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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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22-2286646
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value
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New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Document
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Parts Into Which Incorporated
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Portions of the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders scheduled to be held on May 20, 2015, to be filed pursuant to Regulation 14A
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Part III
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Page
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Signatures
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Index to Consolidated Financial Statements
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•
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Leverage our key technologies to provide integrated solutions to oil and gas companies, across the entire E&P lifecycle
.
More of our customers are seeking fully integrated offerings from seismic companies, from survey planning and design, to leading technology differentiation in acquisition and processing. We have transformed ourself from an equipment provider to an integrated service provider, where leading equipment and software technologies underpin our solution offerings. The growth in our Solutions business over the past decade is a testament to our steadfast execution of this strategy. Whereas our solutions, including our BasinSPAN
TM
2-D seismic programs, were originally focused on the earlier, frontier exploration, phase of the E&P lifecycle, our newest offering, OBS services through OceanGeo, is geared to the later, less volatile, production phase of the E&P lifecycle leveraging our Calypso OBS data acquisition system.
|
•
|
Expand and globalize our Solutions business.
We seek to expand and grow our Solutions business to new regions, with new customers and new offerings, including proprietary services for E&P companies through our GXT data processing and GeoVentures multi-client businesses. For the foreseeable future, we expect the majority of our future investments to be in research and development and computing infrastructure for our data processing business and to support our GeoVentures multi-client projects. We believe this focus better positions our company as a full-service technology company with an increasing proportion of revenues derived from E&P customers.
|
•
|
Continue investing in advanced software and equipment technology to provide next generation services and products
.
We intend to continue investing in the development of new technologies for use by E&P companies. In particular, we intend to focus on the development of the next generation of our OBS data imaging technology and on our Narwhal ice management system and derivative products, with the goal of obtaining technical and market leadership in what we continue to believe are important and expanding markets. In
2014
, our investment in research and development was equal to approximately
8%
of our total net revenue for the year.
|
•
|
Collaborate with our customers to provide products and solutions designed to meet their needs.
A key element of our business strategy has been to understand the challenges faced by E&P companies in seismic survey planning, seismic data acquisition, processing, and interpretation. We will continue to develop and offer technology and services that enable us to work with E&P companies to solve their unique challenges, especially in the harshest and most extreme environments around the world. We have found that a collaborative relationship with E&P companies, with a goal of better understanding their imaging challenges and then working with them to assure them that the right technologies are properly applied, is the most effective method for meeting their needs. Our goal of being a full solutions provider to solve the most difficult challenges for our customers is an important element of our long-term business strategy, and we are implementing this partnership approach globally through local personnel in our regional organizations who understand the unique challenges in their areas.
|
•
|
We are leveraging our key technologies to provide integrated solutions to oil and gas companies
.
More of our customers are seeking fully integrated offerings from seismic companies, from survey planning and design, to leading technology differentiation in acquisition and processing. ION has become an integrated service provider, through service offerings by our Solutions segment.
|
•
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We are a broad-based seismic solutions provider, with offerings spanning the entire geophysical workflow
.
We are a technology-focused full-value-chain service provider, with offerings that span the entire seismic workflow, from survey planning and data acquisition to processing and interpretation. Our offerings include seismic data acquisition hardware, data acquisition services, command and control software, value-added services associated with seismic survey design, seismic data processing and interpretation, and seismic data libraries.
|
•
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Our “asset light” strategy enables us to avoid significant fixed costs and to remain financially flexible.
We do not own a fleet of marine vessels and, with the exception of OceanGeo, we do not provide our own seismic crews to acquire seismic data. We outsource a majority of our seismic data acquisition activity to third parties that operate their own fleets of seismic acquisition vessels and equipment. Doing so enables us to avoid the fixed costs associated with these assets and personnel and to manage our business in a manner designed to afford us the flexibility to quickly decrease our costs or capital investments in the event of a downturn. We actively manage the costs of developing our multi-client data library business by requiring our customers to partially pre-fund, or underwrite, the investment for any new project. Our target goal is to have customer underwritten investment equal to approximately 75% of the total cost of each new project’s data acquisition. We believe this conservative approach to data library investment is the most prudent way to avoid risks of any sudden reduction in the demand for seismic data giving us the flexibility to aggressively reduce cash outflows in the event of an industry downturn.
|
•
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Our global footprint and ability to work in harsh conditions allow us to offset regional downturns.
Our focus on conducting business around the world, even in the harshest and most extreme environments, has been and will continue to be a key component of our strategy. This global focus has been helpful in minimizing the impact of any one regional slowdown for short or extended periods of time. We believe that our customers prefer to work with companies that are capable of delivering high quality, safe, and environmentally sensitive service in those environments. For example, our operational expertise and equipment and software technologies enable us to operate in the harsh Arctic environment and to acquire seismic data in areas for which no modern seismic data previously existed. This expertise and these technologies permit us to extend the time window for data acquisition, facilitate our customers’ drilling decisions, reducing exploration and production risk.
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•
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We have a diversified and blue chip customer base.
We provide services and products to a diverse, global customer base that includes many of the largest oil and gas and geophysical companies in the world, including national oil companies (NOCs) and international oil companies (IOCs). Over the past decade, we have made significant progress in expanding our customer list and revenue sources. Whereas almost all of our revenues in 2003 were derived principally from seismic contracting companies, in
2014
E&P companies accounted for approximately
76%
of our total revenues. Even though we provide services and products to some of the largest companies in the world, no single customer accounted for more than 10% of our total revenue in
2012
,
2013
or
2014
. We focus our sales and marketing efforts on high-quality, historically creditworthy customers.
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•
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the expected outcome of the WesternGeco litigation and future potential adverse effects on our liquidity in the event that we must collateralize our appeal bond for the full amount of the bond or are unsuccessful in our appeal of the judgment;
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•
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future oil and gas commodity prices;
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•
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future levels of capital expenditures of our customers for seismic activities;
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•
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the effects of current and future worldwide economic conditions (particularly in developing countries) and demand for oil and natural gas and seismic equipment and services;
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•
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the effects of current and future unrest in the Middle East, North Africa and other regions, including Ukraine;
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•
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the timing of anticipated revenues and the recognition of those revenues for financial accounting purposes;
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•
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the effects of ongoing and future industry consolidation, including, in particular, the effects of consolidation and vertical integration in the towed marine seismic streamers market;
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•
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the timing of future revenue realization of anticipated orders for multi-client survey projects and data processing work in our Solutions segment;
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•
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future levels of our capital expenditures;
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•
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future government regulations, particularly in the Gulf of Mexico;
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•
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expected net revenues, income from operations and net income;
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•
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expected gross margins for our services and products;
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•
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future benefits to be derived from our INOVA Geophysical joint venture;
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•
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future benefits to be derived from our OceanGeo subsidiary;
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•
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future seismic industry fundamentals, including future demand for seismic services and equipment;
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•
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future benefits to our customers to be derived from new services and products;
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•
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future benefits to be derived from our investments in technologies, joint ventures and acquired companies;
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•
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future growth rates for our services and products;
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•
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the degree and rate of future market acceptance of our new services and products;
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•
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expectations regarding E&P companies and seismic contractor end-users purchasing our more technologically-advanced services and products;
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•
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anticipated timing and success of commercialization and capabilities of services and products under development and start-up costs associated with their development;
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•
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future cash needs and future availability of cash to fund our operations and pay our obligations;
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•
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potential future acquisitions;
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•
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future opportunities for new products and projected research and development expenses;
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•
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expected continued compliance with our debt financial covenants;
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•
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expectations regarding realization of deferred tax assets; and
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•
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anticipated results with respect to certain estimates we make for financial accounting purposes.
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•
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the supply of and demand for oil and gas;
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•
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the level of prices, and expectations about future prices, of oil and gas;
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•
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the cost of exploring for, developing, producing and delivering oil and gas;
|
•
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the expected rates of decline for current production;
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•
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the discovery rates of new oil and gas reserves;
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•
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weather conditions, including hurricanes, that can affect oil and gas operations over a wide area, as well as less severe inclement weather that can preclude or delay seismic data acquisition;
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•
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domestic and worldwide economic conditions;
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•
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political instability in oil and gas producing countries;
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•
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technical advances affecting energy consumption;
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•
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government policies regarding the exploration, production and development of oil and gas reserves;
|
•
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the ability of oil and gas producers to raise equity capital and debt financing; and
|
•
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merger and divestiture activity among oil and gas companies and seismic contractors.
|
•
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Seismic data acquisition activities in marine ocean bottom areas are subject to the risk of downtime or reduced productivity, as well as to the risks of loss to property and injury to personnel, mechanical failures and natural disasters. In addition to losses caused by human errors and accidents, we may also become subject to losses resulting from, among other things, political instability, business interruption, strikes and weather events; and
|
•
|
OceanGeo’s equipment and services may expose us to litigation and legal proceedings, including those related to product liability, personal injury and contract liability.
|
•
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increased costs associated with the operation of the business and the management of geographically dispersed operations;
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•
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OceanGeo’s cash flows may be inadequate to fund its capital requirements, thereby requiring additional contributions to OceanGeo by us;
|
•
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risks associated with our new Calypso ocean bottom product that is intended to be utilized by OceanGeo in its operations, including risks that the new technology may not perform as well as we anticipate;
|
•
|
difficulties in retaining and integrating key technical, sales and marketing personnel and the possible loss of such employees and costs associated with their loss;
|
•
|
the diversion of management’s attention and other resources from other business operations and related concerns;
|
•
|
the requirement to maintain uniform standards, controls and procedures;
|
•
|
we may not be able to realize operating efficiencies, cost savings or other benefits that we expect from OceanGeo’s operations; and
|
•
|
OceanGeo may experience difficulties and delays in securing new business and customer projects.
|
•
|
increased costs associated with the integration and operation of the new business and the management of geographically dispersed operations;
|
•
|
risks associated with the assimilation of new technologies, operations, sites and personnel;
|
•
|
difficulties in retaining and integrating key technical, sales and marketing personnel and the possible loss of such employees and costs associated with their loss;
|
•
|
difficulties associated with preserving relationships with our customers, partners and vendors;
|
•
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risks that any technology developed by the joint venture may not perform as well as we had anticipated;
|
•
|
the strength of future seismic contractor demand for land seismic equipment and the highly competitive nature of the land seismic equipment manufacturing industry;
|
•
|
the diversion of management’s attention and other resources from other business operations and related concerns;
|
•
|
the potential inability to replicate operating efficiencies in the joint venture’s operations;
|
•
|
the requirement to maintain uniform standards, controls and procedures;
|
•
|
the impairment of relationships with employees and customers as a result of the integration of management personnel from different companies;
|
•
|
the divergence of our interests from BGP’s interests in the future, disagreements with BGP on ongoing manufacturing, research and development and operational activities, or the amount, timing or nature of further investments in the joint venture;
|
•
|
the terms of our joint venture arrangements may turn out to be unfavorable to us;
|
•
|
because we currently own only 49% of the total equity interests in INOVA Geophysical, there are certain decisions affecting the business of the joint venture that we cannot control or influence;
|
•
|
we may not be able to realize the operating efficiencies, cost savings or other benefits that we expect from the joint venture;
|
•
|
joint venture profits and cash flows may prove inadequate to fund cash dividends or other distributions from the joint venture to the joint venture partners; and
|
•
|
the joint venture may experience difficulties and delays in production of the joint venture’s products.
|
•
|
we may have difficulty satisfying our obligations with respect to our outstanding debt;
|
•
|
we may have difficulty obtaining financing in the future for working capital, capital expenditures, acquisitions or other purposes;
|
•
|
we may need to use all, or a substantial portion, of our available cash flow to pay interest and principal on our debt, which will reduce the amount of money available to finance our operations and other business activities;
|
•
|
our vulnerability to general economic downturns and adverse industry conditions could increase;
|
•
|
our flexibility in planning for, or reacting to, changes in our business and in our industry in general could be limited;
|
•
|
our amount of debt and the amount we must pay to service our debt obligations could place us at a competitive disadvantage compared to our competitors that have less debt;
|
•
|
our customers may react adversely to our significant debt level and seek or develop alternative licensors or suppliers;
|
•
|
we may have insufficient funds, and our debt level may also restrict us from raising the funds necessary to repurchase all of the Notes (defined below) tendered to us upon the occurrence of a change of control, which would constitute an event of default under the Notes; and
|
•
|
our failure to comply with the restrictive covenants in our debt instruments which, among other things, limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could have a material adverse effect on our business or prospects.
|
•
|
incur additional indebtedness;
|
•
|
create liens;
|
•
|
pay dividends and make other distributions in respect of our capital stock;
|
•
|
redeem our capital stock;
|
•
|
make investments or certain other restricted payments;
|
•
|
sell certain kinds of assets;
|
•
|
enter into transactions with affiliates; and
|
•
|
effect mergers or consolidations.
|
•
|
limit our ability to plan for or react to market or economic conditions or meet capital needs or otherwise restrict our activities or business plans; and
|
•
|
adversely affect our ability to finance our operations, acquisitions, investments or strategic alliances or other capital needs or to engage in other business activities that would be in our interest.
|
•
|
future competition from more established companies entering the market;
|
•
|
technology obsolescence;
|
•
|
dependence upon continued growth of the market for seismic data processing;
|
•
|
the rate of change in the markets for these segments’ technology and services;
|
•
|
research and development efforts not proving sufficient to keep up with changing market demands;
|
•
|
dependence on third-party software for inclusion in these segments’ services and products;
|
•
|
misappropriation of these segments’ technology by other companies;
|
•
|
alleged or actual infringement of intellectual property rights that could result in substantial additional costs;
|
•
|
difficulties inherent in forecasting sales for newly developed technologies or advancements in technologies;
|
•
|
recruiting, training and retaining technically skilled, experienced personnel that could increase the costs for these segments, or limit their growth; and
|
•
|
the ability to maintain traditional margins for certain of their technology or services.
|
•
|
We may not fully recover our costs of acquiring and processing seismic data through future sales. The ultimate amounts involved in these data sales are uncertain and depend on a variety of factors, many of which are beyond our control.
|
•
|
The timing of these sales is unpredictable and can vary greatly from period to period. The costs of each survey are capitalized and then amortized as a percentage of sales and/or over the expected useful life of the data. This amortization will affect our earnings and, when combined with the sporadic nature of sales, will result in increased earnings volatility.
|
•
|
Regulatory changes that affect companies’ ability to drill, either generally or in a specific location where we have acquired seismic data, could materially adversely affect the value of the seismic data contained in our library. Technology changes could also make existing data sets obsolete. Additionally, each of our individual surveys has a limited book life based on its location and oil and gas companies’ interest in prospecting for reserves in such location, so a particular survey may be subject to a significant decline in value beyond our initial estimates.
|
•
|
The value of our multi-client data could be significantly adversely affected if any material adverse change occurs in the general prospects for oil and gas exploration, development and production activities.
|
•
|
The cost estimates upon which we base our pre-commitments of funding could be wrong. The result could be losses that have a material adverse effect on our financial condition and results of operations. These pre-commitments of funding are subject to the creditworthiness of our clients. In the event that a client refuses or is unable to pay its commitment, we could incur a substantial loss on that project.
|
•
|
As part of our asset-light strategy, we routinely charter vessels from third-party vendors to acquire seismic data for our multi-client business. As a result, our cost to acquire our multi-client data could significantly increase if vessel charter prices rise materially.
|
•
|
disruption of E&P activities;
|
•
|
restriction on the movement and exchange of funds;
|
•
|
inhibition of our ability to collect advances and receivables;
|
•
|
enactment of additional or stricter U.S. government or international sanctions;
|
•
|
limitation of our access to markets for periods of time;
|
•
|
expropriation and nationalization of assets of our company or those of our customers;
|
•
|
political and economic instability, which may include armed conflict and civil disturbance;
|
•
|
currency fluctuations, devaluations and conversion restrictions;
|
•
|
confiscatory taxation or other adverse tax policies; and
|
•
|
governmental actions that may result in the deprivation of our contractual rights.
|
•
|
operating results that vary from the expectations of securities analysts and investors;
|
•
|
factors influencing the levels of global oil and natural gas exploration and exploitation activities, such as depressed prices for natural gas in North America or disasters such as the Deepwater Horizon incident in the Gulf of Mexico in 2010;
|
•
|
the operating and securities price performance of companies that investors or analysts consider comparable to us;
|
•
|
actions by rating agencies related to the Notes;
|
•
|
announcements of strategic developments, acquisitions and other material events by us or our competitors; and
|
•
|
changes in global financial markets and global economies and general market conditions, such as interest rates, commodity and equity prices and the value of financial assets.
|
•
|
authorizing the issuance of “blank check” preferred stock without any need for action by stockholders;
|
•
|
providing for a classified board of directors with staggered terms;
|
•
|
requiring supermajority stockholder voting to effect certain amendments to our certificate of incorporation and bylaws;
|
•
|
eliminating the ability of stockholders to call special meetings of stockholders;
|
•
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prohibiting stockholder action by written consent; and
|
•
|
establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.
|
Operating Facilities
|
|
|
Square
Footage |
|
Segment
|
|
Houston, Texas
|
|
|
208,000
|
|
|
Global Headquarters and Solutions
|
Harahan, Louisiana
|
|
|
150,000
|
|
|
Systems
|
Denver, Colorado
|
|
|
29,000
|
|
|
Solutions
|
Edinburgh, Scotland
|
|
|
23,000
|
|
|
Software
|
Jebel Ali, Dubai, United Arab Emirates
|
|
|
2,000
|
|
|
International Sales Headquarters
|
|
|
|
412,000
|
|
|
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Price Range
|
||||||
Period
|
High
|
|
Low
|
||||
Year ended December 31, 2014:
|
|
|
|
||||
Fourth Quarter
|
$
|
3.02
|
|
|
$
|
2.29
|
|
Third Quarter
|
4.36
|
|
|
2.79
|
|
||
Second Quarter
|
4.73
|
|
|
3.85
|
|
||
First Quarter
|
4.54
|
|
|
2.82
|
|
||
Year ended December 31, 2013:
|
|
|
|
||||
Fourth Quarter
|
$
|
5.36
|
|
|
$
|
2.81
|
|
Third Quarter
|
6.58
|
|
|
4.59
|
|
||
Second Quarter
|
6.90
|
|
|
5.55
|
|
||
First Quarter
|
7.70
|
|
|
6.23
|
|
Period
|
(a)
Total Number of Shares Acquired
|
|
(b)
Average Price Paid Per Share
|
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Program
|
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Program
|
|||
October 1, 2014 to October 31, 2014
|
—
|
|
|
$
|
—
|
|
|
Not applicable
|
|
Not applicable
|
November 1, 2014 to November 30, 2014
|
—
|
|
|
$
|
—
|
|
|
Not applicable
|
|
Not applicable
|
December 1, 2014 to December 31, 2014
|
77,070
|
|
|
$
|
2.47
|
|
|
Not applicable
|
|
Not applicable
|
Total
|
77,070
|
|
|
$
|
2.47
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Write-down of multi-client data library
|
$
|
(100,100
|
)
|
|
$
|
(5,461
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Write-down of excess and obsolete inventory
|
$
|
(6,952
|
)
|
|
$
|
(21,197
|
)
|
|
$
|
(1,326
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of goodwill and intangible assets
|
$
|
(23,284
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Write-down of receivables
|
$
|
(8,214
|
)
|
|
$
|
(9,157
|
)
|
|
$
|
(5,640
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Write-down of marine equipment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,928
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
||||||||||
Write-down of deferred financing charges, including amortization of non-cash debt discounts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(18,777
|
)
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Reversal of (accrual for) loss contingency related to legal proceedings
|
$
|
69,557
|
|
|
$
|
(183,327
|
)
|
|
$
|
(10,000
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Gain on sale of Source product line
|
$
|
6,522
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gain on sale of cost method investments
|
$
|
5,463
|
|
|
$
|
3,591
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gain on legal settlements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,895
|
|
|
$
|
—
|
|
|
$
|
24,500
|
|
Equity in earnings (losses) of investments
|
$
|
(49,485
|
)
|
(a)
|
$
|
(42,320
|
)
|
|
$
|
297
|
|
|
$
|
(22,862
|
)
|
|
$
|
(23,724
|
)
|
Loss on disposition of land equipment division
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(38,115
|
)
|
Fair value adjustments of a warrant associated with certain bridge financing arrangements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,788
|
|
Conversion payment of preferred stock
|
$
|
—
|
|
|
$
|
(5,000
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Includes the full write-down of our investment in INOVA Geophysical of
$30.7 million
.
