Maxar Technologies Inc. - Quarter Report: 2023 March (Form 10-Q)

March 31,

December 31,

Current portion

Non-current portion

Total securitization liabilities

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
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				83-2809420
(State or jurisdiction of incorporation or organization)				(IRS Employer Identification No.)


1300 W. 120^th Avenue, Westminster, Colorado		80234
(Address of principal executive offices)		(Zip Code)

303-684-7660

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock par value of $0.0001 per share

MAXR

New York Stock Exchange

Toronto Stock Exchange

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 of 1934 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 ☒	Accelerated Filer ☐	Non-accelerated Filer ☐	Smaller Reporting Company ☐ Emerging Growth Company ☐

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 financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 26, 2023, there were 75,838,570 shares of the registrant’s common stock, at $0.0001 par value, outstanding.

Table of Contents

Maxar Technologies Inc.

Quarterly Report on Form 10-Q

For the period ended March 31, 2023

HIDDEN ROW
Item Number
Table of Contents
PART I
1.	Financial Statements	3
	Unaudited Condensed Consolidated Statements of Operations	3
	Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income	4
	Unaudited Condensed Consolidated Balance Sheets	5
	Unaudited Condensed Consolidated Statements of Cash Flows	6
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity	7
	Notes to the Unaudited Condensed Consolidated Financial Statements	8
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
3.	Quantitative and Qualitative Disclosures about Market Risk	37
4.	Controls and Procedures	37
PART II
1.	Legal Proceedings	38
1A.	Risk Factors	38
2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
3.	Defaults Upon Senior Securities	38
4.	Mine Safety Disclosures	38
5.	Other Information	38
6.	Exhibits	38
	Signatures	41

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PART I. FINANCIAL INFORMATION

MAXAR TECHNOLOGIES INC.

Unaudited Condensed Consolidated Statements of Operations

(In millions, except per share amounts)


	Three Months Ended
	March 31,
	2023		2022
Revenues:
Product	$	176	$	154
Service		243		251
Total revenues		419		405
Costs and expenses:
Product costs, excluding depreciation and amortization		147		127
Service costs, excluding depreciation and amortization		109		93
Selling, general and administrative		117		104
Depreciation and amortization		39		68
Gain on sale of assets		(6)		—
Operating income		13		13
Interest expense, net		29		23
Other income, net		(2)		(3)
Loss before taxes		(14)		(7)
Income tax expense (benefit)		—		—
Net loss	$	(14)	$	(7)

Net loss per common share:
Basic	$	(0.19)	$	(0.10)
Diluted	$	(0.19)	$	(0.10)

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.

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MAXAR TECHNOLOGIES INC.

Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income

(In millions)


	Three Months Ended
	March 31,
	2023		2022
Net loss	$	(14)	$	(7)
Other comprehensive (loss) income, net of tax:
Unrealized (loss) gain on interest rate swaps		(1)		8
Reclassification of (gain) loss to net income		(7)		3
Other comprehensive (loss) income, net of tax		(8)		11
Comprehensive (loss) income, net of tax	$	(22)	$	4

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.

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MAXAR TECHNOLOGIES INC.

Unaudited Condensed Consolidated Balance Sheets

(In millions)


	March 31,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	26	$	52
Trade and other receivables, net		379		380
Inventory, net		45		46
Advances to suppliers		39		25
Prepaid assets		32		35
Other current assets		107		70
Total current assets		628		608
Non-current assets:
Orbital receivables, net		302		307
Property, plant and equipment, net		1,113		1,094
Intangible assets, net		722		718
Non-current operating lease assets		131		133
Goodwill		1,649		1,649
Other non-current assets		95		97
Total assets	$	4,640	$	4,606
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	92	$	87
Accrued liabilities		87		76
Accrued compensation and benefits		52		77
Contract liabilities		387		364
Current portion of long-term debt		21		22
Current operating lease liabilities		35		34
Other current liabilities		105		76
Total current liabilities		779		736
Non-current liabilities:
Pension and other postretirement benefits		106		106
Operating lease liabilities		131		133
Long-term debt		2,193		2,172
Other non-current liabilities		68		71
Total liabilities		3,277		3,218
Commitments and contingencies
Stockholders’ equity:
Common stock ($0.0001 par value, 240 million common shares authorized; 75.5 million and 74.7 million issued and outstanding at March 31, 2023 and December 31, 2022, respectively)		—		—
Additional paid-in capital		2,273		2,276
Accumulated deficit		(887)		(873)
Accumulated other comprehensive loss		(24)		(16)
Total Maxar stockholders' equity		1,362		1,387
Noncontrolling interest		1		1
Total stockholders' equity		1,363		1,388
Total liabilities and stockholders' equity	$	4,640	$	4,606

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.

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MAXAR TECHNOLOGIES INC.

Unaudited Condensed Consolidated Statements of Cash Flows

(In millions)


	Three Months Ended
	March 31,
	2023		2022
Cash flows provided by (used in):
Operating activities:
Net loss	$	(14)	$	(7)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		39		68
Stock-based compensation expense		9		15
Amortization of debt issuance costs and other non-cash interest expense		5		3
Gain on sale of asset		(6)		—
Other		(2)		5
Changes in operating assets and liabilities:
Trade and other receivables, net		8		29
Accounts payable and liabilities		(22)		(25)
Contract liabilities		23		(39)
Other		4		(1)
Cash provided by operating activities		44		48
Investing activities:
Purchase of property, plant and equipment and development or purchase of software		(63)		(64)
Sale of asset		6		—
Acquisition of investment		—		(2)
Cash used in investing activities		(57)		(66)
Financing activities:
Net proceeds from Revolving Credit Facility		20		—
Settlement of securitization liability		(4)		(4)
Repayments of long-term debt		(6)		(1)
Other		(12)		(2)
Cash used in financing activities		(2)		(7)
Decrease in cash, cash equivalents, and restricted cash		(15)		(25)
Cash, cash equivalents, and restricted cash, beginning of year		52		48
Cash, cash equivalents, and restricted cash, end of period	$	37	$	23

Reconciliation of cash flow information:
Cash and cash equivalents	$	26	$	22
Restricted cash included in prepaid and other current assets		11		1
Total cash, cash equivalents, and restricted cash	$	37	$	23

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.

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MAXAR TECHNOLOGIES INC.

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In millions, except per share amounts)

Three months ended March 31, 2023:


								Accumulated
								other				Total
	Common Stock			Additional		Accumulated		comprehensive		Noncontrolling		stockholders’
	Shares	Amount		paid-in capital		deficit		loss		interest		equity
Balance as of December 31, 2022	74.7	$	—	$	2,276	$	(873)	$	(16)	$	1	$	1,388
Common stock issued under employee stock purchase plan	0.8		—		—		—		—		—		—
Equity classified stock-based compensation expense	—		—		(3)		—		—		—		(3)
Dividends ($0.01 per common share)	—		—		—		—		—		—		—
Comprehensive loss	—		—		—		(14)		(8)		—		(22)
Balance as of March 31, 2023	75.5	$	—	$	2,273	$	(887)	$	(24)	$	1	$	1,363

Three months ended March 31, 2022:


								Accumulated
								other				Total
	Common Stock			Additional		Accumulated		comprehensive		Noncontrolling		stockholders’
	Shares	Amount		paid-in capital		deficit		income (loss)		interest		equity
Balance as of December 31, 2021	72.7	$	—	$	2,235	$	(720)	$	(53)	$	1	$	1,463
Common stock issued under employee stock purchase plan	0.1		—		2		—		—		—		2
Equity classified stock-based compensation expense	0.6		—		6		—		—		—		6
Dividends ($0.01 per common share)	—		—		—		—		—		—		—
Comprehensive (loss) income	—		—		—		(7)		11		—		4
Balance as of March 31, 2022	73.4	$	—	$	2,243	$	(727)	$	(42)	$	1	$	1,475

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed 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.”

