Maxar Technologies Inc.

Patrick Elliott - Manager-Finance and Investor Relations Jeffrey R. Tarr - President, Chief Executive Officer & Director Gary W.

Ferrera - Chief Financial Officer & Executive Vice President

Denny L. Galindo - Morgan Stanley & Co.

LLC Peter P. Appert - Piper Jaffray & Co (Broker) Mark W.

Strouse - JPMorgan Securities LLC Jonathan Raviv - Citigroup Global Markets, Inc. (Broker) Josephine L.

Millward - The Benchmark Co. LLC Chris D.

Quilty - Raymond James & Associates, Inc. Andrea Susan James - Dougherty & Company James McIlree - Chardan Capital Markets LLC Howard Alan Rubel - Jefferies LLC

MANAGEMENT DISCU.S.SION SECTION

Thank you, Bryan. Good afternoon and thanks for joining our call today.

With me are Jeff Tarr, President and Chief Executive Officer; Gary Ferrera, Chief Financial Officer; and Fred Graffam, Senior Vice President of Investor Relations. Our remarks today will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended.

Any forward-looking statements are based upon our historical performance and our current plans, estimates and expectations. We may make forward-looking statements about, among other matters, revenue and revenue growth, adjusted EBITDA and adjusted EBITDA margin, earnings per share, cash flow, sales pipelines and strategic initiatives.

Inclusion of this forward-looking information should not be regarded as representation by us that we will achieve future plans, estimates or expectations. Such forward-looking statements are subject to various risks, 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. 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 occurrence of unanticipated events.

Please refer to our earnings release, which can be found at our website at www.digitalglobe.com for a discussion of these risk factors. You should also refer to our earnings release for an explanation of the non-GAAP financial measures discussed during this call for a reconciliation of those measures to the nearest applicable GAAP measures.

These non-GAAP measures are indicators that management uses to provide additional meaningful comparisons between current results and prior reported results and as a basis for planning and forecasting for future periods. For your convenience, we have posted slides on the Investor Relations section of our website, at www.digitalglobe.com to give you an overview of the information we will cover today.

During the question-and-answer session, please limit your questions to one question plus a follow-up and then please reenter the queue if you have additional questions. With that, I will turn the call over to Jeff.

Good afternoon and thank you for joining us for today's discussion of our fourth quarter and full year results. I'll begin with a few thoughts on the strategic agreement we announced earlier this week.

I'll then update our progress executing our strategy for long-term shareowner value creation and our plans for 2016 in the context of the five-point strategy outlined on our last call. Finally, I'll turn the call over to Gary to discuss our financial results, which came in above our revised guidance range.

Gary will also share our outlook for 2016, which is in line with the view we shared on our Q3 call. First, this week's announcement.

Late Sunday, we signed an important strategic partnership with KACST, our longtime direct access customer in Saudi Arabia, and their affiliate, TAQNIA Space, to develop and launch six or more sub-meter small satellites. We've long been of the view that small satellite imagery alone is of limited value but, when combined with the high-resolution, high-accuracy imagery that only DigitalGlobe can offer, we will be able to unlock the potential of this technology.

Our approach to date has been to partner with emerging small sat providers, adding their content to platforms, which is something we plan to continue to do. However, we concluded that the real unlock occurs when we can optimize the orbits of the small sats in our larger constellation and task them, as we do our other satellites.

This will enable us to do things not possible with standalone small sat constellations. Once on orbit, along with our WorldView-1 and WorldView-3 replacement capacity, we will be able to revisit the most rapidly changing and volatile regions on earth approximately 40 times per day.

We will use this unprecedented revisit to identify change in aerial time and then zoom in with our high-resolution, high-accuracy satellites to see essential detail. We will work both ways.

When we identify an object of interest with our high-resolution satellites, we will then monitor change on an ongoing basis with the smaller lower-res satellites. The other important aspect of this agreement is a disruptive and highly capital-efficient business model.

Over the years, we've made a substantial investment in building out a highly scalable ground infrastructure, including remote ground terminals and production and distribution platforms. Our longstanding partners in Saudi Arabia will benefit from this investment, from our access to the largest buyers of imagery in the world and from the value proposition that can only be realized through integration with our high-resolution constellation.

In return, KACST and TAQNIA will fully fund, build and launch the satellites, thereby, improving the capital efficiency of our business. This is an important strategic step for DigitalGlobe that will enhance all five components of our strategy for long-term shareowner value concentration.

