Revenue

3 Months Ended

Mar. 31, 2021

Revenue

Revenue

11. REVENUE

On March 31, 2021, the Company had $1.8 billion of remaining performance obligations, which represents the transaction price of firm orders less inception-to-date revenues recognized. Remaining performance obligations generally exclude unexercised contract options and indefinite delivery/indefinite quantity contracts. The Company expects to recognize revenues relating to existing performance obligations of approximately $1.0 billion, $0.5 billion and $0.3 billion for the remaining nine months ended December 31, 2021, the year ending December 31, 2022 and thereafter, respectively.

Contract liabilities by segment are as follows:

As of March 31, 2021	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	42	$	243	$	285
As of December 31, 2020	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	45	$	234	$	279

The increase in contract liabilities is primarily due to cash received on a commercial contract in the Space Infrastructure segment in advance of services performed. The increase is partially offset by revenues recognized based upon the satisfaction of performance obligations.

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

Three Months Ended March 31, 2021	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	142	$	—	$	142
Service revenues		250		—		—		250
Intersegment		—		13		(13)		—
	$	250	$	155	$	(13)	$	392
Three Months Ended March 31, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	107	$	—	$	107
Service revenues		271		3		—		274
Intersegment		—		22		(22)		—
	$	271	$	132	$	(22)	$	381

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 for both the three months ended March 31, 2021 and 2020, 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 months ended March 31, 2021, the Company recognized a $25 million cumulative adjustment to revenue related to the Sirius XM contract with Sirius XM Holdings Inc. (“Sirius XM”). This resulted primarily from adjusting the EAC transaction price for the amount of the final milestone and expected orbital payments due to the non-performance of the SXM-7 satellite and other adjustments. In addition to the cumulative adjustment, incremental costs of $3 million were incurred related to the SXM-7 recovery efforts during the three months ended March 31, 2021. See Note 4 for additional details regarding the adjustment to trade and other receivables.

The Company did not incur COVID-19 related EAC growth during the three months ended March 31, 2021, compared to $18 million of COVID-19 related EAC growth for the three months ended March 31, 2020. The Company’s current estimates at completion on the Company’s satellite manufacturing contracts assume, among other things, that the Company remains in a COVID-19 operating posture in the factories through the spring of 2021.

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. During the three months ended March 31, 2021, the Company recorded $10 million in EAC adjustments on loss contracts. During the three months ended March 31, 2020, the Company recorded $19 million in EAC adjustments on a commercial satellite loss contract which included significant development efforts further delayed by COVID-19.

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

	Three Months Ended March 31,
	2021		2020
United States	$	323	$	302
Asia		22		27
Europe		15		18
Middle East		14		13
Australia		11		7
South America		2		9
Other		5		5
Total revenues	$	392	$	381

Revenues from significant customers are as follows:

Three Months Ended March 31, 2021	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	171	$	66	$	—	$	237
Commercial and other		79		89		(13)		155
Total revenues	$	250	$	155	$	(13)	$	392
Three Months Ended March 31, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	199	$	65	$	—	$	264
Commercial and other		72		67		(22)		117
Total revenues	$	271	$	132	$	(22)	$	381

The Company had revenues from a commercial customer in the Space Infrastructure segment that represented 19% of total revenues for the three months ended March 31, 2021. The revenues from this commercial customer in the Space Infrastructure segment were less than 10% of the Company’s total revenues for the three months ended March 31, 2020.