As previously announced, on December 15, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with certain affiliates of funds advised by Advent International Corporation (“Advent”), pursuant to which, subject to the terms and conditions set forth therein, the outstanding shares of common stock of the Company will be acquired for $53.00 per share in an all-cash transaction. At a special meeting of Maxar stockholders held on April 19, 2023, our stockholders voted to adopt the Merger Agreement. We currently anticipate that the transaction will close in early May of 2023, subject to the satisfaction or waiver of the remaining closing conditions. Refer to the “Recent Developments” section of Part I, Item 2 for additional information regarding the Merger Agreement.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The Unaudited Condensed Consolidated Financial Statements include the accounts of Maxar Technologies Inc., and all consolidated subsidiary entities. The Company’s Unaudited Condensed 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 (“SEC”). All intercompany balances and transactions are eliminated on consolidation.

The Company’s Unaudited Condensed 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.

The Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K filed with the SEC. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. In management’s opinion, all adjustments of a normal recurring nature that are necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included.

Use of estimates, assumptions and judgments

The preparation of the Unaudited Condensed 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 period. Estimates have been prepared using the most current and best available information; however, actual results could differ materially from those estimates.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

Recent Accounting Guidance Adopted

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, 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 market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance was effective beginning on March 12, 2020, and the Company elected to apply the amendments beginning in the second quarter of 2022. On June 30, 2022, the Company amended its existing interest rate swaps that mature in June 2023 to modify the designated hedged interest rate risk from LIBOR to the Secured Overnight Financing Rate (“SOFR”) in connection with the Company's amendment and restatement of its Syndicated Credit Facility (as defined below) and elected to apply the contract modification optional expedient to the amendments and consider the amendments as a continuation of the existing contracts without performing an assessment that would otherwise be required under U.S. GAAP. See Note 8 for additional details regarding the amendments to the existing interest swaps.

3.	TRADE AND OTHER RECEIVABLES, NET


	March 31,		December 31,
	2023		2022
Billed	$	182	$	198
Unbilled		151		134
Total trade receivables		333		332
Orbital receivables, current portion		45		44
Other		2		4
Allowance for doubtful accounts		(1)		—
Trade and other receivables, net	$	379	$	380

The Company has orbital receivables from 13 customers for which the largest customer’s value represents 33% of the stated current and non-current balance sheet values as of both March 31, 2023 and December 31, 2022.

There have been no changes in the allowance for expected credit losses related to non-current orbital receivables for the three months ended March 31, 2023.

Securitization liabilities are as follows:

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

4.	INVENTORY, NET


	March 31,		December 31,
	2023		2022
Raw materials	$	37	$	44
Work in process		10		4
Total	$	47	$	48
Inventory reserve		(2)		(2)
Inventory, net	$	45	$	46

5.PROPERTY, PLANT AND EQUIPMENT, NET


	March 31,		December 31,
	2023		2022
Satellites	$	398	$	398
Equipment		212		209
Computer hardware		127		114
Leasehold improvements		95		95
Furniture and fixtures		17		17
Construction in process¹		874		855
Property, plant and equipment, at cost		1,723		1,688
Accumulated depreciation		(610)		(594)
Property, plant and equipment, net	$	1,113	$	1,094

¹Construction in process is primarily related to the construction of the Company’s WorldView Legion satellites.

Depreciation expense for property, plant and equipment was $18 million and $19 million for the three months ended March 31, 2023 and 2022, respectively.

6.	INTANGIBLE ASSETS


	March 31, 2023						December 31, 2022
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
Customer relationships	$	615	$	(245)	$	370	$	615	$	(234)	$	381
Software		483		(179)		304		461		(174)		287
Technologies		49		(15)		34		49		(14)		35
Trade names and other		28		(14)		14		28		(13)		15
Intangible assets	$	1,175	$	(453)	$	722	$	1,153	$	(435)	$	718

Amortization expense related to intangible assets was $21 million and $49 million for the three months ended March 31, 2023 and 2022.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

7.	LONG-TERM DEBT AND INTEREST EXPENSE, NET


	March 31,		December 31,
	2023		2022
Syndicated Credit Facility:
Revolving Credit Facility	$	145	$	125
Term Loan B		1,489		1,493
7.75% 2027 Notes		500		500
7.54% 2027 Notes		150		150
Deferred financing		19		19
Obligations under finance leases and other		5		5
Debt discount and issuance costs		(94)		(98)
Total long-term debt		2,214		2,194
Current portion of long-term debt		(21)		(22)
Non-current portion of long-term debt	$	2,193	$	2,172

Syndicated Credit Facility

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 June 2027 (“Revolving Credit Facility”) and (ii) a senior secured first lien term B facility in an aggregate principal amount of $1.5 billion maturing in June 2029, which was issued with an original issue discount of 4.50% (“Term Loan B”).

On June 14, 2022, the Company amended the terms of the Syndicated Credit Facility pursuant to an amended and restated credit agreement (“Amended and Restated Credit Agreement”). The maximum Consolidated Net Debt Leverage Ratio financial maintenance covenant permitted under the Amended and Restated Credit Agreement are (1) 5.00:1.00 for each fiscal quarter ending on or after March 31, 2023 through and including December 31, 2023 and (2) 4.50:1.00 for each fiscal quarter ending on or after March 31, 2024. The required level of the Interest Coverage Ratio maintenance covenant is 2.50:1.00 as of the last day of each fiscal quarter. As of March 31, 2023, the Company was in compliance with its debt covenants.

Borrowings under Term Loan B bear interest at a rate equal to, at the Company’s option, either Adjusted Term SOFR plus an applicable margin ranging from 4.00% to 4.25% or adjusted base rate (“ABR”) plus an applicable margin ranging from 3.00% to 3.25%, in each case depending on the total Consolidated Net Debt Leverage Ratio. Starting September 30, 2022, the Company must make equal quarterly installment payments in aggregate annual amounts equal to 1% of the original principal amount of Term Loan B, with the final balance payable at maturity on June 14, 2029; provided that if the 7.75% 2027 Notes are not repaid in full by the date that is 91 days prior to the maturity date of the 7.75% 2027 Notes, the maturity date for the Term Loan B will be the maturity date of the 7.75% 2027 Notes. Borrowings under Term Loan B may be repaid by the Company, in whole or in part, together with accrued interest, without premium or penalty.

Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, if such borrowings are in U.S. dollars, either Adjusted Term SOFR plus an applicable margin ranging from 2.75% to 3.50% or ABR plus an applicable margin ranging from 1.75% to 2.50%, in each case depending on the total Consolidated Net Debt Leverage Ratio. The Company may also, at its option, borrow in Canadian dollars, Euros or British Pounds Sterling using the same applicable margins as noted for U.S. dollars. The Revolving Credit Facility is payable at maturity on June 14, 2027. The Revolving Credit Facility may be repaid by the Company, in whole or in part, together with accrued interest, without premium or penalty.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued. The Company had $13 million and $24 million of issued and undrawn letters of credit outstanding under the Revolving Credit Facility as of March 31, 2023 and December 31, 2022, respectively. The $11 million decrease of issued and undrawn letters of credit is primarily due to approximately $10 million of obligations now being collateralized with cash versus previously collateralized by letters of credit. The approximately $10 million of cash collateral is classified as restricted cash within Other current assets on the Unaudited Condensed Consolidated Balance Sheets as of March 31, 2023.

7.75% Notes due 2027

On June 14, 2022, the Company issued $500 million in aggregate principal amount of 7.75% 2027 Notes in a private placement to qualified institutional buyers in the U.S. pursuant to Rule 144A under the Securities Act of 1933, as amended (“Securities Act”) and outside the U.S. pursuant to Regulation S under the Securities Act. The 7.75% 2027 Notes were issued at a price equal to 100% of their face value and are recorded as long-term debt in the consolidated financial statements. The 7.75% 2027 Notes bear interest at the rate of 7.75% per year, payable semi-annually in cash in arrears on June 15 and December 15 of each year, beginning on December 15, 2022. The 7.75% 2027 Notes will mature on June 15, 2027, unless earlier redeemed or repurchased. The 7.75% 2027 Notes are secured on a first-priority basis by liens on the Company’s and the guarantors’ assets that also secure, equally and ratably, the Company’s indebtedness under the Syndicated Credit Facility and the 7.54% 2027 Notes (as defined below) pursuant to the terms of a first lien intercreditor agreement. The 7.75% 2027 Notes are also guaranteed on a senior secured basis by each of the Company’s subsidiaries that are guarantors under the Syndicated Credit Facility and its 7.54% 2027 Notes (as defined below).

