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EX-32.2 - EX-32.2 - DIGITALGLOBE, INC.dgi-20170630ex322f06346.htm
EX-32.1 - EX-32.1 - DIGITALGLOBE, INC.dgi-20170630ex3210b795f.htm
EX-31.2 - EX-31.2 - DIGITALGLOBE, INC.dgi-20170630ex312a7ca1a.htm
EX-31.1 - EX-31.1 - DIGITALGLOBE, INC.dgi-20170630ex3110efea1.htm
EX-10.5 - EX-10.5 - DIGITALGLOBE, INC.dgi-20170630ex105036c45.htm
EX-10.4 - EX-10.4 - DIGITALGLOBE, INC.dgi-20170630ex104683a1d.htm
EX-10.3 - EX-10.3 - DIGITALGLOBE, INC.dgi-20170630ex1039c9c4f.htm
EX-10.2 - EX-10.2 - DIGITALGLOBE, INC.dgi-20170630ex102c74116.htm
EX-10.1 - EX-10.1 - DIGITALGLOBE, INC.dgi-20170630ex1016ac97c.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: June 30, 2017

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     

 

Commission file number 001-34299

 

DIGITALGLOBE, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware

 

31-1420852

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

 

 

 

1300 West 120th Avenue

Westminster, Colorado

 

80234

(Address of principal executive office)

 

(Zip Code)

 

(303) 684-4000

(Registrant’s telephone number, including area code)

 

N/A

(Former address of principal executive office)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒  No  ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒  No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

 

 

Large accelerated filer  ☒

Accelerated filer  ☐

 

 

Non-accelerated filer  ☐ (Do not check if smaller reporting company)

Smaller reporting company  ☐

 

 

Emerging growth company  ☐

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ☐  No  ☒

 

As of July 21, 2017, there were 62,250,895 shares of the registrant’s Common Stock, par value $0.001 per share, outstanding.

 

 

 

 


 

DigitalGlobe, Inc.

 

INDEX

 

 

 

 

 

Page

PART I. 

Financial Information

3

Item 1 

Financial Statements

3

Unaudited Condensed Consolidated Statements of Operations 

3

Unaudited Condensed Consolidated Balance Sheets 

4

Unaudited Condensed Consolidated Statements of Cash Flows 

5

Notes to Unaudited Condensed Consolidated Financial Statements 

6

Item 2 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3 

Quantitative and Qualitative Disclosures about Market Risk

26

Item 4 

Controls and Procedures

26

PART II. 

Other Information

27

Item 1 

Legal Proceedings

27

Item 1A 

Risk Factors

27

Item 2 

Unregistered Sales of Equity Securities and Use of Proceeds

27

Item 3 

Defaults Upon Senior Securities

27

Item 4 

Mine Safety Disclosures

27

Item 5 

Other Information

27

Item 6 

Exhibit Index

27

 

Picture 1

2


 

 

PART I — FINANCIAL INFORMATION

 

ITEM 1.  FINANCIAL STATEMENTS

 

DigitalGlobe, Inc.

 

Unaudited Condensed Consolidated Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the six months ended

 

 

June 30,

 

June 30,

(in millions, except per share data)

    

2017

    

2016

 

2017

    

2016

Revenue

 

$

225.7

 

$

175.5

 

$

435.4

 

$

350.9

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue, excluding depreciation and amortization

 

 

69.7

 

 

38.1

 

 

131.0

 

 

72.6

Selling, general and administrative

 

 

54.0

 

 

42.8

 

 

117.1

 

 

89.2

Depreciation and amortization

 

 

86.3

 

 

66.9

 

 

165.8

 

 

137.9

Restructuring charges

 

 

0.3

 

 

1.6

 

 

0.6

 

 

4.5

Income from operations

 

 

15.4

 

 

26.1

 

 

20.9

 

 

46.7

Interest expense, net

 

 

(13.3)

 

 

(4.7)

 

 

(22.8)

 

 

(9.8)

Loss from early extinguishment of debt

 

 

 —

 

 

 —

 

 

(0.5)

 

 

 —

Income (loss) before income taxes

 

 

2.1

 

 

21.4

 

 

(2.4)

 

 

36.9

Income tax (expense) benefit

 

 

(0.2)

 

 

(7.9)

 

 

2.1

 

 

(13.9)

Equity in earnings from joint ventures, net of tax

 

 

0.8

 

 

(1.3)

 

 

0.8

 

 

(2.2)

Net income

 

 

2.7

 

 

12.2

 

 

0.5

 

 

20.8

Preferred stock dividends

 

 

(1.0)

 

 

(1.0)

 

 

(2.0)

 

 

(2.0)

Net income less preferred stock dividends

 

 

1.7

 

 

11.2

 

 

(1.5)

 

 

18.8

Income allocated to participating securities

 

 

(0.1)

 

 

(0.5)

 

 

 —

 

 

(0.9)

Net income (loss) available to common stockholders

 

$

1.6

 

$

10.7

 

$

(1.5)

 

$

17.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

0.03

 

$

0.17

 

$

(0.02)

 

$

0.28

Diluted earnings (loss) per share

 

$

0.03

 

$

0.17

 

$

(0.02)

 

$

0.28

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

62.1

 

 

62.9

 

 

61.9

 

 

63.9

Diluted

 

 

63.3

 

 

63.4

 

 

61.9

 

 

64.2

 

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.

