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DigitalGlobe Reports Second Quarter 2012 Results

LONGMONT, CO -- (Marketwire) -- Jul 31, 2012 -- DigitalGlobe, Inc. (NYSE: DGI), a leading global provider of high-resolution earth imagery solutions, today reported financial results for the second quarter ended June 30, 2012.

Second quarter 2012 revenue was $101.8 million, up 23% compared with the same period last year. Net income in the second quarter was $9.6 million, or $0.21 per share, compared with a net loss of $(0.9) million, or $(0.02) per share in second quarter 2011. Second quarter 2012 EBITDA was $47.9 million, delivering an EBITDA margin of 47%, up more than 700 basis points year over year compared with the second quarter 2011 EBITDA margin of 39.9%. This margin expansion occurred despite incurring $2.0 million of non-recurring costs in connection with the recently announced combination with GeoEye.

"Our team delivered an outstanding second quarter," said Jeffrey R. Tarr, President and Chief Executive Officer. "We grew revenue at a strong double-digit rate, expanded margins and raised our guidance. We are excited about our planned business combination with GeoEye and are on track to close the transaction in late 2012 or early 2013. Across the board, we are successfully transforming DigitalGlobe into a high-growth, recurring-revenue geospatial information business."

Second Quarter Business Highlights

2012 Outlook
For the full year, the company now expects to report GAAP revenue growth of approximately 16% compared with 2011, an increase from its previous expectation of approximately 14% growth. Including the impact of certain non-recurring expenses related to its planned business combination with GeoEye, the company expects to achieve a full-year EBITDA margin of approximately 46% and to incur capital expenditures of approximately $200 million. Both expectations for EBITDA margin and total capital expenditures are unchanged from prior expectations.

"Our ability to raise revenue guidance for the year while maintaining our EBITDA margin despite incurring significant costs related to our combination with GeoEye is a testament to the strength of our model," said Yancey Spruill, Chief Financial Officer.

Conference Call Information
DigitalGlobe's management will host a conference call today at 5 p.m. EDT to discuss second quarter 2012 results.

The conference call dial-in numbers are as follows:
U.S./Canada dial-in: (866) 394-8778
International dial-in: (706) 679-9623
Passcode: 92336993

A replay of the call will be available through August 31, 2012 at the following numbers:
U.S./Canada dial-in: (855) 859-2056
International dial-in: (404) 537-3406
Passcode: 92336993

DigitalGlobe will also sponsor a live and archived webcast of the conference call on the Investor Relations portion of its website. Click here to directly access the live webcast.

Supplemental earnings materials are available on the company's website at www.digitalglobe.com.

About DigitalGlobe
DigitalGlobe is a leading global provider of commercial high-resolution earth imagery products and services. Sourced from our own advanced satellite constellation, our imagery solutions support a wide variety of uses within defense and intelligence, civil agencies, mapping and analysis, environmental monitoring, oil and gas exploration, infrastructure management, Internet portals and navigation technology. With our collection sources and comprehensive ImageLibrary (containing more than one billion square kilometers of earth imagery and imagery products) we offer a range of on- and off-line products and services designed to enable customers to easily access and integrate our imagery into their business operations and applications. For more information, visit www.digitalglobe.com.

DigitalGlobe is a registered trademark of DigitalGlobe, Inc.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained herein and other of our reports, filings, and public announcements may contain or incorporate forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar words, although not all forward-looking statements contain these words.