7.54% Notes due 2027

On June 25, 2020, the Company issued $150 million in aggregate principal amount of 7.54% Senior Secured Notes due 2027 (“7.54% 2027 Notes”). The 7.54% 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. The 7.54% 2027 Notes were issued at a price of 98.25% and are recorded as long-term debt in the consolidated financial statements. The 7.54% 2027 Notes bear interest at the rate of 7.54% per year, payable semi-annually in cash in arrears, for which interest payments commenced December 2020. The 7.54% 2027 Notes will mature on December 31, 2027, unless earlier redeemed or repurchased. The 7.54% 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.

Interest expense, net on long-term debt and other obligations is as follows:


	Three Months Ended
	March 31,
	2023		2022
Interest on long-term debt	$	46	$	33
Interest on orbital securitization liability		1		1
Capitalized interest		(18)		(11)
Interest expense, net	$	29	$	23

8.	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 Accounting Standards Codification 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

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

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 March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Orbital receivables ¹	$	—	$	400	$	—	$	400
Interest rate swaps		—		13		—		13
	$	—	$	413	$	—	$	413
Liabilities
Long-term debt ²	$	—	$	2,175	$	—	$	2,175
	$	—	$	2,175	$	—	$	2,175


	Recurring Fair Value Measurements as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets
Orbital receivables ¹	$	—	$	392	$	—	$	392
Interest rate swaps		—		21		—		21
	$	—	$	413	$	—	$	413
Liabilities
Long-term debt ²	$	—	$	2,168	$	—	$	2,168
	$	—	$	2,168	$	—	$	2,168

¹	The carrying value of orbital receivables was $347 million and $351 million as of March 31, 2023 and December 31, 2022, respectively.

Long-term debt excludes borrowings under the Revolving Credit Facility, deferred financing costs and obligations under finance leases and other, and is carried at amortized cost. The outstanding carrying value was $2,045 million as of both March 31, 2023 and December 31, 2022. The carrying value of borrowings under the Revolving Credit Facility approximates their fair value.

In June 2022, the Company amended its existing interest rate swaps that mature in June 2023 to modify the designated hedged interest rate risk from LIBOR to SOFR in connection with the Company’s Amended and Restated Credit Agreement. In total, as of March 31, 2023, an aggregate of $1 billion of the Company’s variable rate long-term debt is fixed at an average one-month SOFR rate of 1.71% (excluding the margin specified in the Syndicated Credit Facility) pursuant to the Company’s outstanding interest rate swaps. In each of June 2023 and June 2024, the Company will have interest rate swap maturities of $500 million.

The Company determines fair value of its derivative financial instruments and orbital receivables based on internal valuation models, such as a 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 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

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

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 periods ended March 31, 2023 and December 31, 2022.

9.	STOCKHOLDERS’ EQUITY

Changes in the components of Accumulated other comprehensive (loss) income are as follows:


	Foreign currency translation adjustments		Interest rate swaps		Pension and other postretirement plan adjustments		Total accumulated other comprehensive loss
Balance as of December 31, 2022	$	(2)	$	21	$	(35)	$	(16)
Other comprehensive loss before reclassifications		—		(1)		—		(1)
Reclassification of gain to net income		—		(7)		—		(7)
Tax benefit (expense)		—		—		—		—
Balance as of March 31, 2023	$	(2)	$	13	$	(35)	$	(24)

10.

REVENUES

As of March 31, 2023, the Company had $3,292 million 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 $1,309 million, $851 million and $1,132 million for the remaining nine months ending December 31, 2023, the year ending December 31, 2024 and thereafter, respectively.

Contract liabilities by segment are as follows:


As of March 31, 2023	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	99	$	288	$	387

As of December 31, 2022	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	107	$	257	$	364

Contract liabilities increased to $387 million as of March 31, 2023 from $364 million as of December 31, 2022. The increase of $23 million in contract liabilities is primarily due to an increase in contract liabilities within the Space Infrastructure segment driven by recent contracts awarded to the Company. The Company had an immaterial balance of non-current contract liabilities as of March 31, 2023 and December 31, 2022. Non-current contract liabilities are included in Other non-current liabilities on the Unaudited Condensed Consolidated Balance Sheets.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

The Company’s primary sources of revenues are as follows:


Three Months Ended March 31, 2023	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	176	$	—	$	176
Service revenues		243		—		—		243
Intersegment		—		19		(19)		—
	$	243	$	195	$	(19)	$	419

Three Months Ended March 31, 2022	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	154	$	—	$	154
Service revenues		251		—		—		251
Intersegment		—		23		(23)		—
	$	251	$	177	$	(23)	$	405

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 costs associated with the design, manufacture and delivery of products and services are used in determining the EAC. Changes to EAC cost or estimated contractual consideration are recorded as a cumulative catch-up adjustment.

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 EAC adjustments on loss contracts of $7 million and $9 million for the three months ended March 31, 2023 and 2022, respectively.

The Company recognized revenue from post-launch services within the Space Infrastructure segment of $6 million for both the three months ended March 31, 2023 and 2022.

Revenues based on the geographic location of customers are as follows:


	Three Months Ended
	March 31,
	2023		2022
United States	$	365	$	335
Asia		20		22
Middle East		12		15
Europe		8		17
Australia		6		7
Canada		3		6
Other		5		3
Total revenues	$	419	$	405

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

Revenues from significant customers are as follows:


Three Months Ended March 31, 2023	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	168	$	75	$	—	$	243
Commercial and other		75		120		(19)		176
Total revenues	$	243	$	195	$	(19)	$	419

Three Months Ended March 31, 2022	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	169	$	63	$	—	$	232
Commercial and other		82		114		(23)		173
Total revenues	$	251	$	177	$	(23)	$	405

The Company had revenues from commercial customer (“Customer A”) in the Space Infrastructure segment that represented 13% of total revenues for the three months ended March 31, 2023. The revenues from commercial Customer A were below 10% for the three months ended March 31, 2022. The Company had revenues from another commercial customer (“Customer B”) in the Space Infrastructure segment that were below 10% for the three months ended March 31, 2023. The revenues from commercial Customer B represented 11% of the Company’s total revenues for the three months ended March 31, 2022.

11.	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 (“EBITDA”) adjusted for certain items affecting comparability of the Company’s 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, (gain) loss on orbital receivables allowance, offset obligation fulfillment, amortization of deferred ERP implementation costs 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.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

The following table summarizes the operating performance of the Company’s segments:


	Three Months Ended
	March 31,
	2023		2022
Revenues:
Earth Intelligence	$	243	$	251
Space Infrastructure		195		177
Intersegment eliminations		(19)		(23)
Total revenues	$	419	$	405

Adjusted EBITDA:
Earth Intelligence	$	73	$	99
Space Infrastructure		14		19
Intersegment eliminations		(8)		(9)
Corporate and other expenses		(22)		(25)
Restructuring		(5)		(1)
Transaction and integration related expense		(4)		—
Amortization of deferred ERP implementation costs		(1)		—
Gain on sale of asset		6		—
Depreciation and amortization		(39)		(68)
Interest expense, net		(29)		(23)
Interest income ¹		1		1
Loss before taxes	$	(14)	$	(7)

Included in Other income, net on the Unaudited Condensed Consolidated Statements of Operations.

The Company’s capital expenditures are as follows:


Three Months Ended March 31, 2023	Earth Intelligence		Space Infrastructure		Corporate and Eliminations		Total
Capital expenditures:
Property, plant and equipment	$	22	$	4	$	13	$	39
Intangible assets		23		—		1		24
	$	45	$	4	$	14	$	63

Three Months Ended March 31, 2022	Earth Intelligence		Space Infrastructure		Corporate and Eliminations		Total
Capital expenditures:
Property, plant and equipment	$	28	$	3	$	12	$	43
Intangible assets		19		—		2		21
	$	47	$	3	$	14	$	64

Substantially all of the Company’s long-lived tangible assets were in the United States as of March 31, 2023 and December 31, 2022.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

12.

