Revenues

9 Months Ended

Sep. 30, 2021

Revenues

Revenues

12. REVENUES

On September 30, 2021, the Company had $2.1 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 $0.4 billion, $1.1 billion and $0.6 billion for the remaining three months ended December 31, 2021, the year ending December 31, 2022 and thereafter, respectively.

Contract liabilities by segment are as follows:

As of September 30, 2021	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	34	$	225	$	259
As of December 31, 2020	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	45	$	234	$	279

The decrease in contract liabilities is primarily due to revenues recognized based upon the satisfaction of performance obligations on commercial contracts in both the Earth Intelligence and Space Infrastructure segments. The Company did not have a balance for non-current contract liabilities at September 30, 2021. The Company had $1 million of non-current contract liabilities at December 31, 2020. Non-current contract liabilities are included in Other non-current liabilities on the Unaudited Condensed Consolidated Balance Sheets.

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

Three Months Ended September 30, 2021	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	166	$	—	$	166
Service revenues		271		—		—		271
Intersegment		—		14		(14)		—
	$	271	$	180	$	(14)	$	437
Three Months Ended September 30, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	161	$	—	$	161
Service revenues		274		1		—		275
Intersegment		—		19		(19)		—
	$	274	$	181	$	(19)	$	436
Nine Months Ended September 30, 2021	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	498	$	—	$	498
Service revenues		804		—		—		804
Intersegment		—		43		(43)		—
	$	804	$	541	$	(43)	$	1,302
Nine Months Ended September 30, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	425	$	—	$	425
Service revenues		823		8		—		831
Intersegment		—		64		(64)		—
	$	823	$	497	$	(64)	$	1,256

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 $6 million and $20 million for the three and nine months ended September 30, 2021, respectively, as compared to $8 million and $22 million for the three and nine months ended September 30, 2020, 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"). Revenue recognition is also contingent on estimated contractual consideration. An EAC includes all direct costs and indirect costs directly attributable to a program or allocable based on program cost pooling arrangements. Estimates regarding the Company’s cost associated with the design, manufacture and delivery of products and services are used in determining the EAC. Changes to an EAC or estimated contractual consideration are recorded as a cumulative adjustment to revenue.

The Company recognized a cumulative adjustment to revenue of $5 million and $30 million for the three and nine months ended September 30, 2021, respectively, related to the Sirius XM contract with Sirius XM Holdings Inc. (“Sirius XM”). This resulted primarily from adjusting the EAC transaction price for the amount of the final milestone and expected orbital payments from Sirius XM due to the non-performance of the SXM-7 satellite and other adjustments. In addition to the cumulative adjustment recognized for the nine months ended September 30, 2021, incremental costs of $3 million were incurred related to the SXM-7 recovery efforts during the first quarter of 2021. See Note 5 for additional details regarding the adjustment to trade and other receivables.

The Company did not incur COVID-19 related EAC growth during the three and nine months ended September 30, 2021, compared to $3 million and $27 million of COVID-19 related EAC growth incurred for the three and nine months ended September 30, 2020, respectively.

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 $3 million and $26 million in EAC adjustments on loss contracts during the three and nine months ended September 30, 2021, respectively. The Company recorded $6 million and $42 million in EAC adjustments on a commercial satellite loss contract which included significant development efforts further delayed by COVID-19 for the three and nine months ended September 30, 2020, respectively.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020	2021		2020
United States	$	363	$	358	$	1,058	$	1,016
Asia		25		25		67		75
Australia		9		9		57		26
Europe		18		25		54		67
Middle East		13		12		40		38
South America		6		4		13		19
Other		3		3		13		15
Total revenues	$	437	$	436	$	1,302	$	1,256

Revenues from significant customers are as follows:

Three Months Ended September 30, 2021	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	174	$	51	$	—	$	225
Commercial and other		97		129		(14)		212
Total revenues	$	271	$	180	$	(14)	$	437
Three Months Ended September 30, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	198	$	69	$	—	$	267
Commercial and other		76		112		(19)		169
Total revenues	$	274	$	181	$	(19)	$	436
Nine Months Ended September 30, 2021	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	525	$	178	$	—	$	703
Commercial and other		279		363		(43)		599
Total revenues	$	804	$	541	$	(43)	$	1,302
Nine Months Ended September 30, 2020	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	600	$	208	$	—	$	808
Commercial and other		223		289		(64)		448
Total revenues	$	823	$	497	$	(64)	$	1,256

The Company had revenues from a commercial customer in the Space Infrastructure segment that represented 18% and 19% of total revenues for the three and nine months ended September 30, 2021, respectively. The revenues from this commercial customer in the Space Infrastructure segment were less than 10% of the Company’s total revenues for the three and nine months ended September 30, 2020.