3


 

DigitalGlobe, Inc.

 

Unaudited Condensed Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

    

June 30,

    

December 31,

(in millions, except par value)

 

2017

 

2016

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

107.3

 

$

109.3

Restricted cash

 

 

3.4

 

 

2.4

Accounts receivable, net of allowance for doubtful accounts of $1.7 and $1.6, respectively

 

 

147.5

 

 

114.6

Deferred contract costs

 

 

12.5

 

 

10.3

Prepaid and other current assets

 

 

19.9

 

 

23.8

Total current assets

 

 

290.6

 

 

260.4

Property and equipment, net of accumulated depreciation of $1,544.7 and $1,387.8, respectively

 

 

1,885.6

 

 

2,002.5

Goodwill

 

 

578.1

 

 

578.1

Intangible assets, net of accumulated amortization of $47.6 and $39.0, respectively

 

 

78.4

 

 

87.0

Long-term restricted cash

 

 

8.6

 

 

4.8

Long-term deferred contract costs

 

 

48.8

 

 

49.3

Other assets

 

 

32.1

 

 

27.8

Total assets

 

$

2,922.2

 

$

3,009.9

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

11.2

 

$

15.0

Current portion of long-term debt

 

 

12.8

 

 

47.2

Deferred revenue

 

 

85.9

 

 

86.3

Other accrued liabilities

 

 

50.8

 

 

70.7

Total current liabilities

 

 

160.7

 

 

219.2

Long-term debt, net of discount and debt issuance costs

 

 

1,237.7

 

 

1,242.1

Deferred revenue, non-current

 

 

181.9

 

 

216.9

Deferred income taxes, net, non-current

 

 

119.8

 

 

124.0

Other liabilities

 

 

37.0

 

 

34.8

Total liabilities

 

$

1,737.1

 

$

1,837.0

COMMITMENTS AND CONTINGENCIES (Note 13)

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Series A convertible preferred stock, $0.001 par value; 0.08 shares authorized; 0.08 shares issued and outstanding at June 30, 2017 and December 31, 2016

 

 

 —

 

 

Common stock; $0.001 par value; 250.0 shares authorized; 77.9 shares issued and 62.3 shares outstanding at June 30, 2017 and 77.0 shares issued and 61.4 shares outstanding at December 31, 2016

 

 

0.2

 

 

0.2

Treasury stock, at cost; 15.6 shares at June 30, 2017 and  December 31, 2016

 

 

(342.0)

 

 

(342.0)

Additional paid-in capital

 

 

1,527.9

 

 

1,518.3

Accumulated deficit

 

 

(1.0)

 

 

(3.6)

Total stockholders’ equity

 

 

1,185.1

 

 

1,172.9

Total liabilities and stockholders’ equity

 

$

2,922.2

 

$

3,009.9

 

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.

4


 

DigitalGlobe, Inc.

 

Unaudited Condensed Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

For the six months ended

 

 

June 30,

(in millions)

    

2017

    

2016

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

0.5

 

$

20.8

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization expense

 

 

165.8

 

 

137.9

Stock-based compensation expense, net of capitalized stock-based compensation expense

 

 

12.3

 

 

8.3

Amortization of aerial image library, deferred contract costs and lease incentive

 

 

6.1

 

 

8.4

Deferred income taxes

 

 

(2.1)

 

 

14.0

Amortization of debt issuance costs, accretion of debt discount, and other

 

 

1.6

 

 

6.0

Changes in working capital:

 

 

 

 

 

 

Accounts receivable, net

 

 

(32.9)

 

 

(8.5)

Deferred contract costs

 

 

(9.1)

 

 

(8.0)

Other current and non-current assets

 

 

(0.1)

 

 

(2.4)

Accounts payable

 

 

(3.8)

 

 

5.7

Accrued liabilities

 

 

(17.5)

 

 

(4.1)

Deferred revenue

 

 

(35.4)

 

 

(27.4)

Net cash flows provided by operating activities

 

 

85.4

 

 

150.7

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Capital expenditures

 

 

(35.8)

 

 

(85.8)

Investment in joint venture

 

 

 —

 

 

(7.5)

Net cash flows used in investing activities

 

 

(35.8)

 

 

(93.3)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Payment of debt and capital lease obligations

 

 

(42.7)

 

 

(3.9)

Repurchase of common stock

 

 

 —

 

 

(76.8)

Value of shares surrendered to satisfy employee tax obligations

 

 

(7.4)

 

 

(2.0)

Proceeds from exercise of stock options and other

 

 

3.3

 

 

(0.8)

Net cash flows used in financing activities

 

 

(46.8)

 

 

(83.5)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

2.8

 

 

(26.1)

Cash, cash equivalents and restricted cash, beginning of period

 

 

116.5

 

 

134.0

Cash, cash equivalents and restricted cash, end of period

 

$

119.3

 

$

107.9

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

Cash paid for interest, net of capitalized amounts of $5.1 and $21.8, respectively

 

 

21.0

 

 

7.4

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Changes to accruals for capital expenditures, including interest, and additions to capital lease obligations

 

 

(4.0)

 

 

0.4

Non-cash preferred stock dividend accrual

 

 

(1.0)

 

 

(1.0)

 

See accompanying notes to the Unaudited Condensed Consolidated Financial Statements.