EMPLOYEE BENEFIT PLANS

The following table summarizes the components of net periodic benefit (credit) cost for the Company’s pension plans:


	Three Months Ended
	March 31,
	2023		2022
Interest cost	$	5	$	4
Expected return on plan assets		(6)		(7)
Expenses paid		1		1
Net periodic benefit credit	$	—	$	(2)

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. In 2021, the Company elected to take advantage of certain provisions of the American Rescue Plan Act of 2021 and due to the Company’s election, there are no required contributions for the Company’s qualified pension plan for the year ending December 31, 2023, and there were no required contributions for the year ended December 31, 2022.

13.	INCOME TAXES

For the three months ended March 31, 2023 and 2022, the effective tax rate on Income before taxes was 0%. The effective tax rates for the three months ended March 31, 2023 and 2022 differ from the statutory U.S. federal income tax rate of 21.0% primarily due to estimated permanent differences and changes in valuation allowance. The Company does not anticipate a significant change to the Company’s gross unrecognized tax benefits within the next 12 months.

The Company assesses the deferred tax assets for recoverability on a quarterly basis. Based upon all available positive and negative evidence, the Company maintains a valuation allowance to reduce the net U.S. deferred tax asset to the amount that is more-likely-than-not realizable.

The Company computes an estimated annual effective tax rate (“AETR”) each quarter based on the current and forecasted continuing operating results. The income tax expense or benefit associated with the interim period is computed using the most recent estimated AETR applied to the year-to-date ordinary income or loss, plus the tax effect of any significant or infrequently occurring items recorded during the interim period. The computation of the estimated AETR at each interim period requires certain estimates and significant judgments including, but not limited to, the expected operating income (loss) for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent differences and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur and additional information becomes known or as the tax environment changes.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

14.

NET LOSS PER COMMON SHARE

The following table includes the calculation of basic and diluted net loss per common share:


	Three Months Ended
	March 31,
	2023		2022
Net loss	$	(14)	$	(7)

Weighted average number of common shares outstanding-basic		75.0		73.2
Weighted dilutive effect of equity awards		—		—
Weighted average number of common shares outstanding - diluted		75.0		73.2

Net loss per common share:
Basic	$	(0.19)	$	(0.10)
Diluted	$	(0.19)	$	(0.10)

For the three months ended March 31, 2023 and 2022, approximately 2 million and 3 million shares subject to awards, respectively, were excluded from the diluted weighted average number of ordinary common shares outstanding calculation because their effect would have been anti-dilutive.

15.	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.

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

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

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 Unaudited Condensed 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.

In the third quarter of 2022, the Company recorded a $12 million liability related to the satisfaction of an offset obligation incurred by the Company as a result of conducting business in a foreign country. The Company had expected to satisfy the offset obligation through other operational means that did not require cash payments or the transfer of other assets. In the third quarter of 2022 an agreement was reached to satisfy the Company’s offset obligation in the foreign country by making a total of $12 million in cash payments from November 2022 to January 2024. The Company recorded the current portion of the liability within Accrued liabilities and the non-current portion of the liability within Other non-current liabilities on the Company’s Unaudited Condensed Consolidated Balance Sheets and a $12 million expense within Other expense (income), net on the Company’s Unaudited Condensed Consolidated Statements of Operations.

In the fourth quarter of 2022, the Company made its first payment towards the $12 million offset obligation in the amount of $4 million. As of March 31, 2023 the remaining offset obligation balance to be settled is a short-term liability of $8 million, of which $4 million is to be paid during 2023 and the remaining $4 million is to be paid in early 2024.

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 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. The parties have reached an agreement to resolve the action on a class-wide basis for a one-time payment of $27 million, to be funded by insurance maintained by Maxar. The Company recorded a liability of $27 million within Other current liabilities and an asset within Other current assets on the Company’s Unaudited Condensed Consolidated Balance Sheet. The agreement is contingent on Court approval. As part of the Court approval

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

process, class members will have an opportunity to object to, or opt-out of, the settlement pursuant to procedures to be established by the Court.

On October 21, 2019, a Maxar stockholder filed a putative class action lawsuit captioned McCurdy v. Maxar Technologies Inc., et al., No. 19CV35070 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 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. (“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 parties have reached an agreement to resolve the action on a class-wide basis for a one-time payment of $37 million, to be funded by insurance maintained by Maxar. The Company recorded a liability of $37 million within Other current liabilities and an asset within Other current assets on the Company’s Unaudited Condensed Consolidated Balance Sheet. The agreement is contingent on Court approval. As part of the Court approval process, class members will have an opportunity to object to, or opt-out of, the settlement pursuant to procedures to be established by the Court.

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 the 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.

Eight complaints in connection with the Merger Agreement have been filed in federal court as individual actions. Those complaints are captioned as follows: (1) O’Dell v. Maxar Technologies Inc., et al., 23-cv-00929 (filed February 3, 2023 in the Southern District of New York); (2) Johnson v. Maxar Technologies Inc., et al., 23-cv-00383 (filed February 9, 2023 in the District of Colorado); (3) Zaczkiewicz v. Maxar Technologies Inc., et al., 23-cv-00401-STV (filed February 10, 2023 in the District of Colorado); (4) Jeweltex Manufacturing Retirement Plan v. Maxar Technologies Inc., et al., 23-cv-00873 (filed February 27, 2023 in the Northern District of California); (5) Coffman v. Maxar Technologies Inc., et al., 23-cv-02261 (filed March 16, 2023 in the Southern District of New York); (6) Finger v. Maxar Technologies Inc., et al., 23-cv-00306-UNA (filed March 20, 2023 in the District of Delaware); (7) Respler & Teitelbaum MD PC PSP v. Maxar Technologies Inc., et al., 23-cv-02362 (filed March 20, 2023 in the Southern District of New York); and (8) Ryan v. Maxar Technologies Inc., et al., 23-cv-02437 (filed March 22, 2023 in the Southern District of New York) (the “Federal Court Complaints”). Additionally, one complaint in connection with the Merger Agreement was filed in Colorado state court: Garfield v. Cyprus, et al., 2023CV30393 (filed March 16, 2023 in the Colorado District Court, Adams County) (the “State Court Complaint,” and, together with the Federal Court Complaints, the “Complaints”).

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

The Federal Court Complaints generally allege that the preliminary proxy statement filed by Maxar on January 31, 2023 (the “Preliminary Proxy Statement”) and/or the definitive proxy statement filed by Maxar on March 16, 2023 (the “Definitive Proxy Statement”), both filed in connection with the Merger Agreement, misrepresent and/or omit certain purportedly material information related to the Merger Agreement. The Federal Court Complaints assert violations of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder against Maxar and the members of Maxar’s Board of Directors. The Federal Court Complaints seek, among other things: (i) an injunction enjoining the consummation of the Merger and the other transactions contemplated by the Merger Agreement; (ii) rescission or rescissory damages in the event the Merger and the other transactions contemplated by the Merger Agreement are consummated; (iii) direction that the defendants comply with the Exchange Act and disseminate a revised proxy statement; (iv) direction that defendants account for all damages suffered as a result of any misconduct; (v) costs of the action, including plaintiffs’ attorneys’ fees and experts’ fees; and (vi) other relief the court may deem just and proper. The State Court Complaint also generally alleges certain misrepresentations and/or omissions of purportedly material information in the Definitive Proxy Statement related to the Merger Agreement, asserting violations of the Colorado Securities Act, Colorado Revised Statutes §§ 11-51-501 and 11-51-604(3) against Maxar and the members of Maxar’s Board of Directors, violations of §§ 11-51-604(5)(b) and (c) against the members of Maxar’s Board of Directors, as well as allegations of misrepresentations and concealment, and negligent misrepresentation and concealment, under Colorado state law against Advent, Maxar and the members of Maxar’s Board of Directors. The State Court Complaint seeks, among other things: (i) a declaration that the defendants have violated Colorado Revised Statute § 11-51-501; (ii) a declaration that the defendants fraudulently or negligently misrepresented and omitted purportedly material facts in the Definitive Proxy Statement; (iii) enjoining further violations of § 11-51-501; (iv) enjoining and/or rescinding the consummation of the Merger and the other transactions contemplated by the Merger Agreement; (v) enjoining further alleged misrepresentations related to the Definitive Proxy Statement; (vi) dissemination of a proxy statement that does not contain purportedly false or misleading statements; (vii) attorneys’ fees, experts’ fees, interest and costs; and (viii) other such relief the court may find just and proper.

