5. Contracts-in-Process and Long-Term Receivables

Contracts-in-Process

All contracts-in-process were purchased by MDA in connection with the Sale.

Contracts-in-process as of December 31, 2011 were comprised of the following (in thousands):


	December 31,
	2011
U.S. government contracts:
Amounts billed	$	34
Unbilled receivables		1,311
		1,345
Commercial contracts:
Amounts billed		107,886
Unbilled receivables		50,030
		157,916
	$	159,261

As of December 31, 2011, billed receivables were reduced by an allowance for doubtful accounts of $0.2 million.

Unbilled amounts included recoverable costs and accrued profit on progress completed, which had not been billed. Such amounts were billed in accordance with the contract terms, typically upon shipment of the product, achievement of contractual milestones, or completion of the contract and, at such time, were reclassified to billed receivables.

Long-Term Receivables

Orbital receivables and deferred receivables were purchased by MDA in connection with the Sale. We collected notes receivable, including interest, from Telesat of $24.1 million in October 2012.

Billed receivables relating to long-term contracts were expected to be collected within one year. As of December 31, 2011, we classified deferred billings and the orbital receivable component of unbilled receivables expected to be collected beyond one year as long-term. Fresh-start fair value adjustments relating to long-term receivables were amortized using the effective interest method over the life of the related orbital stream (see Note 9).

Receivable balances related to satellite orbital incentive payments, deferred billings, the Land Note receivable (see Note 1) and the long-term portion of the Telesat consulting services fee (see Note 19) as of December 31, 2012 and 2011 are presented below (in thousands):


	December 31,
	2012		2011
Orbital receivables	$	—	$	354,852
Deferred receivables		—		1,973
Land Note receivable		101,000		—
Telesat notes receivable for consulting services		1,250		20,700
		102,250		377,525
Less: current portion		(34,917)		(14,837)
Long-term receivables	$	67,333	$	362,688

The current portion of long-term receivables as of December 31, 2011 was included in contracts-in-process.

Receivable balances related to Land Note receivable and the Telesat consulting services fee (see Note 19) as of December 31, 2012 are scheduled to be received as follows (in thousands)


	Long-Term
	Receivables
2013	$	34,917
2014		33,667
2015		33,666
		102,250

Financing Receivables

The following summarizes the age of financing receivables that had a contractual maturity of over one year as of December 31, 2012 (in thousands):


			Financing Receivables						More
			Subject To				90 Days or		Than 90
	Total		Aging		Current		Less		Days
Land Note	$	101,000	$	101,000	$	101,000	$	—	$	—

The following summarizes the age of financing receivables that have a contractual maturity of over one year as of December 31, 2011 (in thousands):



							Financing Receivables						More
							Subject To				90 Days or		Than 90
	Total		Unlaunched		Launched		Aging		Current		Less		Days
Satellite Manufacturing:
Orbital Receivables
Long term orbitals	$	340,015	$	141,518	$	198,497	$	198,497	$	198,497	$	—	$	—
Short term unbilled		11,370		—		11,370		11,370		11,370		—		—
Short term billed		3,467		—		3,467		3,467		1,084		—		2,383
		354,852		141,518		213,334		213,334		210,951		—		2,383

Deferred Receivables		1,973		—		—		1,973		1,973		—		—

Consulting Services:
Telesat receivables		20,700		—		—		20,700		20,700		—		—
		377,525		141,518		213,334		236,007		233,624		—		2,383
Contracts-in-Process:
Unbilled receivables		39,971		39,971		—		—		—		—		—
Total financing receivables	$	417,496	$	181,489	$	213,334	$	236,007	$	233,624	$	—	$	2,383

Billed receivables of $104.5 million as of December 31, 2011 (not including billed orbital receivables of $3.5 million) have been excluded from the table above as they have contractual maturities of less than one year.

Long term unbilled receivables included satellite orbital incentives related to satellites under construction of $141.5 million as of December 31, 2011. These receivables were not included in financing receivables subject to aging in the table above since the timing of their collection was not determinable until the applicable satellite launch. Contracts-in-process included $40.0 million as of December 31, 2011 of unbilled receivables that represented accumulated incurred costs and earned profits net of losses on contracts in process that had been recorded as sales but had not yet been billed to customers. These receivables were not included in financing receivables subject to aging in the table above since the timing of their collection was not determinable until the contractual obligation to bill the customer was fulfilled.

We assign internal credit ratings for all our customers with financing receivables. The credit worthiness of each customer is based upon public information and/or information obtained directly from our customers. We utilize credit ratings where available from the major credit rating agencies in our analysis. We have therefore assigned our rating categories to be comparable to those used by the major credit rating agencies. Credit risk profile by internally assigned ratings, consisted of the following (in thousands):


Rating Categories	December 31,		December 31,
	2012		2011
A/BBB	$	101,000	$	41,607
BB/B		—		246,373
B/CCC		—		94,156
Customers in bankruptcy		—		39,307
Other		—		(3,947)
Total financing receivables	$	101,000	$	417,496