These five components are as follows. One, we will manage our industry-leading imagery business with an orientation towards improvements in efficiency to drive strong free cash flow and returns.

Two, we will make disciplined investments on our multi-source platform initiative for growth. Three, we will leverage our analytics services business to further integrate our imagery platform and tools into our customers' workflows, driving increased productivity and value.

Four, we will significantly reduce our capital intensity over time and ensure that we sustain a commanding technological lead over both current and aspiring competitors. And, five, we will continue to return capital to shareowners.

Now, let me spend a few minutes on the progress we've made within each of these five components of our strategy and highlight our goals for 2016. The first component of our strategy, which we refer to as imagery leadership, focuses on extending our industry lead while delivering margin expansion, strong free cash flow and returns.

Over time, DigitalGlobe has and will continue to make investments that ensure we maintain a commanding lead on the aspects of quality that matter to our customers. Among our more recent investments is the early launch of WorldView-4, the development and deployment of our constellation DAPs, the creation of our Basemap suite of offerings, and the formation of our Vricon joint venture with Saab.

Importantly, we've made these investments while driving significant cost out of our business as we have done year after year. In 2015, we removed a total of $30 million of annualized costs, bringing our total cost takeout since the GeoEye combination to $150 million.

Our most recent expense reduction efforts position us well to overcome the operating expense headwinds that accompany any satellite launch while continuing to deliver on our EBITDA margin targets. In 2016, in addition to the go-to-market goals that I'll discuss in a moment, our imagery business will be focused on the successful launch and commissioning of WorldView-4 and on continuing to drive efficiencies in our business with a particular focus on systems enhancements and the reduction of third-party spend.

Let me now spend a few minutes on each of the three customer categories served by our imagery business, beginning with the U.S. Government, followed by international defense and intelligence, and finally, commercial.

In 2015, we continued to deliver strong execution in our imagery business with the U.S. Government.

With the addition of WorldView-3 to our constellation, we were able to generate $82 million of incremental revenues through the EnhancedView SLA. We also renewed Global-EGD with modest growth in billings albeit with some reduction in future recognized revenue due to increased deferrals.

I'm pleased to report that our partnership with the U.S. National Geospatial-Intelligence Agency has never been stronger.

During this, our 14th consecutive year serving the NGA, we again executed flawlessly against our service level agreement. We were appreciative that during the quarter the NGA publicly clarified our unique and mission-critical role as the source of 90% of the nation's foundational imagery.

They also highlighted that any purchases of small sat imagery will be incremental to our existing contract. I'm proud of our legacy of performance and confident in our long-term future with our largest customer.

Our goals for our imagery business with the U.S. Government for 2016 are straightforward.

During the year, our team will continue to flawlessly deliver on the exacting performance metrics demanded by our service level agreement, and enhance and renew Global-EGD while driving even higher levels of usage across the U.S. Government.

Our international defense and intelligence business has also never been stronger. WorldView-3 and our new constellation DAPs are speeding timelines while giving our customers access to more capacity and capability where and when they need it.

During the quarter, we grew our DAP business by 31% due to unrest in the Middle East and parts of Asia-Pacific. The global security environment stretched our capacity in multiple regions and resulted in customers spending significantly beyond their contractual minimums.

For these reasons, we do not expect a repeat of this unprecedented growth in 2016. I'm also pleased that during the quarter we executed contracts and LOIs for WorldView-3 and WorldView-4 totaling $335 million, which will contribute approximately $38 million of annualized growth, beginning with the expected commercial availability of WorldView-4 in 2017.

So while DAP growth will likely slow in 2016, we expect it to take a meaningful step-up next year. Our goals for this part of our business include continued progress of signing LOIs and contracts, the successful launch of WorldView-4 this September, and the readying of our ground infrastructure, including our constellation DAPs, in order to speed the monetization of this important asset in 2017.

While we saw strength in our imagery business with the U.S. Government and DAP in 2015, our commercial business was pressured throughout the year.

Economic factors including emerging market growth, currency devaluations and oil and gas commodity prices impacted this part of our business. We were able to offset some of these headwinds with growth from WorldView-3 but not enough to deliver the uplift in revenue we had previously expected.

Our decision to protect pricing prevented early adoption of 30-centimeter imagery by our LBS customers. The situation was exacerbated by the sale of Microsoft's mapping assets to Uber, delaying that contract renewal.

