Revenues

3 Months Ended

Mar. 31, 2022

Revenues

Revenues

10. REVENUES

As of March 31, 2022, the Company had $1.6 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, $0.4 billion and $0.2 billion for the remaining nine months ending December 31, 2022, the year ending December 31, 2023 and thereafter, respectively.

Contract liabilities by segment are as follows:

As of March 31, 2022	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	36	$	214	$	250
As of December 31, 2021	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	32	$	257	$	289

Contract liabilities decreased to $250 million as of March 31, 2022 from $289 million as of December 31, 2021. The decrease in contract liabilities is primarily due to revenues recognized based upon the satisfaction of performance obligations within the Space Infrastructure segment. The Company had an immaterial balance of non-current contract liabilities as of March 31, 2022 and December 31, 2021. 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 March 31, 2022	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	154	$	—	$	154
Service revenues		251		—		—		251
Intersegment		—		23		(23)		—
	$	251	$	177	$	(23)	$	405
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

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 for the three months ended March 31, 2022, compared to $7 million for the three months ended March 31, 2021, related to these contracts, which is included in product revenues in the Unaudited Condensed Consolidated Statements of Operations.

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 an EAC or estimated contractual consideration are recorded as a cumulative adjustment to revenue.

The Company recognized a cumulative adjustment to revenue of $25 million for the three months ended March 31, 2021 related to the Sirius XM contract with Sirius XM Holdings Inc. (“Sirius XM”). This adjustment 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. See Note 3 for additional details regarding the adjustment to trade and other receivables.

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 $9 million in EAC adjustments on loss contracts during the three months ended March 31, 2022 compared to $10 million for the three months ended March 31, 2021.

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

	Three Months Ended March 31,
	2022		2021
United States	$	335	$	323
Asia		22		22
Europe		17		15
Middle East		15		11
Australia		7		2
Canada		6		14
Other		3		5
Total revenues	$	405	$	392

Revenues from significant customers are as follows:

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
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

The Company had revenues from a commercial customer in the Space Infrastructure segment that represented 11% of total revenues for the three months ended March 31, 2022. The revenues from this commercial customer in the Space Infrastructure segment represented 19% of the Company’s total revenues for the three months ended March 31, 2021.