10-Q

UNITED STATES

  SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

[x]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

[  ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-34709

GLOBAL GEOPHYSICAL SERVICES, INC.

(Name of registrant as specified in its charter)

DELAWARE	05-0574281
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

13927 South Gessner Road

Missouri City, TX 77489

Telephone number:  (713) 972-9200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes    [x]                   No   [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes    [x]                  No   [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “accelerated filer”, “large accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (check one):

Large accelerated filer [  ]        Accelerated filer [x]      Non-accelerated filer [  ]        Smaller reporting company[  ]

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Yes    [  ]                  No   [x]

At May 1, 2012, there were 37,120,986 shares of common stock, par value $0.01 per share, outstanding.

GLOBAL GEOPHYSICAL SERVICES, INC.

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements	1
Consolidated Balance Sheets as of  March 31, 2012 (Unaudited) and  December 31, 2011	1
Consolidated Statements of Operations for the Three Month Period Ended March 31, 2012 and 2011	3
Consolidated Statements of Cash Flows for the Three Month Period Ended March 31, 2012 and 2011	4
Consolidated Statements of Stockholders’ Equity	5
Notes to Consolidated Financial Statements	6
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.  Quantitative and Qualitative Disclosure About Market Risk	25
Item 4.  Controls and Procedures	25
PART II.  OTHER INFORMATION
Item 1.  Legal Proceedings	26
Item 1A.  Risk Factors	26
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.  Defaults Upon Senior Securities	26
Item 4.  Mine Safety Disclosures	26
Item 5.  Other Information	26
Item 6.  Exhibits	27

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

	March 31, 2012		December 31, 2011
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	26,988	$	21,525
Restricted cash investments		2,821		5,639
Accounts receivable, net		81,254		86,889
Income and other taxes receivable		6,197		7,060
Prepaid expenses and other current assets		4,134		6,050
TOTAL CURRENT ASSETS		121,394		127,163
MULTI-CLIENT LIBRARY, net		253,728		232,235
PROPERTY AND EQUIPMENT, net		113,456		118,420
GOODWILL		12,381		12,381
INTANGIBLE ASSETS, net		14,714		9,929
OTHER ASSETS		7,924		6,245
TOTAL ASSETS	$	523,597	$	506,373

See accompanying notes to consolidated financial statements.

1

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(In thousands, except par value and share amounts)

	March 31,			December 31,
	2012			2011
	(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	53,946		$	55,764
Current portion of long-term debt		14,357			11,416
Current portion of capital lease obligations		6,682			7,256
Income and other taxes payable		2,551			5,169
Deferred revenue		43,711			39,560
Other payables		3,749			821
TOTAL CURRENT LIABILITIES		124,996			119,986
DEFERRED INCOME TAXES, net		6,122			2,120
LONG-TERM DEBT, net of current portion and unamortized discount		266,908			265,873
CAPITAL LEASE OBLIGATIONS, net of current portion		1,411			2,613
NON-CONTROLLING INTERESTS		1,259			1,469
OTHER LIABILITIES		750			750
TOTAL LIABILITIES		401,446			392,811
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common Stock, $0.01 par value, 100.0 million shares authorized, 46.8 million shares and 46.7 million shares issued and 37.1 million shares and 37.0 million shares outstanding at March 31, 2012 and December 31, 2011, respectively		468			467
Additional paid-in capital		247,763			246,104
Accumulated deficit		(29,554	)		(36,484	)
		218,677			210,087
Less: treasury stock, at cost, 9.7 million shares and 9.7 million shares at March 31, 2012 and December 31, 2011, respectively		96,526			96,525
TOTAL STOCKHOLDERS’ EQUITY		122,151			113,562
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	523,597		$	506,373

See accompanying notes to consolidated financial statements.

2

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three Month Period Ended March 31,
	2012			2011
	(unaudited)
REVENUES	$	96,111		$	76,835
OPERATING EXPENSES		60,694			55,075
GROSS PROFIT		35,417			21,760
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES		15,541			11,012
INCOME FROM OPERATIONS		19,876			10,748
OTHER INCOME (EXPENSE)
Interest expense, net		(7,115	)		(5,807	)
Foreign exchange gain (loss)		(110	)		818
Other expense		(182	)		(2	)
TOTAL OTHER EXPENSE		(7,407	)		(4,991	)
INCOME BEFORE INCOME TAXES		12,469			5,757
INCOME TAX EXPENSE		5,749			3,012
INCOME AFTER INCOME TAXES		6,720			2,745
NET LOSS, attributable to non-controlling interests		(210	)		(44	)
NET INCOME, attributable to common shareholders	$	6,930		$	2,789
INCOME PER COMMON SHARE
Basic	$	0.19		$	0.08
Diluted	$	0.19		$	0.08
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		37,039			36,407
Diluted		37,039			36,668

See accompanying notes to consolidated financial statements.

3

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Month Period Ended March 31,
	2012			2011
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income, attributable to common shareholders	$	6,930		$	2,789
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation (net) and amortization expense		30,218			33,910
Non-cash revenue from Multi-client data exchange		(932	)		(973	)
Deferred tax expense		4,002			1,097
Gain on sale of assets		(9,423	)		(65	)
Other		1,578			1,593
Effects of changes in operating assets and liabilities
Accounts receivable, net		5,636			(4,277	)
Prepaid expenses and other current assets		1,415			794
Accounts payable and accrued expenses		(1,818	)		5,492
Deferred revenue		2,878			14,105
Other		(1,557	)		(1,057	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		38,927			53,408
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(9,698	)		(8,220	)
Investment in Multi-client library		(38,686	)		(52,075	)
Investment in unconsolidated subsidiary		(250	)		-
Change in restricted cash investments		2,818			(2,662	)
Purchase of intangibles		(2,547	)		(1,000	)
Proceeds from sale of assets		14,018			66
NET CASH USED IN INVESTING ACTIVITIES		(34,345	)		(63,891	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of discount		51,433			-
Principal payments on long-term debt		(1,692	)		(2,597	)
Net proceeds on revolving credit facility		(45,940	)		5,000
Debt issuance costs		(1,364	)		-
Principal payments on capital lease obligations		(1,775	)		-
Purchase of treasury stock		-			(1	)
Issuances of stock, net		219			705
NET CASH PROVIDED BY FINANCING ACTIVITIES		881			3,107
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		5,463			(7,376	)
CASH AND CASH EQUIVALENTS, beginning of period		21,525			28,237
CASH AND CASH EQUIVALENTS, end of period	$	26,988		$	20,861

See accompanying notes to consolidated financial statements.

