Maxar Technologies Reports Third Quarter 2019 Results

NON-GAAP FINANCIAL MEASURES

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

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

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

EBITDA and Adjusted EBITDA are not recognized terms under U.S. GAAP and may not be defined similarly by other companies. EBITDA and Adjusted EBITDA should not be considered alternatives to net (loss) income as indications of financial performance or as alternate to cash flows from operations as measures of liquidity. EBITDA and Adjusted EBITDA have limitations as an analytical tool and should not be considered in isolation or as a substitute for our results reported under U.S. GAAP. The table below reconciles our net (loss) income to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2019 and 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

2019

 

2018

($ millions)

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(26

)

 

$

(289

)

 

$

61

 

 

$

(314

)

Income tax expense (benefit)

 

 

3

 

 

 

(6

)

 

 

4

 

 

 

(47

)

Interest expense, net

 

 

50

 

 

 

52

 

 

 

148

 

 

 

155

 

Interest income

 

 

(1

)

 

 

 

 

 

(1

)

 

 

 

Depreciation and amortization

 

 

96

 

 

 

119

 

 

 

293

 

 

 

343

 

EBITDA

 

$

122

 

 

$

(124

)

 

$

505

 

 

$

137

 

Transaction and integration related expense

 

 

7

 

 

 

14

 

 

 

13

 

 

 

24

 

Restructuring

 

 

(1

)

 

 

2

 

 

 

21

 

 

 

15

 

Impairment losses, including inventory

 

 

 

 

 

213

 

 

 

15

 

 

 

213

 

Satellite insurance recovery

 

 

 

 

 

 

 

 

(183

)

 

 

 

CEO severance

 

 

 

 

 

 

 

 

3

 

 

 

 

Adjusted EBITDA

 

$

128

 

 

$

105

 

 

$

374

 

 

$

389

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

Space Systems

 

 

11

 

 

 

(7

)

 

 

49

 

 

 

34

 

Imagery

 

 

140

 

 

 

129

 

 

 

384

 

 

 

396

 

Services

 

 

9

 

 

 

9

 

 

 

22

 

 

 

19

 

Intersegment eliminations

 

 

(13

)

 

 

(7

)

 

 

(26

)

 

 

(16

)

Corporate and other expenses

 

 

(19

)

 

 

(19

)

 

 

(55

)

 

 

(44

)

Adjusted EBITDA

 

$

128

 

 

$

105

 

 

$

374

 

 

$

389

 


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