2010 ANNUAL REPORT April 7, 2011
Total Page:16
File Type:pdf, Size:1020Kb
2010 ANNUAL REPORT April 7, 2011 Dear Shareowners, I join DigitalGlobe this week with great excitement for our future and for our potential to create shareowner value. My enthusiasm is based on three fundamental beliefs. First, DigitalGlobe produces the highest quality imagery from the most capable and largest constellation of commercial satellites circling the globe. Second, the power to capture and analyze timely, high-resolution imagery anywhere on earth enables our company to help customers tackle a myriad of mission critical challenges. Finally, we have just begun to realize the market opportunity through customer acquisition and the sale of value-added products and services. Satellite imagery and analysis should continue to benefit from a number of important secular trends and challenges, including: geopolitical risk assessment; anticipation and management of supply chain disruptions; conservation of water and other natural resources; energy and mineral exploration; monitoring the effects of climate change; aiding warfighters and law enforcement; and urban growth and economic development. Our critical role in aiding customers with disaster recovery was especially evident in recent weeks. The tragic earthquake and tsunami in Japan highlighted the critical role of our satellite imagery. During the days and weeks following the tragedy, our imagery and analysis appeared daily on major news outlets around the world. More importantly, we continue to aid in the recovery effort — providing images and insight to government agencies, businesses concerned about their employees and organizations providing relief efforts. 2010 ACCOMPLISHMENTS As I reviewed the accomplishments of the past year, I am incredibly proud of the team I have joined. A highlight of 2010 was the award of EnhancedView by the U.S. Government’s National Geospatial- Intelligence Agency (NGA). This $3.55 billion 10-year contract award further confirmed the critical nature of what we do every day on behalf of our largest customer — helping save lives and making the world a better place. In 2010 the company grew revenue 14 percent to $322 million, and increased adjusted EBITDA(1) by 27 percent to $182 million. We generated more than $70 million in free cash flow(1) in the year, even with the step-up in capital spending related to EnhancedView. During the year we also diversified our revenue base. We now derive 38% of our revenue from sources other than the NGA, up from 25% in 2009. Our growth came disproportionately from customers outside the U.S. Our non-U.S. business nearly doubled in 2010 and now represents close to 30% of our revenue. This growth outside the U.S. came from the sale of capacity through our Direct Access Program (DAP) and from the sale of products to both non-U.S. governments and commercial accounts. We generated additional growth both within and outside the U.S. from map-makers, Internet portals, wireless providers, international civil governments, and energy and financial services companies. We exceeded the 1 billion square kilometer mark in our ImageLibrary during the year and have now mapped the earth’s surface more than seven times. The 2009 launch and early 2010 commissioning of our WorldView-2 satellite enabled us to extend our lead in this important archiving capability. This library, combined with our unique 8-band technology, gives us substantial capability to help customers monitor critical changes on the Earth’s surface. Importantly, we continued to deliver new products and made it easier for customers to use our imagery and value-added information and insight with the recent launch of our DigitalGlobe Cloud Services 3.0 Series. More than 200 customers now take advantage of that distributed web services capability to access refreshed imagery on line and on demand. Several notable product launches during 2010 included our Advanced Ortho Series, Advanced Visualization Series and the Assured Monitoring Series. Finally, we started construction of our WorldView-3 satellite. This should allow us to further provide customers with timely, high-resolution imagery and insight following its anticipated launch in 2014. None of these accomplishments would have been possible if not for the efforts of my predecessor, Jill Smith, who leaves the company this week to spend more time with her family in Boston. The board and management team join me in expressing appreciation for her leadership and wishing her well. THE YEAR AHEAD While I am in the opening days of my tenure as CEO, it would be premature to detail specific plans for the next year. During these first 100 days, we will be undertaking a thorough review of our business. I will be meeting with customers, employees, industry experts, our board and shareowners — to develop a perspective on what’s working well and to identify opportunities to maximize shareowner value. During this time we will also be focused on a number of areas: • Realizing the full potential of our contract with NGA; • Developing an even deeper understanding of our customers’ needs in order to accelerate our growth; • Ensuring we are investing in the best opportunities; and • Taking steps to make sure our talented team members are operating in an environment where they are able to do their very best work. In all of these efforts I will be working closely with our capable management team and board of directors, including our accomplished Chairman, General Howell Estes III. We look forward to keeping you abreast of our progress and are fully committed to doing everything in our power to deliver a superior return on your investment. Best regards, Jeffrey R. Tarr President and Chief Executive Officer (1) For a reconciliation of adjusted EBITDA, please see enclosed Annual Report on Form 10-K. Free cash flow is defined as Operating Cash Flows less Investing Cash Flows as set forth on Form 10-K. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark one) ¥ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010 OR n TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from: to Commission File No. 001-34299 DIGITALGLOBE, INC. (Exact name of registrant as specified in its charter) Delaware 31-1420852 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1601 Dry Creek Drive, Suite 260 80503 Longmont, Colorado (Zip Code) (Address of principal executive office) (303) 684-4000 (Registrant’s telephone number, including area code) (Title of Each Class) (Name of Each Exchange on Which Registered) Common Stock, par Value $0.001 per Share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Not Applicable Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¥ No n Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes n No ¥ 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 n 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 n No n Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. n Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¥ Accelerated filer n Non-accelerated filer n Smaller reporting company n (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes n No ¥ State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: The aggregate market value of the registrant’s common stock held by non-affiliates, computed by reference to the closing sale price of $26.30 as reported by the New York Stock Exchange on June 30, 2010 was $826,162,056. The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of February 25, 2011 (latest practicable date) was 46,051,665, shares. Documents Incorporated by Reference: Portions of the registrant’s Definitive Proxy Statement for the 2011 Annual Meeting of Stockholders are incorporated by reference into Part III. TABLE OF CONTENTS PAGE SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ......................