DigitalGlobe Reports Third Quarter 2015 Results

EBITDA margin is calculated by dividing EBITDA by U.S. GAAP revenue. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by U.S. GAAP revenue. We have not provided a reconciliation of our Adjusted EBITDA outlook to the comparable forward-looking U.S. GAAP financial measure because we are unable to provide a forward-looking estimate of the reconciling items between such non-U.S. GAAP forward-looking measure and the comparable forward-looking U.S. GAAP measure. Certain factors that are materially significant to our ability to estimate these items are out of our control and/or cannot be reasonably predicted. Accordingly, a reconciliation to the comparable forward-looking U.S. GAAP measure is not available without unreasonable effort.


DigitalGlobe, Inc. Reconciliation of Net Cash Flows Provided by Operating Activities to Free Cash Flow

	For the nine months ended
	September 30,
(in millions)	2015			2014
Net cash flows provided by operating activities	$	237.5		$	148.6
Net cash flows used in investing activities		(106.3	)		(237.8	)
Acquisition of businesses, net of cash acquired		—			35.7
Free cash flow	$	131.2		$	(53.5	)

Free Cash Flow margin is calculated by dividing Free Cash Flow by U.S. GAAP revenue.


DigitalGlobe, Inc. Consolidated Balance Sheets

	September 30,			December 31,
(in millions, except par value)	2015			2014
ASSETS
Current Assets:
Cash and cash equivalents	$	147.6		$	117.8
Restricted cash		2.3			2.3
Accounts receivable, net of allowance for doubtful accounts of $2.4 and $0.5, respectively		87.4			133.6
Deferred contract costs		9.2			9.1
Prepaid and current assets		19.4			22.6
Deferred income taxes, net		24.1			24.1
Total current assets		290.0			309.5
Property and equipment, net of accumulated depreciation of $1,116.6 and $1,095.5, respectively		2,076.9			2,174.7
Goodwill		484.1			484.5
Intangible assets, net of accumulated amortization of $27.1 and $19.5, respectively		35.4			43.0
Long-term restricted cash		4.9			4.0
Long-term deferred contract costs		49.7			41.8
Other assets		35.4			37.7
Total assets	$	2,976.4		$	3,095.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	7.3		$	4.4
Current portion of long-term debt		5.5			5.5
Deferred revenue		80.1			91.0
Other accrued liabilities		50.1			62.2
Total current liabilities		143.0			163.1
Long-term debt, net of discount		1,128.4			1,132.1
Deferred revenue, non-current		290.7			335.1
Deferred income taxes, net, non-current		106.1			101.9
Other liabilities		29.9			9.5
Total liabilities	$	1,698.1		$	1,741.7
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
DigitalGlobe, Inc. stockholders’ equity:
Series A convertible preferred stock, $0.001 par value; 0.08 shares authorized; 0.08 shares issued and outstanding at September 30, 2015 and December 31, 2014		—			—
Common stock; $0.001 par value; 250.0 shares authorized; 76.5 shares issued and 70.0 shares outstanding at September 30, 2015 and 76.1 shares issued and 73.2 shares outstanding at December 31, 2014		0.2			0.2
Treasury stock, at cost; 6.5 shares at September 30, 2015 and 2.9 shares at December 31, 2014		(181.6	)		(80.1	)
Additional paid-in capital		1,499.4			1,484.0
Accumulated deficit		(39.7	)		(52.4	)
Total DigitalGlobe, Inc. stockholders’ equity		1,278.3			1,351.7
Noncontrolling interest		—			1.8
Total stockholders’ equity		1,278.3			1,353.5
Total liabilities and stockholders’ equity	$	2,976.4		$	3,095.2


DigitalGlobe, Inc. Consolidated Statements of Cash Flows

	For the nine months ended
	September 30,
(in millions)	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	12.7		$	6.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		205.3			172.9
Amortization of aerial image library, deferred contract costs and lease incentive		12.3			11.6
Non-cash stock-based compensation expense, net of capitalized stock-based compensation expense		14.2			13.3
Amortization of debt issuance costs and accretion of debt discount, net of capitalized interest		5.0			—
Deferred income taxes		4.2			(1.3	)
Excess tax benefit from share-based compensation		(1.3	)		(1.9	)
Other		0.8			1.4
Changes in working capital, net of assets acquired and liabilities assumed in business combinations:
Accounts receivable, net		46.2			(8.1	)
Deferred contract costs		(13.1	)		(6.4	)
Other current and non-current assets		2.5			4.5
Accounts payable		(1.8	)		(16.0	)
Accrued liabilities		5.8			(2.0	)
Deferred revenue		(55.3	)		(25.7	)
Net cash flows provided by operating activities		237.5			148.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction in progress additions		(97.9	)		(193.9	)
Property and equipment additions		(2.5	)		(12.0	)
Acquisition of businesses, net of cash acquired		—			(35.7	)
(Increase) decrease in restricted cash		(0.9	)		3.8
Loan to joint venture		(5.0	)		—
Net cash flows used in investing activities		(106.3	)		(237.8	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt		(4.1	)		(4.1	)
Repurchase of common stock		(100.5	)		(15.0	)
Proceeds from exercise of stock options		5.4			8.6
Preferred stock dividend payment		(3.0	)		(3.0	)
Excess tax benefit from share-based compensation		1.3			1.9
Other		(0.5	)		(0.9	)
Net cash flows used in financing activities		(101.4	)		(12.5	)
Net increase (decrease) in cash and cash equivalents		29.8			(101.7	)
Cash and cash equivalents, beginning of period		117.8			229.1
Cash and cash equivalents, end of period	$	147.6		$	127.4

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest, net of capitalized amounts of $28.2 million and $47.6 million, respectively		22.6			—
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Changes to non-cash property, equipment and construction in progress accruals, including interest		1.3			16.3
Additions to capital lease obligations		—			(3.1	)
Non-cash preferred stock dividend accrual		(1.0	)		(1.0	)

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