Maxar Technologies Inc.

Patrick Elliott - DigitalGlobe, Inc. Jeffrey R.

Tarr - DigitalGlobe, Inc. Gary W.

Ferrera - DigitalGlobe, Inc.

Ash Birla - Dougherty & Co. LLC Josephine L.

Millward - The Benchmark Co. LLC Peter P.

Appert - Piper Jaffray & Co. Jonathan Raviv - Citigroup Global Markets, Inc.

(Broker) Howard Alan Rubel - Jefferies Denny L. Galindo - Morgan Stanley & Co.

LLC Chris D. Quilty - Quilty Analytics, Inc.

James McIlree - Chardan Capital Markets LLC Mark W. Strouse - JPMorgan Securities LLC

Thank you, Donovan. 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 Corporate Development and Investor Relations. Our remarks today, including statements about our planned acquisition of The Radiant Group, will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which 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 expectations.

These include revenue, adjusted EBITDA, margins, earnings per share, cash flow, sales pipelines and strategic initiatives. These also include the possibility that satisfaction of the closing conditions to the planned Radiant Group acquisition may be delayed or may not be satisfied or waived, potential loss of key employees and customers of the acquired business, difficulties managing and integrating operations, exposure to unanticipated costs or liabilities resulting from the acquisition and any changes in general economic and/or industry-specific conditions.

We undertake no obligation to revise or update any forward-looking statements. Please refer to our earnings release and publicly filed reports, which can be found on our website, for a more detailed discussion.

You should also refer to our earnings release for an explanation of the non-GAAP financial measures discussed during this call and for a reconciliation of those measures, which we believe provide meaningful comparisons between periods. For your convenience, we have posted supplemental materials on the Investor Relations section of the website.

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

Good afternoon, and thank you for joining today's call. I'm pleased to report that strong execution of our five-point strategy for shareowner value creation is delivering solid results with over performance on the top and bottom line.

This is allowing us to raise guidance for the full year. I'll begin the call by updating you on our progress executing our strategy.

Gary will then discuss our financial results and revised guidance. I will then return with a few closing comments before opening the call for questions.

The first point in our strategy is imagery leadership, which is about extending our industry lead in our core imagery business while delivering margin expansion, strong free cash flow and returns. During the quarter, each of our three customer groups contributed to our growth.

Let me spend a few minutes on each. Our business with the U.S.

government has never been stronger. During the quarter, we marked our 50th straight month of delivering on all of the service-level metrics required by the EnhancedView SLA.

We also renewed Global EGD. Through our Global EGD platform, DigitalGlobe provides online access to our high-resolution archive and daily imagery collections to well over 100,000 U.S.

government users and coalition partners around the globe, typically within two hours to four hours of collection and as rapidly as 20 minutes. Our international defense and intelligence imagery revenue also grew in the quarter, extending our track record of strong performance.

With $415 million in new DAP contracts and LOIs, we are setting the stage for improved company growth in the second half of 2017 as we bring our new and existing customers online with our new constellation DAP and WorldView-4. Our commercial imagery revenue also grew in the quarter with the return of Microsoft as an important customer and a number of other recent customer wins earlier in the year, including Uber and Esri.

With 500 of the world's 1,700 largest cities in our Basemap +Metro product now available at 30 centimeters, we are extending our commanding lead over the competition and beginning to unlock new use cases. Rounding out the successful execution of our imagery leadership strategy is continued strong cost management, which is enabling margin expansion while simultaneously funding our investments in the future.

Turning now to the second point in our strategy, platform leadership. DigitalGlobe has been making good progress building the world's leading multi-force geospatial analytics platform to enable customers, developers and partners to unlock the power of our imagery at scale and drive long-term growth.

This business again grew at a strong double-digit rate in the quarter albeit on a small base. In the quarter, we launched our SpaceNet initiative with In-Q-Tel's CosmiQ Works, NVIDIA and Amazon.

Through SpaceNet, DigitalGlobe has released a large volume of high resolution earth imagery to support the development of new machine learning algorithms to analyze satellite imagery at scale. We're also pleased to announce the acquisition of Timbr, a small leading-edge data sciences firm, which will help us accelerate the growth of our Geospatial Big Data platform.

Through the integration of Timbr, we will make it easier for our growing ecosystem of developers to create, deploy and utilize algorithms that run on our 80-petabyte image library and other third party data sources to reveal new insights. 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 through proprietary solutions combined with open source software and our unique IP to address critical intelligence mission requirements.