4

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, unaudited)

	Common Stock		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit			Total Stockholders' Equity
Balances at December 31, 2011	$	467	$	246,104	$	(96,525	)	$	(36,484	)	$	113,562
Issuance of common stock		1		218		-			-			219
Compensation expense associated with stock grants		-		1,389		-			-			1,389
Charitable contribution expense associated with stock grant		-		52		-			-			52
Purchase of treasury stock		-		-		(1	)		-			(1	)
Net income		-		-		-			6,930			6,930
Balances at March 31, 2012	$	468	$	247,763	$	(96,526	)	$	(29,554	)	$	122,151

See accompanying notes to consolidated financial statements.

5

GLOBAL GEOPHYSICAL SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The consolidated financial statements of Global Geophysical Services, Inc. and Subsidiaries (the “Company”) included herein are unaudited and have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2011.  In the opinion of management, the accompanying unaudited financial information includes all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the interim financial information.  Operating results for the interim periods are not necessarily indicative of the results of any subsequent periods.  Certain information in the footnote disclosures normally included in annual financial statements has been condensed or omitted for the interim periods presented.  These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2011. Certain amounts in the 2011 consolidated financial statements have been reclassified to conform to the classifications in the 2012 consolidated financial statements.

NOTE 2 - SELECTED BALANCE SHEET ACCOUNTS

Restricted cash investments (in thousands): 

	March 31, 2012		December 31, 2011
	(unaudited)
Pledged for letters of credit	$	2,821	$	5,639
	$	2,821	$	5,639

Prepaid expenses and other current assets included the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Mobilization costs, net	$	3,539	$	4,220
Prepaid expenses		503		862
Note receivable, current portion		92		968
	$	4,134	$	6,050

Accounts receivable, net included the following (in thousands):

	March 31, 2012			December 31, 2011
	(unaudited)
Accounts receivable, trade	$	58,357		$	65,019
Unbilled		27,826			25,355
Allowance for doubtful accounts		(4,929	)		(3,485	)
	$	81,254		$	86,889

The Company sometimes experiences disagreements or disputes with customers relating to the Company's charges. At December 31, 2011, the Company had disputes of approximately $4.8 million in net receivables which relate to charges for the Company's services with certain customers. As of March 31, 2012, the company recorded a net charge of $2.7 million as bad debt expense toward the resolution of certain disputes. Bad debt expense for the three months ended March 31, 2012 and 2011 was $2.9 million and $0, respectively.

6

Other assets included the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Debt issuance costs, net	$	6,068	$	4,877
Investment in unconsoliated subsidiary		809		741
Other	$	1,047	$	627
	$	7,924	$	6,245

NOTE 3 - MULTI-CLIENT SERVICES LIBRARY

Multi-client Services library consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Multi-client library, at cost	$	519,228	$	475,379
Less: accumulated amortization		265,500		243,144
Multi-client library, net	$	253,728	$	232,235

Multi-client Services library amortization expense for the three months ended March 31, 2012 and 2011 was $22.4 million and $25.5 million, respectively.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in thousands): 

	March 31, 2012		December 31, 2011
	(unaudited)
Furniture and fixtures	$	143	$	216
Boats		7,174		7,174
Machinery and equipment		307,958		321,342
Computers and software		16,630		17,077
Land		2,157		2,157
Buildings		13,601		13,601
		347,663		361,567
Less: accumulated depreciation		243,200		252,517
		104,463		109,050
Construction in process		8,993		9,370
Net property and equipment	$	113,456	$	118,420

The following table represents an analysis of depreciation expense (in thousands):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Gross depreciation expense	$	10,065	$	12,622
Less: capitalized depreciation for Multi-client library		2,958		4,667
Net depreciation expense	$	7,107	$	7,955

7

In March 2012, the Company entered into various agreements for the sale of certain assets resulting in total proceeds of $14.0 million. As a result, the Company recognized a gain of $1.9 million.

In March 2012, the Company completed a like-kind equipment exchange resulting in a gain of $7.5 million.

NOTE 5 - GOODWILL AND OTHER INTANGIBLES

Goodwill and other intangibles included the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Customer list	$	3,984	$	3,984
Trademark		1,759		1,679
Patents		3,913		3,913
Non-compete agreements		1,058		866
Intellectual property		8,171		2,901
		18,885		13,343
Less: accumulated amortization		4,171		3,414
Total intangible assets, net		14,714		9,929
Goodwill		12,381		12,381
Total goodwill and other intangibles	$	27,095	$	22,310

Intangible assets subject to amortization are amortized over their estimated useful lives which are between two and fifteen years.  Amortization expense for the three months ended March 31, 2012 and 2011 was $0.8 million and $0.4 million, respectively. In January 2012 the Company increased $4.4 million in other intangible assets as a result of the acquisition of Sensor Geophysical Ltd. During the three months ended March 31, 2012, the Company capitalized $1.1 million of development costs related to internal use software to other intangible assets.

NOTE 6 - INCOME TAXES

The Company provides for income taxes during interim periods based on an estimate of the effective tax rate for the year.  Discrete items and changes in the estimate of the annual effective tax rate are recorded in the period in which they occur.

The Company assesses the likelihood that deferred tax assets will be recovered from the existing deferred tax liabilities or future taxable income in each jurisdiction.  To the extent the Company believes that recovery is not more likely than not, it establishes a valuation allowance.  The Company has recorded valuation allowances in several non-US jurisdictions for its net deferred tax assets since management believes it is more likely than not that these assets will not be realized because the future taxable income necessary to utilize these losses cannot be established, projected, or the Company no longer has operations in these jurisdictions.

The effective income tax rate for the three months ended March 31, 2012 and 2011 was 46.1% and 52.3%, respectively.

The Company’s effective income tax rate in 2012 and 2011 differs from the federal statutory rate primarily due to state income taxes, non-deductible expenses, tax rate differential from non-US operations, and valuation allowances in non-US jurisdictions.

8

NOTE 7 - LONG-TERM DEBT

Senior Notes: On April 22, 2010, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Banc of America Securities LLC, as representatives of the initial purchasers (the “Initial Purchasers”), relating to the offer and sale by the Company of $200.0 million aggregate principal amount of its 10½% senior notes due 2017 (the “Notes”).  The Company’s net proceeds from the offering were approximately $188.1 million after deducting the Initial Purchasers’ discounts, offering expenses and original issue discount. The issuance of the Notes occurred on April 27, 2010. The Notes were offered and sold to the Initial Purchasers and resold only to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and in offshore transactions in reliance on Regulation S under the Securities Act.

