Revenue

6 Months Ended

Jun. 30, 2020

Revenue

Revenue

11. REVENUE

On June 30, 2020, the Company had $1.9 billion of remaining performance obligations, which represents the transaction price of firm orders less inception-to-date revenues recognized. Remaining performance obligations generally exclude unexercised contract options and indefinite delivery/indefinite quantity contracts. The Company expects to recognize revenues relating to existing performance obligations of approximately $0.7 billion, $0.7 billion and $0.5 billion for the remaining six months ended December 31, 2020, the year ending December 31, 2021 and thereafter, respectively.

Contract liabilities by segment are as follows:

As of June 30, 2020	Earth Intelligence 1		Space Infrastructure		Total
Contract liabilities	$	60	$	177	$	237
As of December 31, 2019	Earth Intelligence 1		Space Infrastructure		Total
Contract liabilities	$	130	$	145	$	275

¹ The contract liability balance associated with the Company’s EnhancedView Contract was $20 million and $78 million as of June 30, 2020 and December 31, 2019, respectively. The contract liability balance associated with the Company’s EnhancedView Contract is expected to be recognized as revenue through August 31, 2020. During the six months ended June 30, 2020, imputed interest on advanced payments increased the contract liability balance by $2 million, and $60 million in revenue was recognized, decreasing the contract liability balance.

The decrease in total contract liabilities was primarily due to revenues recognized based upon satisfaction of performance obligations.

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

Three Months Ended June 30, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	157	$	—	$	157
Service revenues		278		4		—		282
Intersegment		—		23		(23)		—
	$	278	$	184	$	(23)	$	439
Three Months Ended June 30, 2019	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	144	$	—	$	144
Service revenues		263		5		—		268
Intersegment		—		32		(32)		—
	$	263	$	181	$	(32)	$	412
Six Months Ended June 30, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	264	$	—	$	264
Service revenues		549		7		—		556
Intersegment		—		45		(45)		—
	$	549	$	316	$	(45)	$	820
Six Months Ended June 30, 2019	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	310	$	—	$	310
Service revenues		517		16		—		533
Intersegment		—		65		(65)		—
	$	517	$	391	$	(65)	$	843

Certain of the Company’s contracts with customers in the Space Infrastructure segment include a significant financing component since payments are received from the customer more than one year after delivery of the promised goods or services. The Company recognized orbital interest revenue of $7 million and $14 million for the three and six months ended June 30, 2020, respectively, as compared to $8 million and $15 million for the three and six months ended June 30, 2019, respectively, related to these contracts, which is included in product revenues.

Revenue in the Space Infrastructure segment is primarily generated from long-term construction contracts. Due to the long-term nature of these contracts, the Company generally recognizes revenue over time using the cost-to-cost method of accounting to measure progress. Under the cost-to-cost method of accounting, revenue is recognized based on the proportion of total costs incurred to estimated total costs-at-completion ("EAC"). An EAC includes all direct costs and indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in determining the EAC. Changes to an EAC are recorded as a cumulative adjustment to revenue.

For the three and six months ended June 30, 2020, the Company incurred COVID-19 related EAC growth of $6 million and $24 million within the Space Infrastructure segment. The changes in the EACs are due to increases in estimated program costs associated with the COVID-19 operating posture and the estimated impact of certain items such as supplier delays and increased labor hours. These costs are considered incremental and separable from normal operations. The COVID-19 EAC growth assumes, among other things, that the Company’s current combination of work from home and limited personnel working on-site for essential operations remains in effect through December 2020.

During the three and six months ended June 30, 2020, the Company recorded an additional $17 million and $36 million estimated loss on a commercial satellite program which includes significant development efforts further delayed by COVID-19. The COVID-19 impact on this program for the three and six months ended June 30, 2020 was $2 million and $14 million which is included in our total COVID-19 impact discussed above.

The revenues based on geographic location of customers are as follows:

	Three Months Ended June 30,
		2020		2019
United States	$	356	$	317
Europe		24		17
Asia		23		37
Middle East		13		10
Australia		10		4
South America		6		25
Other		7		2
Total revenues	$	439	$	412
	Six Months Ended June 30,
		2020		2019
United States	$	658	$	628
Europe		42		24
Asia		50		91
Middle East		26		19
Australia		17		9
South America		15		64
Other		12		8
Total revenues	$	820	$	843

Revenues from significant customers are as follows:

Three Months Ended June 30, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	203	$	75	$	—	$	278
Commercial and other		75		109		(23)		161
Total revenues	$	278	$	184	$	(23)	$	439
Three Months Ended June 30, 2019	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	211	$	33	$	—	$	244
Commercial and other		52		148		(32)		168
Total revenues	$	263	$	181	$	(32)	$	412
Six Months Ended June 30, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	402	$	140	$	—	$	542
Commercial and other		147		176		(45)		278
Total revenues	$	549	$	316	$	(45)	$	820
Six Months Ended June 30, 2019	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	401	$	56	$	—	$	457
Commercial and other		116		335		(65)		386
Total revenues	$	517	$	391	$	(65)	$	843