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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
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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ý
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Emerging growth company
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o
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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 17, 2018, 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 our company from an equipment provider to an integrated service provider, where leading equipment and software technologies underpin our solution offerings. The growth in our E&P Technology & Services business over the past decade is a testament to our steadfast execution of this strategy. Whereas our E&P Technology & Services offerings, including our BasinSPAN
™
2-D seismic programs, were focused on the earlier frontier exploration phase of the E&P lifecycle, our newest offering, OBS Services through OceanGeo, is geared to the later, production phase of the E&P lifecycle leveraging our internally developed technology, including
4Sea
®
, our newest OBS data acquisition system.
|
•
|
Expand and globalize our E&P Technology & Services business
.
We seek to expand and grow our E&P Technology & Services business into new regions, with new customers and new offerings, including data processing services through our Imaging Services group and our Ventures multi-client and proprietary programs. Historically known for our 2-D programs, we entered the 3-D multi-client market in 2013 by acquiring and processing our first survey offshore Ireland. Since then, we have expanded our 3-D seismic data library considerably by purchasing existing seismic data and reimaging the data by using new data processing techniques and algorithms. For the foreseeable future, we expect the majority of our near-term investments to be in research and development and computing infrastructure for our data processing business and to support our 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 technology, our Marlin operations optimization software, and derivative products, with the goal of obtaining technical and market leadership in what we continue to believe are important and expanding markets. In
2017
, our total investment in research and development and engineering 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, 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 around the world. We have found collaborating with E&P companies to better understand their imaging challenges and working with them to ensure 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 formed an E&P Advisors group in 2015 designed to focus specifically on this element of our strategy.
|
•
|
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 solution provider for both towed streamer and ocean bottom seismic services.
|
•
|
We are a broad-based seismic solutions provider, with offerings spanning the entire geophysical workflow
.
We are a technology-focused 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 multi-client 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 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 vessels and equipment. Doing so enables us to avoid 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, as we experienced from 2014-2016. Similar to our asset light strategy, Schlumberger recently announced their plans to exit the land and marine acquisition business. 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 a vast majority of the total cost of each new project’s data acquisition to be underwritten by our customers. We believe this conservative approach to data library investment is the most prudent way to reduce the impact of any sudden reduction in the demand for seismic data, giving us the flexibility to aggressively reduce cash outflows as we have successfully implemented in the current industry downturn.
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•
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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 and diversified portfolio approach has been helpful in minimizing the impact of any regional or country-specific slowdown for short or extended periods of time.
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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 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 the early 2000s were derived principally from seismic service providers, in
2017
, E&P companies accounted for approximately
73%
of our total revenues. Although we provide services and products to some of the largest E&P companies in the world, no single customer accounted for more than 10% of our total revenue in
2016
and
2015
; in
2017
, we had one multi-national oil customer that exceeded 10% of our total revenue.
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•
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any additional damages or adverse rulings in the WesternGeco litigation and future potential adverse effects on our financial results and liquidity;
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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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future oil and gas commodity prices;
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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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future cash needs and availability of cash to fund our operations and pay our obligations;
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•
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facing a significant debt maturity in 2018;
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•
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the effects of current and future unrest in the Middle East, North Africa and other regions;
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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 E&P Technology & Services 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, pertaining to the oil and gas industry;
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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 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 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;
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•
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expectations regarding the impact of the U.S. Tax Cuts and Jobs Act;
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•
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anticipated results with respect to certain estimates we make for financial accounting purposes; and
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•
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compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties.
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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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•
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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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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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significant devaluation of the Mexican Peso and its impact on the Mexican economy and offshore exploration programs;
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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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•
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the ability of oil and gas producers to raise equity capital and debt financing;
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•
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merger and divestiture activity among oil and gas companies and seismic contractors; and
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•
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compliance by members of the
Organization of the Petroleum Exporting Countries (“OPEC”)
and non-OPEC members such as Russia, with recent agreements to cut oil production.
|
•
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we may have difficulty satisfying our obligations with respect to our outstanding debt;
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•
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we may have difficulty obtaining financing in the future for working capital, capital expenditures, acquisitions or other purposes;
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•
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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;
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•
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our vulnerability to general economic downturns and adverse industry conditions could increase;
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•
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our flexibility in planning for, or reacting to, changes in our business and in our industry in general could be limited;
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•
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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;
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•
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our customers may react adversely to our significant debt level and seek or develop alternative licensors or suppliers;
|
•
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we may have insufficient funds, and our debt level may also restrict us from raising the funds necessary to repurchase all of the Notes, as defined below, tendered to us upon the occurrence of a change of control, which would constitute an event of default under the Notes; and
|
•
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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.
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•
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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
|
•
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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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OceanGeo’s cash flows may be inadequate to realize the value of manufactured equipment for use in its ocean bottom seismic surveys;
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•
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risks associated with our Calypso and 4Sea ocean bottom products that are intended to be utilized by OceanGeo in its operations, including risks that the new technology may not perform as well as we anticipate;
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•
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difficulties in retaining and integrating key technical, sales and marketing personnel and the possible loss of such employees and costs associated with their loss;
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•
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the diversion of management’s attention and other resources from other business operations and related concerns;
|
•
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the requirement to maintain uniform standards, controls and procedures;
|
•
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our inability to realize operating efficiencies, cost savings or other benefits that we expect from OceanGeo’s operations; and
|
•
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difficulties and delays in securing new business and customer projects.
|
•
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incur additional indebtedness;
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•
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create liens;
|
•
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pay dividends and make other distributions in respect of our capital stock;
|
•
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redeem our capital stock;
|
•
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make investments or certain other restricted payments;
|
•
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sell certain kinds of assets;
|
•
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enter into transactions with affiliates; and
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•
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effect mergers or consolidations.
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•
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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
|
•
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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.
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•
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future competition from more established companies entering the market;
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•
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technology obsolescence;
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•
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dependence upon continued growth of the market for seismic data processing;
|
•
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the rate of change in the markets for these segments’ technology and services;
|
•
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further consolidation of the participants within this market;
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•
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research and development efforts not proving sufficient to keep up with changing market demands;
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•
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dependence on third-party software for inclusion in these segments’ services and products;
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•
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misappropriation of these segments’ technology by other companies;
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•
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alleged or actual infringement of intellectual property rights that could result in substantial additional costs;
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•
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difficulties inherent in forecasting sales for newly developed technologies or advancements in technologies;
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•
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recruiting, training and retaining technically skilled, experienced personnel that could increase the costs for these segments, or limit their growth; and
|
•
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the ability to maintain traditional margins for certain of their technology or services.
|
•
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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.
|
•
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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 on a straight-line basis 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.
|
•
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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.
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•
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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.
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•
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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.
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•
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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.
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•
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disruption of E&P activities;
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•
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restriction on the movement and exchange of funds;
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•
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inhibition of our ability to collect advances and receivables;
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•
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enactment of additional or stricter U.S. government or international sanctions;
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•
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limitation of our access to markets for periods of time;
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•
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expropriation and nationalization of assets of our company or those of our customers;
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•
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political and economic instability, which may include armed conflict and civil disturbance;
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•
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currency fluctuations, devaluations and conversion restrictions;
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•
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confiscatory taxation or other adverse tax policies; and
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•
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governmental actions that may result in the deprivation of our contractual rights.
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•
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operating results that vary from the expectations of securities analysts and investors;
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•
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factors influencing the levels of global oil and natural gas exploration and exploitation activities, such as the decline in crude oil prices and depressed prices for natural gas in North America or disasters such as the Deepwater Horizon incident in the Gulf of Mexico in 2010;
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•
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the operating and securities price performance of companies that investors or analysts consider comparable to us;
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•
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actions by rating agencies related to the Notes;
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•
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announcements of strategic developments, acquisitions and other material events by us or our competitors; and
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•
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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.
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authorizing the issuance of “blank check” preferred stock without any need for action by stockholders;
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•
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providing for a classified board of directors with staggered terms;
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•
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requiring supermajority stockholder voting to effect certain amendments to our certificate of incorporation and bylaws;
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•
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eliminating the ability of stockholders to call special meetings of stockholders;
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•
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prohibiting stockholder action by written consent; and
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•
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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
|
226,000
|
|
|
Global Headquarters, E&P Technology & Services and Ocean Bottom Seismic Services
|
Harahan, Louisiana
|
144,000
|
|
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Devices group within E&P Operations Optimization
|
Edinburgh, Scotland
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16,000
|
|
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Optimization Software & Services group within E&P Operations Optimization
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Chertsey, England
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18,000
|
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E&P Technology & Services
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404,000
|
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Price Range
|
||||||
Period
|
High
|
|
Low
|
||||
Year ended December 31, 2017:
|
|
|
|
||||
Fourth Quarter
|
$
|
20.54
|
|
|
$
|
7.55
|
|
Third Quarter
|
9.85
|
|
|
3.20
|
|
||
Second Quarter
|
4.85
|
|
|
4.10
|
|
||
First Quarter
|
6.30
|
|
|
3.87
|
|
||
Year ended December 31, 2016:
|
|
|
|
||||
Fourth Quarter
|
$
|
8.40
|
|
|
$
|
5.65
|
|
Third Quarter
|
6.99
|
|
|
4.73
|
|
||
Second Quarter
|
9.65
|
|
|
5.45
|
|
||
First Quarter
|
9.50
|
|
|
5.10
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Write-down of multi-client data library
|
$
|
(2,304
|
)
|
|
$
|
—
|
|
|
$
|
(399
|
)
|
|
$
|
(100,100
|
)
|
|
$
|
(5,461
|
)
|
Write-down of excess and obsolete inventory
|
$
|
(398
|
)
|
|
$
|
(429
|
)
|
|
$
|
(151
|
)
|
|
$
|
(6,952
|
)
|
|
$
|
(21,197
|
)
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of goodwill and intangible assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(23,284
|
)
|
|
$
|
—
|
|
Write-down of receivables
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,214
|
)
|
|
$
|
(9,157
|
)
|
Accelerated vesting and cash exercise of stock appreciation right awards
|
$
|
(6,141
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Reversal of (accrual for) loss contingency related to legal proceedings
|
$
|
(5,000
|
)
|
|
$
|
1,168
|
|
|
$
|
101,978
|
|
|
$
|
69,557
|
|
|
$
|
(183,327
|
)
|
Gain on sale of Source product line
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,522
|
|
|
$
|
—
|
|
Gain on sale of cost method investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,463
|
|
|
$
|
3,591
|
|
Recovery of INOVA bad debts
|
$
|
844
|
|
|
$
|
3,983
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Loss on bond exchange
|
$
|
—
|
|
|
$
|
(2,182
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity in earnings (losses) of investments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(49,485
|
)
|
|
$
|
(42,320
|
)
|
Conversion payment of preferred stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,000
|
)
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(In thousands, except for per share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
|
$
|
197,554
|
|
|
$
|
172,808
|
|
|
$
|
221,513
|
|
|
$
|
509,558
|
|
|
$
|
549,167
|
|
Gross profit
|
|
75,639
|
|
|
36,032
|
|
|
8,003
|
|
|
62,223
|
|
|
159,313
|
|
|||||
Income (loss) from operations
|
|
(8,699
|
)
|
|
(43,171
|
)
|
|
(100,632
|
)
|
|
(117,929
|
)
|
|
16,396
|
|
|||||
Net income (loss) applicable to common shares
|
|
(30,242
|
)
|
|
(65,148
|
)
|
|
(25,122
|
)
|
|
(128,252
|
)
|
|
(251,874
|
)
|
|||||
Net income (loss) per basic share
|
|
$
|
(2.55
|
)
|
|
$
|
(5.71
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
(11.72
|
)
|
|
$
|
(23.84
|
)
|
Net income (loss) per diluted share
|
|
$
|
(2.55
|
)
|
|
$
|
(5.71
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
(11.72
|
)
|
|
$
|
(23.84
|
)
|
Weighted average number of common shares outstanding
|
|
11,876
|
|
|
11,400
|
|
|
10,957
|
|
|
10,939
|
|
|
10,567
|
|
|||||
Weighted average number of diluted shares outstanding
|
|
11,876
|
|
|
11,400
|
|
|
10,957
|
|
|
10,939
|
|
|
10,567
|
|
|||||
Balance Sheet Data (end of year):
|
|
|
|
|
|
|
|
|
||||||||||||
Working capital
|
|
$
|
(8,628
|
)
|
(a)
|
$
|
16,555
|
|
|
$
|
93,160
|
|
|
$
|
222,099
|
|
|
$
|
248,857
|
|
Total assets
|
|
301,069
|
|
|
313,216
|
|
|
435,088
|
|
|
617,257
|
|
|
864,671
|
|
|||||
Long-term debt
(b)
|
|
156,744
|
|
|
158,790
|
|
|
182,992
|
|
|
190,594
|
|
|
220,152
|
|
|||||
Total equity
|
|
30,806
|
|
|
53,398
|
|
|
112,040
|
|
|
135,712
|
|
|
257,885
|
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in multi-client library
|
|
$
|
23,710
|
|
|
$
|
14,884
|
|
|
$
|
45,558
|
|
|
$
|
67,785
|
|
|
$
|
114,582
|
|
Capital expenditures
|
|
1,063
|
|
|
1,488
|
|
|
19,241
|
|
|
8,264
|
|
|
16,914
|
|
|||||
Depreciation and amortization (other than multi-client library)
|
|
16,592
|
|
|
21,975
|
|
|
26,527
|
|
|
27,656
|
|
|
18,158
|
|
|||||
Amortization of multi-client library
|
|
47,102
|
|
|
33,335
|
|
|
35,784
|
|
|
64,374
|
|
|
86,716
|
|
(a)
|
Working Capital at December 31, 2017 is negative due to $28.5 million of Third Lien Notes (maturing May 15, 2018) being reclassified from long-term to current.