The Notes are a general unsecured, senior obligation of the Company. The Notes are unconditionally guaranteed as to principal, premium, if any, and interest by the Company’s domestic subsidiaries (the “Guarantors”) on a senior unsecured basis. (See Note 15)

The Company used the proceeds from the offering and sale of the Notes to repay outstanding indebtedness and used the remaining proceeds for capital expenditures and for general working capital purposes.

On April 27, 2010, in connection with the offering of the Notes, the Company entered into (i) an Indenture with The Bank of New York Mellon Trust Company, N.A., (the “Trustee”), and (ii) a Registration Rights Agreement with the Initial Purchasers. The following is a brief summary of the material terms and conditions of the Indenture and the Registration Rights Agreement.

The Company and the Guarantors entered into an Indenture with the Trustee, pursuant to which the Company issued the Notes at a price equal to 97.009% of their face value.

On March 23, 2012, the Company entered into a Purchase Agreement (the “New Purchase Agreement”) with Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Citigroup Global Markets, Inc., as representatives of the initial purchasers (the “New Initial Purchasers”), relating to the offer and sale by the Company of $50.0 million aggregate principle amount of its 10½% senior notes due 2017 (the “New Notes”). The Company’s net proceeds from the offering were approximately $47.0 million after deducting the Initial Purchasers’ discounts, offering expenses and original issue discount.  The issuance of the New Notes occurred on March 28, 2012. The New Notes were offered and sold to the Initial Purchasers and resold only to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144Aunder the Securities Act, and in offshore transactions in reliance on Regulation S under the Securities Act.

The New Notes are a general unsecured, senior obligation of the Company. The New Notes are unconditionally guaranteed as to principal, premium, if any, and interest by the Company’s domestic subsidiaries (the “Guarantors”) on a senior unsecured basis. (See Note 15)

The Company used the proceeds from the offering and sale of the New Notes to repay outstanding indebtedness under its existing Bank of America Revolving Credit Facility.

The New Notes are covered under the terms of the Indenture dated April 27, 2010. The Notes and the New Notes are hereinafter referred to as the “Senior Notes”.

Interest — The Notes and the New Notes will bear interest from April 27, 2010 and from March 28, 2012, respectively, at a rate of 10.5% per annum. The Company will pay interest on the Notes and the New Notes semi-annually, in arrears, on May 1 and November 1 of each year, beginning November 1, 2010 and May 1, 2012, respectively.

Principal and Maturity — The Senior Notes were issued with a $250.0 million aggregate principal amount and will mature on May 1, 2017.

Optional Redemption by the Company — At any time prior to May 1, 2013, the Company may redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of certain equity offerings at a redemption price of 110.500% of the aggregate principal amount of the Senior Notes redeemed if at least 65% of the aggregate principal amount of the Senior Notes remains outstanding immediately after such redemption and the redemption occurs within 90 days of the closing date of such equity offering. On or after May 1, 2014, the Company may redeem the Senior Notes at the following percentages of the original principal amount: (i) 105.250% from May 1, 2014 to April 30, 2015; (ii) 102.625% from May 1, 2015 to April 30, 2016; and (iii) 100% from May 1, 2016 and thereafter.

9

Repurchase Obligations by the Company — If there is a change of control of the Company (as defined in the Indenture), each holder of the Senior Notes may require the Company to purchase their Senior Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

Events of Default — The Indenture also contains events of default including, but not limited to, the following: (i) nonpayment; (ii) defaults in certain other indebtedness of the Company or the Guarantors; and (iii) the failure of the Company or the Guarantors to comply with their respective covenants in the event of a mandatory redemption, optional redemption, option to repurchase, or a merger, consolidation or sale of assets. Upon an event of default, the holders of the Senior Notes or the Trustee may declare the Senior Notes due and immediately payable. As of March 31, 2012, the Company was in compliance with all respective covenants.

Debt Issuance Costs: The costs related to the issuance of debt are capitalized and amortized to interest expense using the effective interest method over the maturity period of the related debt. Accumulated amortization was $1.2 million and $1.0 million at March 31, 2012 and December 31, 2011, respectively.

Bank of America Revolving Credit Facility: On April 30, 2010, the Company entered into a revolving credit facility under the terms of a Credit Agreement (the “Revolving Credit Facility”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender from time to time party thereto. The Revolving Credit Facility provided for borrowings of up to $50.0 million with a maturity date of April 30, 2013. On June 9, 2011, the Company amended the Revolving Credit Facility to provide for borrowings of up to $70.0 million under substantially similar terms. The loans under the Revolving Credit Facility bear interest at a rate equal to LIBOR plus the Applicable Rate or the Base Rate plus the Applicable Rate. The Base Rate is defined as the higher of (x) the prime rate and (y) the Federal Funds rate plus 0.50%. The Applicable Rate is defined as a percentage determined in accordance with a pricing grid based upon the Company’s leverage ratio, that will decline from LIBOR plus 4.00% or the prime rate plus 3.00% to a minimum rate equal to LIBOR plus 3.50% or the prime rate plus 2.50%. The Company is able to prepay borrowings under the Revolving Credit Facility at any time without penalty or premium, subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings. The Company also pays a commitment fee of 0.75% per annum on the actual daily unused portions of the Revolving Credit Facility.

The Company’s Revolving Credit Facility is secured by a first priority lien on substantially all of the Company’s assets, the assets of the Company’s non-foreign subsidiaries, the stock of the Company’s non-foreign subsidiaries and 66% of the stock of certain of the Company’s foreign subsidiaries. In addition, the Company’s non-foreign subsidiaries will guarantee the Company’s obligations under the Revolving Credit Facility.

The terms of the Revolving Credit Facility limit the Company’s ability and the ability of certain of the Company’s subsidiaries to, among other things: incur or guarantee additional indebtedness; grant additional liens on the Company’s assets; make certain investments or certain acquisitions of substantially all or a portion of another entity’s business or assets; merge with another entity or dispose of the Company’s assets; pay dividends; enter into transactions with affiliates; engage in other lines of business and repurchase stock.

Additionally, the Revolving Credit Facility requires that the Company maintain certain ratios of total senior, secured debt to consolidated EBITDA (as defined therein), and of consolidated EBITDA to consolidated interest. The Revolving Credit Facility includes customary provisions with respect to events of default. Upon the occurrence and continuation of an event of default under the Revolving Credit Facility, the lenders will be able to, among other things, terminate their revolving loan commitments, accelerate the repayment of the loans outstanding and declare the same to be immediately due and payable. As of March 31, 2012, the Company was in compliance with all respective covenants.

