference in assets held for sale
Leasing transactions
Other
Deferred tax liabilities
Deferred tax assets, net
Year Ended December 31,
2020
2021
2019
$
153 $
32
81
—
41
41
3
51
—
402
(215)
187
(5)
(64)
(81)
—
(35)
—
(185)
209 $
—
84
—
35
52
20
55
1
456
(228)
228
(10)
(72)
(106)
—
(38)
—
(226)
$
2 $
2 $
219
27
75
94
9
41
6
61
18
550
(231)
319
—
(66)
(124)
(78)
(43)
(9)
(320)
(1)
The Company assesses the deferred tax assets for recoverability and, based upon all available evidence, establishes a
valuation allowance to reduce the deferred tax assets to the amount that is more-likely-than-not realizable. The valuation
allowance decreased $13 million from December 31, 2020 to December 31, 2021. This decrease was primarily due to the
impact of current year operations and adjustments to prior year deferred taxes.
During 2019, in connection with the MDA Transaction, the Company re-evaluated its prior permanent reinvestment
assertion and concluded that it could no longer assert that the basis difference related to its investment was permanently
reinvested. Accordingly, the Company established a deferred tax liability of approximately $78 million on the taxable
temporary difference associated with its investment. In connection with the completion of the MDA Transaction, taxable
gain was recognized in 2020 resulting in a release of the taxable temporary difference associated with its investment.
As of December 31, 2021, the Company has approximately $520 million, $874 million, and $12 million of federal, state
and non-U.S. net operating loss (“NOL”) carryforwards.
The following table summarizes the NOL carryforwards by jurisdiction:
Federal
State
Non-U.S.
Expiration Period
2036 - 2037
None
2025 - 2040
None
None
$
Year Ended
December 31, 2021
273
247
713
161
12
118
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
The Company also has U.S. federal and state tax credits, net of unrecognized tax benefits, carried forward of $71 million
and $9 million as of December 31, 2021, relating to research and development expenditures set to expire between 2022
and 2041 and state research credits with no expiration. Additionally, the Company has U.S. foreign tax credits carried
forward of $3 million set to expire between 2022 and 2026.
The Company has evaluated its tax positions and has determined that it has certain unrecognized tax benefits.
Accordingly, the Company has reduced certain tax attributes to the extent they would be utilized to offset an
unrecognized tax benefit. The following table summarizes the changes in unrecognized tax benefits:
Balance, beginning of year
Gross increases related to prior period tax positions
Gross increases related to current period tax positions
Gross decreases related to prior period tax positions
Balance, end of year
Year Ended December 31,
2020
2021
2019
$
$
9 $
7
1
—
17 $
7 $
2
1
(1)
9 $
—
6
1
—
7
As of December 31, 2021, there were $17 million of unrecognized tax benefits that, if recognized, would be offset by
changes in the deferred tax assets. It is not anticipated that a material increase or reduction of unrecognized tax benefits
will occur within the next twelve months.
The Company records interest and penalties accrued or recovered in relation to unrecognized tax benefits in income tax
expense. The Company has not recognized any interest and penalties in the three-year comparative period due to
available tax attributes.
The Company and its subsidiaries file income tax returns in the United States and various foreign jurisdictions. We are
not currently under any income tax examinations. The Company is open to federal and state income tax examinations
until the applicable statute of limitations expires, generally three years after tax return filing; however, the ability for the
taxing authority to adjust tax attribute carryforwards will continue until generally three years after tax attribute
utilization.