In addition to the Complaints, starting on February 6, 2023, purported stockholders of Maxar sent demand letters (together with the Complaints, the “Matters”) alleging similar deficiencies regarding the disclosures made in the Preliminary Proxy Statement and the Definitive Proxy Statement. One such letter additionally seeks corporate books and records in order to investigate alleged wrongdoing by Maxar’s Board of Directors, executive officers and/or financial advisors in connection with the Merger Agreement.

Maxar cannot predict the outcomes of the Matters. Maxar management believes that the Matters are without merit and intends to vigorously defend against the Matters and any subsequent demands or filed actions. If additional similar complaints are filed or demands sent, absent new or significantly different allegations, Maxar will not necessarily disclose such additional filings or demands.

To avoid the risk of the Matters delaying or adversely affecting the Merger and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, Maxar determined to make voluntary supplemental disclosures related to the Merger for the purpose of mooting any alleged disclosure issues (the “litigation-related supplemental disclosures”). The litigation-related supplemental disclosures were filed by Maxar on a Form 8-K on April 11, 2023. The State Court Complaint was voluntarily dismissed with prejudice on April 12, 2023.

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, 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.

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MAXAR TECHNOLOGIES INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

(Tabular amounts in millions, unless otherwise noted)

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 the Company maintains 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.

16.	SUPPLEMENTAL CASH FLOW

Selected cash payments and non-cash activities are as follows:


	Three Months Ended
	March 31,
	2023		2022
Supplemental operating cash flow information:
Cash paid for interest	$	29	$	15
Income tax (refunds), net of payments		—		(8)
Supplemental non-cash investing and financing activities:
Accrued capital expenditures		9		19

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains “forward-looking statements” as defined in Section 27A of the United States Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (“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 management’s current expectations and assumptions based on information currently known to us and our projections of the future, about which we cannot be certain. Forward-looking statements are subject to various risks and uncertainties which could cause actual results to differ materially from the anticipated results or expectations expressed in this Quarterly Report on Form 10-Q. Such factors, risks and uncertainties include: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement between the parties to the proposed transaction; (2) the failure to obtain certain required regulatory approvals or the failure to satisfy any of the other closing conditions to the completion of the proposed transaction within the expected timeframes or at all; (3) risks related to disruption of management’s attention from Maxar’s ongoing business operations due to the proposed transaction; (4) the effect of the announcement of the proposed transaction on the ability of Maxar to retain and hire key personnel and maintain relationships with its customers, suppliers and others with whom it does business, or on its operating results and business generally; (5) the ability of Maxar to meet expectations regarding the timing and completion of the transaction; (6) the impacts resulting from the conflict in Ukraine or related geopolitical tensions; (7) the impacts of the global COVID-19 pandemic or any other pandemics, epidemics or infectious disease outbreaks; (8) Maxar’s ability to generate a sustainable order rate for the satellite and space manufacturing operations and develop new technologies to meet the needs of its customers or potential new customers; (9) the impacts of any changes to the policies, priorities, regulations, mandates and funding levels of governmental entities; (10) the impacts if Maxar’s programs fail to meet contractual requirements or its products contain defects or fail to operate in the expected manner; (11) any significant disruption in or unauthorized access to Maxar’s computer systems or those of third parties that it utilizes in its 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; (12) satellites are subject to construction and launch delays, launch failures, damage or destruction during launch; (13) if Maxar satellites fail to operate as intended; (14) the impacts of any loss of, or damage to, a satellite and any failure to obtain data or alternate sources of data for Maxar’s products; (15) any interruption or failure of Maxar’s infrastructure or national infrastructure; (16) Maxar’s business with various governmental entities is concentrated in a small number of primary contracts; (17) Maxar operates in highly competitive industries and in various jurisdictions across the world; (18) uncertain global macro-economic and political conditions; (19) Maxar is a party to legal proceedings, investigations and other claims or disputes, which are costly to defend and, if determined adversely to it, could require it to pay fines or damages, undertake remedial measures or prevent it from taking certain actions; (20) Maxar’s ability to attract, train and retain employees; (21) any disruptions in U.S. government operations and funding; (22) any 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; (23) Maxar’s business involves significant risks and uncertainties that may not be covered by insurance; (24) Maxar often relies on a single vendor or a limited number of vendors to provide certain key products or services; (25) any disruptions in the supply of key raw materials or components and any difficulties in the supplier qualification process, as well as any increases in prices of raw materials; (26) any changes in Maxar’s accounting estimates and assumptions; (27) Maxar may be required to recognize impairment charges; (28) Maxar’s business is capital intensive, and it may not be able to raise adequate capital to finance its business strategies, including funding future satellites, or to refinance or renew its debt financing arrangements, or it may be able to do so only on terms that significantly restrict its ability to operate its business; (29) Maxar’s 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; (30) Maxar’s indebtedness and other contractual obligations; (31) Maxar’s current financing arrangements contain certain restrictive covenants that impact its future operating and financial flexibility; (32) Maxar’s actual operating results may differ significantly from its guidance; (33) Maxar could be adversely impacted by actions of activist stockholders; (34) the price of Maxar’s common stock has been volatile and may fluctuate substantially; (35) Maxar’s operations in the U.S. government market

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are subject to significant regulatory risk; (36) failure to comply with the requirements of the National Industrial Security Program Operating Manual could result in interruption, delay or suspension of Maxar’s ability to provide its products and services, and could result in loss of current and future business with the U.S. government; (37) Maxar’s business is subject to various regulatory risks; (38) any changes in tax law, in Maxar’s tax rates or in exposure to additional income tax liabilities or assessments; (39) Maxar’s ability to use its U.S. federal and state net operating loss carryforwards and certain other tax attributes may be limited; (40) Maxar’s operations are subject to governmental law and regulations relating to environmental matters, which may expose it to significant costs and liabilities; and (41) the other risks listed from time to time in Maxar’s filings with the SEC. As a result, although we believe we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be accurate. The forward-looking statements contained in this Quarterly Report on Form 10-Q speak only as of the date hereof and are expressly qualified in their entirety by the foregoing risks and uncertainties. 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. 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” refer collectively to Maxar Technologies Inc. and its consolidated subsidiaries.

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”.

Unless otherwise indicated, our significant accounting policies and estimates, material cash requirements, commitments, contingencies and business risks and uncertainties as described in our MD&A and consolidated financial statements for the year ended December 31, 2022, are substantially unchanged.

RECENT DEVELOPMENTS

Agreement and Plan of Merger with Advent International Corporation

On December 15, 2022, we entered into the Merger Agreement with Galileo Parent, Inc., a Delaware corporation (“Parent”), Galileo Bidco, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), and solely for the purposes set forth therein, Galileo Topco, Inc., a Delaware corporation and an indirect parent of Parent (“Preferred Equity Issuer”). Parent, Merger Sub and Preferred Equity Issuer are affiliates of funds advised by Advent, a private equity firm headquartered in Boston, Massachusetts. British Columbia Investment Management Corporation or one or more of its affiliates will also be a minority investor in Preferred Equity Issuer. The Merger Agreement provides that, on the terms and subject to the conditions of the Merger Agreement, at the closing of the transactions contemplated therein, Merger Sub will merge with and into Maxar (the “Merger”). Parent has obtained equity financing, preferred equity financing and debt financing commitments for the purpose of financing the transactions contemplated by the Merger Agreement and paying related fees and expenses. Under the terms of the Merger Agreement, our stockholders will receive $53.00 in cash for each share of our common stock they hold on the transaction closing date.

As previously mentioned, on April 19, 2023, our stockholders voted to adopt the Merger Agreement. We currently anticipate that the Merger will close in early May 2023, subject to the satisfaction or waiver of all other closing conditions, including receipt of outstanding regulatory approvals.