|
(b)
|
Includes current maturities of long-term debt.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net revenues:
|
|
|
|
|
|
||||||
E&P Technology & Services:
|
|
|
|
|
|
||||||
New Venture
|
$
|
100,824
|
|
|
$
|
27,362
|
|
|
$
|
48,294
|
|
Data Library
|
40,016
|
|
|
39,989
|
|
|
63,326
|
|
|||
Total multi-client revenues
|
140,840
|
|
|
67,351
|
|
|
111,620
|
|
|||
Imaging Services
|
16,409
|
|
|
25,538
|
|
|
45,630
|
|
|||
Total
|
$
|
157,249
|
|
|
$
|
92,889
|
|
|
$
|
157,250
|
|
E&P Operations Optimization:
|
|
|
|
|
|
||||||
Devices
|
$
|
23,610
|
|
|
$
|
26,746
|
|
|
$
|
36,269
|
|
Optimization Software & Services
|
16,695
|
|
|
16,756
|
|
|
27,994
|
|
|||
Total
|
$
|
40,305
|
|
|
$
|
43,502
|
|
|
$
|
64,263
|
|
Ocean Bottom Seismic Services
|
$
|
—
|
|
|
$
|
36,417
|
|
|
$
|
—
|
|
Total
|
$
|
197,554
|
|
|
$
|
172,808
|
|
|
$
|
221,513
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||||||||||
|
As Reported
|
|
Restructuring and Other Charges
|
|
As Adjusted
|
|
As Reported
|
|
Restructuring and Other Charges
|
|
As Adjusted
|
|
As Reported
|
|
Restructuring and Other Charges
|
|
As Adjusted
|
||||||||||||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
E&P Technology & Services
|
$
|
65,196
|
|
|
$
|
—
|
|
|
$
|
65,196
|
|
|
$
|
4,708
|
|
|
$
|
766
|
|
|
$
|
5,474
|
|
|
$
|
13,508
|
|
|
$
|
3,193
|
|
|
$
|
16,701
|
|
E&P Operations Optimization
|
20,076
|
|
|
—
|
|
|
20,076
|
|
|
21,745
|
|
|
188
|
|
|
21,933
|
|
|
33,995
|
|
|
536
|
|
|
34,531
|
|
|||||||||
Ocean Bottom Seismic Services
|
(9,633
|
)
|
|
—
|
|
|
(9,633
|
)
|
|
9,579
|
|
|
123
|
|
|
9,702
|
|
|
(39,500
|
)
|
|
252
|
|
|
(39,248
|
)
|
|||||||||
Total
|
$
|
75,639
|
|
|
$
|
—
|
|
|
$
|
75,639
|
|
|
$
|
36,032
|
|
|
$
|
1,077
|
|
(c)
|
$
|
37,109
|
|
|
$
|
8,003
|
|
|
$
|
3,981
|
|
(e)
|
$
|
11,984
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
E&P Technology & Services
|
41
|
%
|
|
—
|
%
|
|
41
|
%
|
|
5
|
%
|
|
1
|
%
|
|
6
|
%
|
|
9
|
%
|
|
2
|
%
|
|
11
|
%
|
|||||||||
E&P Operations Optimization
|
50
|
%
|
|
—
|
%
|
|
50
|
%
|
|
50
|
%
|
|
—
|
%
|
|
50
|
%
|
|
53
|
%
|
|
1
|
%
|
|
54
|
%
|
|||||||||
Ocean Bottom Seismic Services
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
26
|
%
|
|
—
|
%
|
|
27
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||||||||
Total
|
38
|
%
|
|
—
|
%
|
|
38
|
%
|
|
21
|
%
|
|
—
|
%
|
|
21
|
%
|
|
4
|
%
|
|
1
|
%
|
|
5
|
%
|
|||||||||
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
E&P Technology & Services
|
$
|
42,505
|
|
|
$
|
—
|
|
|
$
|
42,505
|
|
|
$
|
(16,446
|
)
|
|
$
|
1,128
|
|
|
$
|
(15,318
|
)
|
|
$
|
(24,941
|
)
|
|
$
|
4,295
|
|
|
$
|
(20,646
|
)
|
E&P Operations Optimization
|
8,022
|
|
|
—
|
|
|
8,022
|
|
|
9,652
|
|
|
197
|
|
|
9,849
|
|
|
20,131
|
|
|
1,790
|
|
|
21,921
|
|
|||||||||
Ocean Bottom Seismic Services
|
(16,259
|
)
|
|
—
|
|
|
(16,259
|
)
|
|
(1,756
|
)
|
|
504
|
|
|
(1,252
|
)
|
|
(55,080
|
)
|
|
252
|
|
|
(54,828
|
)
|
|||||||||
Support and other
|
(42,967
|
)
|
|
6,141
|
|
(a)
|
(36,826
|
)
|
|
(34,621
|
)
|
|
180
|
|
|
(34,441
|
)
|
|
(40,742
|
)
|
|
877
|
|
|
(39,865
|
)
|
|||||||||
Total
|
$
|
(8,699
|
)
|
|
$
|
6,141
|
|
|
$
|
(2,558
|
)
|
|
$
|
(43,171
|
)
|
|
$
|
2,009
|
|
(c)
|
$
|
(41,162
|
)
|
|
$
|
(100,632
|
)
|
|
$
|
7,214
|
|
(e)
|
$
|
(93,418
|
)
|
Operating margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
E&P Technology & Services
|
27
|
%
|
|
—
|
%
|
|
27
|
%
|
|
(18
|
)%
|
|
2
|
%
|
|
(16
|
)%
|
|
(16
|
)%
|
|
3
|
%
|
|
(13
|
)%
|
|||||||||
E&P Operations Optimization
|
20
|
%
|
|
—
|
%
|
|
20
|
%
|
|
22
|
%
|
|
1
|
%
|
|
23
|
%
|
|
31
|
%
|
|
3
|
%
|
|
34
|
%
|
|||||||||
Ocean Bottom Seismic Services
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(5
|
)%
|
|
2
|
%
|
|
(3
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||||||||
Support and other
|
(22
|
)%
|
|
3
|
%
|
|
(19
|
)%
|
|
(20
|
)%
|
|
—
|
%
|
|
(20
|
)%
|
|
(18
|
)%
|
|
—
|
%
|
|
(18
|
)%
|
|||||||||
Total
|
(4
|
)%
|
|
3
|
%
|
|
(1
|
)%
|
|
(25
|
)%
|
|
1
|
%
|
|
(24
|
)%
|
|
(45
|
)%
|
|
3
|
%
|
|
(42
|
)%
|
|||||||||
Net income (loss) applicable to common shares
|
$
|
(30,242
|
)
|
|
$
|
11,141
|
|
(b)
|
$
|
(19,101
|
)
|
|
$
|
(65,148
|
)
|
|
$
|
(960
|
)
|
(d)
|
$
|
(66,108
|
)
|
|
$
|
(25,122
|
)
|
|
$
|
(93,587
|
)
|
(f)
|
$
|
(118,709
|
)
|
Diluted net income (loss) per common share
|
$
|
(2.55
|
)
|
|
$
|
0.94
|
|
|
$
|
(1.61
|
)
|
|
$
|
(5.71
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(5.80
|
)
|
|
$
|
(2.29
|
)
|
|
$
|
(8.54
|
)
|
|
$
|
(10.83
|
)
|
(a)
|
Represents accelerated vesting and cash exercise of stock appreciation right awards
|
|||
|
|
|
|
|
(b)
|
In addition to item (a), also impacting net loss applicable to common shares was a loss contingency accrual related to legal proceedings.
|
|||
|
|
|
|
|
(c)
|
Represents severance and facility charges related to the Company’s 2016 restructuring.
|
|||
|
|
|
|
|
(d)
|
Represents a $3.9 million recovery of INOVA bad debts, partially offset by item (b).
|
|||
|
|
|
|
|
(e)
|
Represents severance and facility charges related to the Company’s 2015 restructuring.
|
|||
|
|
|||
(f)
|
In addition to item (d), also impacting net income (loss) applicable to common shares was a reduction in the WesternGeco legal contingency by $102.0 million.
|
|||
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||
|
As Reported
|
|
Special Items
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
(a)
|
|
As Adjusted
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research, development and engineering
|
$
|
16,431
|
|
|
$
|
—
|
|
|
$
|
16,431
|
|
|
$
|
17,833
|
|
|
$
|
(397
|
)
|
|
$
|
17,436
|
|
Marketing and sales
|
20,778
|
|
|
—
|
|
|
20,778
|
|
|
17,371
|
|
|
(262
|
)
|
|
17,109
|
|
||||||
General, administrative and other operating expenses
|
47,129
|
|
|
(6,141
|
)
|
|
40,988
|
|
|
43,999
|
|
|
(273
|
)
|
|
43,726
|
|
||||||
Total operating expenses
|
$
|
84,338
|
|
|
$
|
(6,141
|
)
|
|
$
|
78,197
|
|
|
$
|
79,203
|
|
|
$
|
(932
|
)
|
|
$
|
78,271
|
|
Income (loss) from operations
|
$
|
(8,699
|
)
|
|
$
|
6,141
|
|
|
$
|
(2,558
|
)
|
|
$
|
(43,171
|
)
|
|
$
|
2,009
|
|
|
$
|
(41,162
|
)
|
(a)
|
Includes severance affecting operating expenses.
|
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Reduction of (accrued for) loss contingency related to legal proceedings (Footnote 6)
|
$
|
(5,000
|
)
|
|
$
|
1,168
|
|
Recovery of INOVA bad debts
|
844
|
|
|
3,983
|
|
||
Loss on bond exchange
|
—
|
|
|
(2,182
|
)
|
||
Other expense
|
211
|
|
|
(1,619
|
)
|
||
Total other income (expense)
|
$
|
(3,945
|
)
|
|
$
|
1,350
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||
|
As Reported
|
|
Special Items
(a)
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
(b)
|
|
As Adjusted
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research, development and engineering
|
$
|
17,833
|
|
|
$
|
(397
|
)
|
|
$
|
17,436
|
|
|
$
|
26,445
|
|
|
$
|
(603
|
)
|
|
$
|
25,842
|
|
Marketing and sales
|
17,371
|
|
|
(262
|
)
|
|
17,109
|
|
|
30,493
|
|
|
(304
|
)
|
|
30,189
|
|
||||||
General, administrative and other operating expenses
|
43,999
|
|
|
(273
|
)
|
|
43,726
|
|
|
51,697
|
|
|
(2,326
|
)
|
|
49,371
|
|
||||||
Total operating expenses
|
$
|
79,203
|
|
|
$
|
(932
|
)
|
|
$
|
78,271
|
|
|
$
|
108,635
|
|
|
$
|
(3,233
|
)
|
|
$
|
105,402
|
|
Income (loss) from operations
|
$
|
(43,171
|
)
|
|
$
|
2,009
|
|
|
$
|
(41,162
|
)
|
|
$
|
(100,632
|
)
|
|
$
|
7,214
|
|
|
$
|
(93,418
|
)
|
(a)
|
Includes severance affecting operating expenses.
|
(b)
|
Includes severance affecting operating expenses and facility abandonment charges.
|
|
Years Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Reduction of loss contingency related to legal proceedings (Footnote 6)
|
$
|
1,168
|
|
|
$
|
101,978
|
|
Recovery of INOVA bad debts
|
3,983
|
|
|
—
|
|
||
Loss on bond exchange
|
(2,182
|
)
|
|
—
|
|
||
Other expense
|
(1,619
|
)
|
|
(3,703
|
)
|
||
Total other income
|
$
|
1,350
|
|
|
$
|
98,275
|
|
Date
|
|
Percentage
|
2019
|
|
105.500%
|
2020
|
|
103.500%
|
2021 and thereafter
|
|
100.000%
|
Contractual Obligations
|
Total
|
|
Less Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
||||||||||
Long-term and Short-term debt
|
$
|
149,066
|
|
|
$
|
28,497
|
|
|
$
|
—
|
|
|
$
|
120,569
|
|
|
$
|
—
|
|
Interest on long-term debt obligations
|
44,885
|
|
|
12,197
|
|
|
22,144
|
|
|
10,544
|
|
|
—
|
|
|||||
Revolver credit facility
|
10,000
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equipment capital lease obligations
|
279
|
|
|
250
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
66,710
|
|
|
10,334
|
|
|
19,292
|
|
|
18,686
|
|
|
18,398
|
|
|||||
Purchase obligations
|
500
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
271,440
|
|
|
$
|
61,778
|
|
|
$
|
41,465
|
|
|
$
|
149,799
|
|
|
$
|
18,398
|
|
(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
|
|
—
|
|
|
3.2
|
|
—
|
|
|
4.1
|
|
—
|
|
|
4.2
|
|
|
|
|
4.3
|
|
|
|
|
4.4
|
|
|
|
|
**10.1
|
|
—
|
|
|
**10.2
|
|
—
|
|
|
**10.3
|
|
—
|
|
|
**10.4
|
|
—
|
|
|
**10.5
|
|
—
|
|
|
10.6
|
|
—
|
|
10.7
|
|
—
|
|
|
10.8
|
|
—
|
|
|
10.9
|
|
—
|
|
|
**10.10
|
|
—
|
|
|
**10.11
|
|
—
|
|
|
**10.12
|
|
—
|
|
|
*10.13
|
|
—
|
|
|
10.14
|
|
—
|
|
|
10.15
|
|
—
|
|
|
10.16
|
|
—
|
|
|
**10.17
|
|
—
|
|
|
**10.18
|
|
—
|
|
|
*10.19
|
|
—
|
|
|
*10.20
|
|
—
|
|
|
*10.21
|
|
—
|
|
|
*21.1
|
|
—
|
|
|
*23.1
|
|
—
|
|
|
*24.1
|
|
—
|
|
|
*31.1
|
|
—
|
|
|
*31.2
|
|
—
|
|
|
*32.1
|
|
—
|
|
|
*32.2
|
|
—
|
|
*101
|
|
—
|
The following materials are formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets at December 31, 2017 and 2016, (ii) Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015, (iii) Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015, (v) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017, 2016 and 2015, (vi) Footnotes to Consolidated Financial Statements and (vii) Schedule II – Valuation and Qualifying Accounts.
|
|
|
|
|
|
*
|
Filed herewith.
|
|||
**
|
Management contract or compensatory plan or arrangement.