119
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
22. NET INCOME (LOSS) PER COMMON SHARE
The following table includes the calculation of basic and diluted net income (loss) per common share:
Income (loss) from continuing operations
Income from discontinued operations, net of tax
Net income
Weighted average number of common shares outstanding-basic
Weighted dilutive effect of equity awards
Weighted average number of common shares outstanding-diluted
Basic net income per common share:
Income (loss) from continuing operations
Income from discontinued operations, net of tax
Basic net income per common share
Diluted net income per common share:
Income (loss) from continuing operations
Income from discontinued operations, net of tax
Diluted net income per common share
Year Ended December 31,
2020
2021
2019
$
$
$
$
$
$
46 $
—
46 $
(46)
349
303
$
$
70.6
2.6
73.2
60.7
—
60.7
0.65 $
—
0.65 $
(0.76) $
5.75
4.99 $
0.63 $
—
0.63 $
(0.76) $
5.75
4.99 $
83
26
109
59.6
0.6
60.2
1.39
0.44
1.83
1.38
0.43
1.81
The weighted average number of common shares outstanding for the year ended December 31, 2021 includes 10 million
shares of the Company’s common stock issued in connection with the Offering completed on March 22, 2021. See Note
15 for further details.
For the years ended December 31, 2021, 2020 and 2019 approximately 1 million, 4 million and 2 million awards,
respectively, were excluded from the diluted weighted average number of ordinary common shares outstanding
calculation because their effect would have been anti-dilutive.
23. COMMITMENTS AND CONTINGENCIES
Contingencies in the Normal Course of Business
Satellite construction contracts may include performance incentives whereby payment for a portion of the purchase price
of the satellite is contingent upon in-orbit performance of the satellite. The Company’s ultimate receipt of orbital
performance incentives is subject to the continued performance of its satellites generally over the contractually stipulated
life of the satellites. A complete or partial loss of a satellite’s functionality can result in loss of orbital receivable
payments or repayment of amounts received by the Company under a warranty payback arrangement. The Company
generally receives the present value of the orbital receivables if there is a launch failure or a failure caused by a customer
error, but will forfeit some or all of the orbital receivables if the loss is caused by satellite failure or as a result of
Company error. The Company recognizes orbital performance incentives in the financial statements based on the
amounts that are expected to be received and believes that it will not incur a material loss relating to the incentives
recognized. With respect to the Company’s securitized liability for the orbital receivables, upon the occurrence of an
event of default under the securitization facility agreement or upon the occurrence of limited events, the Company may
be required to repurchase on demand any effected receivables at their then net present value.
120
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
The Company may incur liquidated damages on programs as a result of delays due to slippage, or for programs which
fail to meet all milestone requirements as outlined within the contractual arrangements with customers. Losses on
programs related to liquidated damages result in a reduction of revenue. Changes in estimates related to contracts
accounted for using the cost-to-cost method are recognized in the period in which such changes are made for the
inception-to-date effect of the changes. Unrecoverable costs on contracts that are expected to be incurred in future
periods are recorded in program cost in the current period. Additionally, construction contracts may have termination for
default clauses, which if triggered, could result in potential losses and legal disputes.
The Company enters into agreements in the ordinary course of business with resellers and others. Most of these
agreements require the Company to indemnify the other party against third-party claims alleging that one of its products
infringes or misappropriates a patent, copyright, trademark, trade secret or other intellectual property right. Certain of
these agreements require the Company to indemnify the other party against claims relating to property damage, personal
injury or acts or omissions by the Company, its employees, agents or representatives.
From time to time, the Company has made guarantees regarding the performance of its systems to its customers. Some
of these agreements do not limit the maximum potential future payments the Company could be obligated to make. The
Company evaluates and estimates potential losses from such indemnification based on the likelihood that the future
event will occur. The Company has not incurred any material costs as a result of such obligations and has not accrued
any liabilities related to such indemnification and guarantees in the Consolidated Financial Statements.
The Company has entered into industrial cooperation agreements, sometimes referred to as offset agreements, as a
condition to entering into contracts for its products and services from certain customers in foreign countries. These
agreements are designed to return economic value to the foreign country and may be satisfied through activities that do
not require a direct cash payment, including transferring technology and providing manufacturing, training and other
consulting support to in-country projects. These agreements may provide for penalties in the event the Company fails to
perform in accordance with offset requirements. The Company has historically not been required to pay any such
penalties.
