Revenues

9 Months Ended

Sep. 30, 2022

Revenues

Revenues

10. REVENUES

As of September 30, 2022, the Company had $3 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 $1.5 billion for the remaining three months ending December 31, 2022, the year ending December 31, 2023 and thereafter, respectively.

Contract liabilities by segment are as follows:

As of September 30, 2022	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	114	$	131	$	245
As of December 31, 2021	Earth Intelligence		Space Infrastructure		Total
Contract liabilities	$	32	$	257	$	289

Contract liabilities decreased to $245 million as of September 30, 2022 from $289 million as of December 31, 2021. The decrease of $44 million in contract liabilities is primarily due to revenues recognized based upon the satisfaction of

performance obligations within the Space Infrastructure segment, partially offset by an increase in contract liabilities within the Earth Intelligence segment driven by the Electro-Optical Commercial Layer contract awarded to the Company in May 2022. The Company had an immaterial balance of non-current contract liabilities as of September 30, 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 September 30, 2022	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	161	$	—	$	161
Service revenues		275		—		—		275
Intersegment		—		25		(25)		—
	$	275	$	186	$	(25)	$	436
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
Nine Months Ended September 30, 2022	Earth Intelligence		Space Infrastructure		Eliminations		Total
Product revenues	$	—	$	469	$	—	$	469
Service revenues		810		—		—		810
Intersegment		—		80		(80)		—
	$	810	$	549	$	(80)	$	1,279
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

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 both the three months ended September 30, 2022 and 2021 and $20 million for both the nine months ended September 30, 2022 and 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 $5 million and $30 million for the three and nine months ended September 30, 2021, respectively relate 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 EAC adjustments on loss contracts of $18 million and $3 million for the three months ended September 30, 2022 and 2021, respectively, and $33 million and $26 million for the nine months ended September 30, 2022 and 2021, respectively.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
United States	$	372	$	363	$	1,062	$	1,058
Asia		24		25		71		67
Middle East		15		13		45		40
Europe		14		18		41		54
Australia		5		9		38		57
Canada		3		3		12		8
Other		3		6		10		18
Total revenues	$	436	$	437	$	1,279	$	1,302

Revenues from significant customers are as follows:

Three Months Ended September 30, 2022	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	188	$	55	$	—	$	243
Commercial and other		87		131		(25)		193
Total revenues	$	275	$	186	$	(25)	$	436
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
Nine Months Ended September 30, 2022	Earth Intelligence		Space Infrastructure		Eliminations		Total
U.S. federal government and agencies	$	540	$	176	$	—	$	716
Commercial and other		270		373		(80)		563
Total revenues	$	810	$	549	$	(80)	$	1,279
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

The Company had revenues from a commercial customer in the Space Infrastructure segment that represented 12% and 18% of total revenues for the three months ended September 30, 2022 and 2021, respectively, and 11% and 19% of total revenues for the nine months ended September 30, 2022 and 2021, respectively.