Any forward-looking statements are based upon our historical performance and on our current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions. A number of important factors could cause our actual results or performance to differ materially from those indicated by such forward looking statements, including: the loss, reduction or change in terms of any of our primary contracts; the availability of government funding for our products and services both domestically and internationally; changes in government and customer priorities and requirements (including cost-cutting initiatives, the potential deferral of awards, terminations or reduction of expenditures to respond to the priorities of congress and the administration, or budgetary cuts resulting from congressional committee recommendations or automatic sequestration under the Budget Control Act of 2011); the risk that the anticipated benefits and synergies from the proposed strategic combination of the Company and GeoEye, Inc. cannot be fully realized or may take longer to realize than expected and the risk that a condition to closing of the proposed strategic combination may not be satisfied; the outcome of pending or threatened litigation; the loss or impairment of our satellites; delays in the construction and launch of WorldView-3; delays in implementation of planned ground system and infrastructure enhancements; loss or damage to the content contained in our ImageLibrary; interruption or failure of our ground system and other infrastructure, decrease in demand for our imagery products and services; increased competition that may reduce our market share or cause us to lower our prices; our failure to obtain or maintain required regulatory approvals and licenses; changes in U.S. foreign law or regulation that may limit our ability to distribute our imagery products and services; the costs associated with being a public company; and other important factors, all as described more fully in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.

We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA are not recognized terms under generally accepted accounting principles, or GAAP, in the United States and may not be defined similarly by other companies. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, as indications of financial performance, or as alternatives to cash flow from operations as measures of liquidity. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies in different industries that use similar performance measures whose calculations may differ from ours.

EBITDA and Adjusted EBITDA are key measures used in internal operating reports by management and the board of directors to evaluate the performance of our operations and are also used by analysts, investment banks and lenders for the same purpose. In 2012, EBITDA is being used as a key element of the company-wide bonus incentive plan. Prior to 2012, Adjusted EBITDA had been a key element of the company-wide bonus incentive plan.

EBITDA is a measure of our current period operating performance, excluding charges for depreciation related to prior period capital expenditures and items which are generally non-core in nature. Adjusted EBITDA is a measure of our current period operating performance, excluding charges for capital, depreciation related to prior period capital expenditures and items which are generally non-core in nature, and including EnhancedView deferred revenue and EnhancedView outstanding invoices not yet paid by the National Geospatial-Intelligence Agency (NGA) and excluding the amortization of pre-Final Operation-Capability (FOC) payments related to our NextView contract. EnhancedView outstanding invoices not yet paid by NGA represent an irrevocable right to be paid in cash by NGA.

EBITDA
We believe that the elimination of material non-cash, non-operating items enables a more consistent measurement of period to period performance of our operations. In addition, we believe that elimination of these facilitate comparison of our operating performance to companies in our industry. We believe this EBITDA measure is particularly important in a capital intensive industry such as ours, in which our current period depreciation is not a good indication of our current or future period capital expenditures. The cost to construct and launch a satellite and build the related ground infrastructure may vary greatly from one satellite to another, depending on the satellite's size, type and capabilities. For example, our QuickBird satellite, which we are currently depreciating, cost significantly less than our WorldView-1 and WorldView-2 satellites. Current depreciation expense is not indicative of the revenue generating potential of the satellite.

EBITDA excludes interest income, interest expense, income taxes and loss on early extinguishment of debt because these items are associated with our capitalization and tax structures. EBITDA also excludes depreciation and amortization expense because these non-cash expenses reflect the impact of prior capital expenditure decisions which are not indicative of future capital expenditure requirements. EBITDA excludes loss on derivative instrument and disposal of assets because these are not related to our primary operations.

We use 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. EBITDA should not be considered a substitute for other measures of financial performance reported in accordance with GAAP.

Adjusted EBITDA
We believe that the elimination of material non-cash, non-operating items enables a more consistent measurement of period to period performance of our operations. In addition, we believe that elimination of these items in combination with the addition of the nonrefundable EnhancedView deferred revenue and EnhancedView outstanding invoices not yet paid by NGA as well as the elimination of amortization of pre-FOC payments related to NextView, facilitate comparison of our operating performance to companies in our industry. We believe this Adjusted EBITDA measure is particularly important in a capital intensive industry such as ours, in which our current period depreciation is not a good indication of our current or future period capital expenditures. The cost to construct and launch a satellite and build the related ground infrastructure may vary greatly from one satellite to another, depending on the satellite's size, type and capabilities. For example, our QuickBird satellite, which we are currently depreciating, cost significantly less than our WorldView-1 and WorldView-2 satellites. Current depreciation expense is not indicative of the revenue generating potential of the satellite.