|
(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 8, 2018
|
R. Brian Hanson
|
|
|
|
|
|
|
|
||
/s/ STEVEN A. BATE
|
|
Executive Vice President and Chief
Financial Officer (Principal Financial Officer) |
|
February 8, 2018
|
Steven A. Bate
|
|
|
|
|
|
|
|
||
/s/ SCOTT SCHWAUSCH
|
|
Vice President and Corporate Controller
(Principal Accounting Officer) |
|
February 8, 2018
|
Scott Schwausch
|
|
|
|
|
|
|
|
||
/s/ JAMES M. LAPEYRE, JR.
|
|
Chairman of the Board of Directors and Director
|
|
February 8, 2018
|
James M. Lapeyre, Jr.
|
|
|
|
|
|
|
|
||
/s/ DAVID H. BARR
|
|
Director
|
|
February 8, 2018
|
David H. Barr
|
|
|
|
|
|
|
|
||
/s/ HAO HUIMIN
|
|
Director
|
|
February 8, 2018
|
Hao Huimin
|
|
|
|
Name
|
|
Capacities
|
|
Date
|
|
|
|
||
/s/ MICHAEL C. JENNINGS
|
|
Director
|
|
February 8, 2018
|
Michael C. Jennings
|
|
|
|
|
|
|
|
||
/s/ FRANKLIN MYERS
|
|
Director
|
|
February 8, 2018
|
Franklin Myers
|
|
|
|
|
|
|
|
||
/s/ S. JAMES NELSON, JR.
|
|
Director
|
|
February 8, 2018
|
S. James Nelson, Jr.
|
|
|
|
|
|
|
|
||
/s/ JOHN N. SEITZ
|
|
Director
|
|
February 8, 2018
|
John N. Seitz
|
|
|
|
|
|
|
|
|
Page
|
ION Geophysical Corporation and Subsidiaries:
|
|
|
Reports of Independent Registered Public Accounting Firms
|
|
F-2
|
Consolidated Balance Sheets — December 31, 2017 and 2016
|
|
F-3
|
Consolidated Statements of Operations — Years ended December 31, 2017, 2016 and 2015
|
|
F-4
|
Consolidated Statements of Comprehensive Income (Loss) — Years ended December 31, 2017, 2016 and 2015
|
|
F-5
|
Consolidated Statements of Cash Flows — Years ended December 31, 2017, 2016 and 2015
|
|
F-6
|
Consolidated Statements of Stockholders’ Equity — Years ended December 31, 2017, 2016 and 2015
|
|
F-7
|
Footnotes to Consolidated Financial Statements
|
|
F-8
|
Schedule II — Valuation and Qualifying Accounts
|
|
S-1
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands, except share data)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
52,056
|
|
|
$
|
52,652
|
|
Accounts receivable, net
|
19,478
|
|
|
20,770
|
|
||
Unbilled receivables
|
37,304
|
|
|
13,415
|
|
||
Inventories
|
14,508
|
|
|
15,241
|
|
||
Prepaid expenses and other current assets
|
7,643
|
|
|
9,559
|
|
||
Total current assets
|
130,989
|
|
|
111,637
|
|
||
Deferred income tax asset
|
1,753
|
|
|
—
|
|
||
Property, plant, equipment and seismic rental equipment, net
|
52,153
|
|
|
67,488
|
|
||
Multi-client data library, net
|
89,300
|
|
|
105,935
|
|
||
Goodwill
|
24,089
|
|
|
22,208
|
|
||
Intangible assets, net
|
1,666
|
|
|
3,103
|
|
||
Other assets
|
1,119
|
|
|
2,845
|
|
||
Total assets
|
$
|
301,069
|
|
|
$
|
313,216
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
40,024
|
|
|
$
|
14,581
|
|
Accounts payable
|
24,951
|
|
|
26,889
|
|
||
Accrued expenses
|
38,697
|
|
|
26,240
|
|
||
Accrued multi-client data library royalties
|
27,035
|
|
|
23,663
|
|
||
Deferred revenue
|
8,910
|
|
|
3,709
|
|
||
Total current liabilities
|
139,617
|
|
|
95,082
|
|
||
Long-term debt, net of current maturities
|
116,720
|
|
|
144,209
|
|
||
Other long-term liabilities
|
13,926
|
|
|
20,527
|
|
||
Total liabilities
|
270,263
|
|
|
259,818
|
|
||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value; authorized 26,666,667 shares; outstanding 12,019,701 and 11,792,447 shares at December 31, 2017 and 2016, respectively.
|
120
|
|
|
118
|
|
||
Additional paid-in capital
|
903,247
|
|
|
899,198
|
|
||
Accumulated deficit
|
(854,921
|
)
|
|
(824,679
|
)
|
||
Accumulated other comprehensive loss
|
(18,879
|
)
|
|
(21,748
|
)
|
||
Total stockholders’ equity
|
29,567
|
|
|
52,889
|
|
||
Noncontrolling interests
|
1,239
|
|
|
509
|
|
||
Total equity
|
30,806
|
|
|
53,398
|
|
||
Total liabilities and equity
|
$
|
301,069
|
|
|
$
|
313,216
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Service revenues
|
$
|
159,410
|
|
|
$
|
130,640
|
|
|
$
|
160,480
|
|
Product revenues
|
38,144
|
|
|
42,168
|
|
|
61,033
|
|
|||
Total net revenues
|
197,554
|
|
|
172,808
|
|
|
221,513
|
|
|||
Cost of services
|
103,124
|
|
|
115,763
|
|
|
180,215
|
|
|||
Cost of products
|
18,791
|
|
|
21,013
|
|
|
33,295
|
|
|||
Gross profit
|
75,639
|
|
|
36,032
|
|
|
8,003
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research, development and engineering
|
16,431
|
|
|
17,833
|
|
|
26,445
|
|
|||
Marketing and sales
|
20,778
|
|
|
17,371
|
|
|
30,493
|
|
|||
General, administrative and other operating expenses
|
47,129
|
|
|
43,999
|
|
|
51,697
|
|
|||
Total operating expenses
|
84,338
|
|
|
79,203
|
|
|
108,635
|
|
|||
Loss from operations
|
(8,699
|
)
|
|
(43,171
|
)
|
|
(100,632
|
)
|
|||
Interest expense, net
|
(16,709
|
)
|
|
(18,485
|
)
|
|
(18,753
|
)
|
|||
Other income (expense)
|
(3,945
|
)
|
|
1,350
|
|
|
98,275
|
|
|||
Loss before income taxes
|
(29,353
|
)
|
|
(60,306
|
)
|
|
(21,110
|
)
|
|||
Income tax expense
|
24
|
|
|
4,421
|
|
|
4,044
|
|
|||
Net loss
|
(29,377
|
)
|
|
(64,727
|
)
|
|
(25,154
|
)
|
|||
Net (income) loss attributable to noncontrolling interests
|
(865
|
)
|
|
(421
|
)
|
|
32
|
|
|||
Net loss attributable to ION
|
$
|
(30,242
|
)
|
|
$
|
(65,148
|
)
|
|
$
|
(25,122
|
)
|
Net loss per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(2.55
|
)
|
|
$
|
(5.71
|
)
|
|
$
|
(2.29
|
)
|
Diluted
|
$
|
(2.55
|
)
|
|
$
|
(5.71
|
)
|
|
$
|
(2.29
|
)
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
11,876
|
|
|
11,400
|
|
|
10,957
|
|
|||
Diluted
|
11,876
|
|
|
11,400
|
|
|
10,957
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net loss
|
$
|
(29,377
|
)
|
|
$
|
(64,727
|
)
|
|
$
|
(25,154
|
)
|
Other comprehensive income (loss), net of taxes, as appropriate:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
2,869
|
|
|
(6,967
|
)
|
|
(1,974
|
)
|
|||
Total other comprehensive income (loss), net of taxes
|
2,869
|
|
|
(6,967
|
)
|
|
(1,974
|
)
|
|||
Comprehensive net loss
|
(26,508
|
)
|
|
(71,694
|
)
|
|
(27,128
|
)
|
|||
Comprehensive (income) loss attributable to noncontrolling interests
|
(865
|
)
|
|
(421
|
)
|
|
32
|
|
|||
Comprehensive net loss attributable to ION
|
$
|
(27,373
|
)
|
|
$
|
(72,115
|
)
|
|
$
|
(27,096
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(29,377
|
)
|
|
$
|
(64,727
|
)
|
|
$
|
(25,154
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization (other than multi-client library)
|
16,592
|
|
|
21,975
|
|
|
26,527
|
|
|||
Amortization of multi-client data library
|
47,102
|
|
|
33,335
|
|
|
35,784
|
|
|||
Impairment of multi-client data library
|
2,304
|
|
|
—
|
|
|
399
|
|
|||
Stock-based compensation expense
|
2,552
|
|
|
3,267
|
|
|
5,486
|
|
|||
Accrual (reduction) of loss contingency related to legal proceedings
|
5,000
|
|
|
(1,168
|
)
|
|
(101,978
|
)
|
|||
Loss on bond exchange
|
—
|
|
|
2,182
|
|
|
—
|
|
|||
Write-down of excess and obsolete inventory
|
398
|
|
|
429
|
|
|
151
|
|
|||
Deferred income taxes
|
(5,420
|
)
|
|
(1,181
|
)
|
|
7,444
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
1,692
|
|
|
20,426
|
|
|
69,491
|
|
|||
Unbilled receivables
|
(23,947
|
)
|
|
6,543
|
|
|
1,630
|
|
|||
Inventories
|
190
|
|
|
2,312
|
|
|
2,251
|
|
|||
Accounts payable, accrued expenses and accrued royalties
|
1,443
|
|
|
(5,085
|
)
|
|
(30,264
|
)
|
|||
Deferred revenue
|
5,131
|
|
|
(2,759
|
)
|
|
(1,571
|
)
|
|||
Other assets and liabilities
|
4,370
|
|
|
(13,978
|
)
|
|
(6,720
|
)
|
|||
Net cash provided by (used in) operating activities
|
28,030
|
|
|
1,571
|
|
|
(16,524
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Investment in multi-client data library
|
(23,710
|
)
|
|
(14,884
|
)
|
|
(45,558
|
)
|
|||
Purchase of property, plant, equipment and seismic rental equipment
|
(1,063
|
)
|
|
(1,488
|
)
|
|
(19,241
|
)
|
|||
Proceeds from sale of cost method investments
|
—
|
|
|
2,698
|
|
|
—
|
|
|||
Other investing activities
|
—
|
|
|
30
|
|
|
1,263
|
|
|||
Net cash used in investing activities
|
(24,773
|
)
|
|
(13,644
|
)
|
|
(63,536
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Borrowings under revolving line of credit
|
—
|
|
|
15,000
|
|
|
—
|
|
|||
Repayments under revolving line of credit
|
—
|
|
|
(5,000
|
)
|
|
—
|
|
|||
Payments on notes payable and long-term debt
|
(4,816
|
)
|
|
(8,634
|
)
|
|
(7,452
|
)
|
|||
Cost associated with issuance of debt
|
(53
|
)
|
|
(6,744
|
)
|
|
(145
|
)
|
|||
Repurchase of common stock
|
—
|
|
|
(964
|
)
|
|
(1,989
|
)
|
|||
Payments to repurchase bonds
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|||
Proceeds from employee stock purchases and exercise of stock options
|
1,619
|
|
|
—
|
|
|
—
|
|
|||
Dividend payment to non-controlling interest
|
(100
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities
|
(243
|
)
|
|
(252
|
)
|
|
73
|
|
|||
Net cash used in financing activities
|
(3,593
|
)
|
|
(21,594
|
)
|
|
(9,513
|
)
|
|||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
(260
|
)
|
|
1,386
|
|
|
898
|
|
|||
Net decrease in cash and cash equivalents
|
(596
|
)
|
|
(32,281
|
)
|
|
(88,675
|
)
|
|||
Cash and cash equivalents at beginning of period
|
52,652
|
|
|
84,933
|
|
|
173,608
|
|
|||
Cash and cash equivalents at end of period
|
$
|
52,056
|
|
|
$
|
52,652
|
|
|
$
|
84,933
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||||||
(In thousands, except shares)
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||
Balance at January 1, 2015
|
10,965,606
|
|
|
$
|
110
|
|
|
$
|
889,284
|
|
|
$
|
(734,409
|
)
|
|
$
|
(12,807
|
)
|
|
$
|
(6,565
|
)
|
|
$
|
99
|
|
|
$
|
135,712
|
|
Net (loss) income
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,122
|
)
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(25,118
|
)
|
|||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,974
|
)
|
|
—
|
|
|
(22
|
)
|
|
(1,996
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
5,486
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,486
|
|
|||||||
Vesting of restricted stock units/awards
|
29,191
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of treasury shares
|
(296,488
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,986
|
)
|
|
—
|
|
|
(1,989
|
)
|
|||||||
Restricted stock cancelled for employee minimum income taxes
|
(6,208
|
)
|
|
—
|
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|||||||
Issuance of stock for the ESPP
|
10,588
|
|
|
—
|
|
|
215
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
215
|
|
|||||||
Purchase of subsidiary shares from noncontrolling interest
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
|||||||
Balance at December 31, 2015
(b)
|
10,702,689
|
|
|
107
|
|
|
894,715
|
|
|
(759,531
|
)
|
|
(14,781
|
)
|
|
(8,551
|
)
|
|
81
|
|
|
112,040
|
|
|||||||
Net (loss) income
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(65,148
|
)
|
|
—
|
|
|
—
|
|
|
421
|
|
|
(64,727
|
)
|
|||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,967
|
)
|
|
—
|
|
|
7
|
|
|
(6,960
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,267
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,267
|
|
|||||||
Vesting of restricted stock units/awards
|
40,495
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of treasury shares
|
(155,304
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(963
|
)
|
|
—
|
|
|
(964
|
)
|
|||||||
Restricted stock cancelled for employee minimum income taxes
|
(4,973
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|||||||
Issuance of stock for the ESPP
|
4,100
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||||
Issuance of stock in bond exchange
|
1,205,440
|
|
|
12
|
|
|
1,215
|
|
|
—
|
|
|
—
|
|
|
9,514
|
|
|
—
|
|
|
10,741
|
|
|||||||
Balance at December 31, 2016
|
11,792,447
|
|
|
118
|
|
|
899,198
|
|
|
(824,679
|
)
|
|
(21,748
|
)
|
|
—
|
|
|
509
|
|
|
53,398
|
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,242
|
)
|
|
—
|
|
|
—
|
|
|
865
|
|
|
(29,377
|
)
|
|||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,869
|
|
|
—
|
|
|
(35
|
)
|
|
2,834
|
|
|||||||
Dividend payment to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
(100
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2,552
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,552
|
|
|||||||
Exercise of stock options
|
15,000
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||||
Vesting of restricted stock units/awards
|
115,576
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Employee purchases of unregistered shares of common stock
|
120,567
|
|
|
1
|
|
|
1,572
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,573
|
|
|||||||
Restricted stock cancelled for employee minimum income taxes
|
(23,889
|
)
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|||||||
Balance at December 31, 2017
|
12,019,701
|
|
|
$
|
120
|
|
|
$
|
903,247
|
|
|
$
|
(854,921
|
)
|
|
$
|
(18,879
|
)
|
|
$
|
—
|
|
|
$
|
1,239
|
|
|
$
|
30,806
|
|
(a)
|
Net income attributable to noncontrolling interests for 2015 excludes less than
$(0.1) million
related to the redeemable noncontrolling interests, which is reported in the mezzanine equity section of the Consolidated Balance Sheet.