 

5


 

NOTE 1.General Information

 

DigitalGlobe, Inc., together with its consolidated subsidiaries (“DigitalGlobe,” and “Company”), is a global leader in Earth imagery and information about our changing planet, with unique capabilities that enable users to analyze and extract information from imagery at global scale. Sourced from its own advanced satellite constellation and third-party providers, DigitalGlobe’s imagery solutions and other services provide customers with accurate and mission-critical information about our changing planet, and support a wide variety of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration, and infrastructure management. Additionally, more than one thousand developers are building new applications and machine learning algorithms on DigitalGlobe’s Geospatial Big Data platform and in the Company’s recently expanded Services business. Each day users depend on DigitalGlobe to better understand our changing planet in order to save lives, resources and time.

 

DigitalGlobe’s principal customers include U.S. and foreign governments, location-based services (“LBS”) providers, and those in energy and other industry verticals. The imagery that forms the foundation of the Company’s products, services and analysis is collected daily from DigitalGlobe’s constellation of high-resolution imaging satellites and maintained in the Company’s imagery archives (“ImageLibrary”).

 

NOTE 2.Summary of Significant Accounting Policies

 

Basis of Presentation

 

The Unaudited Condensed Consolidated Financial Statements include the accounts of DigitalGlobe, Inc. and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

 

The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In management’s opinion, all adjustments of a normal recurring nature that are necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included. The results of operations for the six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or for any future period.

 

These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission. The December 31, 2016 Condensed Consolidated Balance Sheet was derived from the Company’s annual audited financial statements, but does not include all disclosures required in the annual financial statements prepared in accordance with U.S. GAAP. Certain prior period amounts have been reclassified to conform to the current period presentation.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities at the reporting date, and amounts of revenue and expenses during the periods presented. Due to the inherent uncertainties in making estimates, actual results could differ materially from those estimates and such differences may be material to the Unaudited Condensed Consolidated Financial Statements.

 

Comprehensive Income

 

For the three and six months ended June 30, 2017 and 2016, there were no material differences between net income and comprehensive income.

 

6


 

Recent Accounting Pronouncements

 

Recently Adopted Accounting Standards

 

 

 

 

 

Standard

 

 

Description and Impact on the Financial Statements

ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash

 

 

This standard is intended to reduce the diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The standard requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents and amounts generally described as restricted cash or restricted-cash equivalents. Therefore, amounts generally described as restricted cash and restricted-cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company retrospectively adopted Accounting Standards Update (“ASU”) 2016-18 on January 1, 2017, and this adoption did not have a material impact on its Consolidated Financial Statements and related disclosures.

ASU 2016-09, Improvements to Employee Share-Based Payment Accounting

 

 

This standard simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Entities will be required to recognize the income tax effects of awards in the income statement when the awards vest or are settled. The Company adopted ASU 2016-09 on January 1, 2017, and it did not have a material impact on its Consolidated Financial Statements and related disclosures.

 

7


 

Standards Not Yet Adopted

 

 

 

 

    

    

Standard

 

Description

ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

 

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”), a new revenue recognition model that will replace nearly all existing revenue recognition guidance under U.S. GAAP. Under Topic 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Topic 606 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company is planning to adopt Topic 606, including several amendments issued by the FASB, on January 1, 2018.

The new standard permits i) retrospective adoption, under which each prior reporting period presented will be presented as if the new standard had always been applied, or ii) adoption by recognizing the cumulative effect of applying the guidance to all prior activity at the date of initial application. Management currently anticipates adopting the standard using the full retrospective method; however, the Company’s ability to do so is dependent on system readiness and whether the Company has the information necessary to apply Topic 606 to prior periods.

The Company is still in the process of evaluating the effects of adopting Topic 606. However, management has completed its initial review of the EnhancedView Contract (“EnhancedView Contract”) with the United States National Geospatial-Intelligence Agency ("NGA"), the NextView Agreement and Direct Access Program (“DAP”) contracts. Revenue from these sources represented 58% of DigitalGlobe’s revenue for the six months ended June 30, 2017. While the Company has not quantified the effects of anticipated changes to reflect Topic 606, the Company's initial conclusions are summarized below:

• U.S. Government – Management expects the recognition of NextView amortization (as defined in Note 14 of the Notes to the Unaudited Condensed Consolidated Financial Statements) to differ because management believes the EnhancedView Contract would be considered a modification to the NextView Agreement. This is expected to result in NextView amortization being recognized as capacity is provided to the NGA over the term of the EnhancedView Contract as opposed to being recognized straight-line over the estimated useful life of WorldView-1.

• DAP – Under Topic 606, customer facility payments are expected to be recognized over the life of the related contract, which will be a shorter recognition period than the current practice of recognizing the payments over the longest estimated remaining useful life of the satellites accessed by the customer. In addition, while direct incremental costs incurred in the construction of the facility will continue to be deferred under the new standard, the period over which these costs are recognized may change.

Management will continue to evaluate Topic 606 (including how it may impact other customer contracts) and the resulting impact to the Consolidated Financial Statements through the date of adoption.

ASU 2016-02, Leases (Topic 842)

 

This standard requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The new guidance also requires additional disclosure regarding leasing arrangements. This standard requires the use of a modified retrospective transition method and is effective for the Company beginning January 1, 2019.  Early adoption is permitted.  The Company is currently evaluating the effect that ASU 2016-02 will have on the Consolidated Financial Statements and related disclosures.