Risks and uncertainties related to COVID-19
The near and long-term impacts of the current pandemic on the cost and schedule of the numerous programs in the
Company’s existing backlog and the timing of new awards remain uncertain. The Company is observing stress in its
supplier base inside and outside the U.S. and will continue to monitor and assess the actual and potential COVID-19
impacts on employees, customers, suppliers and the productivity of the work being done, all of which to some extent
could affect revenues, estimated costs to complete projects, earnings and cash flow. The Company has received some
force majeure claims from suppliers related to COVID-19; however, at this time the Company does not expect the claims
to result in a material financial impact.
In many instances, COVID-19 represents a force majeure event and as such, the Company has notified certain customers
that it will be exercising its legal rights, and in some instances the Company has made claims exercising such rights,
given the uncertain nature of the current pandemic and the near and long-term impacts on the cost and schedule of the
numerous programs in the existing backlog.
Legal proceedings
On January 14, 2019, a Maxar stockholder filed a putative class action lawsuit captioned Oregon Laborers Employers
Pension Trust Fund, et al. v. Maxar Technologies Inc., No. 1:19-cv-00124-WJM-SKC in the United States District Court
for the District of Colorado (“Colorado Action”), naming Maxar and members of management as defendants alleging,
among other things, that the Company’s public disclosures were deficient in violation of the federal securities laws and
121
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
seeking monetary damages. On October 7, 2019, the lead plaintiff filed a consolidated amended complaint alleging
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against the Company and members of
management in connection with the Company’s public disclosures between March 26, 2018 and January 6, 2019. The
consolidated complaint alleges that the Company’s statements regarding the AMOS-8 contract, accounting for its GEO
communications assets and WorldView-4 were allegedly false and/or misleading during the class period. On September
11, 2020, the court granted in part, and denied in part, defendants’ motion to dismiss. On July 16, 2021, the court in the
Colorado Action certified a class consisting of investors who purchased or acquired Maxar stock between May 9, 2018
and October 30, 2018, inclusive. Also, in January 2019, a Maxar stockholder resident in Canada issued a putative class
action lawsuit captioned Charles O’Brien v. Maxar Technologies Inc., No. CV-19-00613564-00CP in the Ontario
Superior Court of Justice against Maxar and members of management claiming misrepresentations in Maxar’s public
disclosures and seeking monetary damages. On November 15, 2019, Mr. O’Brien and another Maxar stockholder
resident in Canada issued a new putative class action lawsuit captioned Charles O’Brien v. Maxar Technologies Inc.,
No. CV-19-00631107-00CP, naming Maxar and certain members of management and the board of directors as
defendants as well as Maxar’s auditor, KPMG LLP. On February 7, 2020, the January 2019 lawsuit was
discontinued. The Statement of Claim alleges that the Company’s statements regarding the AMOS-8 contract,
accounting for its GEO communications assets, and WorldView-4 were false and/or misleading during the class period
and claims damages of $700 million. On April 24, 2020, the plaintiffs served their motion record for leave under the
Securities Act (Ontario) and to certify the action as a class proceeding, which motion is currently pending. By order
dated September 23, 2021, the action against KPMG LLP was discontinued. The Company intends to vigorously defend
against these cases.
On October 21, 2019, a Maxar stockholder filed a putative class action lawsuit captioned McCurdy
v. Maxar Technologies Inc., et al., No. I9CV35070 in the Superior Court of the State of California, County of Santa
Clara, naming Maxar, and certain members of management and the board of directors as defendants. The lawsuit alleges
violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 in connection with the Company’s June 2, 2017
Registration Statement and Prospectus (“Offering Materials”) filed in anticipation of its October 5, 2017 merger with
DigitalGlobe, Inc. (the “DigitalGlobe Merger”). On April 30, 2020, the plaintiff filed an amended complaint alleging the
same causes of action against the same set of defendants as set forth in his original complaint. The lawsuit is based upon
many of the same underlying factual allegations as the Colorado Action. Specifically, the lawsuit alleges the Company’s
statements regarding its accounting methods and risk factors, including those related to the GEO communications
business, were false and/or misleading when made. On January 24, 2021, the court granted in part, and denied in part,
defendants’ motion to dismiss. On August 20, 2021, the court certified a class consisting of investors who acquired
Maxar stock in exchange for DigitalGlobe stock pursuant to the Offering Materials issued in connection with the
DigitalGlobe Merger. The Company intends to vigorously defend against this lawsuit.