I'm pleased to report that we recently renewed two of our three largest LBS customers and the third is still operating under a multi-year agreement signed in 2014. Going forward, we have brought our commercial sales and product teams together under one leader, singularly focused on driving profitable growth in our commercial business and we've rationalized certain vertical specific investments.

We believe there is potential to further optimize pricing, unlock new opportunities with our largest customers, strengthen our reseller channel and continue to migrate customers to our subscription offerings, including our platform products, which I'll discuss in a moment. We believe the steps we are taking will eventually put our commercial business back on a growth trajectory although we remain cautious in our outlook for this part of our business in the current year.

The second component of our strategy, platform leadership, is focused on growing our emerging platform business. Launched only a year ago, our Geospatial Big Data platform is attracting application developers and customers most of whom have historically not been buyers of our imagery.

Among our recent customer announcements is Facebook, which shared this week that they are using our Geospatial Big Data Platform to support their population mapping effort, and the U.S. Government which is now also utilizing the platform.

We are seeing strong sequential growth in this emerging business, though it is still small and largely unproven and, therefore, it will likely take time before it has a material impact on our company. With that said, we are confident that our Geospatial Big Data platform addresses many of the prior impediments to mining our imagery for insights at scale and we are encouraged by the progress we're making.

Looking to 2016, we intend to continue to add functionality and third-party data sources to our platform. We will also actively recruit developers and build upon our marquee list of early adopters with the hope of sustaining the strong sequential growth we have seen in our first few quarters since inception.

Spatial on Demand, our multi-source platform serving oil and gas majors, grew 19% in 2015, normalized for our partial year of ownership in 2014. This strong performance was generated despite the precipitous downturn in that end market.

With that said, we have considered the global outlook in our guidance and are not counting on this product to be a contributor to growth in 2016. The third component of our strategy, services leadership, is focused on our efforts to more deeply embed our imagery and platforms in our customers' workflows, using professional services combined with proprietary analytic software and IT.

This business, which has been primarily focused on serving the U.S. government, fell short of our expectations in 2015 due to budgetary pressures and challenges securing new contract vehicles.

Nevertheless, it remains an important part of our portfolio. For example, late in the year, this team helped us win an important contract for our Geospatial Big Data platform with the U.S.

government and is now actively engaged in the implementation. In 2016, our services team intends to serve not only our U.S.

government customers, but increasingly to engage with strategic accounts wherever professional services are required to help customers get full value from our imagery and platform offerings. The fourth component of our strategy is focused on reducing our capital intensity over time.

As we stated in our Q3 call, we expect the cost to replenish our constellation will be substantially less than the cost of the original build. We will begin investment to replace the combined capacity of WorldView-1 and WorldView-2 in either 2017 or 2018, depending on capacity utilization, the projected use lives of our in-orbit satellites at that time, and the needs of the U.S.

Government. Another example of this strategy in action is our recently announced deal with KACST and TAQNIA, which will further enhance our future architecture in a highly capital efficient fashion.

This brings me to the fifth and final component of our strategy, returning capital to shareowners. By executing the first four components of our strategy, we are positioning our company to generate excess cash flow that can be returned to shareowners.

In December, we successfully amended our credit agreement to give us more flexibility and capacity to execute our share repurchase program. Since initiating the program in July of 2014, we have repurchased $264 million in stock and have $72 million remaining on our current authorization.

Taken together, we believe continued execution against this five-point strategy will create long-term value for shareowners. We're committed to driving margin expansion, free cash flow and returns from our leading imagery business, to unlocking new markets and growth with our emerging platform business, to leveraging our professional services to create new value for our customers, to driving down our capital intensity, and to continuing to return capital to our shareowners.

The investments we've made to establish our position as the world's leading provider of satellite imagery and geospatial information put us in a strong competitive position. We have the only constellation of very high-resolution satellites, a global network of ground stations, highly automated image processing, powerful delivery and analytic platforms and a secure infrastructure that enables us to provide mission-critical information in near real-time that uniquely delivers on the requirements of the largest and most sophisticated buyers of imagery and geospatial information in the world.

We're excited about the future and look forward to sharing with you our continued progress. Let me now turn the call over to Gary to discuss our results and guidance in detail.

Thanks, Jeff, and welcome, everyone. We are pleased that we exceeded the high-end of the revised annual guidance that we provided in late October.