Adjusted EBITDA excludes interest income, interest expense, income taxes and loss on early extinguishment of debt because these items are associated with our capitalization and tax structures. Adjusted EBITDA also excludes depreciation and amortization expense because these non-cash expenses reflect the impact of prior capital expenditure decisions which are not indicative of future capital expenditure requirements. Adjusted EBITDA excludes non-cash stock compensation expense, because these items are non-cash expenses and loss on derivative instrument and disposal of assets because these are not related to our primary operations.

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.                             
         Unaudited Condensed Consolidated Statements of Operations          
                      and Comprehensive Income (Loss)                       
                                                                            
                       For the three months ended  For the six months ended 
                                June 30,                   June 30,         
                       --------------------------  ------------------------ 
(in millions, except                     2011                       2011    
 per share data)           2012       Revised(1)       2012      Revised(1) 
                       ------------  ------------  -----------  ----------- 
Revenue                $      101.8  $       82.5  $     188.8  $     159.9 
Costs and expenses:                                                         
  Cost of revenue,                                                          
   excluding                                                                
   depreciation and                                                         
   amortization                20.0          15.4         38.0         28.5 
  Selling, general and                                                      
   administrative              33.5          34.2         63.3         64.4 
  Depreciation and                                                          
   amortization                28.5          29.2         57.6         58.4 
                       ------------  ------------  -----------  ----------- 
Income from operations         19.8           3.7         29.9          8.6 
  Other income                                                              
   (expense), net              (0.4)            -         (0.4)         0.2 
  Interest income                                                           
   (expense), net              (2.6)         (5.7)        (5.8)       (13.6)
                       ------------  ------------  -----------  ----------- 
Income (loss) before                                                        
 income taxes                  16.8          (2.0)        23.7         (4.8)
  Income tax (expense)                                                      
   benefit                     (7.2)          1.1        (10.3)         2.6 
                       ------------  ------------  -----------  ----------- 
    Net income (loss)  $        9.6  $       (0.9) $      13.4  $      (2.2)
                       ------------  ------------  -----------  ----------- 
Comprehensive Income:                                                       
    Net income (loss)  $        9.6  $       (0.9) $      13.4  $      (2.2)
                       ------------  ------------  -----------  ----------- 
Earnings (loss) per                                                         
 share:                                                                     
  Basic earnings                                                            
   (loss) per share    $       0.21  $      (0.02) $      0.29  $      (0.5)
                       ------------  ------------  -----------  ----------- 
  Diluted earnings                                                          
   (loss) per share    $       0.21  $      (0.02) $      0.29  $      (0.5)
                       ------------  ------------  -----------  ----------- 
Weighted average                                                            
 common shares                                                              
 outstanding:                                                               
  Basic                        46.0          46.3         46.0         46.2 
                       ------------  ------------  -----------  ----------- 
  Diluted                      46.2          46.3         46.1         46.2 
                       ------------  ------------  -----------  ----------- 
                                                                            
 (1) The Company revised its financial information for the first three      
     quarters of 2011 as a result of the full-year 2011 audit completed in  
     February 2012. Please refer to the company's 2011 Annual Report on Form
     10-K for detail.                                                       
                                                                            
                                                                            
                                                                            
                             DigitalGlobe, Inc.                             
   Reconciliation of GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA   
                                (unaudited)                                 
                                                                            