On November 14, 2019, a derivative action was filed against Maxar and certain current and former members of
management and the board of directors in United States District Court for the District of Delaware, captioned as Dorling,
Derivatively on Behalf of Nominal Defendant Maxar Technologies Inc. v. Lance, et al., No. 19-cv-02134-UNA. On
September 18, 2020, another purported derivative action was filed in the same court against Maxar and certain current
and former members of management and the board of directors, captioned as Golub, Derivatively on Behalf of Maxar
Technologies Inc. v. Lance, et al., No. 20-cv-01251-UNA. Both complaints concern the same factual allegations as
asserted in the Colorado Action. The court has consolidated and stayed both derivative cases.
On September 15, 2021, a derivative action was filed against Maxar and certain current and former members of
management and the board of directors in the Court of Chancery of the State of Delaware, captioned as Egan, on behalf
of Maxar Technologies, Inc., v. Lance et al., C.A. No. 2021-0796-PAF. The complaint concerns the same factual
allegations as asserted in the Colorado Action. The action is currently stayed by stipulation of the parties.
The Company is a party to various other legal proceedings and claims that arise in the ordinary course of business as
either a plaintiff or defendant. As a matter of course, the Company is prepared both to litigate these matters to judgment,
122
MAXAR TECHNOLOGIES INC.
Notes to Consolidated Financial Statements Continued
(Tabular amounts in millions of dollars, unless otherwise noted)
as well as to evaluate and consider all reasonable settlement opportunities. The Company establishes accrued liabilities
for these matters where losses are deemed probable and reasonably estimable. The outcome of any of these other
proceedings, either individually or in the aggregate, is not expected to have a material adverse effect on the Company’s
financial position, results of operations or liquidity. The Company expenses legal fees related to contingencies as
incurred.
The Company maintains insurance policies for settlements and judgments, as well as legal defense costs, for lawsuits
such as those described in the preceding paragraphs, although the amount of insurance coverage that we maintain may
not be adequate to cover all claims or liabilities. In addition, provisions of the Company’s Certificate of Incorporation,
Bylaws and indemnification agreements entered into with current and former directors and officers require the
Company, among other things, to indemnify these directors and officers against certain liabilities that may arise by
reason of their status or service as directors or officers and to advance expenses to such directors or officers in
connection therewith.
24. SUPPLEMENTAL CASH FLOW
Selected cash payments and non-cash activities are as follows:
Supplemental cash flow information:
Cash paid for interest
Income tax payments, net of (refunds)
Supplemental non-cash investing and financing activities:
Accrued capital expenditures
Year Ended December 31,
2020
2021
2019
$
$
133 $
(14)
205 $
1
14 $
13 $
193
1
19
123
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We performed an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2021.
The evaluation was performed with the participation of senior management of each business segment and key corporate
functions, under the supervision of the Chief Executive Officer (CEO) and Chief Financial Officer (CFO). Based on this
evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31,
2021.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined
in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with United States generally accepted accounting principles.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based
on the criteria set by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal
Control—Integrated Framework (2013). Based on this assessment, management concluded that our internal control over
financial reporting was effective as of December 31, 2021.
Our independent registered public accounting firm has issued a report on the effectiveness of our internal control over
financial reporting, which is included in this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting that occurred during the quarter ended December
31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
Limitations on the Effectiveness of Controls
Because of the inherent limitations in a cost-effective control system, any control system, no matter how well designed
and operated, can provide only reasonable, not absolute, assurance that it will prevent or detect all misstatements, due to
error or fraud, from occurring in the Consolidated Financial Statements. Additionally, management is required to use
judgment in evaluating controls and procedures.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
124
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information required under Item 10 will be included in the Proxy Statement for the 2022 Annual Meeting of
Stockholders and is incorporated herein by reference.