During the quarter, our services business posted solid growth, helping customers get full value from our imagery and platform offerings. Strong results and growing demand in this part of our business supported our decision to acquire The Radiant Group.

Radiant's expertise in software and services addresses many of our customers' most complex geospatial challenges. In fact, we've been working with Radiant for quite some time in a number of areas, including the implementation of our Geospatial Big Data platform within the U.S.

government. The numerous benefits of this transaction fall into four categories: first, Radiant broadens DigitalGlobe's capabilities across the entire geospatial intelligence value chain; second, Radiant brings together hundreds of innovative developers and analysts with expertise in Geospatial Big Data with the world's leading source of commercial imagery; third, the acquisition further expands DigitalGlobe's customer base across the U.S.

intelligence and special operations community, including the NRO, with access to more than 80 additional contract vehicles, over 20 of which are prime contracts; and fourth, Radiant diversifies our revenue, reduces our asset intensity, and is accretive to growth in revenue, EBITDA, net income, and other key financial metrics. Taken together, these benefits will advance our strategy and enable us to better serve our customers by creating a unique position as the leader in both earth imagery and geospatial analytics with the capability and scale to address the needs of the world's largest and most sophisticated customers.

The fourth component of our strategy is focused on reducing our capital intensity over time while extending our industry lead. The launch of WorldView-4 is an important component of this strategy.

As we announced earlier this month, our scheduled mid-September launch was delayed due to last month's wildfires at Vandenberg Air Force Base. WorldView-4 is safe and secure atop its Atlas V launch vehicle awaiting launch now scheduled for November 6.

We continue to expect the satellite to begin to generate initial DAP revenue in the first half of 2017 and contribute more significantly to growth in the second half. Importantly, WorldView-4 will substantially increase our ability to image the world with resolution, accuracy and clarity far beyond that of all other commercial providers, enabling us to better serve our international defense and intelligence customers and advance new commercial use cases.

After the launch of WorldView-4, we will further enhance our ability to revisit the most volatile regions on earth with the launch of Scout, a fleet of small satellites, which will be built and launched through our partnership with KACST and TAQNIA Space. We made good progress on our venture in the quarter and are targeting a launch in 2019.

Finally, we continue to expect to begin investment in our next generation satellite system in 2017 or 2018 to replace the combined capacity of WorldView-1 and WorldView-2. This industry-leading multi-satellite system will enable us to sustain our lead in resolution and accuracy and extend our lead in revisit at a total cost not to exceed $600 million, excluding capitalized interest, considerably less than the combined cost of WorldView-1 and WorldView-2, thereby driving down our capital intensity.

Our next generation constellation, Scout, and our Radiant acquisition are all examples of how we are reducing capital intensity while extending our industry lead in both collecting earth imagery and analyzing it at scale, using the most advanced technologies in space and on the ground. 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 generating excess cash flow that we are returning to shareowners through our share repurchase program. Since initiating the program in July of 2014, we have repurchased $306 million of our total $335 million authorization, and have reduced our share count by approximately 17%.

We plan to complete the current authorization by year-end. Overall, I'm pleased with our team's progress executing our five-point strategy for shareowner value creation.

Our imagery business is delivering margin expansion, strong free cash flow and returns. Our platform business is unlocking new use cases through an expanding ecosystem of partners.

Our services business is winning new contracts while enabling our customers to realize more value from our imagery and platforms. Our investments and partnerships are driving down our capital intensity while extending our industry lead, and we continue to return capital to shareowners.

Let me now turn the call over to Gary to discuss our results and improved outlook.

Thanks, Jeff, and welcome, everyone. The team continued to execute well this quarter.

Total revenue increased 4.9% over the prior year to $181.8 million while adjusted EBITDA increased 6.2% to $97.6 million. Our adjusted EBITDA margins continue to be strong at 53.7% versus 53% in the prior year.

While we are pleased with these results and will continue to focus on delivering strong margins, it should be noted that we do expect to continue to incur increased incentive compensation expense in Q4 due to the company's year-to-date performance versus last year. We will also continue to make additional investments in the fourth quarter in our platform business and will incur additional costs related to the expected launch and operations of WorldView-4.

Turning to revenue, U.S. government revenue in the quarter was $114.5 million, up $3.5 million or 3.2% year-over-year.