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
(In thousands, except for per share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
|
$
|
509,558
|
|
|
$
|
549,167
|
|
|
$
|
526,317
|
|
|
$
|
454,621
|
|
|
$
|
444,322
|
|
Gross profit
|
|
62,223
|
|
|
159,313
|
|
|
215,801
|
|
|
173,445
|
|
|
165,733
|
|
|||||
Income (loss) from operations
|
|
(117,929
|
)
|
|
16,396
|
|
|
74,527
|
|
|
66,795
|
|
|
52,847
|
|
|||||
Net income (loss) applicable to common shares
|
|
(128,252
|
)
|
|
(251,874
|
)
|
|
61,963
|
|
|
23,422
|
|
|
(38,774
|
)
|
|||||
Net income (loss) per basic share
|
|
$
|
(0.78
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
0.40
|
|
|
$
|
0.15
|
|
|
$
|
(0.27
|
)
|
Net income (loss) per diluted share
|
|
$
|
(0.78
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
0.39
|
|
|
$
|
0.15
|
|
|
$
|
(0.27
|
)
|
Weighted average number of common shares outstanding
|
|
164,089
|
|
|
158,506
|
|
|
155,801
|
|
|
154,811
|
|
|
144,278
|
|
|||||
Weighted average number of diluted shares outstanding
|
|
164,089
|
|
|
158,506
|
|
|
162,765
|
|
|
156,090
|
|
|
144,278
|
|
|||||
Balance Sheet Data (end of year):
|
|
|
|
|
|
|
|
|
||||||||||||
Working capital
|
|
$
|
222,099
|
|
|
$
|
248,857
|
|
|
$
|
164,693
|
|
|
$
|
163,677
|
|
|
$
|
171,851
|
|
Total assets
|
|
617,257
|
|
|
864,671
|
|
|
820,583
|
|
|
674,058
|
|
|
631,857
|
|
|||||
Long-term debt
|
|
190,594
|
|
|
220,152
|
|
|
105,328
|
|
|
105,112
|
|
|
108,660
|
|
|||||
Total equity
|
|
135,712
|
|
|
257,885
|
|
|
499,019
|
|
|
425,812
|
|
|
380,447
|
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in multi-client library
|
|
$
|
67,785
|
|
|
$
|
114,582
|
|
|
$
|
145,627
|
|
|
$
|
143,782
|
|
|
$
|
64,426
|
|
Capital expenditures
|
|
8,264
|
|
|
16,914
|
|
|
16,650
|
|
|
11,060
|
|
|
7,372
|
|
|||||
Depreciation and amortization (other than multi-client library)
|
|
27,656
|
|
|
18,158
|
|
|
16,202
|
|
|
13,917
|
|
|
24,795
|
|
|||||
Amortization of multi-client library
|
|
64,374
|
|
|
86,716
|
|
|
89,080
|
|
|
77,317
|
|
|
85,940
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Net revenues:
|
|
|
|
|
|
||||||
Solutions:
|
|
|
|
|
|
||||||
New Venture
|
$
|
98,649
|
|
|
$
|
154,578
|
|
|
$
|
147,346
|
|
Data Library
|
66,180
|
|
|
111,998
|
|
|
88,085
|
|
|||
Total multi-client revenues
|
164,829
|
|
|
266,576
|
|
|
235,431
|
|
|||
Data Processing
|
113,075
|
|
|
120,808
|
|
|
115,834
|
|
|||
Total
|
$
|
277,904
|
|
|
$
|
387,384
|
|
|
$
|
351,265
|
|
Systems:
|
|
|
|
|
|
||||||
Towed Streamer
|
$
|
43,995
|
|
|
$
|
66,991
|
|
|
$
|
77,769
|
|
Ocean Bottom Equipment
|
—
|
|
|
7,307
|
|
|
14,823
|
|
|||
Other
|
44,422
|
|
|
48,134
|
|
|
39,404
|
|
|||
Total
|
$
|
88,417
|
|
|
$
|
122,432
|
|
|
$
|
131,996
|
|
Software:
|
|
|
|
|
|
||||||
Software Systems
|
$
|
36,203
|
|
|
$
|
35,418
|
|
|
$
|
39,738
|
|
Services
|
3,790
|
|
|
3,933
|
|
|
3,318
|
|
|||
Total
|
$
|
39,993
|
|
|
$
|
39,351
|
|
|
$
|
43,056
|
|
Ocean Bottom Services
|
$
|
103,244
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
509,558
|
|
|
$
|
549,167
|
|
|
$
|
526,317
|
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
|
Year Ended December 31, 2012
|
||||||||||||||||||||||||||||||
|
As Reported
|
|
Restructuring and Other Charges
|
|
As Adjusted
|
|
As Reported
|
|
Restructuring and Other Charges
|
|
As Adjusted
|
|
As Reported
|
|
Restructuring and Other Charges
|
|
As Adjusted
|
||||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Solutions
|
$
|
(24,345
|
)
|
|
$
|
100,825
|
|
(a)
|
$
|
76,480
|
|
|
$
|
111,108
|
|
|
$
|
5,461
|
|
(a)
|
$
|
116,569
|
|
|
$
|
132,950
|
|
|
$
|
—
|
|
|
$
|
132,950
|
|
Systems
|
29,829
|
|
|
7,580
|
|
(b)
|
37,409
|
|
|
19,999
|
|
|
25,688
|
|
(c)
|
45,687
|
|
|
50,790
|
|
|
1,280
|
|
(d)
|
52,070
|
|
|||||||||
Software
|
28,835
|
|
|
137
|
|
(e)
|
28,972
|
|
|
28,206
|
|
|
—
|
|
|
28,206
|
|
|
32,061
|
|
|
—
|
|
|
32,061
|
|
|||||||||
Ocean Bottom Services
|
27,904
|
|
|
—
|
|
|
27,904
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total
|
$
|
62,223
|
|
|
$
|
108,542
|
|
|
$
|
170,765
|
|
|
$
|
159,313
|
|
|
$
|
31,149
|
|
|
$
|
190,462
|
|
|
$
|
215,801
|
|
|
$
|
1,280
|
|
|
$
|
217,081
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Solutions
|
(9
|
)%
|
|
37
|
%
|
|
28
|
%
|
|
29
|
%
|
|
1
|
%
|
|
30
|
%
|
|
38
|
%
|
|
—
|
%
|
|
38
|
%
|
|||||||||
Systems
|
34
|
%
|
|
8
|
%
|
|
42
|
%
|
|
16
|
%
|
|
21
|
%
|
|
37
|
%
|
|
38
|
%
|
|
1
|
%
|
|
39
|
%
|
|||||||||
Software
|
72
|
%
|
|
—
|
%
|
|
72
|
%
|
|
72
|
%
|
|
—
|
%
|
|
72
|
%
|
|
74
|
%
|
|
—
|
%
|
|
74
|
%
|
|||||||||
Ocean Bottom Services
|
27
|
%
|
|
—
|
%
|
|
27
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||||||||
Total
|
12
|
%
|
|
22
|
%
|
|
34
|
%
|
|
29
|
%
|
|
6
|
%
|
|
35
|
%
|
|
41
|
%
|
|
—
|
%
|
|
41
|
%
|
|||||||||
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Solutions
|
$
|
(80,653
|
)
|
|
$
|
102,740
|
|
(a)
|
$
|
22,087
|
|
|
$
|
61,146
|
|
|
$
|
5,461
|
|
(a)
|
$
|
66,607
|
|
|
$
|
88,589
|
|
|
$
|
—
|
|
|
$
|
88,589
|
|
Systems
|
(23,521
|
)
|
|
32,492
|
|
(b)
|
8,971
|
|
|
(9,957
|
)
|
|
28,050
|
|
(c)
|
18,093
|
|
|
10,132
|
|
|
12,848
|
|
(d)
|
22,980
|
|
|||||||||
Software
|
20,212
|
|
|
223
|
|
(e)
|
20,435
|
|
|
23,602
|
|
|
—
|
|
|
23,602
|
|
|
28,129
|
|
|
—
|
|
|
28,129
|
|
|||||||||
Ocean Bottom Services
|
19,070
|
|
|
—
|
|
|
19,070
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Corporate and other
|
(53,037
|
)
|
|
6,487
|
|
(f)
|
(46,550
|
)
|
|
(58,395
|
)
|
|
9,157
|
|
(g)
|
(49,238
|
)
|
|
(52,323
|
)
|
|
—
|
|
|
(52,323
|
)
|
|||||||||
Total
|
$
|
(117,929
|
)
|
|
$
|
141,942
|
|
|
$
|
24,013
|
|
|
$
|
16,396
|
|
|
$
|
42,668
|
|
|
$
|
59,064
|
|
|
$
|
74,527
|
|
|
$
|
12,848
|
|
|
$
|
87,375
|
|
Operating margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Solutions
|
(29
|
)%
|
|
37
|
%
|
|
8
|
%
|
|
16
|
%
|
|
1
|
%
|
|
17
|
%
|
|
25
|
%
|
|
—
|
%
|
|
25
|
%
|
|||||||||
Systems
|
(27
|
)%
|
|
37
|
%
|
|
10
|
%
|
|
(8
|
)%
|
|
23
|
%
|
|
15
|
%
|
|
8
|
%
|
|
9
|
%
|
|
17
|
%
|
|||||||||
Software
|
51
|
%
|
|
—
|
%
|
|
51
|
%
|
|
60
|
%
|
|
—
|
%
|
|
60
|
%
|
|
65
|
%
|
|
—
|
%
|
|
65
|
%
|
|||||||||
Ocean Bottom Services
|
18
|
%
|
|
—
|
%
|
|
18
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||||||||
Corporate and other
|
(10
|
)%
|
|
1
|
%
|
|
(9
|
)%
|
|
(11
|
)%
|
|
2
|
%
|
|
(9
|
)%
|
|
(10
|
)%
|
|
—
|
%
|
|
(10
|
)%
|
|||||||||
Total
|
(23
|
)%
|
|
28
|
%
|
|
5
|
%
|
|
3
|
%
|
|
8
|
%
|
|
11
|
%
|
|
14
|
%
|
|
3
|
%
|
|
17
|
%
|
|||||||||
Net income (loss) applicable to common shares
|
$
|
(128,252
|
)
|
|
$
|
94,143
|
|
(h)
|
$
|
(34,109
|
)
|
|
$
|
(251,874
|
)
|
|
$
|
271,208
|
|
(i)
|
$
|
19,334
|
|
|
$
|
61,963
|
|
|
$
|
(369
|
)
|
|
$
|
61,594
|
|
Diluted net income (loss) per common share
|
$
|
(0.78
|
)
|
|
$
|
0.57
|
|
|
$
|
(0.21
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
1.71
|
|
|
$
|
0.12
|
|
|
$
|
0.39
|
|
|
$
|
—
|
|
|
$
|
0.39
|
|
|
|
|
|
|
(a)
|
Primarily relates to the write-down of our multi-client data library in 2014 and 2013 with the Solutions segment. Also, 2014 was impacted by the impairment of intangible assets and severance-related charges.
|
|||
|
|
|||
(b)
|
Primarily relates to the write-down of goodwill, impacting income (loss) from operations, in addition to inventory write-downs, impacting gross profit (loss), and severance-related charges within the Systems segment.
|
|||
|
|
|||
(c)
|
Represents excess and obsolete inventory and severance-related charges within the Systems segment in 2013.
|
|||
|
|
|||
(d)
|
Represents the write-down of excess and obsolete inventory, marine equipment and receivables within the Systems segment in 2012.
|
|||
|
|
|||
(e)
|
Represents severance-related charges within the Software segment.
|
|||
|
|
|||
(f)
|
Represents the write-down of receivables due from INOVA Geophysical, in addition to severance-related charges.
|
|||
|
|
|||
(g)
|
Represents the write-down of the carrying value of all receivables due from OceanGeo at September 30, 2013.
|
|||
|
|
|||
(h)
|
In addition to items (a), (b), (e) and (f), also impacting net income (loss) applicable to common shares was (i) the full write-down of our equity method investment in INOVA Geophysical of $30.7 million, in addition to our share of charges related to excess and obsolete inventory and customer bad debts of $3.5 million, (ii) a reduction in the WesternGeco legal contingency by $69.6 million, and (iii) non-recurring gains on the sale of a cost method investment of $5.5 million and on the sale of the Source product line of $6.5 million (before tax).
|
|||
|
|
|||
(i)
|
In addition to items (a),(c) and (g), also impacting net income (loss) applicable to common shares was (i) a charge to income tax expense related to our establishing a valuation allowance on our net deferred tax assets, (ii) a third quarter payment made to the holder of our outstanding Series D Preferred Stock in connection with the holder’s conversion of the Series D Preferred Stock, (iii) our additional loss contingency accrual related to the WesternGeco legal proceedings, (iv) $18.8 million representing ION’s 49% share of restructuring charges within the INOVA joint venture, associated with the impairment of intangible assets, write-down of excess and obsolete inventory and rental equipment, and severance-related charges, and (v) $12.5 million representing losses incurred as a result of ION taking a larger ownership position in OceanGeo.
|
|||
|
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
||||||||||||||||||||
|
As Reported
|
|
Special Items
(a)
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
(b)
|
|
As Adjusted
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research, development and engineering
|
$
|
41,009
|
|
|
$
|
(572
|
)
|
|
$
|
40,437
|
|
|
$
|
37,742
|
|
|
$
|
(1,388
|
)
|
|
$
|
36,354
|
|
Marketing and sales
|
39,682
|
|
|
(326
|
)
|
|
39,356
|
|
|
38,583
|
|
|
(277
|
)
|
|
38,306
|
|
||||||
General, administrative and other operating expenses
|
76,177
|
|
|
(9,218
|
)
|
|
66,959
|
|
|
66,592
|
|
|
(9,854
|
)
|
|
56,738
|
|
||||||
Impairment of goodwill and intangible assets
|
23,284
|
|
|
(23,284
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total operating expenses
|
$
|
180,152
|
|
|
$
|
(33,400
|
)
|
|
$
|
146,752
|
|
|
$
|
142,917
|
|
|
$
|
(11,519
|
)
|
|
$
|
131,398
|
|
Income (loss) from operations
|
$
|
(117,929
|
)
|
|
$
|
141,942
|
|
|
$
|
24,013
|
|
|
$
|
16,396
|
|
|
$
|
42,668
|
|
|
$
|
59,064
|
|
(a)
|
Includes (i) the write-down of goodwill related to our Marine Systems reporting unit, (ii) the write-down of intangible assets, (iii) the write-down of receivables related to INOVA Geophysical and other customer bad debt, and (iv) severance charges affecting operating expense lines.
|
(b)
|
Includes (i) the write-down of the remaining carrying value of our receivables from OceanGeo, and (ii) restructuring charges affecting the operating expense lines.
|
|
Fiscal 2014
|
|
Fiscal 2013
|
|
||||
Total net revenues
|
$
|
89,975
|
|
|
$
|
183,619
|
|
|
Gross profit (loss)
|
$
|
247
|
|
(1)
|
$
|
(1,988
|
)
|
(2)
|
Income (loss) from operations
|
$
|
(34,540
|
)
|
(1)
|
$
|
(44,463
|
)
|
|
Net income (loss)
|
$
|
(40,087
|
)
|
|
$
|
(46,149
|
)
|
(2)
|
(1)
|
Impacting INOVA Geophysical’s gross profit in Fiscal 2014, is $3.8 million of a write-down of excess and obsolete inventory. In addition to the special item impacting gross profit (loss), income (loss) from operations was also impacted by $3.4 million of charges related to customer bad debts.
|
(2)
|
Impacting INOVA Geophysical's gross profit in Fiscal 2013, is $36.5 million of restructuring and special items associated with the impairment of intangible assets, write-down of excess and obsolete inventory and rental equipment, and severance-related charges. In addition to the restructuring and special items impacting gross profit, net income (loss) was also impacted by $1.8 million of other restructuring and special items.
|
|
Years Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Reduction of (accrual for) loss contingency related to legal proceedings (Footnote 17)
|
$
|
69,557
|
|
|
$
|
(183,327
|
)
|
Gain on sale of a product line
(1)
|
6,522
|
|
|
—
|
|
||
Gain on sale of a cost method investment
(2)
|
5,463
|
|
|
3,591
|
|
||
Other income (expense)
|
(1,682
|
)
|
|
(2,794
|
)
|
||
Total other income (expense)
|
$
|
79,860
|
|
|
$
|
(182,530
|
)
|
|
|
|
|
(1)
|
In 2014, we sold our Source product line for approximately $14.4 million, net of transaction fees, recording a gain of approximately $6.5 million before taxes. The historical results of this product line have not been material to our results of operations.
|
(2)
|
Includes the 2014 sale of our cost method investment in a privately-owned U.S.-based technology company for total proceeds of approximately
$16.5 million
, of which
$14.1 million
was due and paid at closing.
|
|
Year Ended December 31, 2013
|
|
Year Ended December 31, 2012
|
||||||||||||||||||||
|
As Reported
|
|
Special Items
(1)
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
(2)
|
|
As Adjusted
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research, development and engineering
|
$
|
37,742
|
|
|
$
|
(1,388
|
)
|
|
$
|
36,354
|
|
|
$
|
34,080
|
|
|
$
|
—
|
|
|
$
|
34,080
|
|
Marketing and sales
|
38,583
|
|
|
(277
|
)
|
|
38,306
|
|
|
35,240
|
|
|
—
|
|
|
35,240
|
|
||||||
General, administrative and other operating expenses
|
66,592
|
|
|
(9,854
|
)
|
|
56,738
|
|
|
71,954
|
|
|
(11,568
|
)
|
|
60,386
|
|
||||||
Total operating expenses
|
$
|
142,917
|
|
|
$
|
(11,519
|
)
|
|
$
|
131,398
|
|
|
$
|
141,274
|
|
|
$
|
(11,568
|
)
|
|
$
|
129,706
|
|
Income from operations
|
$
|
16,396
|
|
|
$
|
42,668
|
|
|
$
|
59,064
|
|
|
$
|
74,527
|
|
|
$
|
12,848
|
|
|
$
|
87,375
|
|
(1)
|
Represents severance-related charges as a result of a restructuring of the Systems segment and the write-down of the carrying value of receivables due from OceanGeo.
|
(2)
|
Represents the write-down of marine equipment and receivables within the Systems segment in 2012.
|
|
Fiscal 2013
|
|
Fiscal 2012
|
||||
Total net revenues
|
$
|
183,619
|
|
|
$
|
188,336
|
|
Gross profit (loss)
|
$
|
(1,988
|
)
|
(1)
|
$
|
39,320
|
|
Income (loss) from operations
|
$
|
(44,463
|
)
|
|
$
|
3,241
|
|
Net income (loss)
|
$
|
(46,149
|
)
|
(1)
|
$
|
2,197
|
|
(1)
|
Impacting INOVA Geophysical's gross profit in Fiscal 2013, is $36.5 million of restructuring and special items associated with the impairment of intangible assets, write-down of excess and obsolete inventory and rental equipment, and severance-related charges. In addition to the restructuring and special items impacting gross profit, net income (loss) was also impacted by $1.8 million of other restructuring and special items.
|
|
Years Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Accrual for loss contingency related to legal proceedings (Footnote 17)
|
$
|
(183,327
|
)
|
|
$
|
(10,000
|
)
|
Gain on sale of a cost method investment
|
3,591
|
|
|
—
|
|
||
Gain on legal settlement
(1)
|
—
|
|
|
30,895
|
|
||
Other income (expense)
|
(2,794
|
)
|
|
(3,771
|
)
|
||
Total other income (expense)
|
$
|
(182,530
|
)
|
|
$
|
17,124
|
|
|
|
|
|
(1)
|
Gain related to the 2012 settlement of a patent infringement lawsuit with Sercel.
|
Date
|
|
Percentage
|
2015
|
|
104.063%
|
2016
|
|
102.031%
|
2017 and thereafter
|
|
100.000%
|
Contractual Obligations
|
Total
|
|
Less Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
||||||||||
Long-term debt
|
$
|
175,535
|
|
|
$
|
535
|
|
|
$
|
—
|
|
|
$
|
175,000
|
|
|
$
|
—
|
|
Interest on long-term debt obligations
|
51,030
|
|
|
15,259
|
|
|
29,839
|
|
|
5,932
|
|
|
—
|
|
|||||
Equipment capital lease obligations
|
15,059
|
|
|
7,114
|
|
|
7,945
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
111,055
|
|
|
29,604
|
|
|
20,947
|
|
|
17,538
|
|
|
42,966
|
|
|||||
Purchase obligations
|
14,331
|
|
|
14,331
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
367,010
|
|
|
$
|
66,843
|
|
|
$
|
58,731
|
|
|
$
|
198,470
|
|
|
$
|
42,966
|
|
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company;
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
|
3.1
|
|
—
|
Restated Certificate of Incorporation dated September 24, 2007 filed on September 24, 2007 as Exhibit 3.4 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
3.2
|
|
—
|
Amended and Restated Bylaws of ION Geophysical Corporation filed on September 24, 2007 as Exhibit 3.5 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
3.3
|
|
—
|
Certificate of Ownership and Merger merging ION Geophysical Corporation with and into Input/Output, Inc. dated September 21, 2007, filed on September 24, 2007 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.1
|
|
—
|
Certificate of Rights and Designations of Series D-1 Cumulative Convertible Preferred Stock, dated February 16, 2005 and filed on February 17, 2005 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.2
|
|
—
|
Certificate of Elimination of Series B Preferred Stock dated September 24, 2007, filed on September 24, 2007 as Exhibit 3.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.3
|
|
—
|
Certificate of Elimination of Series C Preferred Stock dated September 24, 2007, filed on September 24, 2007 as Exhibit 3.3 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.4
|
|
—
|
Certificate of Designation of Series D-2 Cumulative Convertible Preferred Stock dated December 6, 2007, filed on December 6, 2007 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.5
|
|
—
|
Certificate of Designations of Series A Junior Participating Preferred Stock of ION Geophysical Corporation effective as of December 31, 2008, filed on January 5, 2009 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.6
|
|
—
|
Certificate of Elimination of Series A Junior Participating Preferred Stock dated February 10, 2012, filed on February 13, 2012 as Exhibit 3.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
4.7
|
|
—
|
Indenture, dated May 13, 2013, among ION Geophysical Corporation, the subsidiary guarantors named therein, Wilmington Trust, National Association, as trustee, and U.S. Bank National Association, as collateral agent, filed on May 13, 2013 as Exhibit 4.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.8
|
|
—
|
Registration Rights Agreement, dated May 13, 2013, among ION Geophysical Corporation, the subsidiary guarantors named therein and Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as representatives of the initial purchasers named therein, filed on May 13, 2013 as Exhibit 4.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.9
|
|
—
|
Certificate of Elimination of Series D-1 Cumulative Convertible Preferred Stock dated September 30, 2013, filed on September 30, 2013 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.10
|
|
—
|
Certificate of Elimination of Series D-2 Cumulative Convertible Preferred Stock dated September 30, 2013, filed on September 30, 2013 as Exhibit 3.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
**10.1
|
|
—
|
Amended and Restated 1990 Stock Option Plan, filed on June 9, 1999 as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (Registration No. 333-80299), and incorporated herein by reference.