 

 

 

 

 

8


 

NOTE 3.Property and Equipment

 

Property and equipment consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

 

    

Depreciable Life

    

 

 

    

 

 

(in millions)

 

(in years)

 

June 30, 2017

 

December 31, 2016

Satellites

 

9

13

 

$

2,681.9

 

$

1,797.7

Construction in progress

 

 

 

 

 

24.4

 

 

948.5

Computer equipment and software

 

3

12

 

 

558.7

 

 

484.8

Machinery and equipment, including ground terminals

 

5

7

 

 

109.1

 

 

103.3

Leasehold improvements

 

3

15

 

 

51.2

 

 

51.1

Furniture, fixtures and other

 

5

7

 

 

5.0

 

 

4.9

Total property and equipment

 

 

 

 

 

 

3,430.3

 

 

3,390.3

Accumulated depreciation

 

 

 

 

 

 

(1,544.7)

 

 

(1,387.8)

Property and equipment, net

 

 

 

 

 

$

1,885.6

 

$

2,002.5

 

Depreciation expense for property and equipment, inclusive of losses on disposals of assets, was $82.0 million and $65.0 million for the three months ended June 30, 2017 and 2016, respectively, and $157.2 million and $133.7 million for the six months ended June 30, 2017 and 2016, respectively. 

 

Satellite Constellation

 

As of June 30, 2017, the Company operated a constellation of five in-orbit and fully commissioned satellites: GeoEye-1, WorldView-1, WorldView-2, WorldView-3, and WorldView-4. The net book value of each in-orbit satellite was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2017

 

December 31, 2016

 

 

Depreciable

 

Gross

 

 

 

 

Net

 

Gross

 

 

 

 

Net

 

    

Life

 

Carrying

 

Accumulated

 

Carrying

 

Carrying

 

Accumulated

 

Carrying

(in millions)

 

(in years)

 

Amount

 

Depreciation

 

Amount

 

Amount

 

Depreciation

 

Amount

GeoEye-1

 

9.0

 

$

211.8

 

$

(187.1)

 

$

24.7

 

$

211.8

 

$

(165.9)

 

$

45.9

WorldView-1

 

13.0

 

 

473.2

 

 

(383.4)

 

 

89.8

 

 

473.2

 

 

(370.1)

 

 

103.1

WorldView-2

 

13.0

 

 

463.2

 

 

(287.7)

 

 

175.5

 

 

463.2

 

 

(271.7)

 

 

191.5

WorldView-3

 

11.5

 

 

649.5

 

 

(155.3)

 

 

494.2

 

 

649.5

 

 

(127.1)

 

 

522.4

WorldView-4

 

10.5

 

 

884.2

 

 

(35.1)

 

 

849.1

 

 

 —

 

 

 —

 

 

 —

Satellites, net

 

 

 

$

2,681.9

 

$

(1,048.6)

 

$

1,633.3

 

$

1,797.7

 

$

(934.8)

 

$

862.9

 

On February 1, 2017, WorldView-4 was placed into service and commercial operations began. As a result, the Company began depreciating the satellite based on its estimated useful life of 10.5 years.

 

NOTE 4.Business Acquisitions

 

In November 2016, the Company acquired all of the outstanding shares of The Radiant Group, Inc. for aggregate cash consideration, net of cash acquired, of $135.1 million. As a result of the transaction, the Company recognized $90.0 million of goodwill (not deductible for tax purposes), $62.1 million of acquired intangible assets and $17.0 million of net liabilities excluding cash acquired, which were primarily comprised of deferred tax liabilities. The Company’s valuation of the acquired assets and liabilities will be completed within one year of the acquisition and the actual fair values may differ significantly from these preliminary estimates.

 

 

9


 

NOTE 5.Goodwill and Intangible Assets

 

There have been no changes in the Company’s goodwill of $578.1 million from December 31, 2016 to June 30, 2017.

 

Intangible assets consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2017

 

December 31, 2016

 

    

 

    

Gross

    

 

 

    

Net

    

Gross

    

 

 

    

Net

 

 

Useful Life

 

Carrying

 

Accumulated

 

Carrying

 

Carrying

 

Accumulated

 

Carrying

(in millions)

 

(in years)

 

Amount

 

Amortization

 

Amount

 

Amount

 

Amortization

 

Amount

Customer relationships

 

10

–  

12

 

$

62.5

 

$

(11.4)

 

$

51.1

 

$

62.5

 

$

(8.7)

 

$

53.8

Technology

 

3

–  

5

 

 

50.7

 

 

(27.2)

 

 

23.5

 

 

50.7

 

 

(22.2)

 

 

28.5

Trademarks

 

 

3

 

 

 

9.7

 

 

(6.5)

 

 

3.2

 

 

9.7

 

 

(5.7)

 

 

4.0

FCC licenses and other

 

2

–  

20

 

 

3.1

 

 

(2.5)

 

 

0.6

 

 

3.1

 

 

(2.4)

 

 

0.7

Total

 

 

 

 

 

$

126.0

 

$

(47.6)

 

$

78.4

 

$

126.0

 

$

(39.0)

 

$

87.0

 

Intangible asset amortization expense was $4.3 million and $1.9 million for the three months ended June 30, 2017 and 2016, respectively, and $8.6 million and $4.2 million for the six months ended June 30, 2017 and 2016, respectively.