This increase was due to demand for our analytic value-added products and services, including new programs signed with NGA, DIA and a new Pentagon program. Diversified commercial revenue was $67.3 million in the quarter, up 8% year-over-year.

This was due to increased image delivery to recently re-signed and new commercial customers and continued strong DAP performance across a majority of our customers. DAP revenue was $30.3 million, up 4.8% from $28.9 million in the prior year.

This year-over-year improvement was driven by an increase in total access minutes across the majority of our DAP customers. As a reminder, we experienced significant out-performance in our DAP revenue in Q4 2015 and do not anticipate that performance to repeat in the fourth quarter as we expect customers to spend more in line with their contracted levels.

At this time, we do not believe that the delay in the launch of WorldView-4 will have any material impact on our 2017 revenue. As we have previously discussed, on a full-year basis, LOIs and commitments for WorldView-4 have the ability to generate an increase in annualized contracted revenue of approximately $55 million.

We anticipate recognizing a small amount of this incremental revenue in the first half of 2017 with the continued ramping throughout the remainder of the year and into 2018 as we complete the installation of new constellation DAPs in the second half of the year. We will provide more specific guidance on our February earnings call once we have launched WorldView-4, completed in-orbit calibrations and prepared our ground assets for operations.

We would also like to note that we have prioritized our efforts on enabling WorldView-4 for DAP customers and investments in both OpEx and CapEx will continue into 2017 as we complete the process of enabling WorldView-4 for full operations. For the quarter, other diversified commercial revenue was $37 million, up 10.8% year-over-year.

Recent contract signings drove most of this growth. As a reminder, revenue from our location-based services customers is highly dependent on the timing of image deliveries.

In the quarter, we experienced higher up-front deliveries than anticipated to these customers, which resulted in $2 million to $3 million in additional revenue being recognized. This was partially offset by weakness in the oil and gas sector.

Moving on to expenses, our cost of revenue increased by 16.3% year-over-year, while SG&A expenses were down 6.3%. During the prior year, year-to-date incentive compensation was reduced to reflect the lower than expected full-year revenue growth, and combined with the impact of current year-over-year performance created a tough comparison.

Due to the company's improved performance, we expect to incur higher incentive compensation expenses in the fourth quarter versus the prior year. In addition, cost of revenue was impacted by a small increase in head count in anticipation of the launch and operation of WorldView-4.

The impact of these increases was mitigated by our continued focus on finding efficiencies across the business. Net interest expense was $4 million reflecting capitalizations of $12.4 million.

Total interest expense for the quarter, inclusive of capitalized interest was $16.5 million. Cash interest in the quarter was $22.4 million and $51.6 million year-to-date.

We continue to expect that cash interest paid will be approximately $58 million for the year. CapEx, excluding capitalized interest, was $50.7 million in the quarter and $114.7 million year-to-date.

We now expect to spend approximately $135 million of CapEx for the year due to additional spend related to WorldView-4, including additional capitalized labor due to the launch delay. For the quarter, we made net investments in C-DAFs totaling $4.5 million that were accounted for as deferred contract costs.

As previously mentioned, by making these investments in advance to the launch, we will accelerate the realization of revenue on WorldView-4. We now believe these investments will approximate $15 million in 2016 net of customer reimbursements.

This is down from our previous estimate of $20 million. Total restructuring and re-engineering costs are expected to be approximately $15 million, $3 million lower than the originally anticipated $18 million.

We have spent $12.7 million to date and expect to complete this plan in the fourth quarter of 2016. We should note that the increase in CapEx versus initial guidance will be more than offset by the previously mentioned lower than expected deferred contract costs, the lower than expected restructuring and re-engineering costs, and the OpEx labor savings due to greater than anticipated capitalized labor.

Free cash flow for the quarter was basically breakeven, down $51.4 million year-over-year. This year-over-year decline is primarily due to the launch insurance payment of $28.5 million in anticipation of the launch of WorldView-4, and an increase of $17.1 million in receivables due to growth in DAP revenue compared to last year, the timing of some DAP payments and some large commercial revenue being recorded toward the end of the quarter.

It should be noted that we received over $10 million of payments for DAP receivables post quarter close. Additionally, we received tenant improvement reimbursements of $8.9 million related to our new headquarters in Q3 of last year.

We expect to return to significant free cash flow generation in the fourth quarter. During the quarter, we repurchased nearly 400,000 shares at an average share price of $26.30 for a total of $9.6 million.