More specifically, revenues slightly exceeded the guidance range due to stronger growth than anticipated in the DAP business, from additional image deliveries and access minutes associated with multiple crises in the Middle East. We significantly exceeded the adjusted EBITDA range and managed to achieve the low end of the original 2015 guidance mainly due to three factors.

As we mentioned in the last call, we needed to sign two constellation DAP contracts by the end of the year to avoid recognizing $6 million of non-cash expenses all in December of 2015. Both of these contracts were signed by yearend and those non-cash expenses will now be recognized throughout 2016.

Secondly, the previously mentioned DAP revenue out performance in one of our highest margin businesses and finally continued focus on generating efficiencies throughout the business. Revenue for the year was $702.4 million, up 7%, driven primarily by the step-up in our SLA with the U.S.

Government and through growth in our international defense and intelligence business. Revenue for the quarter was $181.7 million, down 2% year-over-year.

Though revenue in the quarter was higher than anticipated at the time that we revised guidance, this was due primarily to significant growth in our international defense and intelligence business. In total, it was slightly lower than in the previous year due to lower revenue in USG value-added products as well as continued pressure in our other diversified commercial business.

U.S. Government revenue for the year was $447.6 million, up 13%.

For the quarter USG revenue was $108.7 million, down 5% year-over-year. This decline was due to the expected flat revenue from our EnhancedView SLA as we had already fully recognized the increase in the fourth quarter of 2014 combined with anticipated decline in our USG value-added revenue.

U.S. Government value-added revenue was $95.4 million in the year.

This was below the year-ago level of $117.7 million primarily due to a decrease in deferred revenue earn-out on prior global EGD awards. U.S.

Government value-added revenue was $20.8 million in the quarter. This was below the year-ago level of $26.4 million primarily due to exiting certain non-strategic low margin contracts as well as some timing impact as we attempt to move both new and current opportunities to new contract vehicles.

Diversified commercial revenue was $254.8 million for the year, down 2%, and $73 million in the quarter, up 2%. For the year, DAP revenue was $120.6 million, up 8%.

For the quarter, DAP revenue was $335.5 million, up 31%. While we experienced additional usage across several customers, additional image deliveries and access minutes associated with multiple crises in the Middle East contributed to the majority of the year-over-year improvement.

Other diversified commercial revenue for the year was $134.2 million, down 9%. This decrease resulted primarily from factors we had mentioned throughout last year including LBS and Russia.

Other diversified commercial revenue for the quarter was $37.5 million, down 15% year-over-year. This decrease resulted primarily from economic factors including oil and gas prices, other commodity prices and currency devaluations.

For the year, adjusted EBITDA was up 24% to $355.7 million, delivering a margin of 50.6%, an increase of approximately 700 basis points. I would like to highlight this is the second consecutive year that the company has delivered a 24% increase in adjusted EBITDA off of a 7% increase in revenue.

For the quarter, adjusted EBITDA was higher than anticipated with year-over-year growth of 10% to $102.4 million, increasing margin 640 basis points to 56.4%. This improvement was driven by high margin DAP revenue growth combined with the continued impact of efficiency initiatives.

As previously mentioned, these results put us in the lower end of the original full year guidance range and significantly exceeded the revised guidance range from late October. The team has done an impressive job driving cost out of the business and we will maintain this focus in the future even as we must invest in the anticipated growth for 2017.

Our next 12-month revenue backlog increased slightly year-over-year to $553 million. Growth in DAP backlog was offset by declines in the backlog in location-based services.

However, as Jeff previously mentioned, we have renewed two of our largest LBS customers post year-end. Reported net income expense was $29 million for the year and $5.3 million for the quarter, reflecting capitalization of $30.5 million in annual and $9.8 million in quarterly interest on our debt.

These amounts were impacted by our decision to remove WorldView-4 from storage late in the first quarter in order to make necessary enhancements. Total interest expense inclusive of capitalized leased interest and accretion of debt discount was $59.8 million for the year and $15.2 million for the quarter.

Total cash interest paid for the year was $56.1 million. Reported income tax expense was $9.2 million for the year.

However, we are not currently a significant cash tax payer and we do not expect to be in the near future. At year end, we had a net operating loss carryforward for Federal and State income tax purposes of $258.1 million and $449.3 million respectively.

Net income available to common shareholders in the year was $18.5 million or $0.26 per share. CapEx spending, excluding capitalized interest and tenant reimbursements, was $111 million for the year and $59.1 million in the quarter.