|
|
10.2
|
|
—
|
Office and Industrial/Commercial Lease dated June 2005 by and between Stafford Office Park II, LP as Landlord and Input/Output, Inc. as Tenant, filed on March 31, 2006 as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and incorporated herein by reference.
|
|
10.3
|
|
—
|
Office and Industrial/Commercial Lease dated June 2005 by and between Stafford Office Park District as Landlord and Input/Output, Inc. as Tenant, filed on March 31, 2006 as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and incorporated herein by reference.
|
|
**10.4
|
|
—
|
Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan, filed on June 9, 1999 as Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (Registration No. 333-80299), and incorporated herein by reference.
|
|
**10.5
|
|
—
|
Amendment No. 1 to the Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan dated September 13, 1999 filed on November 14, 1999 as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 1999 and incorporated herein by reference.
|
|
**10.6
|
|
—
|
Input/Output, Inc. Employee Stock Purchase Plan, filed on March 28, 1997 as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-24125), and incorporated herein by reference.
|
|
**10.7
|
|
—
|
Fifth Amended and Restated - 2004 Long-Term Incentive Plan, filed as Appendix A to the definitive proxy statement for the 2010 Annual Meeting of Stockholders of ION Geophysical Corporation, filed on April 21, 2010, and incorporated herein by reference.
|
|
10.8
|
|
—
|
Registration Rights Agreement dated as of November 16, 1998, by and among the Company and The Laitram Corporation, filed on March 12, 2004 as Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, and incorporated herein by reference.
|
|
**10.9
|
|
—
|
Input/Output, Inc. 1998 Restricted Stock Plan dated as of June 1, 1998, filed on June 9, 1999 as Exhibit 4.7 to the Company’s Registration Statement on S-8 (Registration No. 333-80297), and incorporated herein by reference.
|
|
**10.10
|
|
—
|
Input/Output Inc. Non-qualified Deferred Compensation Plan, filed on April 1, 2002 as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, and incorporated herein by reference.
|
|
**10.11
|
|
—
|
Input/Output, Inc. 2000 Restricted Stock Plan, effective as of March 13, 2000, filed on August 17, 2000 as Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2000, and incorporated herein by reference.
|
|
**10.12
|
|
—
|
Input/Output, Inc. 2000 Long-Term Incentive Plan, filed on November 6, 2000 as Exhibit 4.7 to the Company’s Registration Statement on Form S-8 (Registration No. 333-49382), and incorporated by reference herein.
|
|
**10.13
|
|
—
|
Employment Agreement dated effective as of March 31, 2003, by and between the Company and Robert P. Peebler, filed on March 31, 2003 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
**10.14
|
|
—
|
First Amendment to Employment Agreement dated September 6, 2006, between Input/Output, Inc. and Robert P. Peebler, filed on September 7, 2006, as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.15
|
|
—
|
Second Amendment to Employment Agreement dated February 16, 2007, between Input/Output, Inc. and Robert P. Peebler, filed on February 16, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.16
|
|
—
|
Third Amendment to Employment Agreement dated as of August 20, 2007 between Input/Output, Inc. and Robert P. Peebler, filed on August 21, 2007 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
**10.17
|
|
—
|
Fourth Amendment to Employment Agreement, dated as of January 26, 2009, between ION Geophysical Corporation and Robert P. Peebler, filed on January 29, 2009 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
**10.18
|
|
—
|
Employment Agreement dated effective as of June 15, 2004, by and between the Company and David L. Roland, filed on August 9, 2004 as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, and incorporated herein by reference.
|
|
**10.19
|
|
—
|
GX Technology Corporation Employee Stock Option Plan, filed on August 9, 2004 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, and incorporated herein by reference.
|
|
10.20
|
|
—
|
Concept Systems Holdings Limited Share Acquisition Agreement dated February 23, 2004, filed on March 5, 2004 as Exhibit 2.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
10.21
|
|
—
|
Registration Rights Agreement by and between ION Geophysical Corporation and 1236929 Alberta Ltd. dated September 18, 2008, filed on November 7, 2008 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q and incorporated herein by reference.
|
|
**10.22
|
|
—
|
Form of Employment Inducement Stock Option Agreement for the Input/Output, Inc. — Concept Systems Employment Inducement Stock Option Program, filed on July 27, 2004 as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 333-117716), and incorporated herein by reference.
|
|
**10.23
|
|
—
|
Form of Employee Stock Option Award Agreement for ARAM Systems Employee Inducement Stock Option Program, filed on November 14, 2008 as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-155378) and incorporated herein by reference.
|
|
**10.24
|
|
—
|
Input/Output, Inc. 2003 Stock Option Plan, dated March 27, 2003, filed as Appendix B of the Company’s definitive proxy statement filed with the SEC on April 30, 2003, and incorporated herein by reference.
|
|
**10.25
|
|
—
|
Form of Employment Inducement Stock Option Agreement for the Input/Output, Inc. — GX Technology Corporation Employment Inducement Stock Option Program, filed on April 4, 2005 as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 333-123831), and incorporated herein by reference.
|
|
**10.26
|
|
—
|
ION Stock Appreciation Rights Plan dated November 17, 2008, filed as Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and incorporated herein by reference.
|
|
10.27
|
|
—
|
Canadian Master Loan and Security Agreement dated as of June 29, 2009 by and among ICON ION, LLC, as lender, ION Geophysical Corporation and ARAM Rentals Corporation, a Nova Scotia corporation, filed on August 6, 2009 as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
|
|
10.28
|
|
—
|
Master Loan and Security Agreement (U.S.) dated as of June 29, 2009 by and among ICON ION, LLC, as lender, ION Geophysical Corporation and ARAM Seismic Rentals, Inc., a Texas corporation, filed on August 6, 2009 as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
|
|
10.29
|
|
—
|
Registration Rights Agreement dated as of October 23, 2009 by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation filed on March 1, 2010 as Exhibit 10.54 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
|
|
10.30
|
|
—
|
Stock Purchase Agreement dated as of March 19, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
10.31
|
|
—
|
Investor Rights Agreement dated as of March 25, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.2 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
10.32
|
|
—
|
Share Purchase Agreement dated as of March 24, 2010, by and among ION Geophysical Corporation, INOVA Geophysical Equipment Limited and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.3 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
10.33
|
|
—
|
Joint Venture Agreement dated as of March 24, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.4 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.34
|
|
—
|
Fifth Amendment to Employment Agreement dated June 1, 2010, between ION Geophysical Corporation and Robert P. Peebler, filed on June 1, 2010 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.35
|
|
—
|
Employment Agreement dated August 2, 2011, effective as of January 1, 2012, between ION Geophysical Corporation and R. Brian Hanson, filed on November 3, 2011 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, and incorporated herein by reference.
|
|
**10.36
|
|
—
|
Employment Agreement dated effective as of November 28, 2011, between ION Geophysical Corporation and Gregory J. Heinlein, filed on December 1, 2011 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
(b)
|
Exhibits required by Item 601 of Regulation S-K.
|
|
Reference is made to subparagraph (a) (3) of this Item 15, which is incorporated herein by reference.
|
|
|
(c)
|
Not applicable.
|
|
|
|
ION GEOPHYSICAL CORPORATION
|
||
|
|
|
|
|
By
|
|
/s/ R. Brian Hanson
|
|
|
|
R. Brian Hanson
|
|
|
|
President and Chief Executive Officer
|
Name
|
|
Capacities
|
|
Date
|
|
|
|
||
/S/ R. BRIAN HANSON
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer) |
|
February 17, 2015
|
R. Brian Hanson
|
|
|
|
|
|
|
|
||
/S/ STEVEN A. BATE
|
|
Executive Vice President and Chief
Financial Officer (Principal Financial Officer) |
|
February 17, 2015
|
Steven A. Bate
|
|
|
|
|
|
|
|
||
/S/ SCOTT SCHWAUSCH
|
|
Vice President and Corporate Controller
(Principal Accounting Officer) |
|
February 17, 2015
|
Scott Schwausch
|
|
|
|
|
|
|
|
||
/S/ JAMES M. LAPEYRE, JR.
|
|
Chairman of the Board of Directors and Director
|
|
February 17, 2015
|
James M. Lapeyre, Jr.
|
|
|
|
|
|
|
|
||
/S/ DAVID H. BARR
|
|
Director
|
|
February 17, 2015
|
David H. Barr
|
|
|
|
|
|
|
|
||
/S/ HAO HUIMIN
|
|
Director
|
|
February 17, 2015
|
Hao Huimin
|
|
|
|
Name
|
|
Capacities
|
|
Date
|
|
|
|
||
/S/ MICHAEL C. JENNINGS
|
|
Director
|
|
February 17, 2015
|
Michael C. Jennings
|
|
|
|
|
|
|
|
||
/S/ FRANKLIN MYERS
|
|
Director
|
|
February 17, 2015
|
Franklin Myers
|
|
|
|
|
|
|
|
||
/S/ S. JAMES NELSON, JR.
|
|
Director
|
|
February 17, 2015
|
S. James Nelson, Jr.
|
|
|
|
|
|
|
|
||
/S/ JOHN N. SEITZ
|
|
Director
|
|
February 17, 2015
|
John N. Seitz
|
|
|
|
|
|
|
|
|
Page
|
ION Geophysical Corporation and Subsidiaries:
|
|
|
Reports of Independent Registered Public Accounting Firms
|
|
|
Consolidated Balance Sheets — December 31, 2014 and 2013
|
|
|
Consolidated Statements of Operations — Years ended December 31, 2014, 2013 and 2012
|
|
|
Consolidated Statements of Comprehensive Income (Loss) — Years ended December 31, 2014, 2013 and 2012
|
|
|
Consolidated Statements of Cash Flows — Years ended December 31, 2014, 2013 and 2012
|
|
|
Consolidated Statements of Stockholders’ Equity — Years ended December 31, 2014, 2013 and 2012
|
|
|
Footnotes to Consolidated Financial Statements
|
|
|
Schedule II — Valuation and Qualifying Accounts
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In thousands, except share data)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
173,608
|
|
|
$
|
148,056
|
|
Accounts receivable, net
|
114,325
|
|
|
149,448
|
|
||
Unbilled receivables
|
22,599
|
|
|
49,468
|
|
||
Inventories
|
51,162
|
|
|
57,173
|
|
||
Prepaid expenses and other current assets
|
13,662
|
|
|
24,772
|
|
||
Total current assets
|
375,356
|
|
|
428,917
|
|
||
Deferred income tax asset
|
8,604
|
|
|
14,650
|
|
||
Property, plant, equipment and seismic rental equipment, net
|
69,840
|
|
|
46,684
|
|
||
Multi-client data library, net
|
118,669
|
|
|
238,784
|
|
||
Equity method investments
|
—
|
|
|
53,865
|
|
||
Goodwill
|
27,388
|
|
|
55,876
|
|
||
Intangible assets, net
|
6,788
|
|
|
11,247
|
|
||
Other assets
|
10,612
|
|
|
14,648
|
|
||
Total assets
|
$
|
617,257
|
|
|
$
|
864,671
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
7,649
|
|
|
$
|
5,906
|
|
Accounts payable
|
36,863
|
|
|
22,654
|
|
||
Accrued expenses
|
65,264
|
|
|
84,358
|
|
||
Accrued multi-client data library royalties
|
35,219
|
|
|
46,460
|
|
||
Deferred revenue
|
8,262
|
|
|
20,682
|
|
||
Total current liabilities
|
153,257
|
|
|
180,060
|
|
||
Long-term debt, net of current maturities
|
182,945
|
|
|
214,246
|
|
||
Other long-term liabilities
|
143,804
|
|
|
210,602
|
|
||
Total liabilities
|
480,006
|
|
|
604,908
|
|
||
Redeemable noncontrolling interest
|
1,539
|
|
|
1,878
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value; authorized 200,000,000 shares; outstanding 164,484,095 and 163,737,757 shares at December 31, 2014 and 2013, respectively, net of treasury stock
|
1,645
|
|
|
1,637
|
|
||
Additional paid-in capital
|
887,749
|
|
|
879,969
|
|
||
Accumulated deficit
|
(734,409
|
)
|
|
(606,157
|
)
|
||
Accumulated other comprehensive loss
|
(12,807
|
)
|
|
(11,138
|
)
|
||
Treasury stock, at cost, 849,539 shares at both December 31, 2014 and 2013
|
(6,565
|
)
|
|
(6,565
|
)
|
||
Total stockholders’ equity
|
135,613
|
|
|
257,746
|
|
||
Noncontrolling interests
|
99
|
|
|
139
|
|
||
Total equity
|
135,712
|
|
|
257,885
|
|
||
Total liabilities and equity
|
$
|
617,257
|
|
|
$
|
864,671
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Service revenues
|
$
|
384,938
|
|
|
$
|
391,317
|
|
|
$
|
354,583
|
|
Product revenues
|
124,620
|
|
|
157,850
|
|
|
171,734
|
|
|||
Total net revenues
|
509,558
|
|
|
549,167
|
|
|
526,317
|
|
|||
Cost of services
|
278,627
|
|
|
272,047
|
|
|
219,324
|
|
|||
Cost of products
|
68,608
|
|
|
112,346
|
|
|
91,192
|
|
|||
Impairment of multi-client data library
|
100,100
|
|
|
5,461
|
|
|
—
|
|
|||
Gross profit
|
62,223
|
|
|
159,313
|
|
|
215,801
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research, development and engineering
|
41,009
|
|
|
37,742
|
|
|
34,080
|
|
|||
Marketing and sales
|
39,682
|
|
|
38,583
|
|
|
35,240
|
|
|||
General, administrative and other operating expenses
|
76,177
|
|
|
66,592
|
|
|
71,954
|
|
|||
Impairment of goodwill and intangible assets
|
23,284
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
180,152
|
|
|
142,917
|
|
|
141,274
|
|
|||
Income (loss) from operations
|
(117,929
|
)
|
|
16,396
|
|
|
74,527
|
|
|||
Interest expense, net
|
(19,382
|
)
|
|
(12,344
|
)
|
|
(5,265
|
)
|
|||
Equity in earnings (losses) of investments
|
(49,485
|
)
|
|
(42,320
|
)
|
|
297
|
|
|||
Other income (expense)
|
79,860
|
|
|
(182,530
|
)
|
|
17,124
|
|
|||
Income (loss) before income taxes
|
(106,936
|
)
|
|
(220,798
|
)
|
|
86,683
|
|
|||
Income tax expense
|
20,582
|
|
|
25,720
|
|
|
23,857
|
|
|||
Net income (loss)
|
(127,518
|
)
|
|
(246,518
|
)
|
|
62,826
|
|
|||
Net (income) loss attributable to noncontrolling interests
|
(734
|
)
|
|
658
|
|
|
489
|
|
|||
Net income (loss) attributable to ION
|
(128,252
|
)
|
|
(245,860
|
)
|
|
63,315
|
|
|||
Preferred stock dividends
|
—
|
|
|
1,014
|
|
|
1,352
|
|
|||
Conversion payment of preferred stock
|
—
|
|
|
5,000
|
|
|
—
|
|
|||
Net income (loss) applicable to common shares
|
$
|
(128,252
|
)
|
|
$
|
(251,874
|
)
|
|
$
|
61,963
|
|
Net income (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.78
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
0.40
|
|
Diluted
|
$
|
(0.78
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
0.39
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
164,089
|
|
|
158,506
|
|
|
155,801
|
|
|||
Diluted
|
164,089
|
|
|
158,506
|
|
|
162,765
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Net income (loss)
|
$
|
(127,518
|
)
|
|
$
|
(246,518
|
)
|
|
$
|
62,826
|
|
Other comprehensive income (loss), net of taxes, as appropriate:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(882
|
)
|
|
713
|
|
|
2,756
|
|
|||
Equity interest in investee’s other comprehensive income (loss)
|
(841
|
)
|
|
(373
|
)
|
|
1,003
|
|
|||
Unrealized gain on available-for-sale securities
|
28
|
|
|
277
|
|
|
425
|
|
|||
Other changes in other comprehensive income
|
26
|
|
|
131
|
|
|
123
|
|
|||
Total other comprehensive income (loss), net of taxes
|
(1,669
|
)
|
|
748
|
|
|
4,307
|
|
|||
Comprehensive net income (loss)
|
(129,187
|
)
|
|
(245,770
|
)
|
|
67,133
|
|
|||
Comprehensive (income) loss attributable to noncontrolling interests
|
(734
|
)
|
|
658
|
|
|
489
|
|
|||
Comprehensive net income (loss) attributable to ION
|
$
|
(129,921
|
)
|
|
$
|
(245,112
|
)
|
|
$
|
67,622
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(127,518
|
)
|
|
$
|
(246,518
|
)
|
|
$
|
62,826
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization (other than multi-client library)
|
27,656
|
|
|
18,158
|
|
|
16,202
|
|
|||
Amortization of multi-client data library
|
64,374
|
|
|
86,716
|
|
|
89,080
|
|
|||
Stock-based compensation expense
|
8,707
|
|
|
7,476
|
|
|
6,598
|
|
|||
Equity in (earnings) losses of investments
|
49,485
|
|
|
42,320
|
|
|
(297
|
)
|
|||
Gain on sale of Source product line
|
(6,522
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sale of cost method investments
|
(5,463
|
)
|
|
(3,591
|
)
|
|
—
|
|
|||
Accrual for (reduction of) loss contingency related to legal proceedings
|
(69,557
|
)
|
|
183,327
|
|
|
10,000
|
|
|||
Impairment of goodwill and intangible assets
|
23,284
|
|
|
—
|
|
|
—
|
|
|||
Impairment of multi-client data library
|
100,100
|
|
|
5,461
|
|
|
—
|
|
|||
Write-down of excess and obsolete inventory
|
6,952
|
|
|
21,197
|
|
|
1,326
|
|
|||
Write-down of receivables from INOVA Geophysical
|
5,510
|
|
|
—
|
|
|
—
|
|
|||
Write-down of receivables from OceanGeo
|
—
|
|
|
9,157
|
|
|
—
|
|
|||
Write-down of marine equipment
|
—
|
|
|
—
|
|
|
5,928
|
|
|||
Deferred income taxes
|
(437
|
)
|
|
4,844
|
|
|
3,686
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
41,943
|
|
|
(27,571
|
)
|
|
4,006
|
|
|||
Unbilled receivables
|
26,762
|
|
|
40,211
|
|
|
(64,156
|
)
|
|||
Inventories
|
(13,892
|
)
|
|
(8,906
|
)
|
|
(7,039
|
)
|
|||
Accounts payable, accrued expenses and accrued royalties
|
(4,771
|
)
|
|
8,482
|
|
|
61,873
|
|
|||
Deferred revenue
|
(8,382
|
)
|
|
(6,253
|
)
|
|
(6,957
|
)
|
|||
Other assets and liabilities
|
11,549
|
|
|
13,077
|
|
|
(13,995
|
)
|
|||
Net cash provided by operating activities
|
129,780
|
|
|
147,587
|
|
|
169,081
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Investment in multi-client data library
|
(67,785
|
)
|
|
(114,582
|
)
|
|
(145,627
|
)
|
|||
Purchase of property, plant, equipment and seismic rental equipment
|
(8,264
|
)
|
|
(16,914
|
)
|
|
(16,650
|
)
|
|||
Repayment of (net advances to) INOVA Geophysical
|
1,000
|
|
|
(5,000
|
)
|
|
—
|
|
|||
Net investment in and advances to OceanGeo B.V. prior to its consolidation