Shares outstanding at the end of Q3 were 62.4 million. As of the end of the quarter, we have $29 million remaining on our authorization.

We're adjusting our full-year guidance due to the overall strong nine month performance, but more specifically due to continued revenue strength and slightly lower than anticipated costs in the third quarter. It should be noted that the lower than anticipated WorldView-4 costs in Q3 and Q4 is expected to be a headwind in 2017 as we'll have a full year of WorldView-4 costs throughout 2017 versus a small amount in late 2016.

As a reminder, we do anticipate marginally higher costs in Q4 due to disciplined investments in our platform business and some additional costs related to launching and operating WorldView-4. While we do not provide quarterly guidance, we reiterate that we will face a tough comp in Q4 versus last year due to prior-year outperformance in our DAP business, which we do not anticipate repeating.

We now expect revenue for 2016 to be in the range of $700 million to $710 million and adjusted EBITDA in the range of $365 million to $375 million, while we expect CapEx to be $135 million. While we expect The Radiant acquisition to close by year end, we have not included a specific estimate for Radiant in our guidance for the year, due to uncertainty of the specific timing of the close and the fact that at most we expect it will be less than two months included in our financials, which would be immaterial to our results.

However, I would like to note that we estimate that Radiant is on pace to recognize approximately $100 million of revenue for 2016, which is largely earned consistently throughout the year. Jeff also mentioned the recent small acquisition of Timbr, which was for an amount that is immaterial to our cash flow in Q4 and to future results.

We are pleased with our performance to date and remain focused on and committed to driving ongoing efficiency in the business while making disciplined investments to drive long-term revenue and EBITDA growth, margin expansion, free cash flow and ultimately improved returns. With that, I will now turn the call back to Jeff.

Thanks, Gary. Our five point strategy is delivering results and has positioned us to improve our outlook.

Our imagery team is extending our position as the leading source of earth imagery through WorldView-4, Scout and our next generation constellation. And our platform and services teams are further advancing our leadership position, utilizing cloud computing, machine learning, and other forms of artificial intelligence to analyze our imagery and third-party data sources at unprecedented scale.

By extending our lead, both in space and on the ground, combined with a relentless focus on reducing capital intensity and effective capital allocation, including the return of capital to shareowners, we believe we are setting the stage for profitable long-term growth and shareowner value creation. Operator, will you please open the call for questions?

Thank you, guys. Congrats on a great quarter.

Wow. So let's, so first, Gary, I wanted to ask you about the CapEx, $69 million.

You said $50 million was excluding interest expense. So of that $50 million, was $28 million insurance payment?

Yes, $28.5 million was insurance payment.

So the rest, like $20 million, $20.5 million was the total CapEx for WorldView-4 and the maintenance?

Excuse me, I think you're confusing two different things. The free cash flow for the quarter was down a little north of $50 million.

That was related to the fact that we paid a $28.5 million payment for the insurance. And then the differences were because of the tenant improvement reimbursement the prior year.

And the rest, a lot of that was related to timing of payments.

Okay. So of the $69 million, how much was the capitalized in the cash flow from ops – cash flow from investing?

Let me get back to you on that. So you want to know how much is capitalized labor of this total?

No, interest expense. Sorry.

Just interest expense.

Oh, no – sorry. Hold on.

Cap interest was – that is not a number I memorized – $12.4 million.

Okay. $12.4 million.

Okay. Just follow-up on – Jeff, you talked about Microsoft, adding Microsoft as a key customer.

I believe Microsoft sold their mapping business, so can you – would you mind expanding on what are they buying imagery for?

Yeah. Thanks, Ash.

They sold a portion of their mapping infrastructure to Uber a year ago, but they still operate Bing Maps. And so our imagery contract with Microsoft will enable them to update Bing Maps and also use our imagery for other purposes across the enterprise.

Okay. Great.

Congrats on a great quarter. Just one last one if I can squeeze in.

You did $97 million in EBITDA. You're guiding $77 million to $87 million.

Top line also you're guiding a little bit lower. I think DAP you've been saying for three quarters in a row, it's going to decline but it hasn't happened.

Is it because of higher expenses? Or is it just that your – the timing of DAP customers, the guidance, sequential guide down from Q3?

Yeah. I think there's a couple of things there.

I mean, you're kind of down-playing the DAP. We called out last year that we had a very strong performance in DAP in Q4.