CODE OF ETHICS
Our Board of Directors has adopted a Code of Ethics and Business Conduct that governs our Board of Directors, senior
officers (including our Chief Executive Officer and Chief Financial Officer), and employees. Copies of our Code of
Ethics and Business Conduct can be found on the Company Information page of our website under Investors, Corporate
Governance, Governance Documents at http://investor.maxar.com. We will post to our website any amendments and
waivers to the Code of Ethics and Business Conduct that are required to be disclosed by the rules of either the SEC, the
NYSE, or the TSX.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 will be included in the Proxy Statement for the 2022 Annual Meeting of
Shareholders and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by Item 12 will be included in the Proxy Statement for the 2022 Annual Meeting of
Shareholders and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by Item 13 will be included in the Proxy Statement for the 2022 Annual Meeting of
Shareholders and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by Item 14 will be included in the Proxy Statement for the 2022 Annual Meeting of
Shareholders and is incorporated herein by reference.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Documents filed as part of this Annual Report on Form 10-K:
1) All financial statements:
Report of Independent Registered Public Accounting Firm
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and
2019
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Changes in Stockholders Equity for the years ended December 31, 2021, 2020
and 2019
Page
65
69
70
71
72
73
125
2) Financial statement schedules:
Financial statement schedules are omitted because they are not applicable or the required information is
shown in our Consolidated Financial Statements or the notes thereto.
3) Exhibits:
Exhibit No Exhibit Description
Form SEC File No.
Incorporated by Reference
Filed or
Furnished
Exhibit Filing Date Herewith
2.1
3.1
3.2
Stock Purchase Agreement by and Among
Maxar Technologies Inc., Maxar
Technologies Holdings Inc. and Neptune
Acquisition Inc., dated as of December 29,
2019
Amended and Restated Certificate of
Incorporation of Maxar Technologies Inc.,
as filed with the Secretary of the State of
Delaware.
Second Amended and Restated Bylaws of
Maxar Technologies Inc.
8-K 001-38228
2.1
12/30/2019
8-K 001-38228
3.1
1/2/19
8-K 001-38228
3.1
10/29/20
4(vi)1
Description of Securities Registered
Pursuant to Section 12 of the Exchange Act
10-K 001-38228
4.1
2/24/2021
4.1
4.2
4.3
4.4
4.5
4.6
Restated Credit Agreement by and among
Maxar Technologies Ltd., Royal Bank of
Canada and the Lenders named therein,
dated as of October 5, 2017.
First Amending Agreement dated as of
December 21, 2018 to the Restated Credit
Agreement dated as of October 5, 2017.
Second Amending Agreement dated as of
December 21, 2018 to the Restated Credit
Agreement dated as of October 5, 2017.
Third Amending Agreement dated as of
November 4, 2019 to the Restated Credit
Agreement dated as of October 5, 2017.
Fourth Amending Agreement dated as of
December 11, 2019 to the Restated Credit
Agreement dated as of October 5, 2017.
Fifth Amending Agreement dated as of
December 19, 2019 to the Restated Credit
Agreement dated as of October 5, 2017.
6-K 001-38228
10.1
10/16/17
10-K 001-38228
4.2
3/1/19
6-K 001-38228
99.2
12/21/18
8-K
001-38228
4.2
12/11/19
10-K 001-38226
4.5
3/2/20
10-K 001-38228
4.6
3/2/20
126
Exhibit No Exhibit Description
Form SEC File No.
Incorporated by Reference
Filed or
Furnished
Exhibit Filing Date Herewith
4.7
4.8
4.9
4.10
4.11
10.1*
Sixth Amending Agreement dated as of
April 1, 2020 to the Restated Credit
Agreement dated as of October 5, 2017.
Indenture, dated as of December 2, 2019
(Notes due 2023).
Supplemental Indenture No. 1, dated as of
December 11, 2019 (Notes due 2023).
Supplemental Indenture No. 2, dated as of
May 21, 2020 (Notes due 2023).
10-Q 001-38228
4.2
8/5/20
8-K
001-38228
4.1
12/2/19
8-K
001-38228
4.1
12/11/19
10-Q 001-38228
4.1
8/5/20
Indenture, dated as of June 25, 2020 (Notes
due 2027).