Promissory Notes: From time to time, the Company issues short term promissory notes to various foreign financial institutions to finance equipment purchases and working capital needs for our foreign operations.  The balance outstanding under these promissory notes as of March 31, 2012 and December 31, 2011 was $14.1 million and $10.7 million, respectively, at weighted average interest rates of 11.6% and 10.1%, respectively.

In January 2011, the Company issued a non-interest bearing promissory note related to the acquisition of STRM LLC. The balance outstanding under the promissory note as of March 31, 2012 and December 31, 2011 was $0.8 million and $1.0 million, respectively.

Notes payable - insurance: In April 2011, in exchange for insurance services provided, the Company issued two negotiable promissory notes for $1.4 million and $0.5 million at interest rates of 3.05% and 3.19% per annum, respectively. As of March 31, 2012, they were paid in full.

10

Letter of Credit Facility:  In February 2007, the Company entered into a $10.0 million revolving line of credit which is secured by restricted cash.  The terms of the letter of credit facility as currently written only allow for letters of credit to be drawn on the available credit; however, the cash balance in excess of the total outstanding letters of credit may be withdrawn at any time.  As of March 31, 2012 and December 31, 2011, the letters of credit outstanding were $2.8 million and $5.6 million, respectively.

Long-term debt consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Senior notes	$	250,000	$	200,000
Revolving credit facility		24,060		70,000
Promissory notes		14,957		11,678
Notes payable - insurance		-		538
		289,017		282,216
Less:  unamortized discount		7,752		4,927
		281,265		277,289
Less:  current portion		14,357		11,416
Long-term debt, net of current portion and unamortized discount	$	266,908	$	265,873

NOTE 8 – CAPITAL LEASE

In 2011, the Company entered into various sale and leaseback transactions for certain seismic equipment, computer equipment and vehicles that were accounted for as capital leases, with interest rates ranging from 5.0% to 6.3%. The Company received proceeds of $13.2 million and will make monthly payments until maturity dates ranging from March 2013 to September 2013. The balance as of March 31, 2012 was $7.0 million.

In December 2011, the Company entered into a lease transaction for certain heavy equipment that is accounted for as a capital lease with an interest rate of 5.2%. The equipment leased has an initial value of $1.4 million. The Company will make monthly payments until the maturity date of November 2013. The balance as of March 31, 2012 was $1.1 million.

NOTE 9 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows current guidance as it relates to financial assets and financial liabilities, which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements.  The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements.

This guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.   Hierarchical levels, as defined in this guidance and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities are as follows:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Inputs that are both significant to the fair value measurement and unobservable.

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the financial instruments that could have been realized as of March 31, 2012 or that will be realized in the future and do not include expenses that could be incurred in an actual sale or settlement.

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In the normal course of operations, the Company is exposed to market risks arising from adverse changes in interest rates.  Market risk is defined for these purposes as the potential for change in the fair value of debt instruments resulting from an adverse movement in interest rates.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and current debt approximate their fair value due to the short maturity of those instruments, and therefore, have been excluded from the table below.  The fair value of the Notes is determined by multiplying the principal amount by the market price.  The following table sets forth the level 1 fair value of the Company’s financial assets and liabilities as of March 31, 2012 and December 31, 2011 (in thousands):

	March 31, 2012				December 31, 2011
	(unaudited)
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt	$	195,248	$	198,250	$	195,073	$	187,250
Long-term debt	$	47,000	$	47,000	$	-	$	-

The Company is not a party to any hedge arrangements, commodity swap agreements or other derivative financial instruments.

The Company utilizes foreign subsidiaries and branches to conduct operations outside of the United States. These operations expose the Company to market risks from changes in foreign exchange rates.

NOTE 10 - STOCK-BASED COMPENSATION

The Company follows the current guidance for share-based payments which requires all stock-based payments, including stock options, to be recognized as an operating expense over the vesting period, based on their grant date fair values.

In July 2006, the Company’s board of directors and stockholders adopted the Global Geophysical Services, Inc. 2006 Incentive Compensation Plan (the “2006 Incentive Plan”).  The 2006 Incentive Plan provides for a variety of incentive awards, including nonstatutory stock options, incentive stock options within the meaning of Section 422 of the Internal Revenue Code, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based awards, and other stock-based awards.  A total of 9,203,058 shares of common stock are reserved for issuance under the 2006 Incentive Plan.  As of March 31, 2012, a total of 4,830,400 options have been granted and 2,557,200 have been forfeited.

Incentive Stock Options:  The Company estimates the fair value of each stock option on the date of grant using the Black-Scholes-Merton valuation model.  The volatility is based on expected volatility over the expected life of eighty-four months.  As the Company has not historically declared dividends, the dividend yield used in the calculation is zero. Actual value realized, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions.  There is no assurance the value realized by an optionee will be at or near the value estimated by the Black-Scholes-Merton model.

The Company did not grant any stock options during the three months ended March 31, 2012. The following assumptions were used for the three month period ended March 31, 2011:

	Three Month Period Ended March 31, 2011
Risk-free interest rates		2.82	%
Expected lives (in years)		7
Expected dividend yield		0.00	%
Expected volatility		59.72	%

The computation of expected volatility during the three months ended March 31, 2011 was based on the historical volatility. Historical volatility was calculated from historical data for the time approximately equal to the expected term of the option award starting from the grant date. The risk-free interest rate assumption is based upon the U.S. Treasury yield curve in effect at the time of grant for the period corresponding with the expected life of the option.

12

Option activity for the three months ended March 31, 2012 is summarized as follows:

	Number of Optioned Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Weighted Average Optioned Grant Date Fair Value
Balance as of December 31, 2011		2,386,700		$	22.86			$	5.78
Expired
Granted		-		$	-			$	-
Exercised
Forfeited		(113,500	)	$	22.53			$	7.58
Balance as of March 31, 2012		2,273,200		$	22.88		6.37	$	5.69
Exercisable as of March 31, 2012		1,748,525		$	22.93		6.32	$	4.72

Compensation expense associated with stock options for the three months ended March 31, 2012 and 2011 was $0.4 million and $0.5 million, respectively, and is included in selling, general and administrative expenses in the statements of operations. At March 31, 2012 and 2011, the Company had 524,675 and 1,376,075 of nonvested stock option awards, respectively. The total cost of nonvested stock option awards which the Company had not yet recognized was approximately $2.4 million at March 31, 2012.  Such amount is expected to be recognized approximately over a period of 3.25 years from March 31, 2012.