                               Three months ended       Six months ended  
                                    June 30,                June 30,          
                             ----------------------  ---------------------- 
                                            2011                    2011    
(in millions)                   2012     Revised(1)     2012     Revised(1) 
                             ----------  ----------  ----------  ---------- 
Net income (loss)            $      9.6  $     (0.9) $     13.4  $     (2.2)
Depreciation and                                                            
 amortization                      28.5        29.2        57.6        58.4 
Interest (income) expense,                                                  
 net                                2.6         5.7         5.8        13.6 
Income tax expense (benefit)        7.2        (1.1)       10.3        (2.6)
                             ----------  ----------  ----------  ---------- 
EBITDA                       $     47.9  $     32.9  $     87.1  $     67.2 
Non-cash stock compensation                                                 
 expense                            2.2         7.4         4.7         9.5 
EnhancedView deferred                                                       
 revenue                            9.2        16.5        27.2        41.3 
EnhancedView outstanding                                                    
 invoices not yet paid by                                                   
 NGA                                4.6         8.3         4.6         8.3 
Amortization of pre-FOC                                                     
 payment related to NextView       (6.4)       (6.4)      (12.8)      (12.8)
                             ----------  ----------  ----------  ---------- 
Adjusted EBITDA              $     57.5  $     58.7  $    110.8  $    113.5 
                             ----------  ----------  ----------  ---------- 
                                                                            
(2)  The Company revised its financial information for the first three      
     quarters of 2011 as a result of the full-year 2011 audit completed in  
     February 2012. Please refer to the company's 2011 Annual Report on form
     10-K for detail.                                                       
                                                                            
                                                                            

EBITDA and Adjusted EBITDA are not recognized terms under generally accepted accounting principles (GAAP), in the United States and may not be defined similarly by other companies. EBITDA and 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. EBITDA margin is calculated by dividing EBITDA by GAAP revenue. For the second quarter of 2012, Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by the sum of GAAP revenue, plus $13.8 million of deferrals related to the SLA portion of EnhancedView, less $6.4 million of amortized revenue related to NextView. For the six months ended June 30, 2012, Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by the sum of GAAP revenue, plus $31.8 million of deferrals related to the SLA portion of EnhancedView, less $12.8 million of amortized revenue related to NextView.

                                                                            
                             DigitalGlobe, Inc.                             
              Unaudited Condensed Consolidated Balance Sheets               
                                                                            
                                                 June 30,      December 31, 
(in millions, except share data)                    2012           2011     
                                               -------------  ------------- 
ASSETS                                                                      
CURRENT ASSETS:                                                             
Cash and cash equivalents                      $       212.4  $       198.5 
Restricted cash                                          7.8            7.7 
Accounts receivable, net of allowance for                                   
 doubtful accounts of $2.8 and $3.6,                                        
 respectively                                           47.5           50.7 
Prepaid and current assets                              20.3           19.6 
Deferred taxes                                          67.1           65.1 
                                               -------------  ------------- 
  Total current assets                                 355.1          341.6 
Property and equipment, net of accumulated                                  
 depreciation of $619.5 and $563.9,                                         
 respectively                                        1,076.2        1,019.8 
Goodwill                                                 8.7            8.7 
Aerial image library, net of accumulated                                    
 amortization of $29.1 and $25.1, respectively          17.8           13.0 
Long-term restricted cash                                7.8            9.8 
Long-term deferred contract costs                       39.4           44.7 
Other assets                                            12.8           14.0 
                                               -------------  ------------- 
  Total assets                                 $     1,517.8  $     1,451.6 
                                               -------------  ------------- 
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
CURRENT LIABILITIES:                                                        
Accounts payable                               $        14.9  $        19.7 
Accrued interest                                         0.2            0.2 
Current note payable                                     5.0            5.0 
Other accrued liabilities                               50.6           37.5 
Current portion of deferred revenue                     37.8           36.6 
                                               -------------  ------------- 
  Total current liabilities                            108.5           99.0 
Long-term accrued liability                                -            1.4 
Deferred revenue                                       349.1          319.3 
Deferred lease incentive                                 2.7            3.3 
Long-term debt, net of discount                        480.1          481.6 
Long-term deferred tax liability, net                   71.7           59.6 
                                               -------------  ------------- 
  Total liabilities                            $     1,012.1  $       964.2 
                                               -------------  ------------- 
COMMITMENTS AND CONTINGENCIES                                               
STOCKHOLDERS' EQUITY:                                                       
Preferred stock, $0.001 par value; 24,000,000                               
 shares authorized; no shares issued and                                    
 outstanding at June 30, 2012 and December 31,                              
 2011                                                      -              - 
Common stock, $0.001 par value; 250,000,000                                 
 shares authorized; 46,748,615 shares issued                                
 and outstanding at June 30, 2012 and                                       
 46,320,471 shares issued and outstanding at                                
 December 31, 2011                                       0.2            0.2 
Treasury stock, at cost; 80,956 shares at June                              
 30, 2012 and 66,175 shares at December 31,                                 
 2011                                                   (1.4)          (1.2)
Additional paid-in capital                             535.1          530.0 
Accumulated deficit                                    (28.2)         (41.6)
                                               -------------  ------------- 
  Total stockholders' equity                           505.7          487.4 
                                               -------------  ------------- 
  Total liabilities and stockholders' equity   $     1,517.8  $     1,451.6 
                                               -------------  ------------- 
                                                                            