|
(b)
|
The figures for 2015, set forth in the tables above have been retroactively adjusted to reflect the one-for-fifteen reverse stock split completed on February 4, 2016.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Gross costs of multi-client data creation
|
$
|
939,077
|
|
|
$
|
906,306
|
|
Less accumulated amortization
|
(727,872
|
)
|
|
(680,770
|
)
|
||
Less impairments to multi-client data library
|
(121,905
|
)
|
|
(119,601
|
)
|
||
Total
|
$
|
89,300
|
|
|
$
|
105,935
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenues:
|
|
|
|
|
|
||||||
E&P Technology & Services:
|
|
|
|
|
|
||||||
New Venture
|
$
|
100,824
|
|
|
$
|
27,362
|
|
|
$
|
48,294
|
|
Data Library
|
40,016
|
|
|
39,989
|
|
|
63,326
|
|
|||
Total multi-client revenues
|
140,840
|
|
|
67,351
|
|
|
111,620
|
|
|||
Imaging Services
|
16,409
|
|
|
25,538
|
|
|
45,630
|
|
|||
Total
|
$
|
157,249
|
|
|
$
|
92,889
|
|
|
$
|
157,250
|
|
E&P Operations Optimization:
|
|
|
|
|
|
||||||
Devices
|
$
|
23,610
|
|
|
$
|
26,746
|
|
|
$
|
36,269
|
|
Optimization Software & Services
|
16,695
|
|
|
16,756
|
|
|
27,994
|
|
|||
Total
|
$
|
40,305
|
|
|
$
|
43,502
|
|
|
$
|
64,263
|
|
Ocean Bottom Seismic Services
|
$
|
—
|
|
|
$
|
36,417
|
|
|
$
|
—
|
|
Total
|
$
|
197,554
|
|
|
$
|
172,808
|
|
|
$
|
221,513
|
|
Gross profit (loss):
|
|
|
|
|
|
||||||
E&P Technology & Services
|
$
|
65,196
|
|
|
$
|
4,708
|
|
|
$
|
13,508
|
|
E&P Operations Optimization
|
20,076
|
|
|
21,745
|
|
|
33,995
|
|
|||
Ocean Bottom Seismic Services
|
(9,633
|
)
|
|
9,579
|
|
|
(39,500
|
)
|
|||
Total
|
$
|
75,639
|
|
|
$
|
36,032
|
|
|
$
|
8,003
|
|
Gross margin:
|
|
|
|
|
|
||||||
E&P Technology & Services
|
41
|
%
|
|
5
|
%
|
|
9
|
%
|
|||
E&P Operations Optimization
|
50
|
%
|
|
50
|
%
|
|
53
|
%
|
|||
Ocean Bottom Seismic Services
|
—
|
%
|
|
26
|
%
|
|
—
|
%
|
|||
Total
|
38
|
%
|
|
21
|
%
|
|
4
|
%
|
|||
Loss from operations:
|
|
|
|
|
|
||||||
E&P Technology & Services
|
$
|
42,505
|
|
|
$
|
(16,446
|
)
|
|
$
|
(24,941
|
)
|
E&P Operations Optimization
|
8,022
|
|
|
9,652
|
|
|
20,131
|
|
|||
Ocean Bottom Seismic Services
|
(16,259
|
)
|
|
(1,756
|
)
|
|
(55,080
|
)
|
|||
Support and other
|
(42,967
|
)
|
|
(34,621
|
)
|
|
(40,742
|
)
|
|||
Loss from operations
|
(8,699
|
)
|
|
(43,171
|
)
|
|
(100,632
|
)
|
|||
Interest expense, net
|
(16,709
|
)
|
|
(18,485
|
)
|
|
(18,753
|
)
|
|||
Other income (expense)
|
(3,945
|
)
|
|
1,350
|
|
|
98,275
|
|
|||
Loss before income taxes
|
$
|
(29,353
|
)
|
|
$
|
(60,306
|
)
|
|
$
|
(21,110
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Depreciation and amortization (including multi-client data library):
|
|
|
|
|
|
||||||
E&P Technology & Services
|
$
|
53,663
|
|
|
$
|
44,100
|
|
|
$
|
51,014
|
|
E&P Operations Optimization
|
1,349
|
|
|
1,780
|
|
|
2,869
|
|
|||
Ocean Bottom Seismic Services
|
7,001
|
|
|
7,511
|
|
|
6,158
|
|
|||
Support and other
|
1,681
|
|
|
1,919
|
|
|
2,270
|
|
|||
Total
|
$
|
63,694
|
|
|
$
|
55,310
|
|
|
$
|
62,311
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Total assets:
|
|
|
|
||||
E&P Technology & Services
|
$
|
156,555
|
|
|
$
|
159,965
|
|
E&P Operations Optimization
|
74,361
|
|
|
76,992
|
|
||
Ocean Bottom Seismic Services
|
20,828
|
|
|
29,908
|
|
||
Support and other
|
49,325
|
|
|
46,351
|
|
||
Total
|
$
|
301,069
|
|
|
$
|
313,216
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Total assets by geographic area:
|
|
|
|
||||
North America
|
$
|
116,598
|
|
|
$
|
145,013
|
|
Europe
|
51,876
|
|
|
61,329
|
|
||
Middle East
|
70,308
|
|
|
72,984
|
|
||
Latin America
|
55,661
|
|
|
23,891
|
|
||
Other
|
6,626
|
|
|
9,999
|
|
||
Total
|
$
|
301,069
|
|
|
$
|
313,216
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Total fixed assets less accumulated deprecation by geographic area:
|
|
|
|
||||
North America
|
$
|
10,609
|
|
|
$
|
17,637
|
|
Europe
|
20,725
|
|
|
27,714
|
|
||
Middle East
|
20,543
|
|
|
21,370
|
|
||
Latin America
|
170
|
|
|
202
|
|
||
Other
|
106
|
|
|
565
|
|
||
Total
|
$
|
52,153
|
|
|
$
|
67,488
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenues by geographic area:
|
|
|
|
|
|
||||||
Latin America
|
$
|
68,241
|
|
|
$
|
24,090
|
|
|
$
|
16,406
|
|
North America
|
48,120
|
|
|
38,005
|
|
|
74,634
|
|
|||
Europe
|
44,930
|
|
|
41,674
|
|
|
72,577
|
|
|||
Asia Pacific
|
18,896
|
|
|
16,226
|
|
|
19,135
|
|
|||
Commonwealth of Independent States
|
8,222
|
|
|
1,929
|
|
|
11,008
|
|
|||
Africa
|
6,837
|
|
|
41,417
|
|
|
13,182
|
|
|||
Middle East
|
2,308
|
|
|
9,467
|
|
|
14,571
|
|
|||
Total
|
$
|
197,554
|
|
|
$
|
172,808
|
|
|
$
|
221,513
|
|
|
December 31,
|
||||||
Obligations (in thousands)
|
2017
|
|
2016
|
||||
Senior secured second-priority lien notes (maturing December 15, 2021)
|
$
|
120,569
|
|
|
$
|
120,569
|
|
Senior secured third-priority lien notes (maturing May 15, 2018)
|
28,497
|
|
|
28,497
|
|
||
Revolving credit facility (maturing August 22, 2019)
|
10,000
|
|
|
10,000
|
|
||
Equipment capital leases
|
279
|
|
|
3,446
|
|
||
Other debt
|
1,382
|
|
|
1,415
|
|
||
Costs associated with issuances of debt
(1)
|
(3,983
|
)
|
|
(5,137
|
)
|
||
Total
|
156,744
|
|
|
158,790
|
|
||
Current portion of long-term debt and lease obligations
|
(40,024
|
)
|
|
(14,581
|
)
|
||
Non-current portion of long-term debt and lease obligations
|
$
|
116,720
|
|
|
$
|
144,209
|
|
(1)
|
Represents debt issuance costs presented as a direct deduction from the carrying amount of the associated debt liability.
|
•
|
increased the applicable margin for loans by
0.50%
per annum (from
2.50%
per annum to
3.00%
per annum for alternate base rate loans and from
3.50%
per annum to
4.00%
per annum for LIBOR-based loans);
|
•
|
increased the minimum excess availability threshold to avoid triggering the agent’s rights to exercise dominion over cash and deposit accounts and increases certain of the thresholds upon which such dominion ceases;
|
•
|
increased the minimum liquidity threshold to avoid triggering the Company’s obligation to calculate and comply with the existing fixed charge coverage ratio and increased certain of the thresholds upon which such required calculation and compliance cease;
|
•
|
established a reserve that reduced the amount available to be borrowed by the aggregate amount owing under all Third Lien Notes that remain outstanding (if any) on or after February 14, 2018 (i.e.,
90
days prior to the stated maturity of the Third Lien Notes);
|
•
|
increased the maximum amount of certain permitted junior indebtedness to
$200.0 million
(from
$175.0 million
);
|
•
|
incorporated technical and conforming changes to reflect that the Second Lien Notes and the remaining Third Lien Notes (and any permitted refinancing thereof or subsequently incurred replacement indebtedness meeting certain requirements) constitute permitted indebtedness;
|
•
|
clarified the circumstances and mechanics under which the Company may prepay, repurchase or redeem the Second Lien Notes, the remaining Third Lien Notes and certain other junior indebtedness;
|
•
|
modified the cross-default provisions to incorporated defaults under the Second Lien Notes, the remaining Third Lien Notes and certain other junior indebtedness; and
|
•
|
eliminated the potential early commitment termination date and early maturity date that would otherwise have occurred ninety (
90
) days prior the maturity date of the Third Lien Notes if any of the Third Lien Notes then remained outstanding.
