Segment information

9 Months Ended

Sep. 30, 2022

Segment information

Segment information

11. SEGMENT INFORMATION

The Company’s business is organized into two reportable segments: Earth Intelligence and Space Infrastructure. The Earth Intelligence reportable segment is a supplier of high-resolution, high accuracy Earth imagery and other geospatial data sourced from the Company’s advanced satellite constellation and third-party providers, as well as a provider of advanced geospatial information applications and analytic services for national security and commercial solutions. The Space Infrastructure reportable segment is a supplier of space-based infrastructure, robotics, subsystems and information solutions to satellite operators and government agencies.

The Company’s Chief Operating Decision Maker measures the performance of each segment based on revenue and Adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization (“EBITDA”) adjusted for certain items affecting comparability of the Company’s ongoing operating results as specified in the calculation. Certain items affecting the comparability of our ongoing operating results between periods include restructuring, impairments, insurance recoveries, gain (loss) on sale of assets, (gain) loss on orbital receivables allowance, offset obligation fulfillment and transaction and integration related expense. Transaction and integration related expense includes costs associated with de-leveraging activities, acquisitions and dispositions and the integration of acquisitions. Corporate and other expenses include items such as corporate office costs, regulatory costs, executive and director compensation, foreign exchange gains and losses and fees for audit, legal and consulting services.

Intersegment sales are generally recorded at cost plus a specified margin, which may differ from what the segment may be able to obtain on sales to external customers.

The following table summarizes the operating performance of the Company’s segments:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues:
Earth Intelligence	$	275	$	271	$	810	$	804
Space Infrastructure		186		180		549		541
Intersegment eliminations		(25)		(14)		(80)		(43)
Total revenues	$	436	$	437	$	1,279	$	1,302
Adjusted EBITDA:
Earth Intelligence	$	115	$	124	$	343	$	362
Space Infrastructure		33		14		71		29
Intersegment eliminations		(10)		(5)		(28)		(17)
Corporate and other expenses		(28)		(20)		(73)		(62)
Offset obligation fulfillment		(12)		—		(12)		—
Restructuring		(5)		—		(10)		—
Transaction and integration related expense		—		(1)		(1)		(1)
Gain on sale of asset		1		—		1		—
Depreciation and amortization		(64)		(74)		(199)		(221)
Interest expense, net		(30)		(25)		(129)		(127)
Interest income 1		1		1		2		2
Income (loss) before taxes	$	1	$	14	$	(35)	$	(35)

1 Included in Other income, net on the Unaudited Condensed Consolidated Statements of Operations.

The Company incurred restructuring costs of $5 million and $10 million for the three and nine months ended September 30, 2022, respectively. The restructuring costs are primarily related to retention costs, severance costs and the write-off of certain assets related to the outsourcing of certain components of contract manufacturing within the Space Infrastructure segment.

The Company’s capital expenditures are as follows:

Three Months Ended September 30, 2022	Earth Intelligence		Space Infrastructure		Corporate and Eliminations		Total
Capital expenditures:
Property, plant and equipment	$	32	$	3	$	16	$	51
Intangible assets		23		—		1		24
	$	55	$	3	$	17	$	75
Three Months Ended September 30, 2021	Earth Intelligence		Space Infrastructure		Corporate and Eliminations		Total
Capital expenditures:
Property, plant and equipment	$	19	$	3	$	5	$	27
Intangible assets		22		—		2		24
	$	41	$	3	$	7	$	51
Nine Months Ended September 30, 2022	Earth Intelligence		Space Infrastructure		Corporate and Eliminations		Total
Capital expenditures:
Property, plant and equipment	$	100	$	9	$	50	$	159
Intangible assets		63		—		4		67
	$	163	$	9	$	54	$	226
Nine Months Ended September 30, 2021	Earth Intelligence		Space Infrastructure		Corporate and Eliminations		Total
Capital expenditures:
Property, plant and equipment	$	47	$	11	$	26	$	84
Intangible assets		64		—		8		72
	$	111	$	11	$	34	$	156

Substantially all of the Company’s long-lived tangible assets were in the United States as of September 30, 2022 and December 31, 2021.