|
(3,074
|
)
|
|
(24,755
|
)
|
|
—
|
|
|||
Net proceeds from sale of Source product line
|
14,394
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of cost method investments
|
14,051
|
|
|
4,150
|
|
|
—
|
|
|||
Maturity of short-term investments
|
—
|
|
|
—
|
|
|
20,000
|
|
|||
Investment in convertible notes
|
—
|
|
|
(2,000
|
)
|
|
(2,000
|
)
|
|||
Other investing activities
|
928
|
|
|
128
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(48,750
|
)
|
|
(158,973
|
)
|
|
(144,277
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of notes
|
—
|
|
|
175,000
|
|
|
—
|
|
|||
Borrowings under revolving line of credit
|
15,000
|
|
|
35,000
|
|
|
148,250
|
|
|||
Payments under revolving line of credit
|
(50,000
|
)
|
|
(97,250
|
)
|
|
(51,000
|
)
|
|||
Payments on notes payable and long-term debt
|
(12,998
|
)
|
|
(4,361
|
)
|
|
(101,702
|
)
|
|||
Cost associated with issuance of debt
|
(2,194
|
)
|
|
(6,773
|
)
|
|
—
|
|
|||
Acquisition of non-controlling interest
|
(6,000
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of preferred dividends
|
—
|
|
|
(1,014
|
)
|
|
(1,352
|
)
|
|||
Conversion payment of preferred stock
|
—
|
|
|
(5,000
|
)
|
|
—
|
|
|||
Proceeds from employee stock purchases and exercise of stock options
|
577
|
|
|
2,527
|
|
|
807
|
|
|||
Other financing activities
|
(359
|
)
|
|
573
|
|
|
(1,457
|
)
|
|||
Net cash provided by (used in) financing activities
|
(55,974
|
)
|
|
98,702
|
|
|
(6,454
|
)
|
|||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
496
|
|
|
(231
|
)
|
|
219
|
|
|||
Net increase in cash and cash equivalents
|
25,552
|
|
|
87,085
|
|
|
18,569
|
|
|||
Cash and cash equivalents at beginning of period
|
148,056
|
|
|
60,971
|
|
|
42,402
|
|
|||
Cash and cash equivalents at end of period
|
$
|
173,608
|
|
|
$
|
148,056
|
|
|
$
|
60,971
|
|
(In thousands, except shares)
|
Cumulative Convertible Preferred Stock
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||||||||||
Balance at January 1, 2012
|
27,000
|
|
|
$
|
27,000
|
|
|
155,479,776
|
|
|
$
|
1,555
|
|
|
$
|
843,271
|
|
|
$
|
(423,612
|
)
|
|
$
|
(16,193
|
)
|
|
$
|
(6,565
|
)
|
|
$
|
356
|
|
|
$
|
425,812
|
|
Net income (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,315
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
63,319
|
|
||||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,756
|
|
|
—
|
|
|
(38
|
)
|
|
2,718
|
|
||||||||
Change in fair value of effective cash flow hedges (net of taxes)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
—
|
|
|
123
|
|
||||||||
Equity interest in INOVA Geophysical’s other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,003
|
|
|
—
|
|
|
—
|
|
|
1,003
|
|
||||||||
Unrealized net gain (loss) on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
425
|
|
|
—
|
|
|
—
|
|
|
425
|
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,352
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,352
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,598
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,598
|
|
||||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
194,410
|
|
|
2
|
|
|
805
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
807
|
|
||||||||
Vesting of restricted stock units/awards
|
—
|
|
|
—
|
|
|
764,704
|
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted stock cancelled for employee minimum income taxes
|
—
|
|
|
—
|
|
|
(209,068
|
)
|
|
(2
|
)
|
|
(1,266
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,268
|
)
|
||||||||
Issuance of stock for the ESPP
|
—
|
|
|
—
|
|
|
127,127
|
|
|
1
|
|
|
758
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
759
|
|
||||||||
Tax benefits from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(137
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(137
|
)
|
||||||||
Contribution from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
212
|
|
|
212
|
|
||||||||
Balance at December 31, 2012
|
27,000
|
|
|
27,000
|
|
|
156,356,949
|
|
|
1,564
|
|
|
848,669
|
|
|
(360,297
|
)
|
|
(11,886
|
)
|
|
(6,565
|
)
|
|
534
|
|
|
499,019
|
|
||||||||
Net loss (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(245,860
|
)
|
|
—
|
|
|
—
|
|
|
(339
|
)
|
|
(246,199
|
)
|
||||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
713
|
|
|
—
|
|
|
(56
|
)
|
|
657
|
|
||||||||
Change in fair value of effective cash flow hedges (net of taxes)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
131
|
|
||||||||
Equity interest in INOVA Geophysical’s other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(373
|
)
|
|
—
|
|
|
—
|
|
|
(373
|
)
|
||||||||
Unrealized gain (loss) on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277
|
|
|
—
|
|
|
—
|
|
|
277
|
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,014
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,014
|
)
|
||||||||
Conversion payment of preferred stock
|
(27,000
|
)
|
|
(27,000
|
)
|
|
6,065,075
|
|
|
61
|
|
|
21,939
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,476
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,476
|
|
||||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
707,575
|
|
|
7
|
|
|
2,520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,527
|
|
||||||||
Vesting of restricted stock units/awards
|
—
|
|
|
—
|
|
|
578,369
|
|
|
5
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted stock cancelled for employee minimum income taxes
|
—
|
|
|
—
|
|
|
(115,080
|
)
|
|
(1
|
)
|
|
(482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(483
|
)
|
||||||||
Issuance of stock for the ESPP
|
—
|
|
|
—
|
|
|
144,869
|
|
|
1
|
|
|
779
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
780
|
|
||||||||
Tax benefits from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87
|
|
||||||||
Balance at December 31, 2013
|
—
|
|
|
—
|
|
|
163,737,757
|
|
|
1,637
|
|
|
879,969
|
|
|
(606,157
|
)
|
|
(11,138
|
)
|
|
(6,565
|
)
|
|
139
|
|
|
257,885
|
|
||||||||
Net loss (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128,252
|
)
|
|
—
|
|
|
—
|
|
|
18
|
|
|
(128,234
|
)
|
||||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(882
|
)
|
|
—
|
|
|
(58
|
)
|
|
(940
|
)
|
||||||||
Change in fair value of effective cash flow hedges (net of taxes)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||||||
Equity interest in INOVA Geophysical’s other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(841
|
)
|
|
—
|
|
|
—
|
|
|
(841
|
)
|
||||||||
Unrealized gain (loss) on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,707
|
|
||||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
28,500
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
||||||||
Vesting of restricted stock units/awards
|
—
|
|
|
—
|
|
|
662,451
|
|
|
7
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted stock cancelled for employee minimum income taxes
|
—
|
|
|
—
|
|
|
(136,131
|
)
|
|
(1
|
)
|
|
(349
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
||||||||
Issuance of stock for the ESPP
|
—
|
|
|
—
|
|
|
191,518
|
|
|
2
|
|
|
480
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
482
|
|
||||||||
Purchase of subsidiary shares from noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,146
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,146
|
)
|
||||||||
Balance at December 31, 2014
|
—
|
|
|
$
|
—
|
|
|
164,484,095
|
|
|
$
|
1,645
|
|
|
$
|
887,749
|
|
|
$
|
(734,409
|
)
|
|
$
|
(12,807
|
)
|
|
$
|
(6,565
|
)
|
|
$
|
99
|
|
|
$
|
135,712
|
|
(a)
|
Net income attributable to noncontrolling interests for 2014, 2013 and 2012 excludes
$(0.7) million
,
$(0.3) million
and
$(0.5) million
, respectively, related to the redeemable noncontrolling interests, which is reported in the mezzanine equity section of the Consolidated Balance Sheet.
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Gross costs of multi-client data creation
|
$
|
849,522
|
|
|
$
|
791,522
|
|
Less accumulated amortization
|
(611,651
|
)
|
|
(547,277
|
)
|
||
Less impairments to multi-client data library
|
(119,202
|
)
|
|
(5,461
|
)
|
||
Total
|
$
|
118,669
|
|
|
$
|
238,784
|
|
|
Multi-client data library, net
|
|
Equity method investments
(a)
|
|
Goodwill and Intangible Assets
(b)
|
|
Asset write-downs and other
|
|
Severance charges
|
|
Total
|
||||||||||||
Cost of goods sold
|
$
|
100,100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,051
|
|
|
$
|
391
|
|
|
$
|
108,542
|
|
Operating expenses
|
—
|
|
|
—
|
|
|
23,284
|
|
|
8,214
|
|
(c)
|
1,902
|
|
|
33,400
|
|
||||||
Equity in earnings (losses) of investments
|
—
|
|
|
34,199
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,199
|
|
||||||
Consolidated total
|
$
|
100,100
|
|
|
$
|
34,199
|
|
|
$
|
23,284
|
|
|
$
|
16,265
|
|
|
$
|
2,293
|
|
|
$
|
176,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents the full write-down of the Company’s equity method investment in INOVA Geophysical of
$30.7 million
, in addition to the Company’s share of charges related to excess and obsolete inventory and customer bad debts of
$3.5 million
. For a discussion of the Company’s impairment of its equity method investment, see
Footnote 5
“
Equity Method Investments
.”
|
(b)
|
Includes an impairment of the goodwill on the Company’s Marine Systems reporting unit and an impairment of certain intangible assets. For a discussion of the impairment of the goodwill, see
Footnote 11
“
Goodwill
.” For a discussion of the impairment of the intangible asset, see
Footnote 10
“
Details of Selected Balance Sheet Accounts
.”
|
(c)
|
Includes outstanding receivables from INOVA Geophysical of
$5.5 million
.
|
|
Facility charges
|
|
Severance charges
|
|
Asset write-downs and other
|
|
Total
|
||||||||
Cost of goods sold
|
$
|
647
|
|
|
$
|
3,729
|
|
|
$
|
21,351
|
|
|
$
|
25,727
|
|
Operating expenses
|
$
|
—
|
|
|
$
|
1,873
|
|
|
$
|
383
|
|
|
$
|
2,256
|
|
Consolidated total
|
$
|
647
|
|
|
$
|
5,602
|
|
|
$
|
21,734
|
|
|
$
|
27,983
|
|
Estimated Fair Value of Assets Acquired and Liabilities Assumed:
|
|
|
||
Cash and cash equivalents
|
|
$
|
609
|
|
Accounts receivable
|
|
9,247
|
|
|
Prepaid expenses and other current assets
|
|
1,433
|
|
|
Property, plant, equipment and seismic rental equipment, net
|
|
18,474
|
|
|
Other assets
|
|
2,227
|
|
|
Total identifiable assets
|
|
31,990
|
|
|
Accounts payable and accrued liabilities
|
|
(13,464
|
)
|
|
Bank loans
|
|
(6,135
|
)
|
|
Other liabilities
|
|
(1,026
|
)
|
|
Net assets
|
|
11,365
|
|
|
Noncontrolling interest
|
|
(3,410
|
)
|
|
Total consideration
|
|
$
|
7,955
|
|
Pro forma Consolidated ION Income Statement Information (Unaudited)
|
|
Years Ended December 31,
|
||||||
2014
|
|
2013
|
||||||
Net revenues
|
|
$
|
518,742
|
|
|
$
|
580,834
|
|
Loss from operations
|
|
$
|
(114,346
|
)
|
|
$
|
(19,300
|
)
|
Net loss
|
|
$
|
(126,492
|
)
|
|
$
|
(262,974
|
)
|
Net loss applicable to common shares
|
|
$
|
(127,226
|
)
|
|
$
|
(268,330
|
)
|
Basic and diluted net loss per common share
|
|
$
|
(0.78
|
)
|
|
$
|
(1.69
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net revenues:
|
|
|
|
|
|
||||||
Solutions:
|
|
|
|
|
|
||||||
New Venture
|
$
|
98,649
|
|
|
$
|
154,578
|
|
|
$
|
147,346
|
|
Data Library
|
66,180
|
|
|
111,998
|
|
|
88,085
|
|
|||
Total multi-client revenues
|
164,829
|
|
|
266,576
|
|
|
235,431
|
|
|||
Data Processing
|
113,075
|
|
|
120,808
|
|
|
115,834
|
|
|||
Total
|
$
|
277,904
|
|
|
$
|
387,384
|
|
|
$
|
351,265
|
|
Systems:
|
|
|
|
|
|
||||||
Towed Streamer
|
$
|
43,995
|
|
|
$
|
66,991
|
|
|
$
|
77,769
|
|
Ocean Bottom Equipment
|
—
|
|
|
7,307
|
|
|
14,823
|
|
|||
Other
|
44,422
|
|
|
48,134
|
|
|
39,404
|
|
|||
Total
|
$
|
88,417
|
|
|
$
|
122,432
|
|
|
$
|
131,996
|
|
Software:
|
|
|
|
|
|
||||||
Software Systems
|
$
|
36,203
|
|
|
$
|
35,418
|
|
|
$
|
39,738
|
|
Services
|
3,790
|
|
|
3,933
|
|
|
3,318
|
|
|||
Total
|
$
|
39,993
|
|
|
$
|
39,351
|
|
|
$
|
43,056
|
|
Ocean Bottom Services
|
$
|
103,244
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
509,558
|
|
|
$
|
549,167
|
|
|
$
|
526,317
|
|
Gross profit:
|
|
|
|
|
|
||||||
Solutions
|
$
|
(24,345
|
)
|
(a)
|
$
|
111,108
|
|
|
$
|
132,950
|
|
Systems
|
29,829
|
|
(b)
|
19,999
|
|
|
50,790
|
|
|||
Software
|
28,835
|
|
|
28,206
|
|
|
32,061
|
|
|||
Ocean Bottom Services
|
27,904
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
62,223
|
|
|
$
|
159,313
|
|
|
$
|
215,801
|
|
Gross margin:
|
|
|
|
|
|
||||||
Solutions
|
(9
|
)%
|
|
29
|
%
|
|
38
|
%
|
|||
Systems
|
34
|
%
|
|
16
|
%
|
|
38
|
%
|
|||
Software
|
72
|
%
|
|
72
|
%
|
|
74
|
%
|
|||
Ocean Bottom Services
|
27
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Total
|
12
|
%
|
|
29
|
%
|
|
41
|
%
|
|||
Income (loss) from operations:
|
|
|
|
|
|
||||||
Solutions
|
$
|
(80,653
|
)
|
(a)
|
$
|
61,146
|
|
|
$
|
88,589
|
|
Systems
|
(23,521
|
)
|
(b)
|
(9,957
|
)
|
|
10,132
|
|
|||
Software
|
20,212
|
|
|
23,602
|
|
|
28,129
|
|
|||
Ocean Bottom Services
|
19,070
|
|
|
—
|
|
|
—
|
|
|||
Corporate and other
|
(53,037
|
)
|
|
(58,395
|
)
|
|
(52,323
|
)
|
|||
Income (loss) from operations
|
(117,929
|
)
|
|
16,396
|
|
|
74,527
|
|
|||
Interest expense, net
|
(19,382
|
)
|
|
(12,344
|
)
|
|
(5,265
|
)
|
|||
Equity in earnings (losses) of investments
|
(49,485
|
)
|
|
(42,320
|
)
|
|
297
|
|
|||
Other income (expense)
|
79,860
|
|
|
(182,530
|
)
|
|
17,124
|
|
|||
Income (loss) before income taxes
|
$
|
(106,936
|
)
|
|
$
|
(220,798
|
)
|
|
$
|
86,683
|
|
(a)
|
Includes a charge of
$100.1 million
to write down the multi-client data library, impacting gross profit (loss), in addition to charges for the impairment of intangible assets and severance-related charges within the Solutions segment.
|
(b)
|
Includes a charge of
$21.9 million
to write down goodwill, impacting income (loss) from operations, in addition to charges for write-downs of inventory and receivables and severance-related charges within the Systems segment.
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Depreciation and amortization (including multi-client data library):
|
|
|
|
|
|
||||||
Solutions
|
$
|
80,138
|
|
|
$
|
99,774
|
|
|
$
|
98,342
|
|
Systems
|
1,860
|
|
|
2,665
|
|
|
4,185
|
|
|||
Software
|
989
|
|
|
699
|
|
|
776
|
|
|||
Ocean Bottom Services
|
6,517
|
|
|
—
|
|
|
—
|
|
|||
Corporate and other
|
2,526
|
|
|
1,736
|
|
|
1,979
|
|
|||
Total
|
$
|
92,030
|
|
|
$
|
104,874
|
|
|
$
|
105,282
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Total assets:
|
|
|
|
||||
Solutions
|
$
|
265,505
|
|
|
$
|
445,581
|
|
Systems
|
84,465
|
|
|
139,074
|
|
||
Software
|
38,479
|
|
|
45,343
|
|
||
Ocean Bottom Services
|
56,637
|
|
|
—
|
|
||
Corporate and other
|
172,171
|
|
|
234,673
|
|
||
Total
|
$
|
617,257
|
|
|
$
|
864,671
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Total assets by geographic area:
|
|
|
|
||||
North America
|
$
|
347,419
|
|
|
$
|
609,739
|
|
Europe
|
117,622
|
|
|
76,601
|
|
||
Middle East
|
96,532
|
|
|
128,909
|
|
||
Latin America
|
36,529
|
|
|
33,375
|
|
||
Other
|
19,155
|
|
|
16,047
|
|
||
Total
|
$
|
617,257
|
|
|
$
|
864,671
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net revenues by geographic area:
|
|
|
|
|
|
||||||
North America
|
$
|
130,224
|
|
|
$
|
150,160
|
|
|
$
|
164,157
|
|
Latin America
|
111,078
|
|
|
54,008
|
|
|
46,212
|
|
|||
Europe
|
100,188
|
|
|
198,977
|
|
|
200,589
|
|
|||
Africa
|
75,507
|
|
|
16,474
|
|
|
18,469
|
|
|||
Asia Pacific
|
49,881
|
|
|
52,672
|
|
|
55,028
|
|
|||
Middle East
|
39,142
|
|
|
63,157
|
|
|
37,471
|
|
|||
Commonwealth of Independent States
|
3,538
|
|
|
13,719
|
|
|
4,391
|
|
|||
Total
|
$
|
509,558
|
|
|
$
|
549,167
|
|
|
$
|
526,317
|
|
|
INOVA Geophysical
|
|
OceanGeo
|
|
Total
|
||||||
Investment at December 31, 2013
|
$
|
51,065
|
|
|
$
|
2,800
|
|
|
$
|
53,865
|
|
Equity in losses of investments
|
(19,525
|
)
|
|
738
|
|
|
(18,787
|
)
|
|||
Advances to OceanGeo (prior to consolidation)
|
—
|
|
|
3,683
|
|
|
3,683
|
|
|||
Acquisition of controlling interest (consolidation) of OceanGeo
|
—
|
|
|
(7,221
|
)
|
|
(7,221
|
)
|
|||
Equity interest in investees' other comprehensive income (loss)
|
(1,987
|
)
|
|
—
|
|
|
(1,987
|
)
|
|||
Write-down of equity-method investment in INOVA
(1)
|
(29,553
|
)
|
|
—
|
|
|
(29,553
|
)
|
|||
Investments at December 31, 2014
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
This write-down does not include an additional
$1.1 million
impairment of the Company’s share of INOVA’s balance of Accumulated other comprehensive loss. The total impairment recorded by the Company equals
$30.7 million
, as discussed below.
|
(Unaudited)
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
Current assets
|
$
|
105,085
|
|
|
$
|
147,475
|
|
Non-current assets
|
63,212
|
|
|
71,551
|
|
||
Current liabilities
|
99,732
|
|
|
110,972
|
|
||
Non-current liabilities
|
6,498
|
|
|
2,731
|
|
||
Equity
|
$
|
62,067
|
|
|
$
|
105,323
|
|
|
Fiscal 2014 (unaudited)
|
|
Fiscal 2013 (unaudited)
|
|
Fiscal 2012
|
||||||
Total net revenues
|
$
|
89,975
|
|
|
$
|
183,619
|
|
|
$
|
188,336
|
|
Gross profit (loss)
|
$
|
247
|
|
(a)
|
$
|
(1,988
|
)
|
(b)
|
$
|
39,320
|
|
Income (loss) from operations
|
$
|
(34,540
|
)
|
(a)
|
$
|
(44,463
|
)
|
|
$
|
3,241
|
|
Net income (loss)
|
$
|
(40,087
|
)
|
|
$
|
(46,149
|
)
|
(b)
|
$
|
2,197
|
|
(a)
|
Impacting INOVA Geophysical’s Fiscal 2014 gross profit (loss) is
$3.8 million
of a write-down of excess and obsolete inventory. In addition to the special item impacting gross profit (loss), income (loss) from operations was also impacted by
$3.4 million
of charges related to customer bad debts.
|
(b)
|
Includes approximately
$36.5 million
of restructuring and special items associated with the impairment of intangible assets, write-down of excess and obsolete inventory and rental equipment, and severance-related charges. In addition to the restructuring and special items impacting gross profit,
Net income (loss)
was also impacted by
$1.8 million
of other restructuring and special items.