|
Date
|
|
Percentage
|
2019
|
|
105.500%
|
2020
|
|
103.500%
|
2021 and thereafter
|
|
100.000%
|
Years Ended December 31,
|
|
Short-Term and Long-Term Debt
|
|
Capital Lease Obligations
|
|
Other Financing
|
|
Total
|
||||||||
2018
|
|
$
|
38,497
|
|
|
$
|
250
|
|
|
$
|
1,382
|
|
|
$
|
40,129
|
|
2019
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||
2020
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2022
|
|
120,569
|
|
|
—
|
|
|
—
|
|
|
120,569
|
|
||||
Total
|
|
$
|
159,066
|
|
|
$
|
279
|
|
|
$
|
1,382
|
|
|
$
|
160,727
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(166
|
)
|
|
$
|
—
|
|
|
$
|
(4,715
|
)
|
State and local
|
116
|
|
|
28
|
|
|
41
|
|
|||
Foreign
|
5,494
|
|
|
5,574
|
|
|
1,274
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(1,263
|
)
|
|
—
|
|
|
2,726
|
|
|||
Foreign
|
(4,157
|
)
|
|
(1,181
|
)
|
|
4,718
|
|
|||
Total income tax expense
|
$
|
24
|
|
|
$
|
4,421
|
|
|
$
|
4,044
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Expected income tax expense at 35%
|
$
|
(10,274
|
)
|
|
$
|
(21,107
|
)
|
|
$
|
(7,389
|
)
|
Foreign tax rate differential
|
(2,914
|
)
|
|
5,932
|
|
|
1,769
|
|
|||
Foreign tax differences
|
(5,610
|
)
|
|
(4,828
|
)
|
|
4,104
|
|
|||
State and local taxes
|
116
|
|
|
28
|
|
|
41
|
|
|||
Nondeductible expenses
|
4,308
|
|
|
(259
|
)
|
|
578
|
|
|||
Change in U.S. tax rate
|
77,410
|
|
|
—
|
|
|
—
|
|
|||
Expired Capital Loss
|
1,114
|
|
|
1,321
|
|
|
15,950
|
|
|||
Valuation allowance:
|
|
|
|
|
|
||||||
Valuation allowance on expiring capital losses
|
(1,114
|
)
|
|
(1,321
|
)
|
|
(15,950
|
)
|
|||
Valuation allowance on operations
|
(63,012
|
)
|
|
24,655
|
|
|
4,941
|
|
|||
Total income tax expense
|
$
|
24
|
|
|
$
|
4,421
|
|
|
$
|
4,044
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Non-current deferred:
|
|
|
|
||||
Deferred income tax assets:
|
|
|
|
||||
Accrued expenses
|
$
|
1,976
|
|
|
$
|
2,994
|
|
Allowance Accounts
|
2,960
|
|
|
4,861
|
|
||
Net operating loss carryforward
|
87,705
|
|
|
98,896
|
|
||
Capital loss carryforward
|
—
|
|
|
1,114
|
|
||
Equity method investment
|
35,292
|
|
|
58,820
|
|
||
Original issue discount
|
9,624
|
|
|
17,924
|
|
||
Basis in identified intangibles
|
9,408
|
|
|
15,286
|
|
||
Tax credit carryforwards
|
6,929
|
|
|
7,051
|
|
||
Contingency accrual
|
788
|
|
|
—
|
|
||
Other
|
4,035
|
|
|
10,755
|
|
||
Total non-current deferred income tax asset
|
158,717
|
|
|
217,701
|
|
||
Valuation allowance
|
(153,463
|
)
|
|
(217,589
|
)
|
||
Net non-current deferred income tax asset
|
5,254
|
|
|
112
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Other
|
—
|
|
|
(1,240
|
)
|
||
Unbilled receivables
|
(3,501
|
)
|
|
(1,908
|
)
|
||
Basis in property, plant and equipment
|
—
|
|
|
(531
|
)
|
||
Total net non-current deferred income tax asset (liability)
|
$
|
1,753
|
|
|
$
|
(3,567
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance
|
$
|
1,299
|
|
|
$
|
1,250
|
|
|
$
|
1,957
|
|
Increases in unrecognized tax benefits – current year positions
|
59
|
|
|
49
|
|
|
75
|
|
|||
Decreases in unrecognized tax benefits – prior year position
|
(911
|
)
|
|
—
|
|
|
(782
|
)
|
|||
Ending balance
|
$
|
447
|
|
|
$
|
1,299
|
|
|
$
|
1,250
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Reduction of (accrual for) loss contingency related to legal proceedings (Footnote 6)
|
$
|
(5,000
|
)
|
|
$
|
1,168
|
|
|
$
|
101,978
|
|
Recovery of INOVA bad debts
|
844
|
|
|
3,983
|
|
|
—
|
|
|||
Loss on bond exchange
|
—
|
|
|
(2,182
|
)
|
|
—
|
|
|||
Other income
|
211
|
|
|
(1,619
|
)
|
|
(3,703
|
)
|
|||
Total other income (loss)
|
$
|
(3,945
|
)
|
|
$
|
1,350
|
|
|
$
|
98,275
|
|
A summary of accounts receivable follows (in thousands):
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accounts receivable, principally trade
|
$
|
20,050
|
|
|
$
|
22,214
|
|
Less allowance for doubtful accounts
|
(572
|
)
|
|
(1,444
|
)
|
||
Accounts receivable, net
|
$
|
19,478
|
|
|
$
|
20,770
|
|
A summary of inventories follows (in thousands):
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Raw materials and purchased subassemblies
|
$
|
20,448
|
|
|
$
|
21,454
|
|
Work-in-process
|
1,146
|
|
|
2,255
|
|
||
Finished goods
|
7,953
|
|
|
6,581
|
|
||
Reserve for excess and obsolete inventories
|
(15,039
|
)
|
|
(15,049
|
)
|
||
Total
|
$
|
14,508
|
|
|
$
|
15,241
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Buildings
|
$
|
15,822
|
|
|
$
|
17,424
|
|
Machinery and equipment
|
145,654
|
|
|
157,618
|
|
||
Seismic rental equipment
|
1,677
|
|
|
1,557
|
|
||
Furniture and fixtures
|
3,869
|
|
|
3,905
|
|
||
Other
|
28,965
|
|
|
30,049
|
|
||
Total
|
195,987
|
|
|
210,553
|
|
||
Less accumulated depreciation
|
(143,834
|
)
|
|
(143,065
|
)
|
||
Property, plant, equipment and seismic rental equipment, net
|
$
|
52,153
|
|
|
$
|
67,488
|
|
A summary of intangible assets, net, follows (in thousands):
|
December 31, 2017
|
||||||||||
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Customer relationships
|
$
|
34,400
|
|
|
$
|
(32,734
|
)
|
|
$
|
1,666
|
|
Total
|
$
|
34,400
|
|
|
$
|
(32,734
|
)
|
|
$
|
1,666
|
|
|
December 31, 2016
|
||||||||||
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Customer relationships
|
$
|
36,934
|
|
|
$
|
(33,831
|
)
|
|
$
|
3,103
|
|
Total
|
$
|
36,934
|
|
|
$
|
(33,831
|
)
|
|
$
|
3,103
|
|
Years Ended December 31,
|
|
||
2018
|
$
|
1,169
|
|
2019
|
$
|
497
|
|
A summary of accrued expenses follows (in thousands):
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Compensation, including compensation-related taxes and commissions
|
$
|
19,809
|
|
|
$
|
14,935
|
|
Accrued multi-client data library acquisition costs
|
5,104
|
|
|
567
|
|
||
Income tax payable
|
1,868
|
|
|
1,306
|
|
||
Accrual for legal proceedings (Footnote 6)
|
3,750
|
|
|
—
|
|
||
Other
|
8,166
|
|
|
9,432
|
|
||
Total
|
$
|
38,697
|
|
|
$
|
26,240
|
|
A summary of other long-term liabilities follows (in thousands):
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred lease liabilities
|
12,811
|
|
|
13,955
|
|
||
Facility restructuring accrual
|
—
|
|
|
1,765
|
|
||
Deferred income tax liability
|
—
|
|
|
3,679
|
|
||
Other
|
1,115
|
|
|
1,128
|
|
||
Total
|
$
|
13,926
|
|
|
$
|
20,527
|
|
|
E&P Technology & Services
|
|
Optimization Software & Services
|
|
Total
|
||||||
Balance at January 1, 2016
|
$
|
2,943
|
|
|
$
|
23,331
|
|
|
$
|
26,274
|
|
Impact of foreign currency translation adjustments
|
—
|
|
|
(4,066
|
)
|
|
(4,066
|
)
|
|||
Balance at December 31, 2016
|
2,943
|
|
|
19,265
|
|
|
22,208
|
|
|||
Impact of foreign currency translation adjustments
|
—
|
|
|
1,881
|
|
|
1,881
|
|
|||
Balance at December 31, 2017
|
$
|
2,943
|
|
|
$
|
21,146
|
|
|
$
|
24,089
|
|
|
Option Price
per Share
|
|
Outstanding
|
|
Vested
|
|
Available
for Grant
|
||||
January 1, 2015
|
$37.05-245.85
|
|
|
599,069
|
|
|
358,390
|
|
|
183,468
|
|
Granted
|
34.20
|
|
|
53,328
|
|
|
—
|
|
|
(53,328
|
)
|
Vested
|
—
|
|
|
—
|
|
|
79,779
|
|
|
—
|
|
Cancelled/forfeited
|
37.05-231.45
|
|
|
(91,600
|
)
|
|
(53,864
|
)
|
|
12,358
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,652
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
157
|
|
December 31, 2015
|
34.20-245.85
|
|
|
560,797
|
|
|
384,305
|
|
|
97,003
|
|
Increase in shares authorized
|
—
|
|
|
—
|
|
|
—
|
|
|
1,150,940
|
|
Granted
|
3.10
|
|
|
415,000
|
|
|
—
|
|
|
(415,000
|
)
|
Vested
|
—
|
|
|
—
|
|
|
67,480
|
|
|
—
|
|
Cancelled/forfeited
|
3.10-245.85
|
|
|
(128,162
|
)
|
|
(103,432
|
)
|
|
18,895
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(259,300
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
7,182
|
|
December 31, 2016
|
3.10-245.85
|
|
|
847,635
|
|
|
348,353
|
|
|
599,720
|
|
Granted
|
13.15
|
|
|
156,000
|
|
|
—
|
|
|
(156,000
|
)
|
Vested
|
—
|
|
|
—
|
|
|
149,537
|
|
|
—
|
|
Exercised
|
3.10
|
|
|
(15,000
|
)
|
|
(15,000
|
)
|
|
—
|
|
Cancelled/forfeited
|
3.10-245.85
|
|
|
(98,294
|
)
|
|
(47,612
|
)
|
|
82,118
|
|
Restricted stock granted out of option plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,500
|
)
|
Restricted stock forfeited or cancelled for employee minimum income taxes and returned to the plans
|
—
|
|
|
—
|
|
|
—
|
|
|
22,065
|
|
December 31, 2017
|
$3.10-$245.85
|
|
|
890,341
|
|
|
435,278
|
|
|
488,403
|
|
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
|
||||||
$3.10 - $57.90
|
641,030
|
|
|
$
|
15.17
|
|
|
7.1 years
|
|
202,312
|
|
|
$
|
29.89
|
|
$61.05 - $71.85
|
76,963
|
|
|
$
|
62.14
|
|
|
5.8 years
|
|
60,618
|
|
|
$
|
62.43
|
|
$81.60 - $99.60
|
115,742
|
|
|
$
|
88.79
|
|
|
4.4 years
|
|
115,742
|
|
|
$
|
88.79
|
|
$106.05 - $245.85
|
56,606
|
|
|
$
|
131.16
|
|
|
2.7 years
|
|
56,606
|
|
|
$
|
131.16
|
|
Totals
|
890,341
|
|
|
$
|
36.17
|
|
|
6.4 years
|
|
435,278
|
|
|
$
|
63.25
|
|
|
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, 2017
|
847,635
|
|
|
$
|
46.21
|
|
|
|
|
6.1 years
|
|
$
|
1,175
|
|
||
Options granted
|
156,000
|
|
|
$
|
13.15
|
|
|
$
|
8.10
|
|
|
|
|
|
||
Options exercised
|
(15,000
|
)
|
|
$
|
3.10
|
|
|
|
|
|
|
|
||||
Options cancelled
|
(50,682
|
)
|
|
$
|
7.32
|
|
|
|
|
|
|
|
||||
Options forfeited
|
(47,612
|
)
|
|
$
|
180.52
|
|
|
|
|
|
|
|
||||
Total outstanding at December 31, 2017
|
890,341
|
|
|
$
|
36.17
|
|
|
|
|
6.4 years
|
|
$
|
6,774
|
|
||
Options exercisable and vested at December 31, 2017
|
435,278
|
|
|
$
|
63.25
|
|
|
|
|
5.4 years
|
|
$
|
1,436
|
|
|
Number of
Shares/Units
|
|
Total nonvested at January 1, 2017
|
285,308
|
|
Granted
|
59,500
|
|
Vested
|
(115,577
|
)
|
Forfeited
|
(27,529
|
)
|
Total nonvested at December 31, 2017
|
201,702
|
|
|
December 31, 2017
|
Risk-free interest rates
|
2.36%
|
Expected lives (in years)
|
1.25
|
Expected dividend yield
|
—%
|
Expected volatility
|
77.8%
|
|
December 31, 2015
|
Risk-free interest rates
|
2.19%
|
Expected lives (in years)
|
3.3
|
Expected dividend yield
|
—%
|
Expected volatility
|
69.38%
|
|
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, 2015
|
9,333
|
|
|
$
|
45.00
|
|
|
|
|
2.9 years
|
|
$
|
—
|
|
||
SARs granted
|
207,199
|
|
|
$
|
34.20
|
|
|
$
|
9.94
|
|
|
|
|
|
||
Total outstanding at December 31, 2015
|
216,532
|
|
|
$
|
34.67
|
|
|
|
|
|
|
|
||||
SARs granted
|
1,210,000
|
|
|
$
|
3.10
|
|
|
$
|
17.55
|
|
|
|
|
|
||
SARs cancelled
|
(10,399
|
)
|
|
$
|
34.20
|
|
|
|
|
|
|
|
||||
Total outstanding at December 31, 2016
|
1,416,133
|
|
|
$
|
7.70
|
|
|
|
|
|
|
|
||||
SARs exercised
|
(713,330
|
)
|
|
$
|
3.10
|
|
|
|
|
|
|
|
||||
SARs cancelled
|
(136,939
|
)
|
|
$
|
7.70
|
|
|
|
|
|
|
|
||||
Total outstanding at December 31, 2017
|
565,864
|
|
|
$
|
13.49
|
|
|
|
|
7.2 years
|
|
$
|
6,327
|
|
||
SARs exercisable and vested at December 31, 2017
|
44,332
|
|
|
$
|
11.92
|
|
|
|
|
7.2 years
|
|
$
|
583
|
|
|
Years Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Risk-free interest rates
|
2.14%
|
|
1.3%
|
|
1.38%
|
Expected lives (in years)
|
5.0
|
|
5.5
|
|
4.5
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
Expected volatility
|
74.41%
|
|
78.76%
|
|
59.32%
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Stock-based compensation expense
|
$
|
2,552
|
|
|
$
|
3,267
|
|
|
$
|
5,486
|
|
Tax benefit related thereto
|
(862
|
)
|
|
(1,168
|
)
|
|
(1,826
|
)
|
|||
Stock-based compensation expense, net of tax
|
$
|
1,690
|
|
|
$
|
2,099
|
|
|
$
|
3,660
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Stock appreciation rights expense
|
$
|
6,611
|
|
|
$
|
547
|
|
|
$
|
(54
|
)
|
Tax benefit related thereto
|
(2,314
|
)
|
|
(191
|
)
|
|
19
|
|
|||
Stock appreciation rights expense, net of tax
|
$
|
4,297
|
|
|
$
|
356
|
|
|
$
|
(35
|
)
|
|
Years Ended December 31,
|
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest
|
$
|
14,181
|
|
|
$
|
15,691
|
|
|
$
|
15,441
|
|
|
Income taxes
|
7,030
|
|
|
4,474
|
|
|
8,163
|
|
|
|||
Non-cash items from investing and financing activities:
|
|
|
|
|
|
|
||||||
Purchase of computer equipment financed through capital leases
|
—
|
|
|
—
|
|
|
1,178
|
|
|
|||
Leasehold improvement paid by landlord
|
—
|
|
|
955
|
|
|
—
|
|
|
|||
Issuance of stock in bond exchange
|
—
|
|
|
10,741
|
|
|
—
|
|
|
|||
Transfer of inventory to property, plant and equipment
|
—
|
|
|
17,662
|
|
(a)
|
15,936
|
|
(b)
|
|||
Investment in multi-client data library financed through trade payables
|
9,059
|
|
|
—
|
|
|
8,939
|
|
|
(a)
|
This transfer of
$17.7 million
of inventory to property, plant, equipment and seismic rental equipment in December 2016, relates to ocean bottom seismic equipment manufactured by the Company to be deployed in the acquisition of ocean bottom seismic data.
|
(b)
|
This transfer of inventory to property, plant, equipment and seismic rental equipment relates to ocean bottom seismic equipment manufactured by the Company to be deployed in the acquisition of ocean bottom seismic data. During the twelve months ended December 31, 2015, the Company purchased approximately
$19.2 million
of property, plant, equipment and seismic rental equipment, including approximately
$15.3 million
related to the manufacture of ocean bottom seismic equipment that will be used by the Ocean Bottom Seismic Services segment.
