WASHINGTON -- GeoEye
Inc. expects by late October or early November to begin receiving the first
images from its GeoEye-1 satellite, which after several delays was launched
successfully Sept. 6 from Vandenberg Air Force Base, Calif., aboard a Boeing Delta 2 rocket.
Meanwhile,
the Dulles, Va.-based company also plans to have
cleared from its books $29.5 million in tax-related interest and penalties that
resulted from a restatement of its earnings for the past three years.
Company
officials have set their sights on GeoEye-1 to invigorate lagging imagery sales
that account for a $16.5 million drop in revenue for the first half of 2008,
compared to the first half of 2007.
GeoEye-1
will collect black-and-white-imagery with 0.41-meter resolution and color
imagery with 1.65-meter resolution. The satellite is undergoing a calibration
and checkout phase before imagery becomes available 45 to 60 days after launch.
The primary
customer for GeoEye-1 images is the U.S. National Geospatial-Intelligence
Agency (NGA), which agreed as part of its NextView
program to pay $237 million toward building the satellite. The agency similarly
subsidized a satellite for GeoEye competitor DigitalGlobe of Longmont, Colo.
GeoEye-1
cost $502 million to build, launch and insure, according to a Sept. 8 GeoEye filing with the U.S. Securities and Exchange
Commission (SEC). GeoEye-1 is insured for up to $320 million, the filing said.
GeoEye
reviewed its finances during the summer and determined payments by the NGA that
went toward construction of the satellite should have been calculated as income
in previous years. That determination prompted GeoEye
to restate its financial earnings for 2005, 2006, 2007 and the first quarter of
2008. That restatement led to tax interest and penalties totaling $29.5
million.
GeoEye,
however, is seeking approval from the U.S. Internal Revenue Service (IRS) for
an accounting change that would reverse those penalties by the time the company
reports its earnings for the months of July, August and September. The IRS could waive those penalties because
the restatements were triggered by a company review and not an IRS audit, said
Henry Dubois, GeoEye's chief financial officer.
GeoEye-1
originally was scheduled for an April 2008 launch. The launch was postponed to
late summer because of what GeoEye officials said was
a request from the U.S. Department of Defense for the April launch slot.
Company
officials say the delay hurt their NGA sales. Although GeoEye
operates the Ikonos satellite, company officials say
the NGA is more interested in the more-detailed data from GeoEye-1 and from DigitalGlobe's WorldView-1 satellite, which was launched in
September 2007. NGA orders for the first
half of 2008 were down $20.6 million, GeoEye said in
the SEC filing.
The NGA is
looking forward to using GeoEye-1's images, U.S. Navy Vice
Adm. Robert B. Murrett, the agency's director, said
in a Sept. 8 statement. "We are excited about and eagerly await delivery of the
first new imagery," Murrett said. "With the improved
resolution, agility and capacity of the GeoEye-1 satellite, we anticipate
increasing the use of commercial imagery to satisfy our geospatial production
requirements."
Matthew
O'Connell, chief executive of GeoEye, said GeoEye-1
and Ikonos will work in tandem to meet customer
demands.
"This
launch, and our important relationship with the National
Geospatial-Intelligence Agency, shows how public-private partnerships can be
successful for the collection of broad areas of the Earth," he said in Sept. 6
written statement.
GeoEye-1
was built by General Dynamics Advanced Information Systems of Gilbert, Ariz., and the sensor was built by ITT
Corp.'s Space Systems Division of Rochester, N.Y.
GeoEye
has contracted with ITT to provide the instrument for the more-capable GeoEye-2
satellite that will launch no sooner than 2011, according to the SEC filing. GeoEye had spent $15.7 million on GeoEye-2 as of June 30,
and expects to sign a contract with a satellite builder at the end of 2008, the
filing said.