 

The estimated annual amortization expense for acquired intangible assets for each of the next five years and thereafter is as follows:

 

 

 

 

 

(in millions)

 

Amount

Remainder of 2017

 

$

8.5

2018

 

 

12.2

2019

 

 

11.4

2020

 

 

9.9

2021

 

 

9.4

Thereafter

 

 

27.0

Total

 

$

78.4

 

 

NOTE 6.Debt

 

The Company’s debt obligations consist of a $1.275 billion Senior Secured Term Loan Facility (“Term Loan”) and a $200.0 million Senior Secured Revolving Credit Facility (“Revolving Credit Facility,” and together with the Term Loan, the “2016 Credit Facility”). As of June 30, 2017, the Company had not drawn any amounts under the Revolving Credit Facility. The 2016 Credit Facility requires that the Company comply with a maximum leverage ratio. The Company was in compliance with its debt covenants as of June 30, 2017.

 

In December 2016, the Company commenced a tender offer for the $600.0 million aggregate principal amount of its outstanding 5.25% senior notes due February 1, 2021 (“Senior Notes”). In January 2017, the Company completed the subsequent redemption of the remaining outstanding Senior Notes for a total redemption price of $36.1 million, inclusive of accrued interest and related premiums.

 

10


 

The following table provides a summary of the Company’s long-term debt:

 

 

 

 

 

 

 

 

(in millions)

    

June 30, 2017

    

December 31, 2016

Term Loan due January 15, 2024

 

$

1,268.6

 

$

1,275.0

Senior Notes due February 1, 2021

 

 

 —

 

 

34.4

Total borrowings

 

 

1,268.6

 

 

1,309.4

Less: unamortized discounts and issuance costs

 

 

(18.1)

 

 

(20.1)

Total borrowings, net

 

 

1,250.5

 

 

1,289.3

Less: current maturities of long-term debt

 

 

(12.8)

 

 

(47.2)

Total long-term debt, net

 

$

1,237.7

 

$

1,242.1

 

The Company’s future debt payments, excluding interest payments, consisted of the following as of June 30, 2017:

 

 

 

 

 

(in millions)

 

Amount

Remainder of 2017

 

$

6.4

2018

 

 

12.8

2019

 

 

12.8

2020

 

 

12.8

2021

 

 

12.8

Thereafter

 

 

1,211.0

Total

 

$

1,268.6

 

Interest expense, net consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the six months ended

 

 

June 30,

 

June 30,

(in millions)

    

2017

    

2016

    

2017

    

2016

Interest

 

$

12.3

 

$

14.5

 

$

23.8

 

$

28.9

Accretion of debt discount, debt issuance cost amortization and line of credit fees

 

 

1.1

 

 

2.0

 

 

2.3

 

 

4.0

Capitalized interest

 

 

 —

 

 

(11.7)

 

 

(3.1)

 

 

(22.9)

Interest expense

 

$

13.4

 

$

4.8

 

$

23.0

 

$

10.0

Interest income

 

 

(0.1)

 

 

(0.1)

 

 

(0.2)

 

 

(0.2)

Interest expense, net

 

$

13.3

 

$

4.7

 

$

22.8

 

$

9.8

 

 

NOTE 7.Fair Value of Financial Instruments

 

The fair value of long-term debt, estimated using inputs that incorporate certain active market quotations based upon trading activity among lenders as well as other indirect inputs, was $1,268.6 million and $1,310.3 million at June 30, 2017 and December 31, 2016, respectively, and is classified within Level 2 of the valuation hierarchy. Cash equivalents primarily consist of demand deposit money market accounts. The carrying values of cash and cash equivalents, receivables, other current assets, accounts payable and accrued liabilities approximate fair value.

 

11


 

NOTE 8.Deferred Revenue

 

A rollforward of deferred revenue from December 31, 2016 to June 30, 2017 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government

 

Diversified Commercial

 

 

 

 

 

 

 

Value-

    

 

 

 

 

 

 

 

 

 

Enhanced

    

Added

 

NextView

 

 

 

 

 

 

(in millions)

    

View SLA

 

Services

 

Amortization

 

DAP

    

Other

    

Total

December 31, 2016

 

$

135.8

 

$

64.1

 

$

58.6

 

$

37.2

 

$

7.5

 

$

303.2

Deferred revenue on cash collections

 

 

150.0

 

 

29.3

 

 

 —

 

 

39.6

 

 

37.6

 

 

256.5

Deferred revenue recognized

 

 

(168.6)

 

 

(33.1)

 

 

(7.6)

 

 

(46.2)

 

 

(36.4)

 

 

(291.9)

June 30, 2017

 

$

117.2

 

$

60.3

 

$

51.0

 

$

30.6

 

$

8.7

 

$

267.8

 

 

 

 

NOTE 9.Income Taxes

 

The Company’s effective tax rate is estimated based upon the effective tax rate expected to be applicable for the full year. The effective tax rate differed from the statutory federal rate of 35.0% primarily as a result of several immaterial discrete items. 

 

NOTE 10.Stock-Based Compensation

 

During the six months ended June 30, 2017, the Company awarded 0.9 million unvested restricted stock units at an average grant date fair value of $29.89 per share. Of this amount, 0.3 million stock units represent performance shares that are subject to service, performance and market vesting conditions with an average grant date fair value of $33.73 per share. The Company did not grant any stock options during the six months ended June 30, 2017.  