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For additional information regarding the Merger, please refer to our Form 8-K filed with SEC on December 16, 2022, our Definitive Proxy Statement filed with the SEC on March 16, 2023 and our other filings with the SEC.

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 Earth-observation constellation, providing us with over two decades and approximately 150 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. In addition to our Earth observation capabilities, we offer RF and SAR data, which provides more comprehensive and accurate geospatial insights for our customers. Through our updated NOAA remote sensing license, we are also able to collect NEI for our current constellation and our next generation WorldView Legion satellites. Through this new license authority, we can collect and distribute images of space objects across the LEO – the area ranging from 200 kilometers up to 1,000 kilometers in altitude – to both government and commercial customers. In the commercial satellite Earth observation industry, we are a leader across U.S. government agencies, international government agencies and enterprise customer verticals. The U.S. government is the largest customer of our Earth Intelligence segment through the EOCL Contract, G-EGD and OWT programs and various classified and unclassified contract vehicles

We also provide geospatial services that combine imagery, analytic expertise and innovative technology to deliver intelligence solutions to customers. Our approximately 1,500 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. 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 and military simulation and training.

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.

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RESULTS OF OPERATIONS


	Three Months Ended
	March 31,				$		%
	2023		2022		Change		Change
($ millions)
Revenues:
Product	$	176	$	154	$	22	14	%
Service		243		251		(8)	(3)
Total revenues	$	419	$	405	$	14	3	%
Costs and expenses:
Product costs, excluding depreciation and amortization		147		127		20	16
Service costs, excluding depreciation and amortization		109		93		16	17
Selling, general and administrative		117		104		13	13
Depreciation and amortization		39		68		(29)	(43)
Gain on sale of assets		(6)		—		(6)	*
Operating income	$	13	$	13	$	—	*	%
Interest expense, net		29		23		6	26
Other income, net		(2)		(3)		1	(33)
Loss before taxes	$	(14)	$	(7)	$	(7)	100	%
Income tax expense (benefit)		—		—		—	*
Net loss	$	(14)	$	(7)	$	(7)	100	%

* Not meaningful.

Product and service revenues


	Three Months Ended
	March 31,				$		%
	2023		2022		Change		Change
($ millions)
Product revenues	$	176	$	154	$	22	14	%
Service revenues		243		251		(8)	(3)
Total revenues	$	419	$	405	$	14	3	%

Total revenues increased to $419 million from $405 million, or by $14 million, for the three months ended March 31, 2023 compared to the same period of 2022. The increase was primarily due to an increase in product revenues in our Space Infrastructure segment partially offset by a decrease in service revenues in our Earth Intelligence segment.

In the fourth quarter of 2022 and the first quarter of 2023, revenues within our Earth Intelligence segment were adversely affected by customers deferring execution of awards due to protracted approval cycles and in response to broader economics affecting the technology sector. We expect recovery and growth in the remaining quarters of the year. We also have reduced and expect to further reduce expenses in areas that we do not expect will have an adverse effect on future growth, which will help improve Adjusted EBITDA performance through the rest of the year.

Further discussion of the drivers behind changes in revenues is included within the “Results by Segment” section below.

See Note 10, “Revenues” to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1, “Financial Information” for product and service revenue by segment.

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Product and service costs


	Three Months Ended
	March 31,				$		%
	2023		2022		Change		Change
($ millions)
Product costs, excluding depreciation and amortization	$	147	$	127	$	20	16	%
Service costs, excluding depreciation and amortization		109		93		16	17
Total costs	$	256	$	220	$	36	16	%

Total costs of product and services increased to $256 million from $220 million, or by $36 million, for the three months ended March 31, 2023, compared to the same period of 2022. The increase in costs was primarily due to a $20 million increase in product costs within our Space Infrastructure segment and a $16 million increase in service costs within our Earth Intelligence segment. We also have reduced and expect to further reduce expenses in areas that we do not expect will have an adverse effect on future growth, which will help improve Adjusted EBITDA performance through the rest of the year.

Further discussion of the drivers behind changes in product and services costs is included within the “Results by Segment” section below.

Selling, general and administrative


	Three Months Ended
	March 31,				$		%
	2023		2022		Change		Change
($ millions)
Selling, general and administrative	$	117	$	104	$	13	13	%

Selling, general and administrative costs increased to $117 million from $104 million, or by $13 million, for the three months ended March 31, 2023, compared to the same period of 2022. The increase was primarily due to a $5 million increase in transaction and integration related expenses related to the pending Merger, a $5 million increase in research and development expenses primarily within our Space Infrastructure segment, a $3 million increase in restructuring costs, a $2 million increase in information technology costs and a $3 million increase in other expenses. There was also a $6 million increase in labor related expenses driven by annual merit increases and increases in headcount primarily driven by acquisitions for the three months ended March 31, 2023, compared to the same period of 2022. These increases were partially offset by a $7 million decrease in stock-based compensation expense and a $4 million decrease in marketing costs. The decrease in stock-based compensation was primarily due to an immaterial amount of expense related to liability classified awards for the three months ended March 31, 2023, compared to $5 million in incremental expense related to liability classified awards for the three months ended March 31, 2022.

Depreciation and amortization


	Three Months Ended
	March 31,				$		%
	2023		2022		Change		Change
($ millions)
Property, plant and equipment	$	18	$	19	$	(1)	(5)	%
Intangible assets		21		49		(28)	(57)
Depreciation and amortization expense	$	39	$	68	$	(29)	(43)	%

Depreciation and amortization expense decreased to $39 million from $68 million, or by $29 million, for the three months ended March 31, 2023, compared to the same period of 2022. The decrease was primarily driven by a decrease in amortization expense related to intangible assets that were fully amortized in 2022.

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Gain on sale of assets


	Three Months Ended
	March 31,					$	%
	2023		2022			Change	Change
($ millions)
Gain on sale of assets	$	(6)	$	—	$	(6)	*	%

* Not meaningful.

During the three months ended March 31, 2023, we recognized a $6 million gain on sale of asset due to the release of cash held in escrow related to the 2019 sale and leaseback of our owned property in Palo Alto, California. During the three months ended March 31, 2022, we recognized no (gain) loss on sale of assets.

Interest expense, net


	Three Months Ended
	March 31,				$		%
	2023		2022		Change		Change
($ millions)
Interest expense:
Interest on long-term debt	$	46	$	33	$	13	39	%
Interest on orbital securitization liability		1		1		—	—
Capitalized interest		(18)		(11)		(7)	64
Interest expense, net	$	29	$	23	$	6	26	%

Interest expense, net increased to $29 million from $23 million, or by $6 million, for the three months ended March 31, 2023, compared to the same period in 2022. The increase was primarily due to an increase in interest on long-term debt of $13 million driven by an increase in interest rates on our Term Loan B (as defined below) which was amended in the second quarter of 2022. These increases were partially offset by a $7 million increase in capitalized interest related to the building of our WorldView Legion satellites.

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.


	Three Months Ended
	March 31,				$		%
	2023		2022		Change		Change
($ millions)
Revenues:
Earth Intelligence	$	243	$	251	$	(8)	(3)	%
Space Infrastructure		195		177		18	10
Intersegment eliminations		(19)		(23)		4	(17)
Total revenues	$	419	$	405	$	14	3	%

Adjusted EBITDA:
Earth Intelligence	$	73	$	99	$	(26)	(26)	%
Space Infrastructure		14		19		(5)	(26)
Intersegment eliminations		(8)		(9)		1	(11)
Corporate and other expenses		(22)		(25)		3	(12)
Total Adjusted EBITDA	$	57	$	84	$	(27)	(32)	%

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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. See also Note 11, “Segment Information” to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1, “Financial Information” in this Quarterly Report on Form 10-Q for additional information about how we use Adjusted EBITDA to measure the performance of each of our segments.