|
|
December 31,
|
||||||
Obligations (in thousands)
|
2014
|
|
2013
|
||||
Senior secured second-priority notes
|
$
|
175,000
|
|
|
$
|
175,000
|
|
Revolving line of credit
|
—
|
|
|
35,000
|
|
||
Equipment capital leases
|
15,059
|
|
|
8,651
|
|
||
Other debt obligations
|
535
|
|
|
1,501
|
|
||
Total
|
190,594
|
|
|
220,152
|
|
||
Current portion of long-term debt and lease obligations
|
(7,649
|
)
|
|
(5,906
|
)
|
||
Non-current portion of long-term debt and lease obligations
|
$
|
182,945
|
|
|
$
|
214,246
|
|
Date
|
|
Percentage
|
2015
|
|
104.063%
|
2016
|
|
102.031%
|
2017 and thereafter
|
|
100.000%
|
Years Ended December 31,
|
|
Long-Term Debt
|
|
Capital Lease Obligations
|
||||
2015
|
|
$
|
535
|
|
|
$
|
7,114
|
|
2016
|
|
—
|
|
|
5,383
|
|
||
2017
|
|
—
|
|
|
2,562
|
|
||
2018
|
|
175,000
|
|
|
—
|
|
||
2019
|
|
—
|
|
|
—
|
|
||
Thereafter
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
175,535
|
|
|
$
|
15,059
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income (loss) applicable to common shares
|
$
|
(128,252
|
)
|
|
$
|
(251,874
|
)
|
|
$
|
61,963
|
|
Income impact of assumed Series D Preferred Stock conversion
|
—
|
|
|
—
|
|
|
1,352
|
|
|||
Net income (loss) after assumed Series D Preferred Stock conversion
|
$
|
(128,252
|
)
|
|
$
|
(251,874
|
)
|
|
$
|
63,315
|
|
Weighted average number of common shares outstanding
|
164,089
|
|
|
158,506
|
|
|
155,801
|
|
|||
Effect of dilutive stock awards
|
—
|
|
|
—
|
|
|
899
|
|
|||
Effect of Series D Preferred Stock
|
—
|
|
|
—
|
|
|
6,065
|
|
|||
Weighted average number of diluted common shares outstanding
|
164,089
|
|
|
158,506
|
|
|
162,765
|
|
|||
Basic net income (loss) per share
|
$
|
(0.78
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
0.40
|
|
Diluted net income (loss) per share
|
$
|
(0.78
|
)
|
|
$
|
(1.59
|
)
|
|
$
|
0.39
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(678
|
)
|
|
$
|
4,113
|
|
|
$
|
873
|
|
State and local
|
(42
|
)
|
|
485
|
|
|
192
|
|
|||
Foreign
|
21,722
|
|
|
16,278
|
|
|
19,106
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
1,004
|
|
|
4,012
|
|
|
3,822
|
|
|||
Foreign
|
(1,424
|
)
|
|
832
|
|
|
(136
|
)
|
|||
Total income tax expense
|
$
|
20,582
|
|
|
$
|
25,720
|
|
|
$
|
23,857
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Expected income tax expense (benefit) at 35%
|
$
|
(37,428
|
)
|
|
$
|
(77,279
|
)
|
|
$
|
30,339
|
|
Foreign tax rate differential
|
(10,481
|
)
|
|
(2,348
|
)
|
|
(5,404
|
)
|
|||
Foreign tax differences
|
6,444
|
|
|
16,808
|
|
|
4,897
|
|
|||
State and local taxes
|
(42
|
)
|
|
485
|
|
|
192
|
|
|||
Nondeductible expenses and other
|
(1,584
|
)
|
|
(58
|
)
|
|
47
|
|
|||
Goodwill impairment
|
9,444
|
|
|
—
|
|
|
—
|
|
|||
Valuation allowance:
|
|
|
|
|
|
||||||
Valuation allowance on equity in losses of INOVA Geophysical
|
17,644
|
|
|
7,871
|
|
|
(104
|
)
|
|||
Valuation allowance on operations
|
36,585
|
|
|
80,241
|
|
|
(6,110
|
)
|
|||
Total income tax expense
|
$
|
20,582
|
|
|
$
|
25,720
|
|
|
$
|
23,857
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Current deferred:
|
|
|
|
||||
Deferred income tax assets:
|
|
|
|
||||
Accrued expenses
|
$
|
6,495
|
|
|
$
|
5,898
|
|
Allowance accounts
|
7,076
|
|
|
6,282
|
|
||
Total current deferred income tax asset
|
13,571
|
|
|
12,180
|
|
||
Valuation allowance
|
(12,612
|
)
|
|
(10,535
|
)
|
||
Net current deferred income tax asset
|
959
|
|
|
1,645
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Unbilled receivables
|
(6,865
|
)
|
|
(13,516
|
)
|
||
Total net current deferred income tax liability
|
$
|
(5,906
|
)
|
|
$
|
(11,871
|
)
|
Non-current deferred:
|
|
|
|
||||
Deferred income tax assets:
|
|
|
|
||||
Net operating loss carryforward
|
$
|
61,227
|
|
|
$
|
9,043
|
|
Capital loss carryforward
|
18,385
|
|
|
19,657
|
|
||
Equity method investment
|
58,820
|
|
|
41,176
|
|
||
Basis in identified intangibles
|
9,263
|
|
|
9,950
|
|
||
Basis in research and development
|
3,819
|
|
|
3,733
|
|
||
Contingency accrual
|
43,319
|
|
|
67,664
|
|
||
Tax credit carryforwards and other
|
11,515
|
|
|
8,893
|
|
||
Total non-current deferred income tax asset
|
206,348
|
|
|
160,116
|
|
||
Valuation allowance
|
(192,652
|
)
|
|
(140,500
|
)
|
||
Net non-current deferred income tax asset
|
13,696
|
|
|
19,616
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Basis in property, plant and equipment
|
(5,082
|
)
|
|
(5,457
|
)
|
||
Total net non-current deferred income tax asset
|
$
|
8,614
|
|
|
$
|
14,159
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Beginning balance
|
$
|
2,219
|
|
|
$
|
1,834
|
|
|
$
|
1,375
|
|
Increases in unrecognized tax benefits – prior year positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Increases in unrecognized tax benefits – current year positions
|
263
|
|
|
385
|
|
|
459
|
|
|||
Decreases in unrecognized tax benefits – prior year position
|
(525
|
)
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
$
|
1,957
|
|
|
$
|
2,219
|
|
|
$
|
1,834
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Reduction of (accrual for) loss contingency related to legal proceedings (Footnote 17)
|
$
|
69,557
|
|
|
$
|
(183,327
|
)
|
|
$
|
(10,000
|
)
|
Gain on sale of a product line
(1)
|
6,522
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of cost method investments
(2)
|
5,463
|
|
|
3,591
|
|
|
—
|
|
|||
Gain on legal settlement
(3)
|
—
|
|
|
—
|
|
|
30,895
|
|
|||
Other income (expense)
|
(1,682
|
)
|
|
(2,794
|
)
|
|
(3,771
|
)
|
|||
Total other income (expense)
|
$
|
79,860
|
|
|
$
|
(182,530
|
)
|
|
$
|
17,124
|
|
(1)
|
In 2014, the Company sold its Source product line for
$14.4 million
, net of transaction fees, recording a gain of approximately
$6.5 million
before taxes. The historical results of this product line have not been material to the Company’s results of operations.
|
(2)
|
Includes the 2014 sale of the Company’s cost method investment in a privately-owned U.S.-based technology company for total proceeds of approximately
$16.5 million
, of which
$14.1 million
was due and paid at closing.
|
(3)
|
Gain relates to the 2012 settlement of a patent infringement lawsuit with Sercel.
|
A summary of accounts receivable follows (in thousands):
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Accounts receivable, principally trade
|
$
|
121,957
|
|
|
$
|
156,670
|
|
Less allowance for doubtful accounts
|
(7,632
|
)
|
|
(7,222
|
)
|
||
Accounts receivable, net
|
$
|
114,325
|
|
|
$
|
149,448
|
|
A summary of inventories follows (in thousands):
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Raw materials and purchased subassemblies
|
$
|
41,461
|
|
|
$
|
54,168
|
|
Work-in-process
|
18,221
|
|
|
2,297
|
|
||
Finished goods
|
21,284
|
|
|
33,263
|
|
||
Reserve for excess and obsolete inventories
|
(29,804
|
)
|
|
(32,555
|
)
|
||
Total
|
$
|
51,162
|
|
|
$
|
57,173
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Buildings
|
$
|
25,343
|
|
|
$
|
23,292
|
|
Machinery and equipment
|
144,864
|
|
|
97,242
|
|
||
Seismic rental equipment
|
2,166
|
|
|
8,649
|
|
||
Furniture and fixtures
|
4,064
|
|
|
4,673
|
|
||
Other
|
16,481
|
|
|
3,577
|
|
||
Total
|
192,918
|
|
|
137,433
|
|
||
Less accumulated depreciation
|
(123,078
|
)
|
|
(90,749
|
)
|
||
Property, plant, equipment and seismic rental equipment, net
|
$
|
69,840
|
|
|
$
|
46,684
|
|
A summary of intangible assets, net, follows (in thousands):
|
December 31, 2014
|
||||||||||
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Customer relationships
|
$
|
40,234
|
|
|
$
|
(33,446
|
)
|
|
$
|
6,788
|
|
Intellectual property rights
|
3,350
|
|
|
(3,350
|
)
|
|
—
|
|
|||
Total
|
$
|
43,584
|
|
|
$
|
(36,796
|
)
|
|
$
|
6,788
|
|
|
December 31, 2013
|
||||||||||
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Customer relationships
|
$
|
42,593
|
|
|
$
|
(31,880
|
)
|
|
$
|
10,713
|
|
Intellectual property rights
|
4,300
|
|
|
(3,766
|
)
|
|
534
|
|
|||
Total
|
$
|
46,893
|
|
|
$
|
(35,646
|
)
|
|
$
|
11,247
|
|
A summary of accrued expenses follows (in thousands):
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Accrued multi-client data library acquisition costs
|
$
|
6,458
|
|
|
$
|
25,140
|
|
Compensation, including compensation-related taxes and commissions
|
33,386
|
|
|
29,727
|
|
||
Deferred income tax liability
|
5,900
|
|
|
11,967
|
|
||
Income tax payable
|
8,865
|
|
|
5,845
|
|
||
Other
|
10,655
|
|
|
11,679
|
|
||
Total
|
$
|
65,264
|
|
|
$
|
84,358
|
|
A summary of other long-term liabilities follows (in thousands):
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Accrual for loss contingency related to legal proceedings (Footnote 17)
|
$
|
123,770
|
|
|
$
|
193,327
|
|
Facility restructuring accrual
|
4,667
|
|
|
4,837
|
|
||
Other
|
15,367
|
|
|
12,438
|
|
||
Total
|
$
|
143,804
|
|
|
$
|
210,602
|
|
|
Solutions
|
|
Software
|
|
Marine Systems
|
|
Total
|
||||||||
Balance at January 1, 2013
|
$
|
2,943
|
|
|
$
|
25,422
|
|
|
$
|
26,984
|
|
|
$
|
55,349
|
|
Impact of foreign currency translation adjustments
|
—
|
|
|
527
|
|
|
—
|
|
|
527
|
|
||||
Balance at December 31, 2013
|
2,943
|
|
|
25,949
|
|
|
26,984
|
|
|
55,876
|
|
||||
Reduction due to sale of Source product line
(1)
|
—
|
|
|
—
|
|
|
(5,100
|
)
|
|
(5,100
|
)
|
||||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
(21,884
|
)
|
|
(21,884
|
)
|
||||
Impact of foreign currency translation adjustments
|
—
|
|
|
(1,504
|
)
|
|
—
|
|
|
(1,504
|
)
|
||||
Balance at December 31, 2014
|
$
|
2,943
|
|
|
$
|
24,445
|
|
|
$
|
—
|
|
|
$
|
27,388
|
|
(1)
|
In connection with the Company’s sale of its Source product line in the second quarter of 2014, the Company reduced goodwill associated with the Marine Systems reporting unit.
|
|
Option Price
per Share
|
|
Outstanding
|
|
Vested
|
|
Available
for Grant
|
||||
January 1, 2012
|
$2.49-$16.39
|
|
|
6,791,300
|
|
|
3,844,538
|
|
|
4,793,640
|
|
Granted
|
5.96-7.16
|
|
|
1,544,000
|
|
|
—
|
|
|
(1,544,000
|
)
|
Vested
|
—
|
|
|
—
|
|
|
1,060,275
|
|
|
—
|
|
Exercised
|
2.49-7.76
|
|
|
(194,410
|
)
|
|
(194,410
|
)
|
|
—
|
|
Cancelled/forfeited
|
2.49-15.43
|
|
|
(212,540
|
)
|
|
(119,165
|
)
|
|
127,125
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(667,000
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
229,163
|
|
January 1, 2013
|
2.80-16.39
|
|
|
7,928,350
|
|
|
4,591,238
|
|
|
2,938,928
|
|
Increase in shares authorized
|
—
|
|
|
—
|
|
|
—
|
|
|
3,730,000
|
|
Plan Expiration
|
—
|
|
|
—
|
|
|
—
|
|
|
(79,250
|
)
|
Granted
|
3.86-6.64
|
|
|
1,788,300
|
|
|
—
|
|
|
(1,788,300
|
)
|
Vested
|
—
|
|
|
—
|
|
|
1,055,412
|
|
|
—
|
|
Exercised
|
2.80-5.81
|
|
|
(707,575
|
)
|
|
(707,575
|
)
|
|
—
|
|
Cancelled/forfeited
|
3.00-15.43
|
|
|
(750,575
|
)
|
|
(353,600
|
)
|
|
702,325
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(714,950
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
232,700
|
|
December 31, 2013
|
2.83-16.39
|
|
|
8,258,500
|
|
|
4,585,475
|
|
|
5,021,453
|
|
Plan Expiration
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,783
|
)
|
Granted
|
2.47–4.17
|
|
|
1,736,400
|
|
|
—
|
|
|
(1,736,400
|
)
|
Vested
|
—
|
|
|
—
|
|
|
1,391,251
|
|
|
—
|
|
Exercised
|
3.00
|
|
|
(28,500
|
)
|
|
(28,500
|
)
|
|
—
|
|
Cancelled/forfeited
|
3.00–15.43
|
|
|
(980,375
|
)
|
|
(572,375
|
)
|
|
216,800
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(727,550
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
44,530
|
|
December 31, 2014
|
$2.47–$16.39
|
|
|
8,986,025
|
|
|
5,375,851
|
|
|
2,752,050
|
|
Option Price per Share
|
Outstanding
|
|
Weighted Average Exercise Price of Outstanding Options
|
|
Weighted Average Remaining Contract Life
|
|
Vested
|
|
Weighted Average Exercise Price of Vested Options
|
||||||
$2.47 - $4.58
|
3,682,125
|
|
|
$
|
3.80
|
|
|
7.5 years
|
|
1,063,826
|
|
|
$
|
3.54
|
|
$4.79 - $7.19
|
3,683,700
|
|
|
$
|
6.23
|
|
|
6.7 years
|
|
2,698,075
|
|
|
$
|
6.28
|
|
$7.31 - $13.29
|
838,250
|
|
|
$
|
9.26
|
|
|
3.5 years
|
|
832,000
|
|
|
$
|
9.25
|
|
$14.03 - $16.39
|
781,950
|
|
|
$
|
15.25
|
|
|
3.2 years
|
|
781,950
|
|
|
$
|
15.25
|
|
Totals
|
8,986,025
|
|
|
$
|
6.30
|
|
|
6.7 years
|
|
5,375,851
|
|
|
$
|
7.50
|
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value (000’s)
|
|||||||
Total outstanding at January 1, 2014
|
8,258,500
|
|
|
$
|
6.83
|
|
|
|
|
6.8 years
|
|
|
||||
Options granted
|
1,736,400
|
|
|
$
|
3.96
|
|
|
$
|
2.41
|
|
|
|
|
|
||
Options exercised
|
(28,500
|
)
|
|
$
|
3.00
|
|
|
|
|
|
|
|
||||
Options cancelled
|
(470,500
|
)
|
|
$
|
4.94
|
|
|
|
|
|
|
|
||||
Options forfeited
|
(509,875
|
)
|
|
$
|
8.27
|
|
|
|
|
|
|
|
||||
Total outstanding at December 31, 2014
|
8,986,025
|
|
|
$
|
6.30
|
|
|
|
|
6.7 years
|
|
$
|
35
|
|
||
Options exercisable and vested at December 31, 2014
|
5,375,851
|
|
|
$
|
7.50
|
|
|
|
|
5.2 years
|
|
$
|
—
|
|
|
Number of
Shares/Units
|
|
Total nonvested at January 1, 2014
|
1,052,408
|
|
Granted
|
727,550
|
|
Vested
|
(662,451
|
)
|
Forfeited
|
(120,814
|
)
|
Total nonvested at December 31, 2014
|
996,693
|
|
|
Years Ended December 31,
|
||||
|
2014
|
|
2013
|
|
2012
|
Risk-free interest rates
|
1.6% – 1.7%
|
|
0.9% – 1.8%
|
|
0.7% – 1.0%
|
Expected lives (in years)
|
5.5
|
|
5.5
|
|
5.5
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
Expected volatility
|
65.9% – 70.5%
|
|
62.1% – 70.6%
|
|
67.8% – 72.2%
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Stock-based compensation expense
|
$
|
8,707
|
|
|
$
|
7,476
|
|
|
$
|
6,598
|
|
Tax benefit related thereto
|
(2,908
|
)
|
|
(2,469
|
)
|
|
(2,056
|
)
|
|||
Stock-based compensation expense, net of tax
|
$
|
5,799
|
|
|
$
|
5,007
|
|
|
$
|
4,542
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
16,582
|
|
|
$
|
9,576
|
|
|
$
|
4,625
|
|
Income taxes
|
16,124
|
|
|
15,872
|
|
|
18,146
|
|
|||
Non-cash items from investing and financing activities:
|
|
|
|
|
|
||||||
Purchase of computer equipment financed through capital leases
|
12,153
|
|
|
6,455
|
|
|
4,647
|
|
|||
Leasehold improvement paid by landlord
|
—
|
|
|
5,000
|
|
|
—
|
|
|||
Conversion of the Company's investment in a convertible note to equity
|
3,151
|
|
|
6,765
|
|
|
—
|
|
|||
Transfer of inventory to property, plant and equipment
|
10,149
|
|
|
1,422
|
|
|
6,737
|
|
|||
Purchases of property, plant, and equipment and seismic rental equipment financed through accounts payable
|
472
|
|
|
909
|
|
|
—
|
|
|||
Sale of rental equipment financed with a note receivable
|
—
|
|
|
3,636
|
|
|
—
|
|
(a)
|
Includes
$19.9 million
and
$1.7 million
of vessel leases for 2015 and 2016, respectively.
|
|
Three Months Ended
|
||||||||||||||
Year Ended December 31, 2014
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Service revenues
|
$
|
110,696
|
|
|
$
|
89,767
|
|
|
$
|
71,923
|
|
|
$
|
112,552
|
|
Product revenues
|
34,002
|
|
|
31,713
|
|
|
34,617
|
|
|
24,288
|
|
||||
Total net revenues
|
144,698
|
|
|
121,480
|
|
|
106,540
|
|
|
136,840
|
|
||||
Gross profit (loss)
|
56,854
|
|
|
38,228
|
|
|
29,223
|
|
|
(62,082
|
)
|
||||
Income (loss) from operations
|
19,671
|
|
|
3,785
|
|
|
(5,349
|
)
|
|
(136,036
|
)
|
||||
Interest expense, net
|
(4,797
|
)
|
|
(4,934
|
)
|
|
(5,048
|
)
|
|
(4,603
|
)
|
||||
Equity in losses of Investments
|
(1,688
|
)
|
|
(1,781
|
)
|
|
(5,558
|
)
|
|
(40,458
|
)
|
||||
Other income (expense)
|
68,526
|
|
|
6,066
|
|
|
(622
|
)
|
|
5,890
|
|
||||
Income tax expense
|
5,263
|
|
|
653
|
|
|
8,345
|
|
|
6,321
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
(470
|
)
|
|
(1,295
|
)
|
|
381
|
|
|
650
|
|
||||
Net income (loss) applicable to common shares
|
$
|
75,979
|
|
|
$
|
1,188
|
|
|
$
|
(24,541
|
)
|
|
$
|
(180,878
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.46
|
|
|
$
|
0.01
|
|
|
$
|
(0.15
|
)
|
|
$
|
(1.10
|
)
|
Diluted
|
$
|
0.46
|
|
|
$
|
0.01
|
|
|
$
|
(0.15
|
)
|
|
$
|
(1.10
|
)
|
|
Three Months Ended
|
||||||||||||||
Year Ended December 31, 2013
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Service revenues
|
$
|
89,949
|
|
|
$
|
89,603
|
|
|
$
|
44,679
|
|
|
$
|
167,086
|
|
Product revenues
|
39,788
|
|
|
31,312
|
|
|
35,159
|
|
|
51,591
|
|
||||
Total net revenues
|
129,737
|
|
|
120,915
|
|
|
79,838
|
|
|
218,677
|
|
||||
Gross profit (loss)
|
34,957
|
|
|
36,618
|
|
|
(15,104
|
)
|
|
102,842
|
|
||||
Income (loss) from operations
|
1,923
|
|
|
6,770
|
|
|
(56,528
|
)
|
|
64,231
|
|
||||
Interest expense, net
|
(1,066
|
)
|
|
(2,756
|
)
|
|
(4,281
|
)
|
|
(4,241
|
)
|
||||
Equity in earnings (losses) of Investments
|
1,116
|
|
|
(6,338
|
)
|
|
(5,192
|
)
|
|
(31,906
|
)
|
||||
Other income (expense)
|
1,027
|
|
|
(107,118
|
)
|
|
(74,301
|
)
|
|
(2,138
|
)
|
||||
Income tax expense (benefit)
|
1,201
|
|
|
(38,705
|
)
|
|
56,954
|
|
|
6,270
|
|
||||
Net (income) loss attributable to noncontrolling interests
|
76
|
|
|
(59
|
)
|
|
498
|
|
|
143
|
|
||||
Preferred stock dividends
|
338
|
|
|
338
|
|
|
5,338
|
|
|
—
|
|
||||
Net income (loss) applicable to common shares
|
$
|
1,537
|
|
|
$
|
(71,134
|
)
|
|
$
|
(202,096
|
)
|
|
$
|
19,819
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.01
|
|
|
$
|
(0.45
|
)
|
|
$
|
(1.29
|
)
|
|
$
|
0.12
|
|
Diluted
|
$
|
0.01
|
|
|
$
|
(0.45
|
)
|
|
$
|
(1.29
|
)
|
|
$
|
0.12
|
|
•
|
ION Geophysical Corporation and the guarantor subsidiaries (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting).