|
|
Three Months Ended
|
||||||||||||||
Year Ended December 31, 2017
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Service revenues
|
$
|
23,828
|
|
|
$
|
34,454
|
|
|
$
|
52,615
|
|
|
$
|
48,513
|
|
Product revenues
|
8,728
|
|
|
11,547
|
|
|
8,480
|
|
|
9,389
|
|
||||
Total net revenues
|
32,556
|
|
|
46,001
|
|
|
61,095
|
|
|
57,902
|
|
||||
Gross profit
|
6,101
|
|
|
15,618
|
|
|
30,109
|
|
|
23,811
|
|
||||
Income (loss) from operations
|
(13,912
|
)
|
|
(3,572
|
)
|
|
9,936
|
|
|
(1,151
|
)
|
||||
Interest expense, net
|
(4,464
|
)
|
|
(4,241
|
)
|
|
(3,959
|
)
|
|
(4,045
|
)
|
||||
Other income (expense)
|
(5,068
|
)
|
|
192
|
|
|
722
|
|
|
209
|
|
||||
Income tax expense (benefit)
|
(418
|
)
|
|
2,402
|
|
|
1,686
|
|
|
(3,646
|
)
|
||||
Net (income) loss attributable to noncontrolling interests
|
(316
|
)
|
|
(418
|
)
|
|
(78
|
)
|
|
(53
|
)
|
||||
Net income (loss) applicable to ION
|
$
|
(23,342
|
)
|
|
$
|
(10,441
|
)
|
|
$
|
4,935
|
|
|
$
|
(1,394
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(1.98
|
)
|
|
$
|
(0.88
|
)
|
|
$
|
0.42
|
|
|
$
|
(0.12
|
)
|
Diluted
|
$
|
(1.98
|
)
|
|
$
|
(0.88
|
)
|
|
$
|
0.41
|
|
|
$
|
(0.12
|
)
|
|
Three Months Ended
|
||||||||||||||
Year Ended December 31, 2016
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Service revenues
|
$
|
13,156
|
|
|
$
|
25,430
|
|
|
$
|
65,914
|
|
|
$
|
26,140
|
|
Product revenues
|
9,509
|
|
|
10,722
|
|
|
12,708
|
|
|
9,229
|
|
||||
Total net revenues
|
22,665
|
|
|
36,152
|
|
|
78,622
|
|
|
35,369
|
|
||||
Gross profit (loss)
|
(8,930
|
)
|
|
4,853
|
|
|
31,765
|
|
|
8,344
|
|
||||
Income (loss) from operations
|
(30,129
|
)
|
|
(16,588
|
)
|
|
11,864
|
|
|
(8,318
|
)
|
||||
Interest expense, net
|
(4,734
|
)
|
|
(4,702
|
)
|
|
(4,607
|
)
|
|
(4,442
|
)
|
||||
Other income (expense)
|
120
|
|
|
(1,717
|
)
|
|
(2,027
|
)
|
|
4,974
|
|
||||
Income tax expense (benefit)
|
293
|
|
|
2,256
|
|
|
3,316
|
|
|
(1,444
|
)
|
||||
Net (income) loss attributable to noncontrolling interests
|
22
|
|
|
(79
|
)
|
|
(215
|
)
|
|
(149
|
)
|
||||
Net income (loss) applicable to ION
|
$
|
(35,014
|
)
|
|
$
|
(25,342
|
)
|
|
$
|
1,699
|
|
|
$
|
(6,491
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(3.30
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
0.14
|
|
|
$
|
(0.55
|
)
|
Diluted
|
$
|
(3.30
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
0.14
|
|
|
$
|
(0.55
|
)
|
|
Severance charges
(a)
|
|
Loss on bond exchange
(b)
|
|
Total
|
||||||
Cost of goods sold
|
$
|
1,077
|
|
|
$
|
—
|
|
|
$
|
1,077
|
|
Operating expenses
|
932
|
|
|
—
|
|
|
932
|
|
|||
Other expense
|
—
|
|
|
2,182
|
|
|
2,182
|
|
|||
Consolidated total
|
$
|
2,009
|
|
|
$
|
2,182
|
|
|
$
|
4,191
|
|
(a)
|
Represents severance charges related to the second quarter 2016 restructurings.
|
(b)
|
Represents a loss on exchange of bonds during the second quarter 2016.
|
|
Severance charges
(a)
|
|
Facility charges
(b)
|
|
Total
|
||||||
Cost of goods sold
|
$
|
3,981
|
|
|
$
|
—
|
|
|
$
|
3,981
|
|
Operating expenses
|
1,910
|
|
|
1,323
|
|
|
3,233
|
|
|||
Other (income) expense
|
—
|
|
|
1,618
|
|
|
1,618
|
|
|||
Income tax benefit
|
(119
|
)
|
|
(150
|
)
|
|
(269
|
)
|
|||
Net income attributable to noncontrolling interest
|
(172
|
)
|
|
—
|
|
|
(172
|
)
|
|||
Consolidated total
|
$
|
5,600
|
|
|
$
|
2,791
|
|
|
$
|
8,391
|
|
(a)
|
Represents severance charges related to 2015 restructurings, a portion of which relates to a noncontrolling interest.
|
(b)
|
Represents facility charges related to 2015 restructurings.
|
•
|
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 consolid
ating adjustments necessary to present ION Geophysical Corporation’s results on a consolidated basis.
|
|
December 31, 2017
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
39,344
|
|
|
$
|
—
|
|
|
$
|
12,712
|
|
|
$
|
—
|
|
|
$
|
52,056
|
|
Accounts receivable, net
|
50
|
|
|
9,374
|
|
|
10,054
|
|
|
—
|
|
|
19,478
|
|
|||||
Unbilled receivables
|
—
|
|
|
16,666
|
|
|
20,638
|
|
|
—
|
|
|
37,304
|
|
|||||
Inventories
|
—
|
|
|
8,686
|
|
|
5,822
|
|
|
—
|
|
|
14,508
|
|
|||||
Prepaid expenses and other current assets
|
2,427
|
|
|
769
|
|
|
4,447
|
|
|
—
|
|
|
7,643
|
|
|||||
Total current assets
|
41,821
|
|
|
35,495
|
|
|
53,673
|
|
|
—
|
|
|
130,989
|
|
|||||
Deferred income tax asset
|
1,264
|
|
|
—
|
|
|
489
|
|
|
—
|
|
|
1,753
|
|
|||||
Property, plant, equipment and seismic rental equipment, net
|
511
|
|
|
7,170
|
|
|
44,472
|
|
|
—
|
|
|
52,153
|
|
|||||
Multi-client data library, net
|
—
|
|
|
62,438
|
|
|
26,862
|
|
|
—
|
|
|
89,300
|
|
|||||
Investment in subsidiaries
|
693,679
|
|
|
321,934
|
|
|
—
|
|
|
(1,015,613
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
24,089
|
|
|
—
|
|
|
24,089
|
|
|||||
Intangible assets, net
|
—
|
|
|
1,666
|
|
|
—
|
|
|
—
|
|
|
1,666
|
|
|||||
Intercompany receivables
|
—
|
|
|
132,184
|
|
|
90,227
|
|
|
(222,411
|
)
|
|
—
|
|
|||||
Other assets
|
686
|
|
|
145
|
|
|
288
|
|
|
—
|
|
|
1,119
|
|
|||||
Total assets
|
$
|
737,961
|
|
|
$
|
561,032
|
|
|
$
|
240,100
|
|
|
$
|
(1,238,024
|
)
|
|
$
|
301,069
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
39,774
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,024
|
|
Accounts payable
|
1,774
|
|
|
20,982
|
|
|
2,195
|
|
|
—
|
|
|
24,951
|
|
|||||
Accrued expenses
|
12,284
|
|
|
15,601
|
|
|
10,812
|
|
|
—
|
|
|
38,697
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
26,824
|
|
|
211
|
|
|
—
|
|
|
27,035
|
|
|||||
Deferred revenue
|
—
|
|
|
3,201
|
|
|
5,709
|
|
|
—
|
|
|
8,910
|
|
|||||
Total current liabilities
|
53,832
|
|
|
66,858
|
|
|
18,927
|
|
|
—
|
|
|
139,617
|
|
|||||
Long-term debt, net of current maturities
|
116,691
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
116,720
|
|
|||||
Intercompany payables
|
537,417
|
|
|
—
|
|
|
—
|
|
|
(537,417
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
454
|
|
|
6,084
|
|
|
7,388
|
|
|
—
|
|
|
13,926
|
|
|||||
Total liabilities
|
708,394
|
|
|
72,971
|
|
|
26,315
|
|
|
(537,417
|
)
|
|
270,263
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
120
|
|
|
290,460
|
|
|
49,394
|
|
|
(339,854
|
)
|
|
120
|
|
|||||
Additional paid-in capital
|
903,247
|
|
|
180,701
|
|
|
202,290
|
|
|
(382,991
|
)
|
|
903,247
|
|
|||||
Accumulated earnings (deficit)
|
(854,921
|
)
|
|
248,770
|
|
|
59,307
|
|
|
(308,077
|
)
|
|
(854,921
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(18,879
|
)
|
|
4,372
|
|
|
(19,681
|
)
|
|
15,309
|
|
|
(18,879
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(236,242
|
)
|
|
(78,764
|
)
|
|
315,006
|
|
|
—
|
|
|||||
Total stockholders’ equity
|
29,567
|
|
|
488,061
|
|
|
212,546
|
|
|
(700,607
|
)
|
|
29,567
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
1,239
|
|
|
—
|
|
|
1,239
|
|
|||||
Total equity
|
29,567
|
|
|
488,061
|
|
|
213,785
|
|
|
(700,607
|
)
|
|
30,806
|
|
|||||
Total liabilities and equity
|
$
|
737,961
|
|
|
$
|
561,032
|
|
|
$
|
240,100
|
|
|
$
|
(1,238,024
|
)
|
|
$
|
301,069
|
|
|
December 31, 2016
|
||||||||||||||||||
Balance Sheet
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
23,042
|
|
|
$
|
—
|
|
|
$
|
29,610
|
|
|
$
|
—
|
|
|
$
|
52,652
|
|
Accounts receivable, net
|
—
|
|
|
12,775
|
|
|
7,995
|
|
|
—
|
|
|
20,770
|
|
|||||
Unbilled receivables
|
—
|
|
|
5,275
|
|
|
8,140
|
|
|
—
|
|
|
13,415
|
|
|||||
Inventories
|
—
|
|
|
8,610
|
|
|
6,631
|
|
|
—
|
|
|
15,241
|
|
|||||
Prepaid expenses and other current assets
|
3,387
|
|
|
4,624
|
|
|
1,548
|
|
|
—
|
|
|
9,559
|
|
|||||
Total current assets
|
26,429
|
|
|
31,284
|
|
|
53,924
|
|
|
—
|
|
|
111,637
|
|
|||||
Property, plant, equipment and seismic rental equipment, net
|
1,745
|
|
|
12,369
|
|
|
53,374
|
|
|
—
|
|
|
67,488
|
|
|||||
Multi-client data library, net
|
—
|
|
|
97,369
|
|
|
8,566
|
|
|
—
|
|
|
105,935
|
|
|||||
Investment in subsidiaries
|
660,880
|
|
|
257,732
|
|
|
—
|
|
|
(918,612
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
22,208
|
|
|
—
|
|
|
22,208
|
|
|||||
Intangible assets, net
|
—
|
|
|
3,008
|
|
|
95
|
|
|
—
|
|
|
3,103
|
|
|||||
Intercompany receivables
|
—
|
|
|
—
|
|
|
32,174
|
|
|
(32,174
|
)
|
|
—
|
|
|||||
Other assets
|
2,469
|
|
|
145
|
|
|
231
|
|
|
—
|
|
|
2,845
|
|
|||||
Total assets
|
$
|
691,523
|
|
|
$
|
401,907
|
|
|
$
|
170,572
|
|
|
$
|
(950,786
|
)
|
|
$
|
313,216
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
11,281
|
|
|
$
|
3,166
|
|
|
$
|
134
|
|
|
$
|
—
|
|
|
$
|
14,581
|
|
Accounts payable
|
2,101
|
|
|
19,720
|
|
|
5,068
|
|
|
—
|
|
|
26,889
|
|
|||||
Accrued expenses
|
8,579
|
|
|
10,016
|
|
|
7,645
|
|
|
—
|
|
|
26,240
|
|
|||||
Accrued multi-client data library royalties
|
—
|
|
|
23,663
|
|
|
—
|
|
|
—
|
|
|
23,663
|
|
|||||
Deferred revenue
|
—
|
|
|
2,667
|
|
|
1,042
|
|
|
—
|
|
|
3,709
|
|
|||||
Total current liabilities
|
21,961
|
|
|
59,232
|
|
|
13,889
|
|
|
—
|
|
|
95,082
|
|
|||||
Long-term debt, net of current maturities
|
143,930
|
|
|
279
|
|
|
—
|
|
|
—
|
|
|
144,209
|
|
|||||
Intercompany payables
|
472,276
|
|
|
10,155
|
|
|
—
|
|
|
(482,431
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
467
|
|
|
12,117
|
|
|
7,943
|
|
|
—
|
|
|
20,527
|
|
|||||
Total liabilities
|
638,634
|
|
|
81,783
|
|
|
21,832
|
|
|
(482,431
|
)
|
|
259,818
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
118
|
|
|
290,460
|
|
|
19,138
|
|
|
(309,598
|
)
|
|
118
|
|
|||||
Additional paid-in capital
|
899,198
|
|
|
180,700
|
|
|
232,590
|
|
|
(413,290
|
)
|
|
899,198
|
|
|||||
Accumulated earnings (deficit)
|
(824,679
|
)
|
|
216,730
|
|
|
(3,639
|
)
|
|
(213,091
|
)
|
|
(824,679
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
(21,748
|
)
|
|
4,420
|
|
|
(21,787
|
)
|
|
17,367
|
|
|
(21,748
|
)
|
|||||
Due from ION Geophysical Corporation
|
—
|
|
|
(372,186
|
)
|
|
(78,071
|
)
|
|
450,257
|
|
|
—
|
|
|||||
Treasury stock
|
—
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||
Total stockholders’ equity
|
52,889
|
|
|
320,124
|
|
|
148,231
|
|
|
(468,355
|
)
|
|
52,889
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
509
|
|
|
—
|
|
|
509
|
|
|||||
Total equity
|
52,889
|
|
|
320,124
|
|
|
148,740
|
|
|
(468,355
|
)
|
|
53,398
|
|
|||||
Total liabilities and equity
|
$
|
691,523
|
|
|
$
|
401,907
|
|
|
$
|
170,572
|
|
|
$
|
(950,786
|
)
|
|
$
|
313,216
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
77,054
|
|
|
$
|
120,500
|
|
|
$
|
—
|
|
|
$
|
197,554
|
|
Cost of goods sold
|
—
|
|
|
80,427
|
|
|
41,488
|
|
|
—
|
|
|
121,915
|
|
|||||
Gross profit (loss)
|
—
|
|
|
(3,373
|
)
|
|
79,012
|
|
|
—
|
|
|
75,639
|
|
|||||
Total operating expenses
|
39,000
|
|
|
27,950
|
|
|
17,388
|
|
|
—
|
|
|
84,338
|
|
|||||
Income (loss) from operations
|
(39,000
|
)
|
|
(31,323
|
)
|
|
61,624
|
|
|
—
|
|
|
(8,699
|
)
|
|||||
Interest expense, net
|
(16,729
|
)
|
|
(107
|
)
|
|
127
|
|
|
—
|
|
|
(16,709
|
)
|
|||||
Intercompany interest, net
|
1,084
|
|
|
(6,613
|
)
|
|
5,529
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
27,696
|
|
|
67,290
|
|
|
—
|
|
|
(94,986
|
)
|
|
—
|
|
|||||
Other income (expense)
|
(4,610
|
)
|
|
(382
|
)
|
|
1,047
|
|
|
—
|
|
|
(3,945
|
)
|
|||||
Income (loss) before income taxes
|
(31,559
|
)
|
|
28,865
|
|
|
68,327
|
|