This is in line with $110 million that we have guided to throughout the year. We generated $159.8 million of free cash flow for the year, a 22.8% free cash flow margin.

This was positively impacted by a one-time additional $25 million payment received from the U.S. Government based on contractual terms.

Excluding the impact of this payment, our free cash flow margin would have been 19.2%. Going forward, we expect to receive 12 monthly payments a year on this contract.

Free cash flow for the quarter was $28.6 million, down year-over-year by $21 million, due to the timing of milestone payments on WorldView-4. We generated a return on invested capital on a trailing 12-month basis of 9.7%, up more than 780 basis points from a year ago.

We amended our credits agreement in December. The amendment aligned the capacity to repurchase shares under the bank credit facility to our bond indenture and also increased the leverage threshold for which mandatory prepayments from excess cash flow are required.

This amendment has allowed us to accelerate our return of capital to shareholders over the last few months. As part of the amendment, the applicable margin on the term loans was increased by 1%.

Based on the current interest rate environment and including this increase, we anticipate that 2016 cash interest paid will be approximately $58 million for the year. Call protection of 1% for the term loans was provided for certain repricing transactions for the 12 months following execution.

During the fourth quarter, we repurchased 2.7 million shares for $44 million and, as of December 31, we have repurchased a total of 9 million shares at an average purchase price of $24.50 for a total of $219.6 million under the program. This brought our total shares outstanding as of December 31 to 67.4 million.

Since the end of the fourth quarter, we repurchased another $44 million or 3.1 million shares at an average price of $14.20. As of today, we have approximately $72 million remaining on our $335 million share repurchase authorization.

On our previous earnings call, we mentioned that we anticipated the company as a whole to generate flattish top line growth in the near-term and our 2016 guidance reflects those thoughts. While we have built some downside into our 2016 guidance range, the range does not contemplate any extension in satellite lives and assumes the commissioning of WorldView-4 in the first quarter of 2017.

We expect revenue to be in the range of $670 million to $700 million and we expect adjusted EBITDA to be in the range of $330 million to $355 million. While we are not providing quarterly guidance, we do currently expect seasonality for revenue to be similar to 2015 within a percentage point or two each quarter.

Based on historical norms, we would expect adjusted EBITDA to have a greater quarterly variability than revenue. This guidance range normalizes for the outperformance of DAP, primarily in the second and fourth quarters of 2015 which we do not anticipate to repeat in 2016.

We expect continued pressure on other diversified commercial as we continue to see currency devaluations and declines in commodity prices impact our end customers. As Jeff mentioned, we have secured letters of intent and contracts with several direct access customers prior to the launch of WorldView-4 which, on a full year basis, will generate approximately $38 million of incremental revenue.

In order to accelerate the realization of revenue under these agreements, which we currently anticipate to begin in early 2017, we will make investments in cDAFs during 2016 totaling approximately $20 million net of customer reimbursements that will be accounted for as deferred contract costs. By making these investments in advance of launch, we will enjoy an additional year of DAP revenue on WorldView-4.

Our capital expenditures of approximately $125 million, excluding capitalized interest for the year, includes costs to complete and launch WorldView-4 as well as normal maintenance capital. We have demonstrated the benefit of strong expense management and driving EBITDA margin expansion and we'll continue to focus on managing expenses in 2016 while also investing to grow our platform in DAP business in 2017.

With that, I will now turn the call back to Jeff.

Thanks, Gary. While we do not expect top line growth in 2016, we're making disciplined investments offset by savings initiatives to deliver better top line performance in 2017.

We're also taking important steps to reduce our capital intensity and extend our industry lead. Before turning the call over to the operator for questions, I want to take a moment to comment on the 8-K we issued this afternoon, indicating that Bert Turner, who has served the business as SVP of Sales for the last four years, will be leaving the company.

With our decision to more closely integrate product and sales within each of our lines of business, there was no longer a worldwide sales position reporting to the CEO. After thoughtful discussion, Bert has chosen to pursue other career aspirations.

I've known Bert for nearly a decade, dating back to our time together at IHS and I'll miss working with him. Our board and management team joins me in thanking him for his many contributions to our business and we wish him well in his future endeavors.

Operator, will you please open the call for questions.

Hi. Thanks for taking my questions.

Wanted to start off on the DAP revenue profile for next year. It sounds like the Q2 and the Q4 were kind of the outliers last year, but could you give us any more color on just how you expect that to grow over the next year?