Restricted Stock:  To encourage retention and performance, the Company granted certain employees and consultants restricted shares of common stock with a fair value per share determined in accordance with conventional valuation techniques, including but not limited to, arm’s length transactions, net book value or multiples of comparable company earnings before interest, taxes, depreciation and amortization, as applicable. Restricted stock activity for the three months ended March 31, 2012 is summarized as follows:

	Number of Nonvested Restricted Share Awards			Weighted Average Grant Date Fair Value
Balance as of December 31, 2011		994,836		$	10.84
Granted		68,750			9.97
Vested		(92,704	)		11.17
Forfeited		(46,423	)		11.52
Balance as of March 31, 2012		924,459		$	10.71

Compensation / charitable contribution expense associated with restricted stock for the three months ended March 31, 2012 and 2011 was $1.1 million and $0.9 million, respectively, and is included in selling, general and administrative expenses in the statements of operations.  The total cost of non-vested stock awards which the Company has not yet recognized at March 31, 2012 was approximately $6.9 million. This amount is expected to be recognized over the next three years.

Employee Stock Purchase Plan: During the third quarter of 2011, the Company launched an Employee Stock Purchase Plan (“ESPP”). Under the terms of the ESPP, employees can choose to have a portion of their earnings withheld, subject to certain restrictions, to purchase the Company's common stock. The purchase price of the stock is 85% of the lower of the stock price at the beginning or end of the plan period at three-month intervals. The expense related to the ESPP for the three months ended March 31, 2012 was immaterial to our consolidated financial statements. 

NOTE 11 - EARNINGS PER SHARE

The Company follows current guidance for share-based payments which are considered as participating securities. All share-based payment awards that contained non-forfeitable rights to dividends, whether paid or unpaid, were designated as participating securities and included in the computation of earnings per share (“EPS”).

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The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Net income, attributable to common shareholders	$	6,930	$	2,789
Basic weighted average shares outstanding		37,039		36,407
Diluted
Shares issuable from the assumed conversion of stock warrants		-		261
Shares issuable from the assumed conversion of stock options		-		-
Total		37,039		36,668
Basic income per share	$	0.19	$	0.08
Diluted income per share	$	0.19	$	0.08

For the three months ended March 31, 2012, 2,273,200 out-of-the-money stock options have been excluded from diluted earnings per share because they are considered anti-dilutive.

For the three months ended March 31, 2011, 2,814,700 out of the money stock options have been excluded from diluted earnings per share because they are considered anti-dilutive.

NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information (in thousands):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Interest paid	$	1,526	$	325
Income taxes paid	$	885	$	1,915

The following is supplemental disclosure of non-cash investing and financing activities (in thousands):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Option payable recorded against additional paid in capital	$	-	$	702
Non-cash Multi-client asset recorded as deferred revenue	$	1,273	$	715
Note payable related to purchase of business	$	-	$	1,000
Original issue discount on notes payable	$	3,000	$	-
Non-cash property and equipment additions associated with swap of property and equipment	$	7,500	$	-
Purchase price not paid at close of acquisition	$	2,993	$	-

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NOTE 13 – SEGMENT INFORMATION

The Company has two reportable segments: Proprietary Services and Multi-client Services.

The following table sets forth significant information concerning the Company’s reportable segments as of and for the three months ended March 31, 2012 and 2011 (in thousands):

	As of and for the Three Month Period Ended March 31, 2012 (unaudited)
	Proprietary Services		Multi-Client Services		Corporate			Total
Revenue	$	64,835	$	31,276	$	-		$	96,111
Segment income (loss)	$	11,757	$	4,974	$	(9,801	)	$	6,930
Segment assets	$	67,485	$	277,717	$	178,395		$	523,597

	As of and for the Three Month Period Ended March 31, 2011 (unaudited)
	Proprietary Services		Multi-Client Services		Corporate			Total
Revenue	$	39,041	$	37,794	$	-		$	76,835
Segment income (loss)	$	4,809	$	7,893	$	(9,913	)	$	2,789
Segment assets	$	49,745	$	213,860	$	176,939		$	440,544

NOTE 14 – RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU 2011-04”). ASU 2011-04 changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to ensure consistency between U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied prospectively. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011, with early adoption permitted. The adoption of this standard did not materially expand our consolidated financial statement footnote disclosures.

In June 2011, FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU 2011-05”). This standard eliminated the option to report other comprehensive income and its components in the statement of changes in equity. Under this standard, an entity can elect to present items of net income and other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, only the format for presentation. The updated guidance and requirements are effective for interim and annual periods beginning after December 15, 2011. The amendments should be applied retrospectively. Early adoption is permitted. In December 2011, the FASB issued ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”). ASU 2011-12 defers the effective date of the requirement in ASU 2011-05 to disclose on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. All other requirements of ASU 2011-05 are not affected by ASU 2011-12. We believe that the adoption of ASU 2011-05 and ASU 2011-12 will not have material impact on our consolidated financial position, results of operations, or cash flows.

In September 2011, the FASB issued ASU No.  2011-08, “Testing Goodwill for Impairment (Topic 350):  Intangibles—Goodwill and Other” (“ASU 2011-08”). ASU 2011-08 amends current goodwill impairment testing guidance by providing entities with an option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Company adopted this provision effective for the fiscal year ended December 31, 2011.

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NOTE 15 – GUARANTEES OF REGISTERED SECURITIES

On August 3, 2010, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission. Under this registration statement, the Company exchanged $200.0 million of its publicly registered 10½% senior notes due 2017 for a like amount of its privately placed 10½% senior notes due 2017. The debt securities sold are fully and unconditionally guaranteed, on a joint and several bases, by the guarantor subsidiaries which will correspond to all subsidiaries located in the United States. The non-guarantor subsidiaries consist of all subsidiaries outside of the United States.