 

Stock-based compensation expense, net of amounts capitalized to assets under construction, was $5.7 million and $4.3 million during the three months ended June 30, 2017 and 2016, respectively, and $12.3 million and $8.3 million during the six months ended June 30, 2017 and 2016, respectively.

 

As of June 30, 2017, unrecognized compensation expense related to unvested restricted stock awards and units, including those subject to service, performance and market vesting conditions, was $42.9 million, net of estimated forfeitures, to be recognized over a weighted-average remaining vesting period of 2.5 years.

 

As of June 30, 2017, the number of options outstanding and exercisable were 1.0 million at a weighted-average exercise price of $20.37 per share.

 

Most participants elect to have the Company withhold shares to pay for minimum taxes due at the time their restricted stock vests. The value of shares surrendered to satisfy employee tax obligations was $7.4 million and $2.0 million for the six months ended June 30, 2017 and 2016, respectively.

 

 

 

12


 

NOTE 11.  Earnings (Loss) Per Share

 

The following table sets forth the computations of basic and diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the six months ended

 

 

June 30,

 

June 30,

(in millions, except per share data)

    

2017

    

2016

    

2017

    

2016

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2.7

 

$

12.2

 

$

0.5

 

$

20.8

Preferred stock dividends

 

 

(1.0)

 

 

(1.0)

 

 

(2.0)

 

 

(2.0)

Net income less preferred stock dividends

 

 

1.7

 

 

11.2

 

 

(1.5)

 

 

18.8

Income allocated to participating securities

 

 

(0.1)

 

 

(0.5)

 

 

 —

 

 

(0.9)

Net income (loss) available to common stockholders

 

$

1.6

 

$

10.7

 

$

(1.5)

 

$

17.9

Basic weighted average number of common shares outstanding

 

 

62.1

 

 

62.9

 

 

61.9

 

 

63.9

Weighted-average common share equivalents from stock options, restricted stock and convertible preferred stock

 

 

1.2

 

 

0.5

 

 

 —

 

 

0.3

Diluted weighted average number of common shares outstanding

 

 

63.3

 

 

63.4

 

 

61.9

 

 

64.2

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

$

0.17

 

$

(0.02)

 

$

0.28

Diluted

 

$

0.03

 

$

0.17

 

$

(0.02)

 

$

0.28

 

The potential common shares from the conversion of Series A Convertible Preferred Stock that were excluded from the computation of diluted earnings per share, due to their anti-dilutive impact on weighted common share equivalents, were 3.1 million for each of the three and six month periods ended June 30, 2017 and 2016.

 

The number of stock options and non-vested restricted stock awards and units that were excluded from the computation of diluted earnings per share because they were assumed to be repurchased under the treasury stock method were 0.7 million and 2.0 million for the three month periods ended June 30, 2017 and 2016, respectively, and 2.3 million for the six month period ended June 30, 2016. Due to the Company’s net loss after deducting preferred stock dividends for the six month period ended June 30, 2017, potentially dilutive shares were not included in the calculation of diluted loss per share as their effect would have been anti-dilutive.

 

NOTE 12.Related-Party Transactions

 

In the ordinary course of business, the Company is involved in related-party transactions with its equity method investees.

 

In June 2012, the Company made a small investment in a joint venture in China. The Company sold $2.2 million and $1.9 million in products and services to the joint venture for the three months ended June 30, 2017 and 2016, respectively, and $4.2 million and $4.1 million for the six months ended June 30, 2017 and 2016, respectively. Amounts owed to the Company by the joint venture at June 30, 2017 and December 31, 2016 were $5.1 million and $3.6 million, respectively.

 

In May 2015, in exchange for a 50% equity interest in a joint venture, Vricon, Inc., the Company committed to provide imagery to the joint venture from the Company’s ImageLibrary on an ongoing basis for the purpose of producing photo-realistic three-dimensional products and digital elevation models. Upon formation, the Company contributed $5.0 million in the form of a note receivable to the joint venture, which is due May 2018. The Company provided $7.5 million in equity financing to the joint venture during the first quarter of 2016 and provided an additional $2.5 million during the third quarter of 2016.

 

13


 

NOTE 13.Commitments and Contingencies

 

The Company enters into agreements in the ordinary course of business with resellers and others. Most of these agreements require the Company to indemnify the other party against third-party claims alleging that one of the Company’s products infringes or misappropriates a patent, copyright, trademark, trade secret or other intellectual property right. Certain of these agreements require the Company to indemnify the other party against claims relating to property damage, personal injury or acts or omissions by the Company, its employees, agents or representatives.

 

In addition, the Company has made guarantees regarding the performance of its systems to its customers. Some of these agreements do not limit the maximum potential future payments the Company could be obligated to make. The Company evaluates and estimates potential losses from such indemnification based on the likelihood that the future event will occur. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such indemnification and guarantees in the Company’s financial statements.

 

The Company has entered into industrial cooperation agreements, sometimes referred to as offset agreements, as a condition to entering into contracts for its products and services from certain customers in foreign countries. These agreements are designed to return economic value to the foreign country and may be satisfied through activities that do not require a direct cash payment, including transferring technology, providing manufacturing, training and other consulting support to in-country projects. These agreements may provide for penalties in the event the Company fails to perform in accordance with offset requirements. The Company has historically not been required to pay any such penalties.

 

The Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company defends itself vigorously against any such claims. Although the outcome of these matters is currently not determinable, management does not expect that the amounts of losses and other costs to resolve these matters will have a material adverse effect on its consolidated financial position, results of operations or cash flows.