8-K
001-38228
4.1
6/26/20
Form of Executive Change in Control and
Severance Agreement
10-Q 001-38228
10.2
5/11/20
10.2*
Form of Indemnification Agreement.
8-K
001-38228
10.12
1/2/19
10.3.1*
Biggs Porter Employee Term Sheet.
10-K 001-38228
10.3.1
3/1/19
10.3.2*
Amended and Restated Employment
Agreement of Daniel Jablonsky.
10-Q 001-38228
10.1
5/11/20
10.4*
Maxar Technologies Ltd. Omnibus Equity
Incentive Plan.
S-8
333-220853
4.3
10/6/17
10.4.1*
Amendment to the Maxar Technologies
Ltd. Omnibus Equity Incentive Plan.
S-8
001-38228
4.3
5/15/18
10.4.2*
Amendment to the Maxar Technologies
Ltd. Omnibus Equity Incentive Plan.
S-8
333-219296
333-220853
333-224934
4.13
1/2/19
10.4.3*
10.4.4*
10.4.5*
10.4.6*
10.5*
Form of LTIP Award Omnibus Equity
Incentive Plan (U.S. Employees).
Form of LTIP Award Omnibus Equity
Incentive Plan (Canadian Employees).
Form of RSU Award Omnibus Equity
Incentive Plan (U.S. Employees).
Form of RSU Award Omnibus Equity
Incentive Plan (Canadian Employees).
10-K 001-38228
10.4.3
3/1/19
10-K 00138228
10.4.4
3/1/19
10-K 001-38228
10.4.5
3/1/19
10-K 001-38228
10.4.6
3/1/19
Maxar Technologies Ltd. Employee Stock
Option Plan.
S-8
333-220853
4.2
10/6/17
127
Exhibit No Exhibit Description
Form SEC File No.
Incorporated by Reference
Filed or
Furnished
Exhibit Filing Date Herewith
10.5.1*
10.5.2*
10.5.3*
10.6*
10.6.1*
10.7*
10.8*
10.8.1*
10.8.2*
10.8.3*
10.8.4*
10.8.5*
10.8.6*
10.8.7*
10.8.8*
10.8.9*
Form of Restricted Share Unit Award
Agreement Employee Stock Option Plan.
S-8
333-220853
4.5
10/6/17
Form of Restricted Share Unit Award
Agreement.
Amendment to Restricted Share Unit
Award Agreement.
S-8
333-220853
4.6
10/6/17
S-8
333-220853
4.7
10/6/17
MacDonald, Dettwiler and Associates Ltd.
2017 Long-Term Incentive Plan.
S-8
333-220853
4.4
10/6/17
Amendment to MacDonald, Dettwiler and
Associates Ltd. 2017 Long-Term Incentive
Plan.
S-8
333-219296
333-220853
333-224934
4.14
1/2/19
Form of Restricted Share Unit Award
Agreement for Non-U.S. Grantees.
Maxar Technologies Inc. 2019 Incentive
Award Plan.
Form of PSU Award Grant Notice – 2019
Plan.
Form of RSU Award Grant Notice – 2019
Plan.
10-Q 001-34299
10.5
5/2/17
S-8
333-231296
4.3
5/8/19
10-Q 001-38228
10.4
5/9/19
10-Q 001-38228
10.5
5/9/19
Form of Stock Option Grant Notice – 2019
Plan.
10-Q 001-38228
10.6
5/9/19
Form of RSU Award Grant Notice – 1 year
vesting – 2019 Plan.
10-Q 001-38228
10.7
5/9/19
Form of Cash-Settled RSU Award Grant
Notice.
Form of Cash Incentive Award Grant
Notice.
First Amendment to the Maxar
Technologies Inc. 2019 Incentive Award
Plan.
Form of Performance Stock Unit Award
Grant Notice - 2020
Form of Performance Stock Unit Award
Grant Notice - 2021
10-Q 001-38228
10.8
5/9/19
10-Q 001-38228
10.9
5/9/19
8-K
001-38228
10.1
5/15/20
10-Q 001-38228
10.3
5/11/20
10-Q 001-38228
10.1
5/3/21
128
Exhibit No Exhibit Description
Form SEC File No.