We always make it a point to highlight when that's an issue. And last year, for example, in Q3 we didn't have a strong over-performance.

We always point that out. So that is one of the issues with where the guidance is going to fall out, because it's a very high margin business.

And then in addition, I've already called out a few of the facts of where expenses could swing in the quarter related to actually launching WorldView-4, et cetera.

Thanks, Ash.

Hi, guys.

Hi, Josephine.

Great quarter. Jeff, can you comment on the NGA's recent $20 million award to Planet Labs?

How do you think this might impact your U.S. government business long-term?

Well, first of all, there's nothing new there. NGA has been talking for a couple of years now about experimenting with some of the emerging small thought players as they come online.

And we see no impact whatsoever to our relationships with the NGA. Very different use case.

We're foundational and part of the core mission.

Thank you.

Thank you, Josephine.

Thanks. So the commercial revenue strengths I thought was particularly impressive.

You highlighted the $2 million to $3 million from new contracts. I just want to understand, was that meant to say this was sort of a one-time benefit?

Or what do we think about in terms of continuing revenue from some of these newer contracts? And I guess, related to that, Jeff or Gary, just your confidence in the sustainability of commercial revenue growth since you've seen some pretty good improvement over the course of this year.

Thanks, Peter. In response to the first part of your question, yes, that's correct.

There were some one-time imagery deliveries. Also, when we bring new customers online, sometimes we see a large upfront initial delivery, and then it shifts to maintenance over a period of time.

So that's the answer to your first question. Looking at commercial overall, we did have a good quarter in commercial, up about 10% with a number of new contracts and some one-time.

And it is performing better than last year, and it's performing better than we anticipated coming into the year. But I think it's important to keep in mind that we have less visibility in our commercial business than we do in our other revenue streams.

Okay. Fair enough.

And then, Gary, just back to the guidance around the fourth quarter, and specifically the EBITDA margin. I mean, you've called out a bunch of things that impact you in the fourth quarter.

But it does feel like the decline or the sequential decline and the year-to-year decline in margin implied by the guidance, particularly relative to what you've been doing all year long, is pretty dramatic. So could you just remind us again, or call out again, sort of the key drivers of this and how much variance there might be in the number here in the fourth quarter?

Peter, I think, it's a multitude of issues. You're going into Q4.

It's that time of the year when you can have some swings as far as expenses go and reserves and things like that. So in order to be safe, we've given you a range that we're very, very comfortable with.

It's also a period where I mentioned we had some high margins over performance in Q4 last year, for example, the DAP business. And you've got to take that into account also.

Hey. Good afternoon.

It's Jon Raviv on for Jason.

Hi, Jon.

Jeff and Gary, could you add a little more color to the – in line with Peter's question, just the other diversified commercial sales drivers, could you add some color as to what the biggest part of the ODC bucket is at this point? What the sorts of use cases are just to give us an idea?

I understand it's not that visible. Just to get an idea of where some of this growth is coming from in terms of customer use.

So most of the growth in the quarter came from strength in LBS. There aren't a lot of LBS customers, but they're all performing well and that contributed to the upside that we saw.

And then could you also talk a little bit about the international civil business? I know it's been all over the place, especially with Russia but could you comment on what you're seeing from Russia, and also China in that business, please?

Actually, we put a slide into our deck every quarter that actually gives you the exact Russia revenue, and you'll notice it picked up in the quarter slightly. So that was very positive, and that is less of a civil government than it is continued on the LBS theme.

But we're continuing to see the traction with civil government. Though that is lumpier, more project based and that is another reason why Q4 range is where it is, because of the heavy – we're going into a heavy season for civ govs and it's heavily dependent on weather in the region.

Thanks.

Thank you very much. A couple things.

First, Jeff, is there any way that you could give us a little bit of feedback regarding Radiant and what your customers have said now that you've disclosed, you're going to merge with them or acquire them?

Terrific feedback from all of our customers without exception. We're really pleased with what we're hearing.

I think our customers see the same thing we do, which is the power of bringing together the leader in geospatial analytics and related technologies. Serving the U.S.

government with the leader in earth observation is viewed as a way of unlocking the use cases delivering more value and that's a good thing and that's what we're hearing.

On this front of unlocking new use cases, is there any way that you might be able to talk about either the commercial or the international customers in terms of how many new customers you have or some form of intensity or reuse of what I'll call a core element of those customers?