|
•
|
All other nonguarantor subsidiaries.
|
•
|
The consolidating adjustments necessary to present ION Geophysical Corporation’s results on a consolidated basis.
|
|
December 31, 2014
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
109,514
|
|
|
$
|
—
|
|
|
$
|
64,094
|
|
|
$
|
—
|
|
|
$
|
173,608
|
|
Accounts receivable, net
|
123
|
|
|
49,892
|
|
|
64,310
|
|
|
—
|
|
|
114,325
|
|
|||||
Unbilled receivables
|
—
|
|
|
18,548
|
|
|
4,051
|
|
|
—
|
|
|
22,599
|
|
|||||
Inventories
|
—
|
|
|
4,013
|
|
|
47,149
|
|
|
—
|
|
|
51,162
|
|
|||||
Prepaid expenses and other current assets
|
6,692
|
|
|
2,697
|
|
|
8,769
|
|
|
(4,496
|
)
|
|
13,662
|
|
|||||
Total current assets
|
116,329
|
|
|
75,150
|
|
|
188,373
|
|
|
(4,496
|
)
|
|
375,356
|
|
|||||
Deferred income tax asset
|
(7,852
|
)
|
|
6,675
|
|
|
749
|
|
|
9,032
|
|
|
8,604
|
|
|||||
Property, plant, equipment and seismic rental equipment, net
|
6,412
|
|
|
33,065
|
|
|
30,363
|
|
|
—
|
|
|
69,840
|
|
|||||
Multi-client data library, net
|
—
|
|
|
96,423
|
|
|
22,246
|
|
|
—
|
|
|
118,669
|
|
|||||
Investment in subsidiaries
|
675,499
|
|
|
278,294
|
|
|
—
|
|
|
(953,793
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
27,388
|
|
|
—
|
|
|
27,388
|
|
|||||
Intangible assets, net
|
—
|
|
|
6,254
|
|
|
534
|
|
|
—
|
|
|
6,788
|
|
|||||
Intercompany receivables
|
29,979
|
|
|
—
|
|
|
—
|
|
|
(29,979
|
)
|
|
—
|
|
|||||
Other assets
|
10,191
|
|
|
147
|
|
|
274
|
|
|
—
|
|
|
10,612
|
|
|||||
Total assets
|
$
|
830,558
|
|
|
$
|
496,008
|
|
|
$
|
269,927
|
|
|
$
|
(979,236
|
)
|
|
$
|
617,257
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
—
|
|
|
$
|
6,965
|
|
|
$
|
684
|
|
|
$
|
—
|
|
|
$
|
7,649
|
|
Accounts payable
|
4,308
|
|
|
12,028
|
|
|
20,527
|
|
|
—
|
|
|
36,863
|
|
|||||
Accrued expenses
|
3,904
|
|
|
34,738
|
|
|
21,807
|
|
|
4,815
|
|
|
65,264
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
34,624
|
|
|
595
|
|
|
—
|
|
|
35,219
|
|
|||||
Deferred revenue
|
—
|
|
|
5,263
|
|
|
2,999
|
|
|
—
|
|
|
8,262
|
|
|||||
Total current liabilities
|
8,212
|
|
|
93,618
|
|
|
46,612
|
|
|
4,815
|
|
|
153,257
|
|
|||||
Long-term debt, net of current maturities
|
175,000
|
|
|
7,839
|
|
|
106
|
|
|
—
|
|
|
182,945
|
|
|||||
Intercompany payables
|
509,124
|
|
|
8,892
|
|
|
21,087
|
|
|
(539,103
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
2,609
|
|
|
130,985
|
|
|
10,489
|
|
|
(279
|
)
|
|
143,804
|
|
|||||
Total liabilities
|
694,945
|
|
|
241,334
|
|
|
78,294
|
|
|
(534,567
|
)
|
|
480,006
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
1,539
|
|
|
—
|
|
|
1,539
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
1,645
|
|
|
290,460
|
|
|
19,138
|
|
|
(309,598
|
)
|
|
1,645
|
|
|||||
Additional paid-in capital
|
887,749
|
|
|
180,700
|
|
|
234,234
|
|
|
(414,934
|
)
|
|
887,749
|
|
|||||
Accumulated earnings (deficit)
|
(734,409
|
)
|
|
208,846
|
|
|
26,981
|
|
|
(235,827
|
)
|
|
(734,409
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(12,807
|
)
|
|
6,229
|
|
|
(12,795
|
)
|
|
6,566
|
|
|
(12,807
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(431,561
|
)
|
|
(77,563
|
)
|
|
509,124
|
|
|
—
|
|
|||||
Treasury stock
|
(6,565
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,565
|
)
|
|||||
Total stockholders’ equity
|
135,613
|
|
|
254,674
|
|
|
189,995
|
|
|
(444,669
|
)
|
|
135,613
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
99
|
|
|
—
|
|
|
99
|
|
|||||
Total equity
|
135,613
|
|
|
254,674
|
|
|
190,094
|
|
|
(444,669
|
)
|
|
135,712
|
|
|||||
Total liabilities and equity
|
$
|
830,558
|
|
|
$
|
496,008
|
|
|
$
|
269,927
|
|
|
$
|
(979,236
|
)
|
|
$
|
617,257
|
|
|
December 31, 2013
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
124,701
|
|
|
$
|
—
|
|
|
$
|
23,355
|
|
|
$
|
—
|
|
|
$
|
148,056
|
|
Accounts receivable, net
|
1,874
|
|
|
99,547
|
|
|
48,027
|
|
|
—
|
|
|
149,448
|
|
|||||
Unbilled receivables
|
—
|
|
|
33,490
|
|
|
15,978
|
|
|
—
|
|
|
49,468
|
|
|||||
Inventories
|
—
|
|
|
6,595
|
|
|
50,578
|
|
|
—
|
|
|
57,173
|
|
|||||
Prepaid expenses and other current assets
|
12,888
|
|
|
5,030
|
|
|
7,438
|
|
|
(584
|
)
|
|
24,772
|
|
|||||
Total current assets
|
139,463
|
|
|
144,662
|
|
|
145,376
|
|
|
(584
|
)
|
|
428,917
|
|
|||||
Deferred income tax asset
|
6,513
|
|
|
6,960
|
|
|
489
|
|
|
688
|
|
|
14,650
|
|
|||||
Property, plant, equipment and seismic rental equipment, net
|
6,440
|
|
|
29,845
|
|
|
10,399
|
|
|
—
|
|
|
46,684
|
|
|||||
Multi-client data library, net
|
—
|
|
|
212,572
|
|
|
26,212
|
|
|
—
|
|
|
238,784
|
|
|||||
Equity method investments
|
51,065
|
|
|
—
|
|
|
2,800
|
|
|
—
|
|
|
53,865
|
|
|||||
Investment in subsidiaries
|
699,695
|
|
|
248,482
|
|
|
—
|
|
|
(948,177
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
26,984
|
|
|
28,892
|
|
|
—
|
|
|
55,876
|
|
|||||
Intangible assets, net
|
—
|
|
|
8,246
|
|
|
3,001
|
|
|
—
|
|
|
11,247
|
|
|||||
Intercompany receivables
|
8,313
|
|
|
13,419
|
|
|
—
|
|
|
(21,732
|
)
|
|
—
|
|
|||||
Other assets
|
14,315
|
|
|
56
|
|
|
24,262
|
|
|
(23,985
|
)
|
|
14,648
|
|
|||||
Total assets
|
$
|
925,804
|
|
|
$
|
691,226
|
|
|
$
|
241,431
|
|
|
$
|
(993,790
|
)
|
|
$
|
864,671
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
—
|
|
|
$
|
4,716
|
|
|
$
|
1,190
|
|
|
$
|
—
|
|
|
$
|
5,906
|
|
Accounts payable
|
3,515
|
|
|
11,741
|
|
|
7,364
|
|
|
34
|
|
|
22,654
|
|
|||||
Accrued expenses
|
16,652
|
|
|
54,250
|
|
|
13,392
|
|
|
64
|
|
|
84,358
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
45,921
|
|
|
539
|
|
|
—
|
|
|
46,460
|
|
|||||
Deferred revenue
|
—
|
|
|
16,387
|
|
|
4,295
|
|
|
—
|
|
|
20,682
|
|
|||||
Total current liabilities
|
20,167
|
|
|
133,015
|
|
|
26,780
|
|
|
98
|
|
|
180,060
|
|
|||||
Long-term debt, net of current maturities
|
210,000
|
|
|
3,655
|
|
|
591
|
|
|
—
|
|
|
214,246
|
|
|||||
Intercompany payables
|
426,134
|
|
|
—
|
|
|
21,732
|
|
|
(447,866
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
11,757
|
|
|
214,211
|
|
|
8,637
|
|
|
(24,003
|
)
|
|
210,602
|
|
|||||
Total liabilities
|
668,058
|
|
|
350,881
|
|
|
57,740
|
|
|
(471,771
|
)
|
|
604,908
|
|
|||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
1,878
|
|
|
—
|
|
|
1,878
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
1,637
|
|
|
290,460
|
|
|
19,138
|
|
|
(309,598
|
)
|
|
1,637
|
|
|||||
Additional paid-in capital
|
879,969
|
|
|
180,700
|
|
|
235,381
|
|
|
(416,081
|
)
|
|
879,969
|
|
|||||
Accumulated earnings (deficit)
|
(606,157
|
)
|
|
232,186
|
|
|
(4,010
|
)
|
|
(228,176
|
)
|
|
(606,157
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(11,138
|
)
|
|
6,218
|
|
|
(11,920
|
)
|
|
5,702
|
|
|
(11,138
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(369,219
|
)
|
|
(56,915
|
)
|
|
426,134
|
|
|
—
|
|
|||||
Treasury stock
|
(6,565
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,565
|
)
|
|||||
Total stockholders’ equity
|
257,746
|
|
|
340,345
|
|
|
181,674
|
|
|
(522,019
|
)
|
|
257,746
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
139
|
|
|||||
Total equity
|
257,746
|
|
|
340,345
|
|
|
181,813
|
|
|
(522,019
|
)
|
|
257,885
|
|
|||||
Total liabilities and equity
|
$
|
925,804
|
|
|
$
|
691,226
|
|
|
$
|
241,431
|
|
|
$
|
(993,790
|
)
|
|
$
|
864,671
|
|
|
Year Ended December 31, 2014
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
221,008
|
|
|
$
|
291,302
|
|
|
$
|
(2,752
|
)
|
|
$
|
509,558
|
|
Cost of goods sold
|
—
|
|
|
262,829
|
|
|
187,258
|
|
|
(2,752
|
)
|
|
447,335
|
|
|||||
Gross profit (loss)
|
—
|
|
|
(41,821
|
)
|
|
104,044
|
|
|
—
|
|
|
62,223
|
|
|||||
Total operating expenses
|
38,961
|
|
|
88,481
|
|
|
52,710
|
|
|
—
|
|
|
180,152
|
|
|||||
Income (loss) from operations
|
(38,961
|
)
|
|
(130,302
|
)
|
|
51,334
|
|
|
—
|
|
|
(117,929
|
)
|
|||||
Interest expense, net
|
(18,537
|
)
|
|
(245
|
)
|
|
(600
|
)
|
|
—
|
|
|
(19,382
|
)
|
|||||
Intercompany interest, net
|
(340
|
)
|
|
2,146
|
|
|
(1,806
|
)
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
(74,615
|
)
|
|
32,043
|
|
|
738
|
|
|
(7,651
|
)
|
|
(49,485
|
)
|
|||||
Other income
|
4,536
|
|
|
74,295
|
|
|
1,029
|
|
|
—
|
|
|
79,860
|
|
|||||
Income (loss) before income taxes
|
(127,917
|
)
|
|
(22,063
|
)
|
|
50,695
|
|
|
(7,651
|
)
|
|
(106,936
|
)
|
|||||
Income tax expense
|
335
|
|
|
1,277
|
|
|
18,970
|
|
|
—
|
|
|
20,582
|
|
|||||
Net income (loss)
|
(128,252
|
)
|
|
(23,340
|
)
|
|
31,725
|
|
|
(7,651
|
)
|
|
(127,518
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(734
|
)
|
|
—
|
|
|
(734
|
)
|
|||||
Net income (loss) applicable to common shares
|
$
|
(128,252
|
)
|
|
$
|
(23,340
|
)
|
|
$
|
30,991
|
|
|
$
|
(7,651
|
)
|
|
$
|
(128,252
|
)
|
Comprehensive net income (loss)
|
$
|
(129,921
|
)
|
|
$
|
(23,329
|
)
|
|
$
|
30,850
|
|
|
$
|
(6,787
|
)
|
|
$
|
(129,187
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(734
|
)
|
|
—
|
|
|
(734
|
)
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(129,921
|
)
|
|
$
|
(23,329
|
)
|
|
$
|
30,116
|
|
|
$
|
(6,787
|
)
|
|
$
|
(129,921
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2013
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
337,570
|
|
|
$
|
213,826
|
|
|
$
|
(2,229
|
)
|
|
$
|
549,167
|
|
Cost of goods sold
|
—
|
|
|
240,704
|
|
|
151,379
|
|
|
(2,229
|
)
|
|
389,854
|
|
|||||
Gross profit
|
—
|
|
|
96,866
|
|
|
62,447
|
|
|
—
|
|
|
159,313
|
|
|||||
Total operating expenses
|
35,054
|
|
|
62,028
|
|
|
45,835
|
|
|
—
|
|
|
142,917
|
|
|||||
Income (loss) from operations
|
(35,054
|
)
|
|
34,838
|
|
|
16,612
|
|
|
—
|
|
|
16,396
|
|
|||||
Interest expense, net
|
(12,102
|
)
|
|
(49
|
)
|
|
(193
|
)
|
|
—
|
|
|
(12,344
|
)
|
|||||
Intercompany interest, net
|
411
|
|
|
(1,374
|
)
|
|
963
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
(192,220
|
)
|
|
(19,755
|
)
|
|
(19,833
|
)
|
|
189,488
|
|
|
(42,320
|
)
|
|||||
Other income (expense)
|
12,166
|
|
|
(193,289
|
)
|
|
(1,407
|
)
|
|
—
|
|
|
(182,530
|
)
|
|||||
Income (loss) before income taxes
|
(226,799
|
)
|
|
(179,629
|
)
|
|
(3,858
|
)
|
|
189,488
|
|
|
(220,798
|
)
|
|||||
Income tax expense (benefit)
|
19,061
|
|
|
(10,883
|
)
|
|
17,542
|
|
|
—
|
|
|
25,720
|
|
|||||
Net income (loss)
|
(245,860
|
)
|
|
(168,746
|
)
|
|
(21,400
|
)
|
|
189,488
|
|
|
(246,518
|
)
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
658
|
|
|
—
|
|
|
658
|
|
|||||
Net income (loss) attributable to ION
|
(245,860
|
)
|
|
(168,746
|
)
|
|
(20,742
|
)
|
|
189,488
|
|
|
(245,860
|
)
|
|||||
Payment of preferred dividends and conversion payment
|
6,014
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,014
|
|
|||||
Net income (loss) applicable to common shares
|
$
|
(251,874
|
)
|
|
$
|
(168,746
|
)
|
|
$
|
(20,742
|
)
|
|
$
|
189,488
|
|
|
$
|
(251,874
|
)
|
Comprehensive net income (loss)
|
$
|
(245,112
|
)
|
|
$
|
(168,167
|
)
|
|
$
|
(20,779
|
)
|
|
$
|
188,288
|
|
|
$
|
(245,770
|
)
|
Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
658
|
|
|
—
|
|
|
658
|
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(245,112
|
)
|
|
$
|
(168,167
|
)
|
|
$
|
(20,121
|
)
|
|
$
|
188,288
|
|
|
$
|
(245,112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2012
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
311,758
|
|
|
$
|
214,939
|
|
|
$
|
(380
|
)
|
|
$
|
526,317
|
|
Cost of goods sold
|
—
|
|
|
192,639
|
|
|
118,257
|
|
|
(380
|
)
|
|
310,516
|
|
|||||
Gross profit
|
—
|
|
|
119,119
|
|
|
96,682
|
|
|
—
|
|
|
215,801
|
|
|||||
Total operating expenses
|
35,982
|
|
|
61,315
|
|
|
43,977
|
|
|
—
|
|
|
141,274
|
|
|||||
Income (loss) from operations
|
(35,982
|
)
|
|
57,804
|
|
|
52,705
|
|
|
—
|
|
|
74,527
|
|
|||||
Interest expense, net
|
(5,137
|
)
|
|
198
|
|
|
(326
|
)
|
|
—
|
|
|
(5,265
|
)
|
|||||
Intercompany interest, net
|
232
|
|
|
(629
|
)
|
|
397
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
58,162
|
|
|
33,958
|
|
|
—
|
|
|
(91,823
|
)
|
|
297
|
|
|||||
Other income (expense)
|
29,447
|
|
|
(10,334
|
)
|
|
(1,989
|
)
|
|
—
|
|
|
17,124
|
|
|||||
Income (loss) before income taxes
|
46,722
|
|
|
80,997
|
|
|
50,787
|
|
|
(91,823
|
)
|
|
86,683
|
|
|||||
Income tax expense (benefit)
|
(16,593
|
)
|
|
21,771
|
|
|
18,679
|
|
|
—
|
|
|
23,857
|
|
|||||
Net income (loss)
|
63,315
|
|
|
59,226
|
|
|
32,108
|
|
|
(91,823
|
)
|
|
62,826
|
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
489
|
|
|
—
|
|
|
489
|
|
|||||
Net income (loss) attributable to ION
|
63,315
|
|
|
59,226
|
|
|
32,597
|
|
|
(91,823
|
)
|
|
63,315
|
|
|||||
Preferred stock dividends
|
1,352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,352
|
|
|||||
Net income (loss) applicable to common shares
|
$
|
61,963
|
|
|
$
|
59,226
|
|
|
$
|
32,597
|
|
|
$
|
(91,823
|
)
|
|
$
|
61,963
|
|
Comprehensive net income (loss)
|
$
|
67,622
|
|
|
$
|
62,085
|
|
|
$
|
34,967
|
|
|
$
|
(97,541
|
)
|
|
$
|
67,133
|
|
Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
489
|
|
|
—
|
|
|
489
|
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
67,622
|
|
|
$
|
62,085
|
|
|
$
|
35,456
|
|
|
$
|
(97,541
|
)
|
|
$
|
67,622
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2014
|
||||||||||||||
Statement of Cash Flows
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
(53,925
|
)
|
|
$
|
107,590
|
|
|
$
|
76,115
|
|
|
$
|
129,780
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(67,552
|
)
|
|
(233
|
)
|
|
(67,785
|
)
|
||||
Purchase of property, plant, equipment and seismic rental equipment
|
(1,240
|
)
|
|
(4,530
|
)
|
|
(2,494
|
)
|
|
(8,264
|
)
|
||||
Repayment of advances by INOVA Geophysical
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
||||
Net investment in and advances to OceanGeo B.V. prior to its consolidation
|
—
|
|
|
—
|
|
|
(3,074
|
)
|
|
(3,074
|
)
|
||||
Net proceeds from sale of Source product line
|
—
|
|
|
9,881
|
|
|
4,513
|
|
|
14,394
|
|
||||
Proceeds from sale of cost method investments
|
14,051
|
|
|
—
|
|
|
—
|
|
|
14,051
|
|
||||
Other investing activities
|
579
|
|
|
26
|
|
|
323
|
|
|
928
|
|
||||
Net cash provided by (used in) investing activities
|
14,390
|
|
|
(62,175
|
)
|
|
(965
|
)
|
|
(48,750
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Payments under revolving line of credit
|
(50,000
|
)
|
|
—
|
|
|
—
|
|
|
(50,000
|
)
|
||||
Borrowings under revolving line of credit
|
15,000
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
||||
Payments on notes payable and long-term debt
|
—
|
|
|
(5,384
|
)
|
|
(7,614
|
)
|
|
(12,998
|
)
|
||||
Cost associated with issuance of debt
|
(2,194
|
)
|
|
—
|
|
|
—
|
|
|
(2,194
|
)
|
||||
Intercompany lending
|
61,324
|
|
|
(40,031
|
)
|
|
(21,293
|
)
|
|
—
|
|
||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
(6,000
|
)
|
|
(6,000
|
)
|
||||
Proceeds from employee stock purchases and exercise of stock options
|
577
|
|
|
—
|
|
|
—
|
|
|
577
|
|
||||
Other financing activities
|
(359
|
)
|
|
—
|
|
|
—
|
|
|
(359
|
)
|
||||
Net cash provided by (used in) financing activities
|
24,348
|
|
|
(45,415
|
)
|
|
(34,907
|
)
|
|
(55,974
|
)
|
||||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
496
|
|
|
496
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
(15,187
|
)
|
|
—
|
|
|
40,739
|
|
|
25,552
|
|
||||
Cash and cash equivalents at beginning of period
|
124,701
|
|
|
—
|
|
|
23,355
|
|
|
148,056
|
|
||||
Cash and cash equivalents at end of period
|
$
|
109,514
|
|
|
$
|
—
|
|
|
$
|
64,094
|
|
|
$
|
173,608
|
|
|
Year Ended December 31, 2013
|
||||||||||||||||||
Statement of Cash Flows
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(50,731
|
)
|
|
$
|
166,838
|
|
|
$
|
31,480
|
|
|
$
|
—
|
|
|
$
|
147,587
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in multi-client data library
|
—
|
|
|
(111,689
|
)
|
|
(2,893
|
)
|
|
—
|
|
|
(114,582
|
)
|
|||||
Purchase of property, plant, equipment and seismic rental equipment
|
(2,075
|
)
|
|
(10,171
|
)
|
|
(4,668
|
)
|
|
—
|
|
|
(16,914
|
)
|
|||||
Net advances to INOVA Geophysical
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|||||
Investment in and advances to OceanGeo B.V.