Incorporated by Reference
Filed or
Furnished
Exhibit Filing Date Herewith
10.8.10*
Second Amendment to the Maxar
Technologies Inc. 2019 Incentive Award
Plan
8-K
001-38228
10.1
5/13/21
10.9
Maxar Technologies Inc. Employee Stock
Purchase Plan.
S-8
333-231296
4.4
5/8/19
10.10#
Limited Recourse Receivables Purchase
Agreement dated September 16, 2016
among Space Systems/Loral, LLC,
MacDonald, Dettwiler and Associates Ltd.,
and ING Bank N.V.
F-
4/A
21.1
Subsidiaries of the Registrant.
001-38228
10.4
6/2/17
23.1
31.1
31.2
32.1
†
32.2
†
101+
Consent of KPMG LLP, Independent
Registered Public Accounting Firm.
Certification of the Company’s Chief
Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Certification of the Company’s Chief
Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Certification of the Company’s Chief
Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
Certification of the Company’s Chief
Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
The following materials for the Maxar
Technologies Inc. Annual Report on Form
10-K for the year ended December 31,
2021, formatted in Inline eXtensible
Business Reporting Language (iXBRL):
(i.) Audited Consolidated Statements of
Operations
(ii.) Audited Consolidated Balance Sheets
(iii.) Audited Consolidated Statements of
Cash Flows
(iv.) Audited Consolidated Statements of
Stockholders’ Equity and Statement of
Comprehensive
Income (Loss)
(v.) Related notes, tagged or blocks of text
129
X
X
X
X
X
X
X
Exhibit No Exhibit Description
Form SEC File No.
Incorporated by Reference
Filed or
Furnished
Exhibit Filing Date Herewith
104
Cover Page Interactive Data File (the cover
page XBRL tags are embedded in the
Inline XBRL document)
# Certain portions of this exhibit have been omitted by redacting a portion of the text. This exhibit has been filed
separately with the U.S. Securities and Exchange Commission pursuant to a request for confidential treatment.
* Management contract or compensatory plan arrangement.
† Furnished herewith
+ XBRL (eXtensible Business Reporting Language) Information is furnished and not filed or a part of a registration
statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability
under these sections.
ITEM 16. FORM 10-K SUMMARY
None.
130
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 22, 2022
Maxar Technologies Inc.
By:/s/ Biggs C. Porter
Biggs C. Porter
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized
Officer)
131
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following
persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Daniel L. Jablonsky
Daniel L. Jablonsky
President and Chief Executive Officer
(Principal Executive Officer),
Director
February 22, 2022
/s/ Biggs C. Porter
Biggs C. Porter
/s/ Carolyn K. Pittman
Carolyn K. Pittman
/s/ General Howell M. Estes III
General Howell M. Estes III
/s/ Nick S. Cyprus
Nick S. Cyprus
/s/ Roxanne J. Decyk
Roxanne J. Decyk
/s/ Joanne O. Isham
Joanne O. Isham
/s/ General C. Robert Kehler
General C. Robert Kehler
/s/ Gilman Louie
Gilman Louie
/s/ Dr. L. Roger Mason, Jr.
Dr. L. Roger Mason, Jr.
/s/ Dr. Heather A. Wilson
Dr. Heather A. Wilson
/s/ Eric J. Zahler
Eric J. Zahler
/s/ Eddy Zervigon
Eddy Zervigon
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
Senior Vice President and Chief
Accounting Officer
(Principal Accounting Officer)
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
132
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Daniel Jablonsky, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Maxar Technologies Inc. for the year ended December 31,
2021 (the “registrant”),
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
By /s/ Daniel Jablonsky
Daniel Jablonsky
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 22, 2022
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Biggs Porter, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Maxar Technologies Inc. for the year ended December 31,
2021 (the “registrant”),
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
By /s/ Biggs Porter
Biggs Porter
Chief Financial Officer
(Principal Financial Officer)
Date: February 22, 2022
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Maxar Technologies Inc. (the “Company”) on Form 10-K for the year ended
December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel
Jablonsky, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. ss. 1350, as
adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
result of operations of the Company.