I guess, what I would say is Radiant's business today is entirely a U.S. government business.

And as we built our acquisition model, that's what we focused on. So the acquisition case stands alone on U.S.

government. There may be opportunities commercially and opportunities within – amongst U.S.

government allies, but that would be upside and not our initial focus.

Hi there. Good afternoon.

Good afternoon.

We started to get at some of the first comments on 2017 and 2018 talking about the next-generation CapEx. I'm sure it's, probably, too early for you to tell us anything on the capabilities of the new satellite, things like resolution, the number, but I did want to ask two things.

Number one, what's the timeline for when you might reveal some of those kind of basic variables that you need to start the process? Is that something that would come out say when you give guidance for next year?

Or is it something that's going to take a couple of years to get those types of variables, how many satellites, what the resolution is, any other key sensors? And then you also mentioned sustaining a lead in resolution.

Maybe you've said that before but it sounded like you wouldn't improve the resolution. Have you given any thought to improving versus just keeping the resolution at the same resolution that they have been?

Well, Denny, I think your second question in part answers the first question. We have shared some information.

We shared that we intend to sustain our lead in resolution. By the way, our resolution is right up against where U.S.

regulations limit the commercialization of resolution, so that's an appropriate place for us to be and a place that we see as both serving our defense and intelligence customers and new commercial use cases such as mapping and autonomous, support for autonomous vehicles. We've also talked about extending our lead in revisit and I think that's another important point.

Beyond that, as the industry leader, we actually feel it's disadvantageous for us to share exactly where we're going with our competitors. We do have under NDA conversations with customers and those are ongoing and have been taking place for some time.

And I think that I've probably said enough with regard to the future capability.

Hi, guys. A question for you.

There's been a bit of noise lately at the regulatory level. I know you guys have made some requests for use of sensors that's been dragging on for a while, and more recently, discussions about the entire licensing process.

Can you give us an update on where your approvals stand and what you view generally the environment to be?

Well, yes, we have been advocating, as has the industry, for modernization of the regulatory regime. We live under a regulatory regime that was created over a decade ago, and the world has changed considerably.

And we've been making the point to regulators and key stakeholders, as have others in the industry that it is time for change, and that change will further strengthen the industrial base. Change will enable innovation.

And we believe that is good for the security of our nation and good for the industry.

Okay, a different question for you. On the DAP strength in the quarter, you said that was primarily incremental minutes that were driving that demand.

Were there particular things going on in the world? I mean, it seems to be a pretty challenging environment all around that might have drove the incremental demand this quarter that you don't think would be repeatable in Q4?

Well, the world is not getting safer. It is certainly volatile.

All we need to do is pick up a newspaper and see what's going on right now. And that has been supporting our DAP business.

Our DAP business has also benefited from price lift and improving mix with WorldView-3 fully online for our DAP customers. As we look at Q4, it's important to keep in mind that the way our DAP customers work is they establish budgets at the beginning of the year.

Those budgets are approved through government budget approval processes, so they aren't very flexible. And so when they spend more earlier in the year, that can often pressure revenue in later in the year as they revert to the mean, unless they're able to unlock new sources of funds.

And just to be clear, when we were talking about comparability, we were talking about year-over-year Q4 versus Q4 over Q3. And that was because we had a very strong Q4 of 2015.

Thank you. Good afternoon.

Were there any significant WorldView-4 expenses that you recognized in Q4, either one-time costs associated with the launch or ongoing costs that might be associated with increased communication costs? And I'm trying to figure out how much of that might be repeated or not be repeated in Q4.

On an OpEx side in Q4, Jim, we didn't have any significant one-time costs in Q3 related to WorldView-4. We did have some ramping up but there wasn't any major one-time costs other than some things related around the launch timing, but that wouldn't – I wouldn't call it material.

And so the increase in expenses related to the operation of WorldView-4 is really still to be seen in Q4 and in Q1 of next year. Is that correct?

Yes, that's correct.

Okay. Fantastic.

Thank you.

Thank you.

Hey, guys. Thanks for squeezing me in here at the end.

Most of our questions have been answered but I just wanted to try a follow-up to Denny's earlier question about the replacement satellite CapEx. So we've kind of always worked on the assumption that it takes three-and-a-half years to four years or so to build and launch a satellite.

Is there anything about these new satellites or this new system that would materially alter that timeframe?