 

Additionally, DigitalGlobe and its Board of Directors are named as defendants in six putative class action lawsuits filed by purported stockholders of DigitalGlobe that challenge the upcoming merger with MacDonald, Dettwiler and Associates Ltd. (“MDA”). The lawsuits include George Assad v. DigitalGlobe, Inc., et al., Case No. 1:17-cv-01097-PAB-NYW, Jeweltex Manufacturing Inc. Retirement Plan v. DigitalGlobe, Inc., et al., Case No. 1:17-cv-01140-PAB-NYW, Royce Bussey v. DigitalGlobe, Inc., et al., Case No. 1:17-cv-01159-PAB-NYW, Dane Gussin v. DigitalGlobe, Inc., et al., Case No. 1:17-cv-01190-PAB-NYW Stuart Zand v. DigitalGlobe, Inc., et al., Case No. 1:17-cv-01570-PAB-NYW, and Matthew Machion v. DigitalGlobe, Inc., Case No. 1:17-cv-01692-NYW et al., all filed in the U.S. District Court for the District Court of Colorado except for Stuart Zand (filed in the U.S. District Court for the District of Delaware and subsequently transferred to U.S. District Court for the District Court of Colorado). The complaints allege, among other things, that in connection with MDA’s proposed acquisition of DigitalGlobe, DigitalGlobe and its Board of Directors purportedly agreed to a supposedly inadequate price for the DigitalGlobe capital stock, omitted to disclose information in the F-4 registration statement necessary to make the statements therein not materially false or misleading, and potentially engaged in self-dealing. MDA is named as a defendant in three of the lawsuits; SSL MDA Holdings, Inc., a wholly-owned subsidiary of MDA, and Merlin Merger Sub, Inc., a wholly-owned subsidiary of SSL MDA Holdings, Inc., are named as defendants in two of the lawsuits.  Plaintiffs seek as relief, among other things, declaratory and injunctive relief, including enjoining or rescinding the transaction and rescissory damages to the extent already implemented, an order directing the dissemination of a registration statement that is not false or misleading, and an award of attorneys’ and experts’ fees. On June 5, 2017, and June 14, 2017, plaintiffs in Zand and Gussin, respectively, filed motions for preliminary injunction to enjoin the merger until supplemental disclosures have been made to address the alleged omissions in the F-4 registration statement. On July 14, 2017, the court held a consolidated hearing on both motions, and took the motions under submission. On July 21, 2017, these motions for preliminary injunction were denied by the court. While it is too early to predict the outcome of litigation or a reasonable range of potential losses, DigitalGlobe and MDA believe these lawsuits are without merit. Additional lawsuits arising out of or relating to the merger agreement or the merger may be filed in the future.

 

 

14


 

NOTE 14.Significant Customers and Geographic Information

 

The Company operates in a single segment, in which it provides imagery products and services to customers around the world. The Company uses common infrastructure and technology to collect, process and distribute its imagery products and provide services to all customers, and measures performance based on consolidated operating results and achievement of individual strategic objectives and performance goals. 

 

The Company has two primary customer groups: U.S. Government and Diversified Commercial. U.S. Government revenue consists primarily of the EnhancedView Service Level Agreement (“EnhancedView SLA”) with the NGA, other revenue and value-added services, and amortization of payments received from the NGA to offset the construction costs of WorldView-1 under the NextView agreement (“NextView amortization”). Diversified Commercial consists of the following types of customers: DAP, LBS, international civil government, other international defense and intelligence, energy and other industry verticals.

 

The following table summarizes revenue for each customer group:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the six months ended

 

 

June 30,

 

June 30,

(in millions)

    

2017

    

2016

    

2017

    

2016

U.S. Government

 

$

149.5

 

$

111.9

 

$

287.8

 

$

222.2

Diversified Commercial

 

 

76.2

 

 

63.6

 

 

147.6

 

 

128.7

Total

 

$

225.7

 

$

175.5

 

$

435.4

 

$

350.9

 

The Company classifies revenue geographically according to the customer address. U.S. and international sales were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the six months ended

 

 

June 30,

 

June 30,

(in millions)

    

2017

    

2016

    

2017

    

2016

U.S.

 

$

166.5

 

$

126.5

 

$

318.9

 

$

248.1

International

 

 

59.2

 

 

49.0

 

 

116.5

 

 

102.8

Total

 

$

225.7

 

$

175.5

 

$

435.4

 

$

350.9

 

 

 

 

 

 

 

 

15


 