Earth Intelligence

The following table provides selected financial information for the Earth Intelligence segment:


	Three Months Ended
	March 31,						$		%
	2023			2022			Change		Change
($ millions)
Total revenues	$	243		$	251		$	(8)	(3)	%

Adjusted EBITDA	$	73		$	99		$	(26)	(26)	%
Adjusted EBITDA margin (as a % of total revenues)		30.0	%		39.4	%

Revenues from the Earth Intelligence segment decreased to $243 million from $251 million, or by $8 million, for the three months ended March 31, 2023, compared to the same period of 2022. The decrease was primarily driven by a $7 million decrease in revenues from international defense and intelligence customers. There was also a $1 million decrease in revenues from the U.S. government primarily due to a $10 million decrease in imagery solutions revenues partially offset by a $9 million increase in geospatial services revenues.

Adjusted EBITDA decreased to $73 million from $99 million, or by $26 million, for the three months ended March 31, 2023, compared to the same period of 2022. The decrease was primarily related to the above-mentioned decrease in revenues and a $15 million increase in service costs. The increase in service costs included an $8 million increase in geospatial services costs primarily due to higher geospatial services revenues and a $7 million increase in imagery solutions costs, including costs from acquisitions completed in the fourth quarter of 2022. There was also a $4 million increase in selling, general and administrative costs for the three months ended March 31, 2023, compared to the same period of 2022.

Space Infrastructure

The following table provides selected financial information for the Space Infrastructure segment.


	Three Months Ended
	March 31,						$		%
	2023			2022			Change		Change
($ millions)
Total revenues	$	195		$	177		$	18	10	%

Adjusted EBITDA	$	14		$	19		$	(5)	(26)	%
Adjusted EBITDA margin (as a % of total revenues)		7.2	%		10.7	%

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

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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 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 $195 million from $177 million, or by $18 million, for the three months ended March 31, 2023, compared to the same period of 2022. The increase in revenues was primarily due to a $12 million increase in U.S. government revenues driven by the recognition of revenue from recent contract awards. The increase in revenues was also driven by a $6 million increase in revenues from commercial programs for three months ended March 31, 2023, compared to the same period of 2022.

Adjusted EBITDA in the Space Infrastructure segment decreased to $14 million from $19 million, or by $5 million, for the three months ended March 31, 2023, compared to the same period of 2022. The decrease was primarily driven by a change in program mix and higher EAC growth for the three months ended March 31, 2023, compared to the same period of 2022. There was also an increase in selling, general and administrative expenses of $2 million.

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.

Corporate and other expenses decreased to $22 million from $25 million, or by $3 million, for the three months ended March 31, 2023, compared to the same period in 2022. The decrease was primarily driven by a $1 million foreign exchange gain for the three months ended March 31, 2023, compared to a $1 million foreign exchange loss for the same period of 2022.

Intersegment eliminations

Intersegment eliminations are related to projects between our segments, including the construction of our WorldView Legion satellites. Intersegment eliminations remained relatively unchanged as they decreased to $8 million from $9 million, or by $1 million, for the three months ended March 31, 2023, compared to the same period in 2022.

BACKLOG

Our backlog by segment is as follows:


	March 31,		December 31,
	2023		2022
($ millions)
Earth Intelligence	$	2,071	$	2,048
Space Infrastructure		1,221		1,146
Total backlog		3,292		3,194
Unfunded contract options		2,135		2,089
Total	$	5,427	$	5,283

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 $3,292 million as of March 31, 2023 compared to $3,194 million as of December 31, 2022. The increase in backlog was driven by an increase in the Space Infrastructure segment primarily due to a new contract with a commercial customer, partially offset by revenue recognized during the period. Order backlog generally does not include unexercised contract options and potential orders under indefinite delivery/indefinite quantity contracts.

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

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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 $2,135 million and $2,089 million as of March 31, 2023 and December 31, 2022, respectively. Unfunded contract options represent estimated amounts of revenue to be earned in the future from negotiated contracts with unexercised contract options and indefinite delivery/indefinite quantity contracts. Unfunded contract options as of March 31, 2023 and December 31, 2022 were primarily comprised of option years in the EOCL Contract (for the periods June 15, 2027 through June 14, 2032) and other U.S. government contracts. On May 25, 2022, we were awarded the EOCL Contract by the NRO, which is a 10-year contract worth up to $3.24 billion, inclusive of a firm 5-year base contract commitment worth $1.5 billion and $1.74 billion in exercisable options. The EOCL Contract transitioned the imagery acquisition requirement previously addressed by the EnhancedView Contract and, with this award, replaces the scope of the EnhancedView Contract with respect to such requirements.

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 the construction and launch of our WorldView Legion satellites and other capital expenditures. 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.

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.

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. 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. There are no required contributions for our qualified pension plan for the year ending December 31, 2023, and there were no required contributions 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 factors, including inflation and rising interest rate costs, and financial, competitive, legislative and 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. In addition, we maintain cash and investment accounts at multiple financial institutions in amounts that are significantly in excess of the limits insured by the FDIC. If one or

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more of the institutions with which we maintain accounts were to fail or be taken over by the FDIC, such as the recent take-over of Silicon Valley Bank, our ability to access such accounts might be temporarily or permanently limited. Any losses or delay in access to funds as a result of such events could have a material adverse effect on our ability to meet contractual obligations, earnings, financial condition, cash flows and stock price.

We believe that our cash from operating activities generated from continuing operations, together with available borrowings under our Revolving Credit Facility (as defined below), 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


	Three Months Ended
	March 31,
	2023		2022
($ millions)
Cash provided by operating activities	$	44	$	48
Cash used in investing activities		(57)		(66)
Cash used in financing activities		(2)		(7)
Cash, cash equivalents, and restricted cash, beginning of year		52		48
Cash, cash equivalents, and restricted cash, end of period	$	37	$	23

Operating activities

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 decreased to $44 million from $48 million, or by $4 million, for the three months ended March 31, 2023 compared to the same period in 2022. The decrease was primarily driven by a $14 million increase in interest payments for the three months ended March 31, 2023, compared to the same period in 2022. The decrease in cash provided by operating activities was partially offset by favorable changes in working capital for the three months ended March 31, 2023, compared to the same period in 2022.

Investing activities

Cash used in investing activities decreased to $57 million from $66 million, or by $9 million, for the three months ended March 31, 2023 compared to the same period in 2022. Our primary investing activities included expenditures on property, plant and equipment of $39 million and $43 million for the three months ended March 31, 2023 and 2022, respectively, and investments in intangible assets primarily related to internally developed software of $24 million and $21 million for the three months ended March 31, 2023 and 2022, respectively. Property, plant and equipment expenditures for the three months ended March 31, 2023 and 2022 primarily related to the construction of our WorldView Legion satellites. These expenditures were partially offset by a $6 million cash inflow due to the release of cash held in escrow related to the sale and leaseback of our owned property in Palo Alto, California for the three months ended March 31, 2023, compared to the same period in 2022.

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Financing activities

Cash used in financing activities decreased to $2 million from $7 million, or by $5 million, for the three months ended March 31, 2023 compared to the same period in 2022. During the three months ended March 31, 2023, cash used in financing activities included $11 million in payments made to satisfy tax obligations on behalf of certain members of our executive leadership team and Section 16 officers, repayments of long-term debt of $6 million and the settlement of the securitization liability of $4 million. These cash outflows were partially offset by $20 million from the net proceeds of the Revolving Credit Facility (as defined below). During the three months ended March 31, 2022, cash used in financing activities included the settlement of the securitization liability of $4 million.

Long-term debt

The following table summarizes our long-term debt:


	March 31,		December 31,
	2023		2022
($ millions)
Syndicated Credit Facility:
Revolving Credit Facility	$	145	$	125
Term Loan B		1,489		1,493
7.75% 2027 Notes		500		500
7.54% 2027 Notes		150		150
Deferred financing		19		19
Obligations under finance leases and other		5		5
Debt discount and issuance costs		(94)		(98)
Total long-term debt	$	2,214	$	2,194

Syndicated Credit Facility

Our 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 June 2027 (“Revolving Credit Facility”) and (ii) a senior secured first lien term B facility in an aggregate principal amount of $1.5 billion maturing in June 2029, which was issued with an original issue discount of 4.50% (“Term Loan B”).