                                                                            
                                                                            
                             DigitalGlobe, Inc.                             
              Condensed Consolidated Statements of Cash Flows               
                                                                            
                                                 For the six months ended   
                                                         June 30,           
                                                                   2011     
 (in millions)                                      2012         Revised    
                                               -------------  ------------- 
CASH FLOWS FROM OPERATING ACTIVITIES:                                       
Net income (loss)                              $        13.4  $        (2.2)
Adjustments to reconcile net income (loss) to                               
 net cash provided by operating activities:                                 
  Depreciation and amortization expense                 57.6           58.4 
  EnhancedView deferred revenue                         33.8           49.7 
  Recognition of pre-FOC payments                      (12.8)         (12.8)
  Amortization of aerial image library,                                     
   deferred contract costs and lease incentive          10.5            4.2 
  Non-cash stock compensation expense                    4.7            9.5 
  Amortization of debt issuance costs                    1.9            2.2 
  Deferred income taxes                                 10.1           (2.4)
Changes in working capital, net of investing                                
 activities:                                                                
  Accounts receivable, net                               3.2            5.9 
  Prepaids and other assets                             (8.3)          (4.1)
  Accounts payable                                       5.7            1.9 
  Accrued liabilities                                  (13.5)          (5.9)
  Deferred contract costs                               (0.5)             - 
  Deferred revenue                                      10.0           (1.2)
                                               -------------  ------------- 
Net cash flows provided by operating                                        
 activities                                            115.8          103.2 
                                               -------------  ------------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                       
  Construction in progress additions                   (96.5)        (137.4)
  Other property and equipment additions                (4.8)          (4.0)
  Decrease in restricted cash                            1.9            5.0 
                                               -------------  ------------- 
Net cash flows used in investing activities            (99.4)        (136.4)
                                               -------------  ------------- 
CASH FLOWS FROM FINANCING ACTIVITIES:                                       
  Repayment of long-term debt                           (2.5)             - 
  Proceeds from exercise of stock options                  -            1.3 
  Repurchase of common stock                               -           (0.2)
                                               -------------  ------------- 
Net cash flows (used in) provided by financing                              
 activities                                             (2.5)           1.1 
                                               -------------  ------------- 
Net increase (decrease) in cash and cash                                    
 equivalents                                            13.9          (32.1)
Cash and cash equivalents, beginning of period         198.5          179.3 
                                               -------------  ------------- 
Cash and cash equivalents, end of period       $       212.4  $       147.2 
                                               -------------  ------------- 
SUPPLEMENTAL CASH FLOW INFORMATION:                                         
Interest capitalized                           $        10.9  $         7.7 
NON-CASH INVESTING AND FINANCING ACTIVITIES:                                
Changes to non-cash construction in progress                                
 accruals, including interest                           12.8            3.2 
                                                                            

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(303) 684-4210

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