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “can,” “will,” “should,” “expects,” “plans,” “anticipates,” “would,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other similar words, although not all forward-looking statements contain these words. Forward-looking statements are based upon our current expectations and assumptions of future events and are subject to risks and uncertainties that could cause our actual results or performance to differ materially from those indicated by such forward-looking statements. Some of the risks or uncertainties that could cause actual results to differ include, but are not limited to: the loss or reduction in scope of any of our primary contracts, or decisions by customers not to exercise renewal options; the availability of government funding for our products and services both domestically and internationally; our ability to meet our obligations under the EnhancedView contract; our reliance on a limited number of vendors to provide certain key products or services to us; breach of our system security measures or loss of our secure facility clearance and accreditation; the loss or damage to any of our satellites; delays in the construction and launch of any of our satellites or our ability to achieve and maintain full operational capacity of all our satellites; loss or damage to the content contained in our ImageLibrary; interruption or failure of our ground systems 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; changes in political or economic conditions, including fluctuations in the value of foreign currencies, interest rates, energy and commodity prices, trade laws and the effects of governmental initiatives to manage economic conditions; our ability to recruit, hire or retain key employees or a highly skilled and diverse workforce; failure to obtain or maintain required regulatory approvals and licenses; and changes in U.S. or foreign law or regulation that may limit our ability to distribute our imagery products and services. Additional risks and uncertainties related to the proposed transaction with MacDonald, Dettwiler and Associates Ltd. (“MDA”) include the possibility that the parties may be unable to obtain required stockholder approvals or regulatory approvals or that other conditions to closing the transaction may not be satisfied, such that the transaction will not close or that the closing may be delayed; the potential adverse effect on partner and customer relationships, operating results and business generally resulting from the proposed transaction; the proposed transaction will require significant time, attention and resources, potentially diverting attention from the conduct of DigitalGlobe’s business; the anticipated benefits of the proposed transaction may not be realized; the anticipated and unanticipated costs, fees, expenses and liabilities related to the transaction; the outcome of any legal proceedings related to the transaction; and the occurrence of any event, change or other circumstances that could give rise to the termination of the transaction agreement. Additional information concerning these and other risk factors can be found in our filings with the U.S. Securities and Exchange Commission (“SEC”), including Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016. We undertake no obligation to revise or update any forward-looking statements, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.  

 

References in this filing to “DigitalGlobe,” “Company,” “we,” “us,” and “our” refer to DigitalGlobe, Inc. and its consolidated subsidiaries.

 

16


 

Overview

 

We are a global leader in Earth imagery and information about our changing planet, with unique capabilities that enable users to analyze and extract information from imagery at global scale. Sourced from our own advanced satellite constellation and third-party providers, our imagery solutions and other services provide customers with accurate and mission-critical information about our changing planet, and support a wide variety of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration, and infrastructure management. Additionally, more than one thousand developers are building new applications and machine learning algorithms on our Geospatial Big Data platform and in our recently expanded Services business. Each day users depend on us to better understand our changing planet in order to save lives, resources and time. 

 

Our principal customers include U.S. and foreign governments, location-based services (“LBS”) providers, and those in energy and other industry verticals. The imagery that forms the foundation of our products, services and analysis is collected daily from our constellation of high-resolution imaging satellites and maintained in our imagery archives (“ImageLibrary”). We believe that our ImageLibrary is the largest, most up-to-date and comprehensive archive of high-resolution Earth imagery commercially available, containing more than 8.1 billion square kilometers of imagery, an area the equivalent of 54 times the landmass of the Earth. As of June 30, 2017, our collection capacity capability was approximately 1.62 billion square kilometers of imagery per year, or the equivalent of roughly 11 times the Earth’s land surface area, and offers intraday revisit around the globe.

 

2017 Highlights

 

Pending Transaction with MDA

 

On February 24, 2017, we entered into a Merger Agreement with MDA, a corporation organized under the laws of British Columbia, upon which we will become an indirect wholly-owned subsidiary of MDA (“Merger”). Under the terms of the Merger Agreement, MDA will provide US$17.50 in cash and 0.3132 of an MDA common share in exchange for each outstanding common and preferred shares of the Company at the closing date.

 

The closing of the Merger is subject to customary closing conditions, including required regulatory approvals, adoption of the Merger Agreement by our stockholders and approval of the issuance of common shares of MDA in connection with the Merger by MDA’s shareholders. The closing of the Merger is not subject to a financing condition.

 

The Merger is expected to close in the third quarter of 2017 or shortly thereafter. Following completion of the Merger, our common stock will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934, as amended, and as such, we will no longer file periodic reports with the SEC.

 

In connection with the Merger, we have incurred, and expect to continue to incur through the closing of the Merger, significant expenses such as transaction, professional services, employee-related and other costs. As of June 30, 2017, we have incurred Merger costs of $12.0 million.

 

Recent Satellite Developments

 

On February 1, 2017, WorldView-4 was placed into service and commercial operations began. WorldView-4 has an estimated useful life of 10.5 years, resulting in depreciation expense of $84.2 million annually. In February 2017, we began providing direct access capacity to certain of our international defense and intelligence customers.

 

17


 

Results of Operations

 

We operate in a single segment in which we use common infrastructure and technology to collect, process and distribute imagery products and provide services to customers around the world. The following table summarizes our results of operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the six months ended

 

 

 

June 30,

 

June 30,

 

(in millions)

 

2017

 

2016

 

% Change

 

2017

 

2016

 

% Change

 

U.S. Government revenue

 

$

149.5

 

$

111.9

 

 

33.6

%  

$

287.8

 

$

222.2

 

 

29.5

%

Diversified Commercial revenue

 

 

76.2

 

 

63.6

 

 

19.8

 

 

147.6

 

 

128.7

 

 

14.7

 

Total revenue

 

 

225.7

 

 

175.5

 

 

28.6

 

 

435.4

 

 

350.9

 

 

24.1

 

Cost of revenue, excluding depreciation and amortization

 

 

69.7

 

 

38.1

 

 

82.9

 

 

131.0

 

 

72.6

 

 

80.4

 

Selling, general and administrative

 

 

54.0

 

 

42.8

 

 

26.2

 

 

117.1

 

 

89.2<