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  "documentTitle": "Maxar Technologies (MAXR)",
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  "authorName": "Ben Axler",
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  "presentationDate": "2018-08-07 00:00:00",
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  "notes": "Includes a quote from a former CFO to support the argument that historical spending was maintenance-heavy.",
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      "text": "We expect capital expenditures to continue in the $315m per year range.",
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      "text": "annual capex: $315m",
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      "text": "If DGI wasn't spending the capex on satellites, then it must have been maintenance capex. As we can see in the table below, during that period, DGI had ~$200m per annum in capex. If that number is \"low\" then our recurring capex number looks very reasonable, if not perhaps even conservative. For what is now the Space Systems division, we can take the old MDA as a proxy, and it spent on average ~$90m of capex per annum over the past 4 years. Given that most of the growth in Space Systems is coming from new projects, such as small satellites, new defense programs, etc - for which Maxar will have to invest in new resources, we think it prudent to assume that Space Systems recurring capex remains similar to current levels. Thus, we believe a reasonable estimate of Maxar's recurring capex is $225m + $90m = $315m.",
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      "text": "A potentially fair criticism of this approach is that Maxar is replacing WorldView satellites with new Legions. While the Company has kept information regarding Legion at a minimum (management has not disclosed the total number of satellites, or how much the satellites cost, etc), we were still able to deduce a similar recurring capex calculation with the help of satellite imaging industry experts. We believe to replace all 4 WorldViews, and deliver the functionality that Maxar is looking for, it will need to launch at least 25 satellites (Legion satellites are much smaller), which would cost $80-$100m per satellite. Using the above estimate, the total needed capex exceeds $2bn, and assuming a similar expected useful life (no reason not to), the implied recurring capex is approximately $200-225m, a range similar to our previous estimate.",
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      "kind": "quote",
      "text": "But essentially from 2014, 2015 and 2016 there was very little CapEx that was spent at DigitalGlobe to build satellites. And they took advantage of that and all the cash flow that was generated during this period and bought back about$300 million of stock.",
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      "text": "But essentially from 2014, 2015 and 2016 there was very little CapEx that was spent at DigitalGlobe to build satellites. And they took advantage of that and all the cash flow that was generated during this period and bought back about$300 million of stock. — Interim Maxar CFO (former MDA CFO) Anil Wirasekara",
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      "text": "Table showing historical capex for DigitalGlobe and MDA from 2013-2016, calculating averages and Spruce Point estimates.",
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      "kind": "title",
      "text": "High Maintenance Capex Needs (Cont'd)",
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