The maximum Consolidated Net Debt Leverage Ratio financial maintenance covenant permitted under the amended and restated credit agreement (“Amended and Restated Credit Agreement”) are (1) 5.00:1.00 for each fiscal quarter ending on or after March 31, 2023 through and including December 31, 2023 and (2) 4.50:1.00 for each fiscal quarter ending on or after March 31, 2024.The required level of the Interest Coverage Ratio maintenance covenant is 2.50:1.00 as of the last day of each fiscal quarter. As of March 31, 2023 and December 31, 2022, we were in compliance with our debt covenants.

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The Revolving Credit Facility includes an aggregate $200 million sub limit under which letters of credit can be issued. We had $13 million and $24 million of issued and undrawn letters of credit outstanding under the Revolving Credit Facility as of March 31, 2023 and December 31, 2022, respectively. The $11 million decrease of issued and undrawn letters of credit is primarily due to approximately $10 million of obligations now being collateralized with cash versus previously collateralized by letters of credit. The approximately $10 million of cash collateral is classified as restricted cash within Other current assets on the Unaudited Condensed Consolidated Balance Sheets as of March 31, 2023.

7.75% Notes due 2027

On June 14, 2022, we issued $500 million in aggregate principal amount of 7.75% 2027 Notes in a private placement to qualified institutional buyers in the U.S. pursuant to Rule 144A under the Securities Act and outside the U.S. pursuant to Regulation S under the Securities Act. The 7.75% 2027 Notes were issued at a price equal to 100% of their face value and are recorded as long-term debt in the consolidated financial statements. The 7.75% 2027 Notes bear interest at the rate of 7.75% per year, payable semi-annually in cash in arrears on June 15 and December 15 of each year, beginning on December 15, 2022. The 7.75% 2027 Notes will mature on June 15, 2027, unless earlier redeemed or repurchased. The 7.75% 2027 Notes are secured on a first-priority basis by liens on our and the guarantors’ assets that also secure, equally and ratably, our indebtedness under the Syndicated Credit Facility and the 7.54% 2027 Notes (as defined below) pursuant to the terms of a first lien intercreditor agreement. The 7.75% 2027 Notes are also guaranteed on a senior secured basis by each of our subsidiaries that are guarantors under our Syndicated Credit Facility and our 7.54% Senior Secured Notes due 2027.

7.54% Notes due 2027

On June 25, 2020, we issued $150 million in aggregate principal amount of 7.54% Senior Secured Notes due 2027 (“7.54% 2027 Notes”). The 7.54% 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. The 7.54% 2027 Notes were issued at a price of 98.25% and are recorded as long-term debt in our consolidated financial statements. The 7.54% 2027 Notes bear interest at the rate of 7.54% per year, payable semi-annually in cash in arrears, for which interest payments commenced December 2020. The 7.54% 2027 Notes will mature on December 31, 2027, unless earlier redeemed or repurchased. The 7.54% 2027 Notes are guaranteed on a senior secured basis by each of our existing and future subsidiaries that guarantee the Syndicated Credit Facility.

See Note 7, “Long-term debt and interest expense, net” to the Unaudited Condensed Consolidated Financial Statements in Part I, Item 1, “Financial Information” in this Quarterly Report on Form 10-Q 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. There were no sales or repurchases of eligible receivables executed in the three months ended March 31, 2023 or 2022.

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 securitization liabilities that have been subsequently measured at amortized cost using the effective interest rate method. The

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securitized orbital receivables and 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.

Interest rate swaps

In June 2022, we amended our existing interest rate swaps that mature in June 2023 to modify the designated hedged interest rate risk from LIBOR to SOFR in connection with our Amended and Restated Credit Agreement. In total, as of March 31, 2023, an aggregate of $1 billion of our variable rate long-term debt is fixed at an average one-month SOFR rate of 1.71% (excluding the margin specified in the Syndicated Credit Facility) pursuant to our outstanding interest rate swaps. In each of June 2023 and June 2024, we will have interest rate swap maturities of $500 million.

Off-balance sheet arrangements

As of March 31, 2023, we had no outstanding foreign exchange sales contracts. As of March 31, 2023, we had $13 million in letters of credit issued under the Syndicated Credit Facility. 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

There were no material changes to our critical accounting policies, estimates or judgments, that occurred in the period covered by this report from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2022.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 2, “Summary of Significant Accounting Policies” to the Unaudited Condensed Consolidated Financial Statements in Part I, Item I, “Financial Information” in this Quarterly Report on Form 10-Q 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, (gain) loss on orbital receivables allowance, offset obligation fulfillment, amortization of deferred ERP implementation costs 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

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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 income (loss) 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 to EBITDA and Total Adjusted EBITDA for the three months ended March 31, 2023 and 2022:


	Three Months Ended
	March 31,
	2023			2022
($ millions)
Net loss	$	(14)		$	(7)
Income tax expense (benefit)		—			—
Interest expense, net		29			23
Interest income		(1)			(1)
Depreciation and amortization		39			68
EBITDA	$	53		$	83
Restructuring		5			1
Transaction and integration related expense		4			—
Amortization of deferred ERP costs		1			—
Gain on sale of asset		(6)			—
Total Adjusted EBITDA	$	57		$	84

Adjusted EBITDA:
Earth Intelligence		73			99
Space Infrastructure		14			19
Intersegment eliminations		(8)			(9)
Corporate and other expenses		(22)			(25)
Total Adjusted EBITDA	$	57		$	84

Net loss margin		(3.3)	%		(1.7)	%
Total Adjusted EBITDA margin		13.6	%		20.7	%

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our market risks from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We performed an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Exchange Act Rule 13a-15(e)) as of March 31, 2023. The evaluation was performed with the participation of senior

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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 March 31, 2023.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting during the quarter ended March 31, 2023 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.

PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

Currently, we are involved in a number of legal proceedings. For a discussion of material legal proceedings, see Note 15, “Commitments and Contingencies” to the Unaudited Condensed Consolidated Financial Statements in Part I, Item I, “Financial Information” in this Quarterly Report on Form 10-Q, which is hereby incorporated by reference.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors from those disclosed in Item 1A Part 1 of our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

The exhibits listed in the Exhibit Index are filed with, or incorporated by reference in, this Form 10-Q.

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EXHIBIT INDEX

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date	Filed or Furnished Herewith

2.1	Agreement and Plan of Merger by and among Maxar Technologies Inc. and Galileo Parent, Inc. and related parties dated as of December 26, 2022.	8-K	001-38228	2.1	12/16/2022

3.1	Amended and Restated Certificate of Incorporation of Maxar Technologies Inc., as filed with the Delaware Secretary of State.	8-K	001-38228	3.1	01/02/2019

3.2	Third Amended and Restated Bylaws of Maxar Technologies Inc.	8-K	001-38228	3.1	11/1/2022

10.1#	Contract by and between Maxar Intelligence Inc. and the National Reconnaissance Office					X

10.2*	Form of Restricted Stock Unit Award Grant Notice – 2023					X

31.1	Certification of the Company’s Chief Executive Officer, Daniel L. Jablonsky, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X

31.2	Certification of the Company’s Chief Financial Officer, Biggs C. Porter, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X

32.1†	Certification of the Company’s Chief Executive Officer, Daniel L. Jablonsky, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X

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		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date	Filed or Furnished Herewith

32.2†	Certification of the Company’s Chief Financial Officer, Biggs C. Porter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X

101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline XBRL: (i) Unaudited Condensed Consolidated Statements of Operations, (ii) Unaudited Condensed Consolidated Statements of Comprehensive Income, (iii) Unaudited Condensed Consolidated Balance Sheets, (iv) Unaudited Condensed Consolidated Statements of Cash Flows, (v) Consolidated Statements of Cash Flows, (vi) Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity, and (vii) Notes to the Unaudited Condensed Consolidated Financial Statements					X

104	Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within 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.

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SIGNATURES

Pursuant to the requirements 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.


May 3, 2023	Maxar Technologies Inc.
	By: /s/ Daniel L. Jablonsky Daniel L. Jablonsky Chief Executive Officer (Principal Executive Officer and Duly Authorized Officer)

	By: /s/ Biggs C. Porter Biggs C. Porter Executive Vice President and Chief Financial Officer (Principal Financial Officer)