Separate condensed consolidating financial statement information for the guarantor subsidiaries and non-guarantor subsidiaries as of March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012 and 2011 is as follows (in thousands):

	As of March 31, 2012 (Unaudited)
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	137,840	$	47,686		$	(64,132	)	$	121,394
Multi-client library, net		253,728		-			-			253,728
Property and equipment, net		108,620		4,836			-			113,456
Investment in subsidiaries		1		-			(1	)		-
Intercompany accounts		36,259		(36,259	)		-			-
Other non-current assets		34,887		132			-			35,019
TOTAL ASSETS	$	571,335	$	16,395		$	(64,133	)	$	523,597
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	123,687	$	65,441		$	(64,132	)	$	124,996
Long-term debt and capital lease obligations, net of current portion and unamortized discount		268,319		-			-			268,319
Deferred income tax and other non-current liabilities		8,131		-			-			8,131
TOTAL LIABILITIES		400,137		65,441			(64,132	)		401,446
Stockholders' equity		171,198		(49,046	)		(1	)		122,151
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	571,335	$	16,395		$	(64,133	)	$	523,597

	As of December 31, 2011
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	139,352	$	47,449		$	(59,638	)	$	127,163
Multi-client library, net		232,235		-			-			232,235
Property and equipment, net		113,041		5,379			-			118,420
Investment in subsidiaries		1		-			(1	)		-
Intercompany accounts		30,807		(30,807	)		-			-
Other non-current assets		28,340		215			-			28,555
TOTAL ASSETS	$	543,776	$	22,236		$	(59,639	)	$	506,373
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	116,882	$	62,742		$	(59,638	)	$	119,986
Long-term debt and capital lease obligations, net of current portion and unamortized discount		268,486		-			-			268,486
Deferred income tax and other non-current liabilities		4,339		-			-			4,339
TOTAL LIABILITIES		389,707		62,742			(59,638	)		392,811
Stockholders' equity		154,069		(40,506	)		(1	)		113,562
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	543,776	$	22,236		$	(59,639	)	$	506,373

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	Three Month Period Ended March 31, 2012 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	61,003		$	38,125		$	(3,017	)	$	96,111
Operating expenses		26,627			36,702			(2,635	)		60,694
Selling, general and administrative expenses		7,249			8,674			(382	)		15,541
Income (loss) from operations		27,127			(7,251	)		-			19,876
Interest income (expense) , net		(7,117	)		2			-			(7,115	)
Other income (expense), net		(425	)		133			-			(292	)
Income (loss) before income taxes		19,585			(7,116	)		-			12,469
Income tax expense		4,325			1,424			-			5,749
Income (loss) after income taxes		15,260			(8,540	)		-			6,720
Net loss, attributable to noncontrolling interests		(210	)		-			-			(210	)
Net income (loss), attributable to common shareholders	$	15,470		$	(8,540	)	$	-		$	6,930

	Three Month Period Ended March 31, 2011 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	70,045		$	8,342		$	(1,552	)	$	76,835
Operating expenses		48,009			8,327			(1,261	)		55,075
Selling, general and administrative expenses		9,362			1,941			(291	)		11,012
Income (loss) from operations		12,674			(1,926	)		-			10,748
Interest income (expense), net		(5,819	)		12			-			(5,807	)
Other income (expense), net		833			(17	)		-			816
Income (loss) before income taxes		7,688			(1,931	)		-			5,757
Income tax expense		2,900			112			-			3,012
Income (loss) after income taxes		4,788			(2,043	)		-			2,745
Net loss, attributable to noncontrolling interests		(44	)		-			-			(44	)
Net income (loss), attributable to common shareholders	$	4,832		$	(2,043	)	$	-		$	2,789

	Three Month Period Ended March 31, 2012 (Unaudited)
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by (used in) operating activities	$	42,847		$	(3,920	)	$	-	$	38,927
Net cash used in investing activities		(34,284	)		(61	)		-		(34,345	)
Net cash provided by (used in) financing activities		1,470			(589	)		-		881
Net increase (decrease) in cash and cash equivalents	$	10,033		$	(4,570	)	$	-	$	5,463

	Three Month Period Ended March 31, 2011 (Unaudited)
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by (used in) operating activities	$	55,264		$	(1,856	)	$	-	$	53,408
Net cash used in investing activities		(62,661	)		(1,230	)		-		(63,891	)
Net cash provided by financing activities		3,107			-			-		3,107
Net decrease in cash and cash equivalents	$	(4,290	)	$	(3,086	)	$	-	$	(7,376	)

17

NOTE 16 - SUBSEQUENT EVENTS

The Company evaluates events and transactions that occur after the balance sheet date but before the consolidated financial statements are issued. The Company evaluated such events and transactions through the date when the consolidated financial statements were filed electronically with the Securities and Exchange Commission.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in combination with our Interim Financial Statements contained in this Form 10-Q and our Financial Statements for the year ended December 31, 2011 included in our form 10-K (Commission file number: 001-34709).

Forward Looking Statements

Statements other than statements of historical fact included in this Form 10-Q that relate to forecasts, estimates or other expectations regarding future events regarding technological advancements and our financial position, business strategy and plans and objectives of our management for future operations, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and similar expressions, as they relate to us or our management, identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about business outlook for the year, backlog and bid activity, business strategy, and related financial performance and statements with respect to future events.  Such forward-looking statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, industry conditions, market position, future operations, profitability, liquidity, backlog, capital resources and other information currently available to management and believed to be appropriate. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, the volatility of oil and natural gas prices, disruptions in the global economy, dependence upon energy industry spending, delays, reductions or cancellations of service contracts, high fixed costs of operations, weather interruptions, inability to obtain land access rights of way, industry competition, limited number of customers, credit risk related to our customers, asset impairments, the availability of capital resources, and operational disruptions. A discussion of these factors, including risks and uncertainties, is set forth under “Risk Factors” in our form 10-K (Commission file number: 001-34709) filed with the Securities and Exchange Commission. These forward-looking statements reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategies and liquidity. Although the Company believes that the expectations reflected in such statements are reasonable, the Company can give no assurance that such expectations will be correct.  All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements. We assume no obligation to update any such forward-looking statements.

Our backlog estimates represent those seismic data acquisition projects for which a client has executed a contract and has a scheduled start date for the project as well as unrecognized pre-committed funding from our Multi-client Services segment. Backlog estimates are based on a number of assumptions and estimates including assumptions related to foreign exchange rates and proportionate performance of contracts and our valuation of assets, such as seismic data, to be received by us as payment under certain agreements. The realization of our backlog estimates is further affected by our performance under term rate contracts, as the early or late completion of a project under term rate contracts will generally result in decreased or increased, as the case may be, revenues derived from these projects. Contracts for services are also occasionally modified by mutual consent. Because of potential changes in the scope or schedule of our clients' projects, we cannot predict with certainty when or if our backlog will be realized. Even where a project proceeds as scheduled, it is possible that the client may default and fail to pay amounts owed to us. In addition, the contracts in our backlog are cancelable by the client. Material delays, payment defaults or cancellations could reduce the amount of backlog currently reported, and consequently, could inhibit the conversion of that backlog into revenues.