|
(94,986
|
)
|
|
(29,353
|
)
|
|||||
Income tax expense (benefit)
|
(1,317
|
)
|
|
(3,175
|
)
|
|
4,516
|
|
|
—
|
|
|
24
|
|
|||||
Net income (loss)
|
(30,242
|
)
|
|
32,040
|
|
|
63,811
|
|
|
(94,986
|
)
|
|
(29,377
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(865
|
)
|
|
—
|
|
|
(865
|
)
|
|||||
Net income (loss) attributable to ION
|
$
|
(30,242
|
)
|
|
$
|
32,040
|
|
|
$
|
62,946
|
|
|
$
|
(94,986
|
)
|
|
$
|
(30,242
|
)
|
Comprehensive net income (loss)
|
$
|
(27,373
|
)
|
|
$
|
31,992
|
|
|
$
|
65,916
|
|
|
$
|
(97,043
|
)
|
|
$
|
(26,508
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(865
|
)
|
|
—
|
|
|
(865
|
)
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(27,373
|
)
|
|
$
|
31,992
|
|
|
$
|
65,051
|
|
|
$
|
(97,043
|
)
|
|
$
|
(27,373
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
79,006
|
|
|
$
|
93,802
|
|
|
$
|
—
|
|
|
$
|
172,808
|
|
Cost of goods sold
|
—
|
|
|
84,373
|
|
|
52,403
|
|
|
—
|
|
|
136,776
|
|
|||||
Gross profit (loss)
|
—
|
|
|
(5,367
|
)
|
|
41,399
|
|
|
—
|
|
|
36,032
|
|
|||||
Total operating expenses
|
31,438
|
|
|
27,274
|
|
|
20,491
|
|
|
—
|
|
|
79,203
|
|
|||||
Income (loss) from operations
|
(31,438
|
)
|
|
(32,641
|
)
|
|
20,908
|
|
|
—
|
|
|
(43,171
|
)
|
|||||
Interest expense, net
|
(18,406
|
)
|
|
(173
|
)
|
|
94
|
|
|
—
|
|
|
(18,485
|
)
|
|||||
Intercompany interest, net
|
978
|
|
|
(4,397
|
)
|
|
3,419
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
(19,756
|
)
|
|
23,368
|
|
|
—
|
|
|
(3,612
|
)
|
|
—
|
|
|||||
Other income (expense)
|
3,528
|
|
|
702
|
|
|
(2,880
|
)
|
|
—
|
|
|
1,350
|
|
|||||
Income (loss) before income taxes
|
(65,094
|
)
|
|
(13,141
|
)
|
|
21,541
|
|
|
(3,612
|
)
|
|
(60,306
|
)
|
|||||
Income tax expense
|
54
|
|
|
1,337
|
|
|
3,030
|
|
|
—
|
|
|
4,421
|
|
|||||
Net income (loss)
|
(65,148
|
)
|
|
(14,478
|
)
|
|
18,511
|
|
|
(3,612
|
)
|
|
(64,727
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(421
|
)
|
|
—
|
|
|
(421
|
)
|
|||||
Net income (loss) attributable to ION
|
$
|
(65,148
|
)
|
|
$
|
(14,478
|
)
|
|
$
|
18,090
|
|
|
$
|
(3,612
|
)
|
|
$
|
(65,148
|
)
|
Comprehensive net income (loss)
|
$
|
(72,331
|
)
|
|
$
|
(14,478
|
)
|
|
$
|
10,907
|
|
|
$
|
4,208
|
|
|
$
|
(71,694
|
)
|
Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(421
|
)
|
|
—
|
|
|
(421
|
)
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(72,331
|
)
|
|
$
|
(14,478
|
)
|
|
$
|
10,486
|
|
|
$
|
4,208
|
|
|
$
|
(72,115
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||
Income Statement
|
ION Geophysical Corporation
|
|
The Guarantors
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Total net revenues
|
$
|
—
|
|
|
$
|
145,615
|
|
|
$
|
76,954
|
|
|
$
|
(1,056
|
)
|
|
$
|
221,513
|
|
Cost of goods sold
|
—
|
|
|
126,176
|
|
|
88,390
|
|
|
(1,056
|
)
|
|
213,510
|
|
|||||
Gross profit (loss)
|
—
|
|
|
19,439
|
|
|
(11,436
|
)
|
|
—
|
|
|
8,003
|
|
|||||
Total operating expenses
|
26,091
|
|
|
47,579
|
|
|
34,965
|
|
|
—
|
|
|
108,635
|
|
|||||
Loss from operations
|
(26,091
|
)
|
|
(28,140
|
)
|
|
(46,401
|
)
|
|
—
|
|
|
(100,632
|
)
|
|||||
Interest expense, net
|
(18,434
|
)
|
|
(351
|
)
|
|
32
|
|
|
—
|
|
|
(18,753
|
)
|
|||||
Intercompany interest, net
|
697
|
|
|
(3,140
|
)
|
|
2,443
|
|
|
—
|
|
|
—
|
|
|||||
Equity in earnings (losses) of investments
|
16,604
|
|
|
(42,953
|
)
|
|
—
|
|
|
26,349
|
|
|
—
|
|
|||||
Other income (expense)
|
192
|
|
|
101,978
|
|
|
(3,895
|
)
|
|
—
|
|
|
98,275
|
|
|||||
Income (loss) before income taxes
|
(27,032
|
)
|
|
27,394
|
|
|
(47,821
|
)
|
|
26,349
|
|
|
(21,110
|
)
|
|||||
Income tax expense (benefit)
|
(1,910
|
)
|
|
5,031
|
|
|
923
|
|
|
—
|
|
|
4,044
|
|
|||||
Net income (loss)
|
(25,122
|
)
|
|
22,363
|
|
|
(48,744
|
)
|
|
26,349
|
|
|
(25,154
|
)
|
|||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|||||
Net income (loss) attributable to ION
|
$
|
(25,122
|
)
|
|
$
|
22,363
|
|
|
$
|
(48,712
|
)
|
|
$
|
26,349
|
|
|
$
|
(25,122
|
)
|
Comprehensive net income (loss)
|
$
|
(27,096
|
)
|
|
$
|
20,553
|
|
|
$
|
(50,551
|
)
|
|
$
|
29,966
|
|
|
$
|
(27,128
|
)
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|||||
Comprehensive net income (loss) attributable to ION
|
$
|
(27,096
|
)
|
|
$
|
20,553
|
|
|
$
|
(50,519
|
)
|
|
$
|
29,966
|
|
|
$
|
(27,096
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
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
|
$
|
(21,897
|
)
|
|
$
|
61,390
|
|
|
$
|
(11,463
|
)
|
|
$
|
28,030
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(11,797
|
)
|
|
(11,913
|
)
|
|
(23,710
|
)
|
||||
Purchase of property, plant, equipment and seismic rental equipment
|
(165
|
)
|
|
(817
|
)
|
|
(81
|
)
|
|
(1,063
|
)
|
||||
Net cash used in investing activities
|
(165
|
)
|
|
(12,614
|
)
|
|
(11,994
|
)
|
|
(24,773
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Payments on notes payable and long-term debt
|
(1,591
|
)
|
|
(3,167
|
)
|
|
(58
|
)
|
|
(4,816
|
)
|
||||
Cost associated with issuance of debt
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
||||
Intercompany lending
|
38,732
|
|
|
(45,609
|
)
|
|
6,877
|
|
|
—
|
|
||||
Proceeds from employee stock purchases and exercise of stock options
|
1,619
|
|
|
—
|
|
|
—
|
|
|
1,619
|
|
||||
Dividend payment to non-controlling interest
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
||||
Other financing activities
|
(243
|
)
|
|
—
|
|
|
—
|
|
|
(243
|
)
|
||||
Net cash provided by (used in) financing activities
|
38,364
|
|
|
(48,776
|
)
|
|
6,819
|
|
|
(3,593
|
)
|
||||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(260
|
)
|
|
(260
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
16,302
|
|
|
—
|
|
|
(16,898
|
)
|
|
(596
|
)
|
||||
Cash and cash equivalents at beginning of period
|
23,042
|
|
|
—
|
|
|
29,610
|
|
|
52,652
|
|
||||
Cash and cash equivalents at end of period
|
$
|
39,344
|
|
|
$
|
—
|
|
|
$
|
12,712
|
|
|
$
|
52,056
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
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
|
$
|
(30,154
|
)
|
|
$
|
52,385
|
|
|
$
|
(20,660
|
)
|
|
$
|
1,571
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(10,985
|
)
|
|
(3,899
|
)
|
|
(14,884
|
)
|
||||
Purchase of property, plant, equipment and seismic rental equipment
|
(73
|
)
|
|
(343
|
)
|
|
(1,072
|
)
|
|
(1,488
|
)
|
||||
Proceeds from sale of a cost-method investment
|
2,698
|
|
|
—
|
|
|
—
|
|
|
2,698
|
|
||||
Other investing activities
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||
Net cash provided by (used in) investing activities
|
2,625
|
|
|
(11,298
|
)
|
|
(4,971
|
)
|
|
(13,644
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Borrowings under revolving line of credit
|
15,000
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
||||
Repayments under revolving line of credit
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
||||
Payments on notes payable and long-term debt
|
(2,070
|
)
|
|
(6,316
|
)
|
|
(248
|
)
|
|
(8,634
|
)
|
||||
Cost associated with issuance of debt
|
(6,744
|
)
|
|
—
|
|
|
—
|
|
|
(6,744
|
)
|
||||
Repurchase of common stock
|
(964
|
)
|
|
—
|
|
|
—
|
|
|
(964
|
)
|
||||
Intercompany lending
|
31,867
|
|
|
(34,771
|
)
|
|
2,904
|
|
|
—
|
|
||||
Payments to repurchase bonds
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|
(15,000
|
)
|
||||
Other financing activities
|
(252
|
)
|
|
—
|
|
|
—
|
|
|
(252
|
)
|
||||
Net cash provided by (used in) financing activities
|
16,837
|
|
|
(41,087
|
)
|
|
2,656
|
|
|
(21,594
|
)
|
||||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
1,386
|
|
|
1,386
|
|
||||
Net decrease in cash and cash equivalents
|
(10,692
|
)
|
|
—
|
|
|
(21,589
|
)
|
|
(32,281
|
)
|
||||
Cash and cash equivalents at beginning of period
|
33,734
|
|
|
—
|
|
|
51,199
|
|
|
84,933
|
|
||||
Cash and cash equivalents at end of period
|
$
|
23,042
|
|
|
$
|
—
|
|
|
$
|
29,610
|
|
|
$
|
52,652
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
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
|
$
|
(425,310
|
)
|
|
$
|
225,581
|
|
|
$
|
183,205
|
|
|
$
|
(16,524
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Investment in multi-client data library
|
—
|
|
|
(44,687
|
)
|
|
(871
|
)
|
|
(45,558
|
)
|
||||
Purchase of property, plant and equipment
|
(347
|
)
|
|
(3,945
|
)
|
|
(14,949
|
)
|
|
(19,241
|
)
|
||||
Other investing activities
|
—
|
|
|
1,263
|
|
|
—
|
|
|
1,263
|
|
||||
Net cash used in investing activities
|
(347
|
)
|
|
(47,369
|
)
|
|
(15,820
|
)
|
|
(63,536
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Payments on notes payable and long-term debt
|
(153
|
)
|
|
(6,467
|
)
|
|
(832
|
)
|
|
(7,452
|
)
|
||||
Cost associated with issuance of debt
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
||||
Repurchase of common stock
|
(1,989
|
)
|
|
—
|
|
|
—
|
|
|
(1,989
|
)
|
||||
Intercompany lending
|
352,091
|
|
|
(171,745
|
)
|
|
(180,346
|
)
|
|
—
|
|
||||
Other financing activities
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||
Net cash provided by (used in) financing activities
|
349,877
|
|
|
(178,212
|
)
|
|
(181,178
|
)
|
|
(9,513
|
)
|
||||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
898
|
|
|
898
|
|
||||
Net decrease in cash and cash equivalents
|
(75,780
|
)
|
|
—
|
|
|
(12,895
|
)
|
|
(88,675
|
)
|
||||
Cash and cash equivalents at beginning of period
|
109,514
|
|
|
—
|
|
|
64,094
|
|
|
173,608
|
|
||||
Cash and cash equivalents at end of period
|
$
|
33,734
|
|
|
$
|
—
|
|
|
$
|
51,199
|
|
|
$
|
84,933
|
|
Year Ended December 31, 2015
|
Balance at
Beginning of Year |
|
Charged (Credited) to
Costs and Expenses |
|
Deductions
|
|
Balance at
End of Year |
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
7,633
|
|
|
$
|
1,841
|
|
|
$
|
(4,555
|
)
|
|
$
|
4,919
|
|
Allowances for doubtful notes receivable
|
4,000
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
||||
Valuation allowance on deferred tax assets
|
205,264
|
|
|
(11,009
|
)
|
|
—
|
|
|
194,255
|
|
||||
Excess and obsolete inventory
|
29,804
|
|
|
151
|
|
|
(5,480
|
)
|
|
24,475
|
|
Year Ended December 31, 2016
|
Balance at
Beginning of Year |
|
Charged (Credited) to
Costs and Expenses |
|
Deductions
|
|
Balance at
End of Year |
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
4,919
|
|
|
$
|
1,834
|
|
|
$
|
(5,310
|
)
|
|
$
|
1,443
|
|
Allowances for doubtful notes receivable
|
4,000
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
||||
Valuation allowance on deferred tax assets
|
194,255
|
|
|
23,334
|
|
|
—
|
|
|
217,589
|
|
||||
Excess and obsolete inventory
|
24,475
|
|
|
429
|
|
|
(9,855
|
)
|
|
15,049
|
|
Year Ended December 31, 2017
|
Balance at
Beginning of Year
|
|
Charged (Credited) to
Costs and Expenses
|
|
Deductions
|
|
Balance at
End of Year
|
||||||||
|
(In thousands)
|
||||||||||||||
Allowances for doubtful accounts
|
$
|
1,443
|
|
|
$
|
949
|
|
|
$
|
(1,820
|
)
|
|
$
|
572
|
|
Allowances for doubtful notes receivable
|
4,000
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
||||
Valuation allowance on deferred tax assets
|
217,589
|
|
|
(64,126
|
)
|
|
—
|
|
|
153,463
|
|
||||
Excess and obsolete inventory
|
15,049
|
|
|
398
|
|
|
(408
|
)
|
|
15,039
|
|
1.