By /s/ Daniel Jablonsky
Daniel Jablonsky
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 22, 2022
This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange
Commission and is not to be incorporated by reference into any filing of Maxar Technologies Inc. under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of
the Report), irrespective of any general incorporation language contained in such filing.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report of Maxar Technologies Inc. (the “Company”) on Form 10-K for the year ended
December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Biggs
Porter, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to
ss. 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
result of operations of the Company.
By /s/ Biggs Porter
Biggs Porter
Chief Financial Officer
(Principal Financial Officer)
Date: February 22, 2022
This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange
Commission and is not to be incorporated by reference into any filing of Maxar Technologies Inc. under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of
the Report), irrespective of any general incorporation language contained in such filing.
STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative total shareholder return on our Common
Stock during the period October 5, 2017 to December 31, 2021, with the cumulative total return on the NYSE
Composite and with a selected peer group consisting of us and other companies we deem to be comparable. The
2021 peer group consists of the following publicly traded and government contracting companies: Booz Allen
Hamilton Holding Corp., CACI International Inc., Curtiss-Wright Corp., Fortinet Inc., HEICO Corp., Iridium
Communications Inc., Kratos Defense & Security Solutions Inc., ManTech International Corp., Mercury Systems
Inc., Moog Inc., OSI Systems Inc, Parsons Corp., Perficient Inc., Science Applications International Corp., Teledyne
Technologies Inc., Trimble Inc., Viasat Inc. and Virgin Galactic Holdings Inc. This graph assumes: (i) the
investment of $100 on October 5, 2017 in our common stock, the NYSE Composite Index and the peer group
identified above; and (ii) that dividends are reinvested.
COMPARISON OF 51 MONTH CUMULATIVE TOTAL RETURN*
Among Maxar Technologies Inc., the NYSE Composite Index,
2020 Peer Group and 2021 Peer Group
$300
$250
$200
$150
$100
$50
$0
Maxar Technologies Inc.
2020 Peer Group
NYSE Composite
2021 Peer Group
*$100 invested on October 5, 2017 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
The information under “Stock Performance Graph” is not deemed filed with the U.S. Securities and Exchange
Commission and is not to be incorporated by reference in any of our filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual
Report on Form 10-K and irrespective of any general incorporation language in those filings.
A message from Maxar CEO, dan jablonsky
I would like to take this opportunity to
highlight Maxar’s performance in 2021 and
the road ahead, and to remind investors
of our commitment to value creation and
purpose. In brief, we generated solid financial
performance, continued to execute on our
strategy, bolstered talent in key positions,
and improved our financial flexibility during
the year – all of which set us up well for
the future.
As a global leader in Earth Intelligence,
Maxar provides the highest commercial
resolution satellite imagery and derived data
available. We own and operate the world’s
most sophisticated Earth imaging satellite
constellation, delivering diverse and actionable
insights that help governments and innovative
industries conserve resources, expedite
operations, improve compliance and save lives.
In Space Infrastructure, we design, build,
integrate and test solutions for government
and commercial customers across multiple
mission sets, including space-based
communications, robotics, power and
propulsion, Earth observation, exploration
and on-orbit servicing and assembly.
1
TRANSFER AGENT
Computershare Trust Company, N.A.
462 South 4th Street, Suite 1600
Louisville, KY 40202
investor relations contact
Jason Gursky, VP Investor Relations
303-684-7660
investor@maxar.com
Our commitment to customers and their
critical missions remained unwavering as
we managed through the second year of the
COVID-19 pandemic, and we look forward to
both serving and growing with them in the
years to come. Our team members remain
passionate about the work we do and believe
strongly that our Earth Intelligence and Space
Infrastructure capabilities have the power to
change how we navigate and understand our
changing world and explore what’s beyond it.
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maxar.com