No, that's still the timeframe that we expect.

Okay. Fair enough.

Thanks, Jeff.

Thanks.

Hey, there. One quick question on the deferred contract costs coming in a little bit lower than you expected.

Is this coming from you not signing as many new contracts for the satellite as you thought you were? Or is it more of a way that the contracts are structured such that they're not requiring this kind of deferred contract cost to be spent ahead of the contract?

No, Denny. It's nothing sort of structural or fundamentally changed, it's just that we've actually been doing at a cheaper rate, I mean, being able to do it more efficiently.

So nothing to be thinking about structurally or fundamentally about it.

Okay. And then another quick one.

The Microsoft – you kind of hinted at this but I just want to know if you could say it more specifically. Was this a one-time like 30-cm purchase?

Or was this a recurring contract with Microsoft where you're going to be having a recurring relationship with them for whatever they're doing with the imagery these days?

It's a longer-term contract.

Okay. And then lastly, I thought that this time period between launch, assuming the November launch isn't pushed again, and FOC would really be a prime time for new DAP customers or expanded DAP customers.

Can you share anything about how many potential targets you're working on that might – we might see some of them come through in that kind of timeframe between launch and FOC?

I don't want to speculate other than to say that our team does have an active pipeline and there are other opportunities out there. So we're focused on maturing that pipeline, bringing them over to letters of intent and then some letters of intent to close contracts.

And that's ongoing.

Hey. It's Jon Raviv again.

Thanks for taking the follow-ups. Could you offer some insight into the decision process around the next generation CapEx, with specific regard to starting in 2017 or 2018?

What has to happen? What do you have to see?

And almost when do you have to make the decision? And when you make a decision, how should we see that?

Are you going to communicate it? Or will we just see CapEx start to pick up again?

So there are a number of factors that play into our decision-making. One and first and foremost in our mind is the useful life of our on-orbit assets.

So that's something that we monitor and we visit periodically. And then it's overall market conditions, the needs of our customers.

So those are some of the key factors. And you should expect that when it comes time to start that program that we will let you know.

Okay. And then just one final one on the, I know, Jeff, you reiterated your intention to continue share repurchases on the call a couple weeks ago.

Just now that the quarter's closed, do you have any update around that authorization and what will happen – and what might happen going forward?

We are committed to completing the existing authorization and to doing so by year-end. We're focused on that.

We're focused on funding The Radiant acquisition. And once we complete those two efforts, we'll look at all of our options for allocation of capital with a focus on how we create the most value for shareowners.

Jeff, can you just give us your final thoughts, with The Radiant acquisition, you've had kind of a on again, off again focus on commercially focused Big Data analytics, geospatial analytics. Where do you feel that acquisition puts you in terms of your ability to address some of those markets and the appetite to expand that effort?

Well, with regard to commercial and geospatial analytics, our primary investment thrust is our platform. And it's our platform which is enabling developers, partners, customers to access our 80-petabyte archive of data for the first time and run analytics.

And now our acquisition of Timbr is making it even easier for developers to develop new applications that run on that database and to find applications developed by others and create new value in that fashion. So we feel very good about that investment.

It's growing nicely, albeit on a small base. As we look at Radiant, Radiant's existing business is primarily exclusively today U.S.

government, but there are some opportunities. For example, Radiant is developing algorithms that also run on our Geospatial Big Data platform and we would hope at some point in the future to make those algorithms also available to our growing commercial ecosystem of partners.

We believe by doing that, that'll benefit both our commercial customers and reap rewards also for our U.S. government customers too.

So bottom line, the strategy is to partner with companies like Mapbox and Orbital Insight as the primary go-to-market method for the commercial sector?

The primary thrust is to partner with hundreds of developers and content providers to further extend our lead as the leading provider both of the data and the platform to enable developers to unlock the value that's embedded in that 15 years of history.

Thank you all for your time today. We will continue to manage our industry-leading imagery business for free cash flow and returns.

We'll continue to make disciplined investments in our platform for growth. We'll continue to leverage our analytics services to embed our imagery and platforms in our customers' workflows.

We'll continue to drive down our capital intensity while extending our industry lead. We will continue to return capital to shareowners.

I'd like to add that we're delighted to welcome the Timbr team and we look forward to welcoming The Radiant team as we build a company uniquely positioned to help customers better understand our changing planet, and in so doing creating a long-term value for shareowners. Thank you.