We had thought that there might be some sort of 30 centimeter lift in 2016, but it sounds like more the lift might come more like in 2017?

Well, first of all, I'd highlight that we had unexpectedly strong performance in 2015, especially in Q4 and that strong performance stretched our capacity. Our capacity was also stretched in Q2.

And I'd say also that strong performance was driven by geopolitical events that might not repeat next year. So for those reasons, when we put our guidance together for next year, we planned greatly moderated growth, knowing that with the launch of WorldView-4, we're positioned to have a significant growth unlocked in that part of our business.

Okay. And then maybe following up on these new DAP contracts that you signed, is this – the small satellite contracts that you mentioned, is that something that you could pursue similar contracts with your other DAP customers and are you already kind of in talks with some other DAP customers to do something similar, or was this more of a unique case where this particular client wanted to get into small sats and they kind of viewed you as the way that they could kind of get into the small sat development and small sat technology arena?

Well, let me start by saying that the reason that our partners in Saudi chose to partner with us is that doing so allows them to – by partnering with the industry leader allows them to propel their position in the industry to a leadership position, and they already have an indigenous satellite capability. The benefits they get are access to our ground infrastructure and access to our high-resolution constellation to allow us to do things that standalone constellations can't do.

This is complementary to their existing DAP and I'm not going to speculate on any other opportunities. We're very focused on executing this opportunity with our partners in Saudi Arabia.

Thanks. So, Jeff, with regard to the 2016 guidance, if I just think maybe about the midpoint of the revenue range, it would imply obviously a little bit of a decline in revenue.

So is that primarily – since I think you just said that you expected DAP to be growth moderate is what I heard. So I would assume that be flat to up a little bit.

Does this imply you're anticipating that the other commercial and maybe the other value-added services revenue for the U.S. Government are both down on a year-to-year basis?

Yeah. Thanks.

First of all, what we – the guidance we gave is consistent with how we saw the business at the end of Q3 and what's changed is we had an unexpectedly strong morning in our D&I business in Q4, so since that time. As we look forward in terms of where the growth is going to come from, we're really focused on making disciplined investments to drive growth in 2017 without negatively impacting margins in 2016.

So that's where our focus is. In terms of where the specific components of growth are, we haven't given guidance on that, but you have a number of elements that should enable you to model that.

Gary, anything to add?

Yes. Peter, if I look at that discussion we had at the end of Q3, you know, we said we'd be flattish.

We talked about the over performance of DAP. If I had to put a number on it, I'd say, I was surprised by about $5 million.

So as you can imagine, when we built our range, we're very much in line where we expect it to be. So when we're saying flattish, that's sort of what'd be thinking and then we obviously built some downside into the range for safety, for various reasons and everything we discussed in our script.

Okay. And then just as a follow-u, continuing around the same lines in terms of the commercial side, LBS specifically, you mentioned that client renewals.

Any color on the pricing that you're achieving and revenue opportunity in that sub channel specifically?

Yes. What I would say is I believe we have partially derisked our LBS revenue line in 2016.

We still have to make things happen. Those two renewals aren't the entirety of the business.

But so far so good and we're making progress.

Yes. Hey, guys.

Thanks for taking our questions. Just going back to the small sats and the capacity that you will have outside of the region of your DAP partner, how should we think about that as far as how are you – or the ability to go after additional commercial customers versus selling that capacity to the NGA?

And then just follow-up to that, I mean, if you do partner with the NGA, how do we think about those satellites being encumbered?

Well, I think the way you should think about this is that additional capacity, the real value unlock comes from integrating it with our high-resolution satellites to allow us to do what's called in the trade craft, tipping and queuing. And that that will be the primary focus of what we're doing with these satellites, both in the (38:59) regions and we'll monetize that with any customers who are interested in that capability.

Okay. Fair enough.

And then this may not be a fair question to ask since it's been a couple days, but just the reaction from your commercial customers, existing commercial customers since the announcement or even leading up to the announcement, were there any commercial customers that viewed you as a solid partner and wanted you guys to get into the space? I mean, just trying to any about any commitments that there might be looking out to 2017, 2018?

Yeah, I'm not going to disclose any commitments at this point. It's too early, but suffice it to say that we do see customer interest for this unique capability that no one else will offer.

Hey. Good afternoon.

It's Jon Raviv on for Jason. A question on the USG value-add.

