DigitalGlobe Reports Fourth Quarter and Full Year 2009 Financial

DigitalGlobe Reports Fourth Quarter and Full Year 2009 Financial Results

We use Adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance and we do not place undue reliance on this measure as our only measure of operating performance. Adjusted EBITDA should not be considered a substitute for other measures of financial performance reported in accordance with GAAP.

FINANCIAL TABLES TO FOLLOW

DigitalGlobe, Inc. Consolidated Statements of Operations

(in millions, except share and per share data)	Three Months Ended December 31,						Year Ended December 31,
		2008			2009			2008			2009
Historical results of operations:	(unaudited)
Defense and Intelligence revenue	$	55.9		$	57.5		$	222.4		$	231.0
Commercial revenue		16.3			15.4			52.8			50.9
Total revenue		72.2			72.9			275.2			281.9
Cost of revenue excluding depreciation and amortization		8.6			8.9			28.5			31.1
Selling, general and administrative		21.6			23.0			76.1			88.6
Depreciation and amortization		19.3			18.2			75.7			74.4
Income from operations		22.7			22.8			94.9			87.8
Loss from early extinguishment of debt		-			-			-			(7.7	)
Loss on derivative instruments		-			-			-			(1.8	)
Interest income (expense), net		0.2			-			(3.0	)		0.1
Income before income taxes		22.9			22.8			91.9			78.4
Income tax expense		(9.1	)		(9.0	)		(38.1	)		(31.0	)
Net income	$	13.8		$	13.8		$	53.8		$	47.4

Earnings per Share:
Basic earnings per share	$	0.32		$	0.32		$	1.24		$	1.07
Diluted earnings per share	$	0.31		$	0.30		$	1.22		$	1.06
Weighted average common shares outstanding
Basic		43,434,251			43,219,134			43,513,506			44,234,019
Diluted		43,979,426			45,599,550			44,100,898			44,859,992

DigitalGlobe, Inc. Unaudited Reconciliation of GAAP Net Income to Adjusted EBITDA

(in millions)	Three Months Ended December 31,					Year Ended December 31,
	2008			2009		2008		2009
Net income	$	13.8		$	13.8	$	53.8	$	47.4
Depreciation and amortization		19.3			18.2		75.7		74.4
Loss on derivative instrument		-			-		-		1.8
Loss from early extinguishment of debt		-			-		-		7.7
Interest (income), expense net		(0.2	)		-		3.0		(0.1	)
Income tax expense		9.1			9.0		38.1		31.0
Non-cash stock compensation expense		1.7			1.7		4.2		7.2
Adjusted EBITDA	$	43.7		$	42.7	$	174.8	$	169.4

Adjusted EBITDA is not a recognized term under generally accepted accounting principles, or GAAP, in the United States and may not be defined similarly by other companies. Adjusted EBITDA should not be considered an alternative to net income, as an indication of financial performance, or as an alternative to cash flow from operations as a measure of liquidity. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similar performance measures whose calculations may differ from ours.

DigitalGlobe, Inc. Consolidated Balance Sheets

(in millions, except per share data)	As of December 31,
	2008			2009
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	60.8		$	97.0
Restricted cash		2.5			7.3
Accounts receivable, net of allowance for doubtful accounts of $0.9 and $1.2, respectively		44.3			49.7
Accounts receivable from related party		2.5			-
Aerial image library		4.9			-
Prepaid and current assets		5.8			12.0
Income tax receivable		-			3.9
Deferred taxes		24.9			1.7
Total current assets		145.7			171.6
Property and equipment, net of accumulated depreciation of $288.6 and $361.1, respectively		792.9			891.0
Goodwill		8.7			8.7
Intangibles, net of accumulated amortization of $5.4 and $7.2, respectively		3.6			1.8
Aerial image library		-			5.4
Long-term restricted cash		-			16.7
Long-term deferred contract costs		5.7			36.2
Long-term deferred contract costs from related party		15.9			-
Other assets, net		7.7			9.1
Total assets	$	980.2		$	1,140.5
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
Accounts payable	$	0.7		$	4.3
Accounts payable to related party		1.8			-
Accrued interest		3.5			6.2
Other accrued liabilities		20.6			17.9
Other accrued liabilities to related party		2.7			-
Current portion of deferred revenue		28.1			32.8
Total current liabilities		57.4			61.2
Deferred revenue		214.9			239.6
Deferred revenue related party		24.7			-
Deferred lease incentive		6.3			5.4
Long-term debt		230.0			343.5
Long-term debt and accrued interest to related parties		44.6			-
Long-term deferred tax liability		-			11.3
Total liabilities	$	577.9		$	661.0
COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 24,000,000 shares authorized; no shares issued and outstanding at December 31, 2008 and December 31, 2009		-			-
Common stock; $0.001 par value; 250,000,000 shares authorized; 43,468,941 shares issued and outstanding at December 31, 2008 and 45,122,593 shares issued and outstanding at December 31, 2009		0.2			0.2
Treasury stock, at cost; 21,555 shares at December 31, 2008 and 44,039 December 31, 2009		(0.2	)		(0.7	)
Additional paid-in capital		467.2			496.0
Accumulated other comprehensive loss		(1.5	)		-
Accumulated deficit		(63.4	)		(16.0	)
Total stockholders' equity		402.3			479.5
Total liabilities and stockholders' equity	$	980.2		$	1,140.5

DigitalGlobe, Inc. Consolidated Statements of Cash Flows

(in millions)	For the Year Ended December 31,
	2008			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	53.8		$	47.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		75.7			74.4
Non-cash recognition of deferred revenue		(25.5	)		(26.6	)
Non-cash amortization		1.5			5.3
Non-cash stock compensation expense		4.2			7.2
Amortization of debt issuance costs		0.3			-
Write off of debt financing fees		-			5.3
Deferred income taxes		34.7			33.6
Changes in working capital, net of investing activities:
Accounts receivable, net		(3.2	)		(2.6	)
Accounts receivable from related party		3.0			(0.3	)
Income tax receivable		-			(3.9	)
Aerial image library		(2.6	)		(6.1	)
Prepaid and other assets		1.9			(6.3	)
Accounts payable		(1.5	)		1.5
Accounts payable and accrued liabilities to related parties		(1.1	)		3.5
Accrued liabilities		8.1			(5.0	)
Deferred contract costs from related party		(10.3	)		(15.3	)
Deferred revenue		(1.9	)		29.1
Deferred revenue related party		6.5			2.1
Deferred lease incentive		0.8			-
Net cash flows provided by operating activities		144.4			143.3
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction in progress additions		(131.8	)		(155.9	)
Other property, equipment and intangible additions		(10.2	)		(10.9	)
Increase in restricted cash		(0.1	)		(21.5	)
Settlements from derivative instrument		(1.4	)		(2.8	)
Net cash flows used in investing activities		(143.5	)		(191.1	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt, net of issuance costs		38.5			330.9
Proceeds from initial public offering, net of issuance costs		(2.7	)		21.7
Repayment of notes		-			(270.0	)
Repurchase of common stock		-			(0.5	)
Proceeds from exercise of stock options		1.2			1.9
Net cash flows provided by financing activities		37.0			84.0
Net increase in cash and cash equivalents		37.9			36.2
Cash and cash equivalents, beginning of period		22.9			60.8
Cash and cash equivalents, end of period	$	60.8		$	97.0
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes	$	2.2		$	2.4
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Non-cash items capitalized in construction in progress	$	-		$	6.8
Changes to non-cash property and equipment accruals, including interest	$	10.1		$	2.9

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