DigitalGlobe Reports Second Quarter Results

Adjusted EBITDA is not a recognized term under generally accepted accounting principles (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.

Second quarter EnhancedView deferred revenue includes $8.3 million invoiced in the first quarter of 2011 for which cash was received in the second quarter of 2011.


DigitalGlobe, Inc. Unaudited Condensed Consolidated Balance Sheets

(in millions, except share and per share data)	December 31, 2010			June 30, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	179.3		$	147.2
Restricted cash		6.7			3.8
Accounts receivable, net of allowance for doubtful accounts of $1.0 and $1.2, respectively		45.3			39.4
Prepaid and current assets		19.4			18.9
Deferred taxes		62.7			49.9
Total current assets		313.4			259.2
Property and equipment, net of accumulated depreciation of $478.2 and $536.6, respectively		879.1			967.1
Goodwill		8.7			8.7
Intangibles, net of accumulated amortization of $7.7 and $7.8, respectively		0.3			0.2
Aerial image library, net of accumulated amortization of $21.1 and $22.7, respectively		1.9			4.2
Long-term restricted cash		13.6			11.5
Long-term deferred contract costs		42.1			43.7
Other assets, net		7.2			6.4
Total assets	$	1,266.3		$	1,301.0
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	15.0		$	17.0
Accrued interest		6.2			6.2
Other accrued liabilities		26.3			31.8
Current portion of deferred revenue		38.9			36.0
Total current liabilities		86.4			91.0
Long-term accrued liability		6.0			1.4
Deferred rev e nue		246.2			284.8
Deferred lease incentive		4.6			3.9
Long-term debt, net of discount		346.1			347.4
Long-term deferred tax liability		76.7			62.5
Total liabilities	$	766.0		$	791.0
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value; 24,000,000 shares authorized; no shares issued and outstanding at December 31, 2010 and June 30, 2011		–			–
Common stock; $0.001 par value; 250,000,000 shares authorized; 46,073,691 shares issued and outstanding at December 31, 2010 and 46,285,702 shares issued and outstanding at June 30, 2011		0.2			0.2
Treasury stock, at cost; 44,039 shares at December 31, 2010 and 50,395 shares at June 30, 2011		(0.7	)		(0.9	)
Additional paid-in capital		512.7			523.7
Accumulated deficit		(11.9	)		(13.0	)
Total stockholders’ equity		500.3			510.0
Total liabilities and stockholders’ equity	$	1,266.3		$	1,301.0


DigitalGlobe, Inc. Condensed Consolidated Statements of Cash Flows

(in millions)	For the Six Months Ended June 30,
(in millions)		2010			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	2.0		$	(1.1	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		60.1			58.4
EnhancedView deferred revenue		–			49.7
Recognition of pre-FOC payments		(12.8	)		(12.8	)
Amortization of aerial image library, deferred contract costs and lease incentive		2.2			3.6
Non-cash stock compensation expense		2.9			9.0
Amortization of debt issuance costs and debt discount		2.3			2.2
Deferred income taxes		1.4			(1.4	)
Changes in working capital, net of investing activities:
Accounts receivable, net		(5.3	)		5.9
Prepaids and other assets		(0.5	)		(3.2	)
Accounts payable		–			1.9
Accrued liabilities		5.8			(2.0	)
Deferred contract costs		(11.2	)		(4.4	)
Deferred revenue		9.9			(1.2	)
Net cash flows provided by operating activities		56.8			104.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction in progress additions		(16.1	)		(138.8	)
Other property, equipment and intangible additions		(3.3	)		(4.0	)
Change in restricted cash		0.9			5.0
Net cash flows used in investing activities		(18.5	)		(137.8	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Costs associated with initial public offering		(0.3	)		–
Proceeds from exercise of stock options		7.8			1.3
Cash paid for treasury stock		–			(0.2	)
Net cash flows provided by financing activities		7.5			1.1
Net increase (decrease) in cash and cash equivalents		45.8			(32.1	)
Cash and cash equivalents, beginning of period		97.0			179.3
Cash and cash equivalents, end of period	$	142.8		$	147.2
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash received (paid) for income taxes	$	0.1		$	–
Cash paid for interest, net of capitalized amounts $6.8 and $6.0, respectively		11.8			12.6
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Changes to non-cash construction in progress and property, equipment and intangibles accruals, including interest	$	(5.8	)	$	(3.5	)

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