I understand the deferral – moving pieces behind the deferral, but can you go into some of the more specifics or add some more color to what you said about some challenge with certain contract vehicles? Is that a competitive dynamic going on or is that a timing thing with the government?

And what are you thinking about that going forward since you did flag the ability to enhance the number of seats and the amount of inflow flowing over G-EGD? Thanks.

Okay. So, two different topics.

So, the first one, global EGD, which is the platform through which we deliver our imagery and other services over our platform to U.S. Government customers around the globe, that is solid.

We renewed it last year. We renewed it with growth in billings, albeit with some reduction in revenue recognition due to deferrals.

The other piece of this is project-based and, as we talked about on our last call, one of the impacts we saw in our fourth quarter was some deals that we thought would close did not close, in part due to budget constraints, in part due to the fact that we didn't have contract vehicles. You've asked specifically about contract vehicles.

The issue there as we are leaning way forward and innovating and delivering new services for which contract vehicles don't exist. So, that's proving to be a more challenging process than we initially anticipated and we're working on that with our customer.

And just so I understand, is that because what you're doing is something new or the way you're delivering it is something new?

What we're doing is new.

Okay. Thanks.

Good afternoon. Hi.

Hey, Josephine.

Hi. Congratulations on all the pre-launch commitments you've received on WorldView-4.

Can you give us a sense of how firm are these letters of intent and contracts and how much incremental revenue can you drive from DAP customers from WorldView-4? In the past, I think you said an additional $50 million from the new satellites.

So here's what I can tell you is that of the $38 million of annualized growth that we've disclosed about 60% of that is firmly contracted. The balance is in letters of intent.

I would also say a couple of things about letters of intent. First of all, that's the typical process that we have with these customers because both parties need to make investments and they need to secure budgets from their budgetary entities, their government customers.

Our experience is that in general when those LOIs are signed, they generally become firm contracts its part of the process. So we feel very good about where we are and we feel there's additional upside over time against the $38 million of annualized revenue that we've shared.

Thanks. Gary, a follow-up on the – I think you said you're expecting to spend about $20 million this year to accelerate some WorldView contract customers.

Should we view that as $20 million of incremental SG&A or you had mentioned previously you've taken another $30 million out of costs last year so maybe we're flattish on the SG&A line, how should we look at that?

No. It's not SG&A.

This is a deferred contract cost. It's typically hits the balance sheet and then it gets – this is similar if you think about that $6 million we were talking about related to last year that was non-cash because we had already spent it.

So then it gets picked up later. So no, it doesn't have anything to do with SG&A.

Okay. So should we expect SG&A down because of the reductions that you achieved through the course of last year?

Yes. I mean, we haven't given specific guidance on that.

I mean, you can see what we're doing and obviously imply something there. But I haven't given specifics to what's SG&A and what's COGS so I'd rather not go there.

Okay. And a clarification on the LBS renewals, did any of your LBS customers take a 30 centimeter product or were these just renewals using the existing assets and sort of pricing?

Yes. One of them did take some 30 centimeter as part of their contract, specifically over certain major metros and that allowed us to drive some growth in that contract.

Okay. And have you had any luck tapping into the aerial market?

Yeah, we've certainly won some business but otherwise would have gone to aerial. We have learned and we talked about this a couple of quarters ago that we really need to have more coverage in 30 centimeter in order to make a bigger dent in that opportunity in more than one sales cycle.

So it's something we're working and, hopefully, over time we take more opportunities from aerial providers.

Thank you for taking my questions. First one on 2015 cash flow.

As recently as last October, you were guiding to $110 million in CapEx. It looks like it was closer to $170 million.

And then your construction-in-progress additions doubled in Q4. I just wanted to better understand what's going on there and whether or not you spent above your prior expectation?

No. We did not spend above prior expectations.

It's always been $110 million. We came in at $111 million.

I mean, it's pretty close. I think what you're talking about is we had tenant improvements and things like that that were net zero but (46:32)

Yes, I think the items that will reconcile to your number is capitalized interest is included in that number, and tenant improvements which we disclosed in our supplemental disclosures, are both excluded from our cash CapEx numbers that we guide to.

That's why I make it a point to call out what the actual cash interest expense is because I think of that separate.

So do you mean – did I miss – did you give what that would be for 2016 then on top of the $125 million that you gave?

Yes. I said there would be approximately $58 million for cash interest expense and I said that there would be – we didn't expect any significant amount of taxes.