|
Grant of Rights
.
The grant of the stock appreciation rights ("SARs") under this Stock Appreciation Rights Agreement (this "Agreement") by ION Geophysical Corporation (the ''Company") is made subject and pursuant to the terms of the ION Geophysical Corporation Stock Appreciation Rights Plan (the "Plan") for directors, employees and consultants of the Company. This SAR award and its exercise are subject in all respects to the grant terms as set forth in the Plan, a copy of which is attached hereto, and to any rules promulgated pursuant to the Plan by the Committee. Capitalized terms not otherwise defined herein are as defined in the Plan.
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2.
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Grantee.
The Grantee of the SAR award is [Grantee Name] (the "Grantee")
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3.
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Award.
The Company grants the Grantee this SAR award in relation to [Shares Granted]
Shares (the "Covered Shares")
.
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4.
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Exercise Price.
The Exercise Price of this SAR award is [Exercise Price] per SAR Covered Share granted hereunder (being not less than the greater of the fair market value or par value per share of the Common Stock on the Date of Grant as defined by the Plan).
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5.
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Date of Grant.
The Date of Grant of this SAR award is [Grant Date].
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6.
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Vesting.
The total number of SARs and Covered Shares shall vest according to the following schedule:
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Vesting Date
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Number of SARs & Vesting Schedule
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On the date on which the
volume weighted average price per Share for the 20 trading days prior to the date of determination,
(“Volume Weighted Average Price Threshold”), as determined by the Company based on New York Stock Exchange reported closing Share prices, is:
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20% or more higher but less 25% higher than the Exercise Price per SAR hereunder
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[●] Covered Shares
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25% or more higher but less than 30% higher than the Exercise Price per SAR hereunder
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[●] Covered Shares
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30% or more:
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All Covered Shares under the SAR award
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7.
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Exercise Schedule.
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(a)
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No SARS may be exercised prior to the first anniversary of the Date of Grant;
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(b)
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SARs for no more than one-third of the total Covered Shares may be exercised, if vested, on and after the first anniversary of the Date of Grant;
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(c)
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SARs for no more than two-thirds of the total Covered Shares may be exercised, if vested, on and after the second anniversary of the Date of Grant; and
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(d)
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SARs for the total Covered Shares may be exercised, if vested, on and after the third anniversary of the Date of Grant;
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8.
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Maximum Value.
The value of each SAR granted hereunder shall be subject to a cap on the maximum value of each award equal to [Maximum Value] per SAR such that, the value of the Spread for each SAR shall not exceed [Maximum Value] minus the Grant Price.
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9.
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Term.
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(a)
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This SAR award will commence on the Date of Grant and, unless terminated earlier pursuant to Section 7(b) of this Agreement, or the SAR expires (pursuant to Section 6 of this Agreement), this SAR shall terminate at 12:01 a.m. on the date which is ten (10) years from the Date of Grant. (the “Term”).
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(b)
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Early Termination of Unvested Portion of SAR Award
. This SAR award will have four (4) years from the Date of the Grant in which to achieve the 20%, 25% and 30% performance thresholds set forth in Section 6 of this Agreement (the “Performance Period”). Any portion of the SAR award which fails to vest during the Performance Period shall terminate at 12:01 a.m. on the day after the last day of the Performance Period.
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(c)
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Notwithstanding anything else to the contrary in Section 6 or this Section 9 of this Agreement, for a period of one (1) year following the Date of Grant, by written notice to the Grantee, the Committee may, without the consent of the Grantee, reduce the Performance Period to a period which is three (3) years from the Date of Grant. In the event the Committee elects to do so, beginning on the second anniversary of the Grant Date, this SAR award may be cumulatively exercised to the extent vested, until the Expiration Date.
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10.
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Expiration.
The SAR award shall not be exercisable after the Company's close of business on the last business day that occurs prior to the Expiration Date. The "Expiration Date" shall be the earliest to occur of:
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(a)
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the last day of the Term;
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(b)
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if a termination of Employment occurs by reason of Retirement, Death or Disability, the one-year anniversary of the termination of Employment;
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(c)
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if a termination of Employment occurs due to the Grantee's termination by the Company for Cause, 12:01 a.m., Houston, Texas time, on the date of the termination of Employment; and
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(d)
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if a termination of Employment occurs for reasons other than Retirement, Death, Disability, or for Cause
,
the one-hundred and eighty (180) day anniversary of the termination of Employment.
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11.
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Who May Exercise, Transferability.
During the lifetime of the Grantee, this SAR award may be exercised only by the Grantee, or by the Grantee's guardian or legal representative. In all other circumstances, exercise and transfer of the SAR award is permitted subject to the terms of the Plan; provided that the SAR award shall remain subject to the other terms of this Agreement, the Plan, and applicable laws, rules, and regulations.
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12.
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Manner of Exercise.
The SAR award may be exercised by filing a written notice with the Company at its corporate headquarters or by following such other instructions as the Company may deliver to the Grantee from time to time. Upon the exercise of the SAR award, the Grantee shall receive a cash amount from the Company that is equal to the Spread multiplied by the number of Covered Shares for which the SAR award is being exercised. Such amount shall be paid to the Grantee in cash after receipt by the Company of Grantee's written notice of exercise of the SAR award.
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13.
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Tax Withholding.
All payments under this Agreement are subject to withholding of all applicable taxes.
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14.
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Administration.
The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan.
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15.
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Plan Governs.
Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Grantee from the office of the Secretary of the Company; and this Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.
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16.
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Not an Employment Contract.
The SAR Award will not confer on the Grantee any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such Grantee's employment or other service at any time.
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17.
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Notices.
Any written notices provided for in this SAR Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail. Notices sent by U.S. mail shall be deemed received three business days after mailing but in no event later than the date of actual receipt. Notices shall be directed, if to the Grantee, at the Grantee's address indicated by the Company's records, and if to the Company, at the Company's principal executive office.
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18.
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Amendment.
This Agreement may be amended in accordance with the provisions of the Plan, and may otherwise be amended by written agreement of the Grantee and the Company without the consent of any other person.
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19.
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Applicable Law.
The provisions of this Agreement shall be construed in accordance with the laws of the State of Texas, without regard to the conflict of law provisions of any jurisdiction.
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20.
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Settlement in Shares
. If, subsequent to the Grant Date, the Plan is amended to permit the delivery of Shares in settlement of SARs in lieu of cash payments, and such amendment is duly approved by the Company’s shareholders in accordance with applicable law and the New York Stock Exchange rules (or the rules of such other principal securities exchange on which Shares are then listed or admitted to trading), the Committee shall have the discretion, without the consent of the Grantee, to settle the exercise of the SAR or any portion exercised after such amendment and approval, by the delivery of Shares with a Fair Market Value equal to the Spread, or by the delivery of a combination of Shares and cash equal in value to the Spread, as determined by the Committee in its complete discretion.
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21.
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280G Cutback.
Notwithstanding any other provision in this Agreement to the contrary, if any payment received or to be received by the Grantee under this Agreement in connection with a Change in Control or the termination of employment (collectively, the “Payments”) would, whether payable under the terms of this Agreement alone or together with any payment or benefit under any other plan, arrangement or agreement with the Company or one of its Subsidiaries constitute a “parachute payment” within the meaning of Section 280G of the Code, the payment or payments due to the Grantee under this Agreement shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”). Whether and how the limitation under this Section 20 is applicable shall be determined under the Section 280G Rules set forth in Exhibit A, which shall be enforceable as if set forth in this Agreement.
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Subsidiary
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Jurisdiction
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Concept Systems Holdings Limited
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Scotland
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Concept Systems Limited
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Scotland
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GMG/AXIS, Inc.
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Delaware
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GX Geoscience Corporation S. de R.L. de C.V.
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Mexico
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GX Technology Australia Pty Ltd.
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Australia
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GX Technology Canada, Ltd.
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Canada
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GX Technology Corporation
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Texas
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GX Technology EAME, Limited
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UK
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GX Technology Imaging Services Limited
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Egypt
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GX Technology Poland Sp. Z o.o.
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Poland
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GX Technology Processamento de Dados Ltda.
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Brazil
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GX Technology Sismica Brasil Ltda.
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Brazil
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GX Technology Trinidad, Ltd.
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West Indies
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I/O Cayman Islands, Ltd.
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Cayman Islands
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I/O International Holdings, Ltd.
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Cayman Islands
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I/O International, Ltd.
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Cayman Islands
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I/O Luxembourg S.à r.l.
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Luxembourg
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I/O Marine Systems Limited
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UK
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I/O Marine Systems, Inc.
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Louisiana
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I/O U.K. Holdings Limited
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Scotland
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“Inco” Industrial Components ‘s-Gravenhage B.V.
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Netherlands
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ION China Holdings, Limited
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Hong Kong
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ION E&P Advisors, Inc.
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Delaware
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ION EPA Holdings, Inc.
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Delaware
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ION Exploration Products (U.S.A.), Inc.
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Delaware
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ION Geophysical CIS LLC
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Russia
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ION Geophysical Sdn. Bhd.
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Malaysia
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ION HPC Services, Inc.
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Delaware
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ION International Holdings L.P.
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Bermuda
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ION International S.à r.l.
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Luxembourg
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IPOP Management, Inc.
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Delaware
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OceanGeo B.V.
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Netherlands
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OceanGeo Inc.
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British Virgin Islands
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OceanGeo Ltd.
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UK
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Oceangeo Tecnologia de Exploração de Reservatórios do Brasil S.A
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Brazil
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Sailwings Canada Limited
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Canada
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Sensor Nederland B.V.
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Netherlands
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1.
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Registration Statement (Form S-8 No. 333-60950) pertaining to the Input/Output, Inc. Non‑Employee Directors’ Retainer Plan,
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2.
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Registration Statement (Form S-8 No. 333-112677) pertaining to the Input/Output, Inc. 2003 Employee Stock Option Plan,
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3.
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Registration Statement (Form S-8 No. 333-125655) pertaining to the Input/Output, Inc. 2004 Long‑Term Incentive Plan,
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4.
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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,
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5.
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Registration Statement (Form S-3 No. 333-112263) of Input/Output, Inc.,
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6.
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Registration Statement (Form S-3 No. 333-123632) of Input/Output, Inc.,
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7.
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Registration Statement (Form S-8 No. 333-145274) pertaining to the Third Amended and Restated Input/Output, Inc. 2004 Long-Term Incentive Plan,
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8.
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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,
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9.
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Registration Statement (Form S-3 No. 333-159898) of ION Geophysical Corporation,
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10.
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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,
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11.
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Registration Statement (Form S-3 No. 333-166200) of ION Geophysical Corporation,
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12.
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Registration Statement (Form S-8 No. 333-176046) pertaining to the Sixth Amended and Restated 2004 Long-Term Incentive Plan,
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13.
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Registration Statement (Form S-8 No. 333-190474) pertaining to the 2013 Long-Term Incentive Plan,
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14.
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Registration Statement (Form S-4 No. 333-194110) of ION Geophysical Corporation,
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15.
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Registration Statement (Form S-8 No. 333-209707) pertaining to the 2013 Long-Term Incentive Plan, and
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16.
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Registration Statement (Form S-3 No. 333-213769) of ION Geophysical Corporation.
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1.
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I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2017, of ION Geophysical Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: February 8, 2018
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/s/ R. Brian Hanson
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R. Brian Hanson
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President and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2017, of ION Geophysical Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: February 8, 2018
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/s/ Steven A. Bate
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Steven A. Bate
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Executive Vice President and Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 8, 2018
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/s/ R. Brian Hanson
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R. Brian Hanson
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President and Chief Executive Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 8, 2018
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/s/ Steven A. Bate
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Steven A. Bate
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Executive Vice President and Chief Financial Officer
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