Overview

We provide an integrated suite of seismic data solutions to the global oil and gas industry, including our high resolution RG-3D Reservoir Grade® (“RG3D”) seismic solutions. Our seismic data solutions consist primarily of seismic data acquisition, microseismic monitoring, processing and interpretation services. Through these services, we deliver data that enables the creation of high-resolution images of the earth’s subsurface and that reveals complex structural and stratigraphic details. These images are used primarily by oil and gas companies to identify geologic structures favorable to the accumulation of hydrocarbons, to reduce risk associated with oil and gas exploration, to optimize well completion techniques and to monitor changes in hydrocarbon reservoirs. Companies participating in the mining, geothermal and carbon sequestration businesses may also use seismic services. We integrate seismic survey design, data acquisition, processing and interpretation to deliver enhanced services to our clients. In addition, we own and market a growing seismic data library and license this data to clients on a non-exclusive basis.

19

Our seismic solutions are used by many of the world’s largest and most technically advanced oil and gas exploration and production companies, including national oil companies (“NOCs”), major integrated oil companies (“IOCs”), and large independent oil and gas companies. We provide seismic data acquisition on a worldwide basis for land, transition zone and shallow marine areas, including challenging environments such as marshes, forests, jungles, arctic climates, mountains and deserts. We also have significant operational experience in most of the major U.S. shale plays, where we believe our high resolution RG3D seismic solutions are particularly well-suited.

We generate revenues primarily by providing Proprietary Services and Multi-client Services to our clients. Our Proprietary Services generate revenues by conducting geophysical surveys for our clients on a contractual basis where our clients generally acquire all rights to the seismic data obtained through such survey. We also generate revenues by providing microseismic monitoring, data processing and interpretation services. Our Multi-client Services generate revenues by selling licenses, on a non-exclusive basis, to data we own as a part of our seismic data library.

Results of Operations

Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011 (unaudited)

The following table sets forth our consolidated revenues for the period indicated (amounts in millions):

	Three Month Period Ended March 31,
Revenues by Service	(unaudited)
	2012					2011
	Amount		%			Amount		%
Proprietary Services	$	64.8		67	%	$	39.0		51	%
Multi-client Services		31.3		33	%		37.8		49	%
Total	$	96.1		100	%	$	76.8		100	%

	Three Month Period Ended March 31,
Revenues by Area	(unaudited)
	2012					2011
	Amount		%			Amount		%
United States	$	49.8		52	%	$	41.2		54	%
International		46.3		48	%		35.6		46	%
Total	$	96.1		100	%	$	76.8		100	%

Revenues. We recorded revenues of $96.1 million for the three months ended March 31, 2012 compared to $76.8 million for the same period ended in 2011, an increase of $19.3 million, or 25%.

We recorded revenues from Proprietary Services of $64.8 million for the three months ended March 31, 2012, compared to $39.0 million for the same period in 2011, an increase of $25.8 million. Of this amount, the increase related to our U.S. Proprietary operations was $15.1 million. In Europe, Africa, and Middle East, the revenues for the three months ended March 31, 2012 increased to $8.8 million compared to zero for the corresponding period in 2011. The increase of $8.8 million was largely driven by an increase in our crew activities in Algeria and Poland.

Multi-client Services generated revenues of $31.3 million for the three months ended March 31, 2012 compared to $37.8 million for the same period of 2011, a decrease of $6.5 million, or 17%.  The $31.3 million in Multi-client Services revenues included $14.7 million of late sale revenues, $15.6 million of pre-commitment revenues, and $1.0 million in Non-cash data swap transactions. This compared to $10.4 million in late sales revenues, $26.4 million of pre-commitment revenues, and $1.0 million in Non-cash data swap transactions during the same period of 2011.

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The following table sets forth our consolidated Multi-client Services revenues for the period indicated (amounts in millions):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Multi-client revenues
Pre-commitments	$	15.6	$	26.4
Late sales		14.7		10.4
Subtotal		30.3		36.8
Non-cash data swaps		1.0		1.0
Total revenue	$	31.3	$	37.8

Operating expense.  Operating expenses, excluding depreciation and amortization increased by $11.2 million to $28.4 million for the three months ended March 31, 2012.  The primary causes of the increases to costs were compensation, including local labor and benefits, subcontractor costs, reimbursable expenses and material and supplies from the ramp up of proprietary projects in international markets for the three months ended March 31, 2012 versus the same period in 2011.

Selling, General and Administrative Expenses.  SG&A, excluding depreciation and amortization, increased by $4.3 million, or 42%, to $14.6 million for the three months ended March 31, 2012.  The SG&A cost increase is primarily due to the bad debt expense recorded for the settlement of disputed receivable and the increased compensation accrual for the three months ended March 31, 2012.

Depreciation and Amortization Expenses.  Total depreciation (net) and amortization expense decreased by $3.7 million, or 11%, to $30.2 million for the three months ended March 31, 2012.  The Multi-client Services amortization expense was $22.4 million for the three months ended March 31, 2012, representing a 71% average amortization rate for the period.  Gross depreciation expense for the quarter ended March 31, 2012 was $10.1 million, of which, $3.0 million was capitalized in connection with our Multi-client Services investments resulting in a net depreciation expense of $7.1 million.  Some of our older equipment continues to become fully depreciated. Approximately $2.5 million of library amortization expense was attributable to Multi-client projects for which there was no corresponding revenue during the period.

The following table summarizes our depreciation and amortization for the three month period ended (amounts in millions):

	Three Month Period Ended March 31,
	2012			2011
	(unaudited)
Gross depreciation expense	$	10.1		$	12.6
Less: capitalized depreciation for Multi-client library		3.0			4.7
Net depreciation expense	$	7.1		$	7.9
Amortization of intangibles expense		0.7			0.5
Multi-client amortization expense		22.4			25.5
Total depreciation (net) & amortization expense	$	30.2		$	33.9
Average Multi-client amortization rate for the period		71	%		68	%

Interest Expense, Net.  Interest expense, net, increased by $1.3 million, or 22%, to $7.1 million for the three months ended March 31, 2012, compared to $5.8 million for the same quarter of 2011. The increase of interest expense relates to the increased borrowings outstanding under the revolving credit facility and various Promissory Notes.

Other Income (Expense), Net.  Other income (expense), net, was a loss of $0.3 million for the three months ended March 31, 2012 compared to a gain of $0.8 million in the same quarter of 2011. The primary difference related to the foreign exchange loss.

21

Income Tax Expense (Benefit).  Our income tax expense for the three months ended March 31, 2012 was $5.7 million compared to an expense of $3.0 million in the same period of 2011. The effective income tax rate for the three months ended March 31, 2012 and 2011 was approximately 46.1% and 52.3%, respectively. The Company’s effective income tax rate in 2012 and 2011 differs from the federal statutory rate primarily due to state income taxes, non-deductible expenses, tax rate differential from non-US operations, and valuation allowances in non-US jurisdictions.