Thank you. And my second question, regarding your new agreement with the Saudis, how does it affect your evolving relationships with other small sat providers?

Thank you.

We continue to partner with other providers of imagery. We believe as the industry leader with the large archive we have, our distribution platforms, our analytic platforms and our access to the largest buyers of imagery in the world, we have something unique to offer third-party providers and so we continue to pursue those opportunities.

Thank you. At the low end of the revenue guidance, you're talking about a $30 million plus revenue decline.

Would it be fair to say that it's about equally divided between value-added services, DAP and commercial?

That's a good question, Jim. We really haven't given that kind of specific guidance.

AlI I would say is on the low end of our range, we've taken a lot into consideration as far as the external environment, et cetera. But I wouldn't specifically break it down in that way.

Okay. And are you providing what WorldView-4 spending is required this year to launch it?

No. We haven't gotten into that detail.

I mean, when you look at the CapEx, obviously, we've talked in the past about how much we expect to spend on WorldView-4. OpEx is mostly post-launch when you're talking about just telecom costs and things like that.

Hi. It's Howard Rubel; that's a new one for my last name.

We know who you are, Howard. Don't worry.

Thank you very much. The share repurchase is pretty dramatic both at year-end and carrying into the first quarter and so, if for a moment we step back and look at your free cash flow generation on a per share basis, you could be up anywhere from 15% to 20% next year, if we think about it.

Is that a metric that you might consider or the Board might consider as sort of outlining for management compensation?

One issue with that, Howard, is there is a real issue in the accounting world with doing anything by free cash flow per share. So I don't really want to go beyond that.

That's just something that – we know what the shares are, we know what free cash flow is, but the accounting world does not like to see anybody put on a piece of paper free cash flow per share in your public filings or anything else. So, I don't generally say much more than that.

No. I understand.

It's just a pretty dramatic improvement as we look forward. And then...

Yes.

And then second, the world doesn't look like it's any less calm than it was at the beginning of the first quarter and while I know you have some seasonality, have those customers that stressed you in the fourth quarter continued to ask you for as much as possible as we see the year begin?

Yes. I would say the world is uncertain and volatile and that manifests itself in our business in two ways.

To the good, it drives growth in our defense and intelligence business. To the bad, currency devaluations, oil and gas commodity prices and emerging market growth affect us as it does virtually all global companies.

Hey, guys. It's Jon again.

Thanks for taking the follow-up. Just on your margin guide of – it sounds like a 50% to 51% or so next year – any notable adjustments in there or one-timers that are worth flagging, because it doesn't sounds like the $6 million expense item or the cDAF investments really show up in there?

I wouldn't say there's any one-timers – I gave you the example of the $6 million that could have hit in December all at once. That is now actually – actually it's non-cash.

It's going to be in 2016 but spread throughout the year. Variable comp is one of things that is actually a bit of a headwind because, obviously, we didn't hit plan this year.

And we've got those investments of DAP. We've got travel and things like that but nothing that I can think of that's a large one-timer.

Okay. So then just understanding, all else being equal, going from 2016 into 2017 the $6 million that is expensed is no longer expensed in 2017.

So that going away would be a natural tail in 2017 off that 50% to 51% guidance?

For that specific one, yes. Though, obviously some of the $20 million which we have mentioned that we're going to be spending in 2016 is cash in 2016.

That will get amortized out in future years depending on the length of the contracts etcetera.

How long are those contracts normally, though?

Each one of them is different so I really can't give you guidance on that. But I would expect by the time we get to 2017 that would just be minor noise and we're talking small numbers as we grow the margins.

Thanks. Sorry to harp on this, Gary, but the $20 million of incremental cost in the treatment whether it's capitalized or not, how does that flow through our free cash flow calculation for the year?

Is it flowing through as an expense or is it flowing through as a CapEx item?

It's just flowing through as a change in the balance sheet item. Let's think of it that way.

Okay. And a clarification, I think for both the energy business and the DAP business, the language you used was it's not going to grow or going to contribute to growth.

Is that based upon the full year reported number or in the case of the DAP business are you saying excluding the fourth quarter bump that's non-repeatable, it should be at that level?

Well, to be clear, we had bumps in the second and the fourth quarter, but we said they were headwinds due to strong DAP in Q2 and Q4.

Well, thank you very much everyone for your time today. We look forward to continuing to report out on our progress against our strategy for share-owner value creation and look forward to visiting with many of you over the coming weeks.

Thank you.