|
—
|
|
|
—
|
|
|
(24,755
|
)
|
|
—
|
|
|
(24,755
|
)
|
|||||
Proceeds from sale of cost method investments
|
4,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,150
|
|
|||||
Investment in convertible notes
|
(2,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|||||
Capital contribution to affiliate
|
(5,695
|
)
|
|
(7,897
|
)
|
|
—
|
|
|
13,592
|
|
|
—
|
|
|||||
Other investing activities
|
—
|
|
|
128
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|||||
Net cash provided by (used in) investing activities
|
(10,620
|
)
|
|
(129,629
|
)
|
|
(32,316
|
)
|
|
13,592
|
|
|
(158,973
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of notes
|
175,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175,000
|
|
|||||
Payments under revolving line of credit
|
(97,250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97,250
|
)
|
|||||
Borrowings under revolving line of credit
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,000
|
|
|||||
Payments on notes payable and long-term debt
|
—
|
|
|
(3,249
|
)
|
|
(1,112
|
)
|
|
—
|
|
|
(4,361
|
)
|
|||||
Cost associated with issuance of debt
|
(6,773
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,773
|
)
|
|||||
Capital contribution from affiliate
|
—
|
|
|
5,695
|
|
|
7,897
|
|
|
(13,592
|
)
|
|
—
|
|
|||||
Intercompany lending
|
52,646
|
|
|
(39,655
|
)
|
|
(12,991
|
)
|
|
—
|
|
|
—
|
|
|||||
Payment of preferred dividends
|
(6,014
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,014
|
)
|
|||||
Proceeds from employee stock purchases and exercise of stock options
|
2,527
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,527
|
|
|||||
Other financing activities
|
573
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
573
|
|
|||||
Net cash provided by (used in) financing activities
|
155,709
|
|
|
(37,209
|
)
|
|
(6,206
|
)
|
|
(13,592
|
)
|
|
98,702
|
|
|||||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(231
|
)
|
|
—
|
|
|
(231
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
94,358
|
|
|
—
|
|
|
(7,273
|
)
|
|
—
|
|
|
87,085
|
|
|||||
Cash and cash equivalents at beginning of period
|
30,343
|
|
|
—
|
|
|
30,628
|
|
|
—
|
|
|
60,971
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
124,701
|
|
|
$
|
—
|
|
|
$
|
23,355
|
|
|
$
|
—
|
|
|
$
|
148,056
|
|
|
Year Ended December 31, 2012
|
||||||||||||||
Statement of Cash Flows
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Total Consolidated
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
$
|
19,362
|
|
|
$
|
105,768
|
|
|
$
|
43,951
|
|
|
$
|
169,081
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(121,424
|
)
|
|
(24,203
|
)
|
|
(145,627
|
)
|
||||
Purchase of property, plant, equipment and seismic rental equipment
|
(2,485
|
)
|
|
(9,947
|
)
|
|
(4,218
|
)
|
|
(16,650
|
)
|
||||
Maturity of short-term investments
|
20,000
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
||||
Investment in convertible notes
|
(2,000
|
)
|
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
||||
Net cash provided by (used in) investing activities
|
15,515
|
|
|
(131,371
|
)
|
|
(28,421
|
)
|
|
(144,277
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Payments under revolving line of credit
|
(51,000
|
)
|
|
—
|
|
|
—
|
|
|
(51,000
|
)
|
||||
Borrowings under revolving line of credit
|
148,250
|
|
|
—
|
|
|
—
|
|
|
148,250
|
|
||||
Payments on notes payable and long-term debt
|
(99,270
|
)
|
|
(1,626
|
)
|
|
(806
|
)
|
|
(101,702
|
)
|
||||
Intercompany lending
|
(21,699
|
)
|
|
27,229
|
|
|
(5,530
|
)
|
|
—
|
|
||||
Payment of preferred dividends
|
(1,352
|
)
|
|
—
|
|
|
—
|
|
|
(1,352
|
)
|
||||
Proceeds from employee stock purchases and exercise of stock options
|
807
|
|
|
—
|
|
|
—
|
|
|
807
|
|
||||
Other financing activities
|
(1,669
|
)
|
|
—
|
|
|
212
|
|
|
(1,457
|
)
|
||||
Net cash provided by (used in) financing activities
|
(25,933
|
)
|
|
25,603
|
|
|
(6,124
|
)
|
|
(6,454
|
)
|
||||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
2
|
|
|
—
|
|
|
217
|
|
|
219
|
|
||||
Net increase in cash and cash equivalents
|
8,946
|
|
|
—
|
|
|
9,623
|
|
|
18,569
|
|
||||
Cash and cash equivalents at beginning of period
|
21,397
|
|
|
—
|
|
|
21,005
|
|
|
42,402
|
|
||||
Cash and cash equivalents at end of period
|
$
|
30,343
|
|
|
$
|
—
|
|
|
$
|
30,628
|
|
|
$
|
60,971
|
|
Year Ended December 31, 2012
|
Balance at
Beginning of Year |
|
Charged (Credited) to
Costs and Expenses |
|
Deductions
|
|
Balance at
End of Year |
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
1,198
|
|
|
$
|
5,811
|
|
|
$
|
(298
|
)
|
|
$
|
6,711
|
|
Warranty
|
715
|
|
|
1,258
|
|
|
(932
|
)
|
|
1,041
|
|
||||
Valuation allowance on deferred tax assets
|
69,475
|
|
|
(6,214
|
)
|
|
—
|
|
|
63,261
|
|
||||
Excess and obsolete inventory
|
13,037
|
|
|
1,326
|
|
|
(124
|
)
|
|
14,239
|
|
Year Ended December 31, 2013
|
Balance at
Beginning of Year |
|
Charged (Credited) to
Costs and Expenses |
|
Deductions
|
|
Balance at
End of Year |
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
6,711
|
|
|
$
|
12,040
|
|
|
$
|
(11,529
|
)
|
|
$
|
7,222
|
|
Warranty
|
1,041
|
|
|
538
|
|
|
(936
|
)
|
|
643
|
|
||||
Valuation allowance on deferred tax assets
|
63,261
|
|
|
88,112
|
|
|
(338
|
)
|
|
151,035
|
|
||||
Excess and obsolete inventory
|
14,239
|
|
|
18,644
|
|
|
(328
|
)
|
|
32,555
|
|
Year Ended December 31, 2014
|
Balance at
Beginning of Year
|
|
Charged (Credited) to
Costs and Expenses
|
|
Deductions
|
|
Balance at
End of Year
|
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
7,222
|
|
|
$
|
7,275
|
|
|
$
|
(6,864
|
)
|
|
$
|
7,633
|
|
Allowances for doubtful notes receivable
|
—
|
|
|
4,000
|
|
|
—
|
|
|
4,000
|
|
||||
Warranty
|
643
|
|
|
381
|
|
|
(625
|
)
|
|
399
|
|
||||
Valuation allowance on deferred tax assets
|
151,035
|
|
|
54,229
|
|
|
—
|
|
|
205,264
|
|
||||
Excess and obsolete inventory
|
32,555
|
|
|
6,952
|
|
|
(9,703
|
)
|
|
29,804
|
|
|
3.1
|
|
—
|
Restated Certificate of Incorporation dated September 24, 2007 filed on September 24, 2007 as Exhibit 3.4 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
3.2
|
|
—
|
Amended and Restated Bylaws of ION Geophysical Corporation filed on September 24, 2007 as Exhibit 3.5 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
3.3
|
|
—
|
Certificate of Ownership and Merger merging ION Geophysical Corporation with and into Input/Output, Inc. dated September 21, 2007, filed on September 24, 2007 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.1
|
|
—
|
Certificate of Rights and Designations of Series D-1 Cumulative Convertible Preferred Stock, dated February 16, 2005 and filed on February 17, 2005 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.2
|
|
—
|
Certificate of Elimination of Series B Preferred Stock dated September 24, 2007, filed on September 24, 2007 as Exhibit 3.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.3
|
|
—
|
Certificate of Elimination of Series C Preferred Stock dated September 24, 2007, filed on September 24, 2007 as Exhibit 3.3 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.4
|
|
—
|
Certificate of Designation of Series D-2 Cumulative Convertible Preferred Stock dated December 6, 2007, filed on December 6, 2007 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.5
|
|
—
|
Certificate of Designations of Series A Junior Participating Preferred Stock of ION Geophysical Corporation effective as of December 31, 2008, filed on January 5, 2009 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.6
|
|
—
|
Certificate of Elimination of Series A Junior Participating Preferred Stock dated February 10, 2012, filed on February 13, 2012 as Exhibit 3.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
4.7
|
|
—
|
Indenture, dated May 13, 2013, among ION Geophysical Corporation, the subsidiary guarantors named therein, Wilmington Trust, National Association, as trustee, and U.S. Bank National Association, as collateral agent, filed on May 13, 2013 as Exhibit 4.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.8
|
|
—
|
Registration Rights Agreement, dated May 13, 2013, among ION Geophysical Corporation, the subsidiary guarantors named therein and Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as representatives of the initial purchasers named therein, filed on May 13, 2013 as Exhibit 4.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.9
|
|
—
|
Certificate of Elimination of Series D-1 Cumulative Convertible Preferred Stock dated September 30, 2013, filed on September 30, 2013 as Exhibit 3.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
4.10
|
|
—
|
Certificate of Elimination of Series D-2 Cumulative Convertible Preferred Stock dated September 30, 2013, filed on September 30, 2013 as Exhibit 3.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
**10.1
|
|
—
|
Amended and Restated 1990 Stock Option Plan, filed on June 9, 1999 as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (Registration No. 333-80299), and incorporated herein by reference.
|
|
10.2
|
|
—
|
Office and Industrial/Commercial Lease dated June 2005 by and between Stafford Office Park II, LP as Landlord and Input/Output, Inc. as Tenant, filed on March 31, 2006 as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and incorporated herein by reference.
|
|
10.3
|
|
—
|
Office and Industrial/Commercial Lease dated June 2005 by and between Stafford Office Park District as Landlord and Input/Output, Inc. as Tenant, filed on March 31, 2006 as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and incorporated herein by reference.
|
|
**10.4
|
|
—
|
Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan, filed on June 9, 1999 as Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (Registration No. 333-80299), and incorporated herein by reference.
|
|
**10.5
|
|
—
|
Amendment No. 1 to the Input/Output, Inc. Amended and Restated 1996 Non-Employee Director Stock Option Plan dated September 13, 1999 filed on November 14, 1999 as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 1999 and incorporated herein by reference.
|
|
**10.6
|
|
—
|
Input/Output, Inc. Employee Stock Purchase Plan, filed on March 28, 1997 as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-24125), and incorporated herein by reference.
|
|
**10.7
|
|
—
|
Fifth Amended and Restated - 2004 Long-Term Incentive Plan, filed as Appendix A to the definitive proxy statement for the 2010 Annual Meeting of Stockholders of ION Geophysical Corporation, filed on April 21, 2010, and incorporated herein by reference.
|
|
10.8
|
|
—
|
Registration Rights Agreement dated as of November 16, 1998, by and among the Company and The Laitram Corporation, filed on March 12, 2004 as Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, and incorporated herein by reference.
|
|
**10.9
|
|
—
|
Input/Output, Inc. 1998 Restricted Stock Plan dated as of June 1, 1998, filed on June 9, 1999 as Exhibit 4.7 to the Company’s Registration Statement on S-8 (Registration No. 333-80297), and incorporated herein by reference.
|
|
**10.10
|
|
—
|
Input/Output Inc. Non-qualified Deferred Compensation Plan, filed on April 1, 2002 as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, and incorporated herein by reference.
|
|
**10.11
|
|
—
|
Input/Output, Inc. 2000 Restricted Stock Plan, effective as of March 13, 2000, filed on August 17, 2000 as Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2000, and incorporated herein by reference.
|
|
**10.12
|
|
—
|
Input/Output, Inc. 2000 Long-Term Incentive Plan, filed on November 6, 2000 as Exhibit 4.7 to the Company’s Registration Statement on Form S-8 (Registration No. 333-49382), and incorporated by reference herein.
|
|
**10.13
|
|
—
|
Employment Agreement dated effective as of March 31, 2003, by and between the Company and Robert P. Peebler, filed on March 31, 2003 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
**10.14
|
|
—
|
First Amendment to Employment Agreement dated September 6, 2006, between Input/Output, Inc. and Robert P. Peebler, filed on September 7, 2006, as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.15
|
|
—
|
Second Amendment to Employment Agreement dated February 16, 2007, between Input/Output, Inc. and Robert P. Peebler, filed on February 16, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.16
|
|
—
|
Third Amendment to Employment Agreement dated as of August 20, 2007 between Input/Output, Inc. and Robert P. Peebler, filed on August 21, 2007 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
**10.17
|
|
—
|
Fourth Amendment to Employment Agreement, dated as of January 26, 2009, between ION Geophysical Corporation and Robert P. Peebler, filed on January 29, 2009 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
**10.18
|
|
—
|
Employment Agreement dated effective as of June 15, 2004, by and between the Company and David L. Roland, filed on August 9, 2004 as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, and incorporated herein by reference.
|
|
**10.19
|
|
—
|
GX Technology Corporation Employee Stock Option Plan, filed on August 9, 2004 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, and incorporated herein by reference.
|
|
10.20
|
|
—
|
Concept Systems Holdings Limited Share Acquisition Agreement dated February 23, 2004, filed on March 5, 2004 as Exhibit 2.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
10.21
|
|
—
|
Registration Rights Agreement by and between ION Geophysical Corporation and 1236929 Alberta Ltd. dated September 18, 2008, filed on November 7, 2008 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q and incorporated herein by reference.
|
|
**10.22
|
|
—
|
Form of Employment Inducement Stock Option Agreement for the Input/Output, Inc. — Concept Systems Employment Inducement Stock Option Program, filed on July 27, 2004 as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 333-117716), and incorporated herein by reference.
|
|
**10.23
|
|
—
|
Form of Employee Stock Option Award Agreement for ARAM Systems Employee Inducement Stock Option Program, filed on November 14, 2008 as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-155378) and incorporated herein by reference.
|
|
**10.24
|
|
—
|
Input/Output, Inc. 2003 Stock Option Plan, dated March 27, 2003, filed as Appendix B of the Company’s definitive proxy statement filed with the SEC on April 30, 2003, and incorporated herein by reference.
|
|
**10.25
|
|
—
|
Form of Employment Inducement Stock Option Agreement for the Input/Output, Inc. — GX Technology Corporation Employment Inducement Stock Option Program, filed on April 4, 2005 as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 333-123831), and incorporated herein by reference.
|
|
**10.26
|
|
—
|
ION Stock Appreciation Rights Plan dated November 17, 2008, filed as Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and incorporated herein by reference.
|
|
10.27
|
|
—
|
Canadian Master Loan and Security Agreement dated as of June 29, 2009 by and among ICON ION, LLC, as lender, ION Geophysical Corporation and ARAM Rentals Corporation, a Nova Scotia corporation, filed on August 6, 2009 as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
|
|
10.28
|
|
—
|
Master Loan and Security Agreement (U.S.) dated as of June 29, 2009 by and among ICON ION, LLC, as lender, ION Geophysical Corporation and ARAM Seismic Rentals, Inc., a Texas corporation, filed on August 6, 2009 as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, and incorporated herein by reference.
|
|
10.29
|
|
—
|
Registration Rights Agreement dated as of October 23, 2009 by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation filed on March 1, 2010 as Exhibit 10.54 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and incorporated herein by reference.
|
|
10.30
|
|
—
|
Stock Purchase Agreement dated as of March 19, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
10.31
|
|
—
|
Investor Rights Agreement dated as of March 25, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.2 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
10.32
|
|
—
|
Share Purchase Agreement dated as of March 24, 2010, by and among ION Geophysical Corporation, INOVA Geophysical Equipment Limited and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.3 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
10.33
|
|
—
|
Joint Venture Agreement dated as of March 24, 2010, by and between ION Geophysical Corporation and BGP Inc., China National Petroleum Corporation, filed on March 31, 2010 as Exhibit 10.4 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.34
|
|
—
|
Fifth Amendment to Employment Agreement dated June 1, 2010, between ION Geophysical Corporation and Robert P. Peebler, filed on June 1, 2010 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.35
|
|
—
|
Employment Agreement dated August 2, 2011, effective as of January 1, 2012, between ION Geophysical Corporation and R. Brian Hanson, filed on November 3, 2011 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2011, and incorporated herein by reference.
|
|
**10.36
|
|
—
|
Employment Agreement dated effective as of November 28, 2011, between ION Geophysical Corporation and Gregory J. Heinlein, filed on December 1, 2011 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.37
|
|
—
|
First Amendment to Credit Agreement and Loan Documents dated May 29, 2012, filed on May 29, 2012 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference.
|
|
**10.38
|
|
—
|
Consulting Services Agreement dated January 1, 2013, between ION Geophysical Corporation and The
Peebler Group LLC, filed on January 4, 2013 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, and incorporated herein by reference. |
|
10.39
|
|
—
|
2013 Long-Term Incentive Plan, filed as Exhibit 1 to the definitive proxy statement for the 2013 Annual Meeting of Stockholders of ION Geophysical Corporation, filed on April 16, 2013, and incorporated herein by reference.
|
|
10.40
|
|
—
|
Purchase Agreement, dated May 8, 2013, among ION Geophysical Corporation, the subsidiary guarantors named therein and Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as representatives of the initial purchasers named therein, filed on May 13, 2013 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
|
10.41
|
|
—
|
Second Lien Intercreditor Agreement by and among China Merchants Bank Co., Ltd., New York Branch, as administrative agent, first lien representative for the first lien secured parties and collateral agent for the first lien secured parties, Wilmington Trust Company, National Association, as trustee and second lien representative for the second lien secured parties, and U.S. Bank National Association, as collateral agent for the second lien secured parties, and acknowledged and agreed to by ION Geophysical Corporation and the other grantors named therein, filed on May 13, 2013 as Exhibit 10.2 to the Company’s Current Report on Form 8-K and incorporated herein by reference.
|
1.
|
Your employment as the Chief Financial Officer of the Company and the Employment Agreement will be deemed to end effective upon the simultaneous return by you to the Employer of (i) the Resignation attached hereto at Exhibit A and (ii) the Non-Revocation Statement attached hereto as Exhibit B, both no
earlier
than eight days after your execution of this agreement (the “Separation Date”); provided that, you will continue to be a general employee of the Company acting as the Advisor to the CFO until December 31, 2014. Sections 2 (Fiduciary Duty; Confidentiality) and 4 (Non-Competition; Non-Solicit; No Hire) of the Employment Agreement shall survive its termination for the time periods specified in the Employment Agreement.
|
2.
|
From the Separation Date through December 31, 2014, you agree to provide transition services to the Employer as an employee acting as the Advisor to the CFO (the “Transition Period”).Transition services will be provided in two phases:
|
A.
|
Phase 1: From the date of this letter through November 14, you will continue to report to ION’s Houston office during normal business hours and will assist with the orderly transition of information, duties and team members.
|
B.
|
Phase 2: After November 14, you will no longer be required to be present in the office for the purpose of fulfilling your transition duties except as may be requested from time to time by Steve Bate upon reasonable advance notice. During Phase 2 of the Transition Period, you will remain available to respond to questions and to assist in the transition of the business during business hours by telephone and electronic mail but will not otherwise be required to attend to any business matters on behalf of the Company.
|
C.
|
During the Transition Period, you will continue to be paid installments of your bi-weekly Base Salary as defined in the Employment Agreement as and when customarily paid by the Company as well as receive all other benefits given to other employees of the Company (401k match, medical benefits, etc.).
|
3.
|
You have received or will receive by separate cover information regarding your rights to health insurance continuation and your retirement benefits. To the extent that you have such rights, nothing in this agreement will impair those rights; more specifically, you waive no rights to bring an action pursuant to 29 U.S.C. §1132(a)(1)(B) of the Employee Retirement Income Security Act or the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) related to providing eligible employees the opportunity for continuation of participation in the employer’s group health insurance plan under certain circumstances.
|
4.
|
Except as necessary to perform your duties during Phase 1, you have returned or will immediately return to Employer any company property and any trade secrets or other confidential information belonging to Employer, including Employer computer equipment, documents and electronic files, employee identification, keys, building access cards, and other property. Any items retained for the purpose of completing Phase 1, shall be returned upon the conclusion of Phase 1. The foregoing does not include Employee’s mobile phone, outlook contacts, mobile phone number and laptop computer which Employee shall own after Employer is permitted to remove all Employer information.
|
5.
|
In consideration of your acceptance of this agreement and the return of Exhibits A and B, the Employer will provide you with (i) an aggregate amount (the “Payment”), minus applicable taxes and withholdings, equal to
$330,000.00
, which Payment will be paid to you in bi-weekly installments over a period of
26 pay periods
at times consistent with regular payroll payments to employees of Employer commencing at the end of the Transition Period and (ii) reimbursement for Employee’s COBRA payments from the end of the Transition Period through the end of calendar year 2015. If you do not sign and return this agreement including all exhibits hereto at a date no later than the maximum period set forth in Section 12, this agreement will terminate and you will not receive any of the additional consideration outlined above or the consideration to be paid during the Transition Period because you would not otherwise be entitled to such consideration.
|
6.
|
You will remain eligible to participate in the 2014 ION Incentive Compensation Plan (ICP) for the 2014 period. The CEO will recommend payment of a bonus to Employee at the time and in the manner all other bonuses are general paid; provided that, the amount of such bonus is discretionary and must be approved by the Board and Compensation Committee.
|
7.
|
Concurrent with the execution of this Agreement, Employer will provide Employee with a letter of reference in the form attached. Employer will not have any future obligations with respect to references except to confirm the matters set forth in the letter of reference
|
8.
|
Employee agrees that Employee shall not, directly or with or through any other person, directly or indirectly, make, issue, release or authorize any written or oral statement to any third person that are derogatory or defamatory in nature with respect to Employer, or any of their respective members, directors, officers, employees, subcontractors or agents. Employer agrees that, neither Employer nor any of its officers, directors, affiliates or agents shall, directly or with or through any other person, directly or indirectly , make, issue, release or authorize any written or oral statements to any third person that are derogatory or defamatory in nature with respect to Employee, Employee’s family members, or any of his affiliates. Provided, however, that this provision shall not apply to communications required by law or made in response to a valid subpoena or other lawful order compelling a party to provide testimony or information; provided further, that in responding to a valid subpoena or other lawful order, the responding party will provide the other parties with advance notice and an opportunity to seek a protective order or other safeguard for its confidential information. Any inquiries about Employees employment will be directed to the SVP of Human Resources.
|
9.
|
Unless required or otherwise permitted by law, you will not disclose to others any information regarding the following:
|
A.
|
Any information regarding Employer’s trade secrets or any other confidential information.
|
B.
|
The terms of this agreement, the benefit being paid under it and the fact of its payment (except that you may disclose this information to your spouse, attorney, accountant or other professional advisor to whom you must make the disclosure in order for them to render professional services to you; provided that you instruct such persons to maintain the confidentiality of the information just as you must).
|
10.
|
Complete Release, Waiver of Claims and Covenant Not to Sue.
|
A.
|
Release and Waiver: On behalf of yourself and your heirs, executors, successors and assigns, you hereby irrevocably and unconditionally release Employer and its predecessors, subsidiaries, related entities, officers, directors, shareholders, parent companies, agents, attorneys, employees, successors and assigns (for purposes of this Section 7, hereinafter collectively referred to as “Employer”), from all claims or demands you have, may have, or may have had based on or in any way related to your employment with Employer and your Employment Agreement, the termination of that employment and the Employment Agreement, or based on any previous act or omission by or on behalf of Employer. You further agree to waive any right you may have with respect to the claims or demands from which Employer is herewith released. This release and waiver includes, but is not limited to, any rights or claims you may have under , Title VII of the Civil Rights Acts of 1964, as amended; , 42 U.S.C. § 1981; the Civil Rights Act of 1991; Section 1981 of the Civil Rights Act of 1866; the Family and Medical Leave Act, including the revised regulations effective January 16, 2009; the Genetic Information Nondiscrimination Act (GINA); the Equal Pay Act ; the Rehabilitation Act of 1973 and the Americans with Disabilities Act;, ADA Amendments Act of 2008; the Age Discrimination in Employment Act; the Employee Retirement Income Security Act; the Fair Labor Standards Act, the Workers Adjustment and Retraining Notification Act (WARN); 29 U.S.C. § 2101 et seq.; the Older Workers Benefit Protection Act of 1990 (OWBPA); the Occupational Safety and Health Act (OSHA); claims under the Texas Commission on Human Rights Act as codified in the Texas Labor Code, claims for discrimination or retaliation under the Texas Workers’ Compensation Act, and any other federal, state or local laws or regulations. This release and waiver also includes any claims for wrongful discharge, whether based on claimed violations of statutes, regulations or public policy, or based on claims in contract or tort. Employee expressly retains all rights pursuant to existing director and officer insurance policies held by Employer and indemnification obligations pursuant to Employer’s bylaws. On behalf of Employer and its affiliate, Employer hereby irrevocably and unconditionally releases Employee and his affiliates, agents, attorneys, employees, successors and assigns (for purposes of this Section 7, hereinafter collectively referred to as (“Employee”), from all claims or demands Employer has, may have or may have had based on or in any way related to Employee’s employment with Employer and Employee’s Employment Agreement, the termination of that employment and the Employment Agreement, or based on any previous act or omission by or on behalf of Employee. The foregoing releases and waiver also includes any claims that either party suffered, any harm by or through the actions or omissions of the other, including, but not limited to, negligence claims and any other tort, whether intentional or unintentional, or contract claims, including but not limited to defamation, invasion of privacy, and/or wrongful discharge.
|
B.
|
Scope of Release/Non-release of Future Claims based on subsequent acts or omissions: The foregoing releases and waiver, to which both parties voluntarily agree, covers all claims or demands based on any facts or events, whether known or unknown by either party that occurred on or before the effective date of this release. Each party fully understands that if any of the facts or circumstances on which they premise their execution of the foregoing releases and waiver be found, suspected or claimed hereafter to be other than or different from the facts and circumstances now believed by such party to be true, each party nonetheless expressly accepts and assumes the risk of such possible differences in fact or circumstances and agree that this release and waiver shall be and remain effective notwithstanding any such difference in any such fact or circumstances.
|
C.
|
No Future Lawsuits, Complaints, or Claims: Each party hereby waives their right to file any claim or complaint against the other arising out of Employee’s Employment Agreement or Employee’s employment with or separation from employment before any federal, state or local court or any federal, state or local administrative agency, except where such waivers are prohibited by law. This agreement , does not prevent you from filing a timely charge with the EEOC (or with any other agency with similar provisions or regulations concerning the regulation of releases between private parties) concerning claims of discrimination, including a challenge to the validity of the waiver contained in this agreement; although you hereby waive your right to recover any damages or other relief in any claim or suit brought by or through the EEOC or any other federal, state, or local agency on your behalf.
|
11.
|
Denial of Liability: The parties agree that no statement or consideration given in this agreement or the execution of this agreement by any party is intended to or will constitute any evidence of wrongdoing or liability by any of them, any such admission being expressly denied.
|
12.
|
Right to Revoke Release and Waiver of Claims: You acknowledge that you have been given a copy of this Agreement and have been encouraged and advised to consult with an attorney prior to executing this Agreement. You further acknowledge that you have been given
twenty-one (21)
calendar days after receipt of this Agreement within which to consider its terms before signing it. In addition, for a period of seven (7) days following the execution of this Agreement, you will have the opportunity to revoke this Agreement by notifying
Larry Burke, SVP of Human Resources
, in writing of your intent to do so and by returning at that time any monies or other benefits paid or provided to you in connection with this Agreement.
|
13.
|
Entire Agreement/Severability: This agreement, including release, waiver and covenant not to sue, contains all of the promises and covenants exchanged by the parties, and would not have been agreed upon but for the inclusion of every one of its conditions. The terms and conditions hereof constitute the entire agreement between Employer and you and supersede all previous and contemporaneous statements, communications, representations or agreements, either written or oral, by or between Employer and you with respect to the subject matter hereof (except for the terms of any confidentiality, non-competition, non-solicitation, no-hire and/or proprietary information agreements entered by you with or for the benefit of Employer in connection with your employment and Employment Agreement). No contemporaneous or subsequent agreement or understanding modifying, varying or expanding this agreement shall be binding upon either party unless in writing and signed by a duly authorized representative of Employer and you. The release and waiver of claims and covenant not to sue contained in Paragraph 7 of this agreement are essential and material parts of this agreement.
|
14.
|
Outplacement. The Employer will provide outplacement services for the benefit of Employee with Right Management in the manner provided to all prior employees of Employers for a period of one year from the date of this agreement.
|
15.
|
Cooperation. You agree to cooperate with the Employer with regard to any litigation or other legal proceedings involving the Released Parties that relate to matters within your knowledge or responsibility. Without limiting the foregoing, with respect to any proceedings subject to this paragraph, you agree to: (i) meet with a Released Party’s representatives or counsel at mutually convenient times and places; (ii) give truthful and complete testimony to any court, regulatory authority, or other adjudicatory body; (iii) assist in responding to discovery served in the proceedings; and (iv) notify the Company of any contact by an adverse party or its counsel, except as may be prohibited by law. The Company will reimburse you for reasonable expenses incurred by you under this paragraph.
|
16.
|
Applicable Law and Venue: This agreement shall be interpreted and construed in accordance with and shall be governed by the laws of the State of Texas, except to the extent that federal law may apply and have preemptive effect. All disputes arising under or relating to this Agreement shall be brought by the parties in a court of competent jurisdiction in Houston, Harris County, Texas.
|
Section 1.
|
General Duties of Employer and Employee
.
|
Section 2.
|
Compensation and Benefits
.
|
Section 3.
|
Fiduciary Duty; Confidentiality
.
|
Section 4.
|
Term of Agreement
.
|
Section 5.
|
Termination
.
|
Section 7.
|
Change in Control
.
|
Section 8.
|
Section 409A.
|
Section 9.
|
No Obligation to Mitigate; No Rights of Offset
.
|
Section 10.
|
No Effect on Other Rights
.
|
Section 11.
|
Successors; Binding Agreement
.
|
Section 12.
|
Non-Competition; Non-Solicitation; No Hire
.
|
Section 13.
|
Miscellaneous
.
|
Section 14.
|
Arbitration
.
|
Subsidiary
|
Jurisdiction
|
|
|
Beijing ION Geophysical Co., Ltd.
|
China
|
Concept Systems Holdings Limited
|
Scotland
|
Concept Systems Limited
|
Scotland
|
GMG/AXIS, Inc.
|
Delaware
|
GX Technology Australia Pty Ltd.
|
Australia
|
GX Technology Canada, Ltd.
|
Canada
|
GX Technology Corporation
|
Texas
|
GX Technology EAME, Limited
|
UK
|
GX Technology Imaging Services Limited
|
Egypt
|
GX Technology Poland Sp. Z o.o.
|
Poland
|
GX Technology Processamento de Dados Ltda.
|
Brazil
|
GX Technology Sismica Brasil Ltda.
|
Brazil
|
GX Technology Trinidad, Ltd.
|
West Indies
|
I/O Cayman Islands, Ltd.
|
Cayman Islands
|
I/O International, Ltd.
|
Cayman Islands
|
I/O International Holdings, Ltd.
|
Cayman Islands
|
I/O Luxembourg S.à r.l.
|
Luxembourg
|
I/O Marine Systems Limited
|
UK
|
I/O Marine Systems, Inc.
|
Louisiana
|
I/O U.K., LTD.
|
UK
|
I/O U.K. Holdings Limited
|
Scotland
|
“Inco” Industrial Components ‘s-Gravenhage B.V.
|
Netherlands
|
Input/Output Canada, Ltd.
|
Canada
|
ION China Holdings, Limited
|
Hong Kong
|
ION Exploration Products (U.S.A.), Inc.
|
Delaware
|
ION Geophysical CIS LLC
|
Russia
|
ION Geophysical Sdn. Bhd.
|
Malaysia
|
ION International Holdings L.P.
|
Bermuda
|
ION International S.à r.l.
|
Luxembourg
|
ION International Sales Limited
|
Cyprus
|
IPOP Management, Inc.
|
Delaware
|
OceanGeo B.V.
|
Netherlands
|
Oceangeo Tecnologia de Exploração de Reservatórios do Brasil S.A
|
Brazil
|
OceanGeo Inc.
|
British Virgin Islands
|
Sensor Nederland B.V.
|
Netherlands
|
1.
|
Registration Statement (Form S-8 No. 33-54394) pertaining to the Input/Output, Inc. Amended 1990 Stock Option Plan and Amended and Restated 1991 Outside Directors’ Stock Option Plan,
|
2.
|
Registration Statement (Form S-8 No. 33-46386) pertaining to the Input/Output, Inc. 1990 Restricted Stock Plan, 1990 Stock Option Plan and 1991 Directors’ Stock Option Plan,
|
3.
|
Registration Statement (Form S-8 No. 33-85304) pertaining to the Input/Output, Inc. Amended 1990 Stock Option Plan and the Input/Output, Inc. Amended and Restated 1991 Outside Directors Stock Option Plan,
|
4.
|
Registration Statement (Form S-8 No. 333-14231) pertaining to the Input/Output, Inc. 1996 Non-Employee Director Stock Option Plan,
|
5.
|
Registration Statement (Form S-8 No. 333-24125) pertaining to the Input/Output, Inc. Employee Stock Purchase Plan,
|
6.
|
Registration Statement (Form S-8 No. 333-80297) pertaining to the Input/Output, Inc. 1998 Restricted Stock Plan,
|
7.
|
Registration Statement (Form S-8 No. 333-36264) pertaining to the Input/Output, Inc. 2000 Restricted Stock Plan,
|
8.
|
Registration Statement (Form S-8 No. 333-49382) pertaining to the Input/Output, Inc. 2000 Long-Term Incentive Plan,
|
9.
|
Registration Statement (Form S-8 No. 333-60950) pertaining to the Input/Output, Inc. Non-Employee Directors’ Retainer Plan,
|
10.
|
Registration Statement (Form S-8 No. 333-112677) pertaining to the Input/Output, Inc. 2003 Employee Stock Option Plan,
|
11.
|
Registration Statement (Form S-8 No. 333-116355) pertaining to the GX Technology Corporation Employee Stock Option Plan,
|
12.
|
Registration Statement (Form S-8 No. 333-117716) pertaining to the Input/Output, Inc. Concept Systems Employment Inducement Stock Option Program,
|
13.
|
Registration Statement (Form S-8 No. 333-123831) pertaining to the Input/Output, Inc. GX Technology Corp. Employment Inducement Stock Option Program and the Input/Output, Inc. April 2005 Inducement Equity Program,
|
14.
|
Registration Statement (Form S-8 No. 333-125655) pertaining to the Input/Output, Inc. 2004 Long-Term Incentive Plan,
|
15.
|
Registration Statement (Form S-8 No. 333-135775) pertaining to the Input/Output, Inc. Second Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
|
16.
|
Registration Statement (Form S-3 No. 333-112263) of Input/Output, Inc.,
|
17.
|
Registration Statement (Form S-3 No. 333-123632) of Input/Output, Inc.,
|
18.
|
Registration Statement (Form S-8 No. 333-145274) pertaining to the Third Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
|
19.
|
Registration Statement (Form S-8 No. 333-155378) pertaining to the Fourth Amended and Restated 2004 Long-Term Incentive Plan and the ARAM Systems Employee Inducement Stock Options Program,
|
20.
|
Registration Statement (Form S-3 No. 333-159898) of ION Geophysical Corporation,
|
21.
|
Registration Statement (Form S-8 No. 333-167943) pertaining to the Fifth Amended and Restated 2004 Long-Term Incentive Plan and the ION Geophysical Corporation Employee Stock Purchase Plan,
|
22.
|
Registration Statement (Form S-3 No. 333-166200) of ION Geophysical Corporation,
|
23.
|
Registration Statement (Form S-8 No. 333-176046) pertaining to the Sixth Amended and Restated 2004 Long-Term Incentive Plan,
|
24.
|
Registration Statement (Form S-8 No. 333-190474) pertaining to the 2013 Long-Term Incentive Plan, and
|
25.
|
Registration Statement (Form S-4 No. 333-194110) of ION Geophysical Corporation.
|
(1)
|
Registration Statement (Form S-8 No. 33-54394) pertaining to the Input/Output, Inc. Amended 1990 Stock Option Plan and Amended and Restated 1991 Outside Directors’ Stock Option Plan,
|
(2)
|
Registration Statement (Form S-8 No. 33-46386) pertaining to the Input/Output, Inc. 1990 Restricted Stock Plan, 1990 Stock Option Plan and 1991 Directors’ Stock Option Plan,
|
(3)
|
Registration Statement (Form S-8 No. 33-85304) pertaining to the Input/Output, Inc. Amended 1990 Stock Option Plan and the Input/Output, Inc. Amended and Restated 1991 Outside Directors Stock Option Plan,
|
(4)
|
Registration Statement (Form S-8 No. 333-14231) pertaining to the Input/Output, Inc. 1996 Non-Employee Director Stock Option Plan,
|
(5)
|
Registration Statement (Form S-8 No. 333-24125) pertaining to the Input/Output, Inc. Employee Stock Purchase Plan,
|
(6)
|
Registration Statement (Form S-8 No. 333-80297) pertaining to the Input/Output, Inc. 1998 Restricted Stock Plan,
|
(7)
|
Registration Statement (Form S-8 No. 333-36264) pertaining to the Input/Output, Inc. 2000 Restricted Stock Plan,
|
(8)
|
Registration Statement (Form S-8 No. 333-49382) pertaining to the Input/Output, Inc. 2000 Long-Term Incentive Plan,
|
(9)
|
Registration Statement (Form S-8 No. 333-60950) pertaining to the Input/Output, Inc. Non-Employee Directors’ Retainer Plan,
|
(10)
|
Registration Statement (Form S-8 No. 333-112677) pertaining to the Input/Output, Inc. 2003 Employee Stock Option Plan,
|
(11)
|
Registration Statement (Form S-8 No. 333-116355) pertaining to the GX Technology Corporation Employee Stock Option Plan,
|
(12)
|
Registration Statement (Form S-8 No. 333-117716) pertaining to the Input/Output, Inc. Concept Systems Employment Inducement Stock Option Program,
|
(13)
|
Registration Statement (Form S-8 No. 333-123831) pertaining to the Input/Output, Inc. GX Technology Corp. Employment Inducement Stock Option Program and the Input/Output, Inc. April 2005 Inducement Equity Program,
|
(14)
|
Registration Statement (Form S-8 No. 333-125655) pertaining to the Input/Output, Inc. 2004 Long-Term Incentive Plan,
|
(15)
|
Registration Statement (Form S-8 No. 333-135775) pertaining to the Input/Output, Inc. Second Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
|
(16)
|
Registration Statement (Form S-3 No. 333-112263) of Input/Output, Inc.,
|
(17)
|
Registration Statement (Form S-3 No. 333-123632) of Input/Output, Inc.,
|
(18)
|
Registration Statement (Form S-8 No. 333-145274) pertaining to the Third Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
|
(19)
|
Registration Statement (Form S-8 No. 333-155378) pertaining to the Fourth Amended and Restated 2004 Long-Term Incentive Plan and the ARAM Systems Employee Inducement Stock Options Program,
|
(20)
|
Registration Statement (Form S-3 No. 333-159898) of ION Geophysical Corporation,
|
(21)
|
Registration Statement (Form S-8 No. 333-167943) pertaining to the Fifth Amended and Restated 2004 Long-Term Incentive Plan and the ION Geophysical Corporation Employee Stock Purchase Plan,
|
(22)
|
Registration Statement (Form S-3 No. 333-166200) of ION Geophysical Corporation,
|
(23)
|
Registration Statement (Form S-8 No. 333-176046) pertaining to the Sixth Amended and Restated 2004 Long-Term Incentive Plan,
|
(24)
|
Registration Statement (Form S-8 No. 333-190474) pertaining to the 2013 Long-Term Incentive Plan, and
|
(25)
|
Registration Statement (Form S-4 No. 333-194110) of ION Geophysical Corporation
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
December 31, 2014
, of ION Geophysical Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 17, 2015
|
|
/s/ R. Brian Hanson
|
|
|
R. Brian Hanson
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
December 31, 2014
, of ION Geophysical Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 17, 2015
|
|
/s/ Steven A. Bate
|
|
|
Steven A. Bate
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 17, 2015
|
|
/s/ R. Brian Hanson
|
|
|
R. Brian Hanson
|
|
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 17, 2015
|
|
/s/ Steven A. Bate
|
|
|
Steven A. Bate
|
|
|
Executive Vice President and Chief Financial Officer
|