EBITDA. We define EBITDA as net income before interest, taxes, depreciation and amortization. EBITDA is not a measure of financial performance derived in accordance with Generally Accepted Accounting Principles (GAAP) and should not be considered in isolation or as an alternative to net income as an indication of operating performance. The table below presents a reconciliation of EBITDA to net income (in thousands, except per share amounts):

	Three Month Period Ended March 31,
	2012					2011
	Amount			Per Share (2)		Amount			Per Share (2)
Net income, attributable to common shareholders	$	6,930		$	0.19	$	2,789		$	0.08
Net (loss) income, attributable to non-controlling interests		(210	)				(44	)
Income tax expense		5,749					3,012
Interest expense, net		7,115					5,807
EBIT (1)		19,584		$	0.53		11,564		$	0.32
Add: Multi-client amortization		22,356					25,511
Add: Depreciation (net) and intangible amortization		7,862					8,399
EBITDA (1)	$	49,802		$	1.34	$	45,474		$	1.24

(1) EBIT, EBITDA, EBIT per share and EBITDA per share (as defined in the calculations above) are non GAAP measurements.

(2) Calculated using diluted weighted average share outstanding.

Our management believes EBITDA is useful to an investor in evaluating our operating performance because this measure is widely used by investors in the energy industry to measure a company’s operating performance without regard to items excluded from the calculation of such term, which can vary substantially from company to company depending upon, among other factors, accounting methods, book value of assets, capital structure and the method by which assets were acquired. We believe EBITDA helps investors more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and asset base from our operating structure. EBITDA is also used as a supplemental financial measure by our management in presentations to our board of directors, as a basis for strategic planning and forecasting, and as a component for setting incentive compensation.

Liquidity and Capital Resources

Our primary sources of liquidity are cash generated by the Proprietary Services and Multi-client Services we provide to our clients, debt and equity offerings, our revolving credit facility, and equipment financings such as capital leases and proceeds from the sale of assets. Our primary uses of capital include the acquisition of seismic data recording equipment, seismic vehicles and vessels, other equipment needed to outfit new crews and to enhance the capabilities of and maintain existing crews’ energy sources, and investments in Multi-client Services data for our library. We also use capital to fund the working capital required to launch new crews and operate existing crews.  Our cash position, consistent with our revenues, depends to a large extent on the level of demand for our services. Historically, we have supplemented cash from operations with borrowings under our Revolving Credit Facility periodically as the need arises.

22

As of March 31, 2012, we had available liquidity as follows (amounts in millions):

	March 31, 2012
	(unaudited)
Available cash	$	27.0
Undrawn borrowing capacity under Revolving Credit Facility		45.9
Net available liquidity	$	72.9

The following table summarizes the net cash provided by (used in) operating, investing and financing activities for the three months ended March 31, 2012 and 2011 (amounts in millions):

	Three Month Period Ended March 31,
	2012			2011
	(unaudited)
Adjustments to reconcile net income to net cash	$	32.3		$	38.3
Effects of changes in operating assets and liabilities		6.6			15.1
Operating activities	$	38.9		$	53.4
Investing activities	$	(34.3	)	$	(63.9	)
Financing activities	$	0.9		$	3.1

Operating Activities.  Net cash provided by operating activities was $38.9 million for the three months ended March 31, 2012 compared to $53.4 million for the same period ended 2011, a decrease of $14.5 million. The primary changes were in net income which increased by $4.1 million and the decrease in accounts receivable, net of $9.9 million, and were offset by the gain on sale of assets increase of $9.4 million, the decrease of $7.3 million in accounts payable and accrued expenses, and the decrease of $11.2 million in deferred revenue.

Investing Activities. Net cash used in investing activities was $34.3 million for the three months ended March 31, 2012 compared to $63.9 million for the same period ended 2011, a decrease of $29.6 million. The decrease was primarily the result of decreased investment in our Multi-client Services library and increased proceeds from the sale of assets.  The following table sets forth our investment in our Multi-client Services library for the period indicated (amounts in millions): 

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Multi-client investment (period)
Cash	$	38.7	$	52.1
Capitalized depreciation (1)		3.0		4.7
Non-cash data swaps (2)		2.1		1.6
Total	$	43.8	$	58.4
Investment (cumulative)
Cash	$	446.7	$	282.4
Capitalized depreciation (1)		47.0		31.8
Non-cash data swaps (2)		25.5		20.6
Total		519.2		334.8
Cumulative amortization		265.5		156.0
Multi-client net book value	$	253.7	$	178.8

(1) Represents capitalized cost of the equipment, owned or leased, and utilized in connection with Multi-client Services.

(2) Includes non-cash data swap investment recorded as deferred revenue.

23

Financing Activities.  Net cash provided by financing activities was $0.9 million in the three months ended March 31, 2012 compared to $3.1 million for the same period in 2011, a decrease of $2.2 million.  The decrease was primarily the result of increased debt issuance costs and increased principal payments on capital leases.

Capital Resources.  On April 30, 2010, we completed the closing of a revolving credit facility under the terms of a Credit Agreement (the “Revolving Credit Facility”) with Bank of America, N.A., as administrative agent for each lender party to the Revolving Credit Facility.  Our Revolving Credit Facility provides for borrowings of up to $50.0 million. On June 9, 2011, we amended the Revolving Credit Facility to provide for borrowings of up to $70.0 million under substantially similar terms. The loans under our Revolving Credit Facility bear interest at a rate equal to LIBOR plus the Applicable Rate or the Base Rate plus the Applicable Rate. The Base Rate is defined as the higher of (x) the prime rate and (y) the Federal Funds rate plus 0.50%. The Applicable Rate is defined as a percentage determined in accordance with a pricing grid based upon our leverage ratio, that will decline from LIBOR plus 4.00% or the prime rate plus 3.00% to a minimum rate equal to LIBOR plus 3.50% or the prime rate plus 2.50%. We are able to prepay borrowings under our Revolving Credit Facility at any time without penalty or premium, subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings. We also will pay a commitment fee of 0.75% per annum on the actual daily unused portions of the Revolving Credit Facility.

Capital Expenditures. Capital expenditures for the three months ended March 31, 2012 were $60.8 million consisting of purchases of property and equipment of $9.5 million, expenditure related to the like-kind equipment exchange of $7.5 million and investments in our Multi-client Services library of $43.8 million.

Contractual Obligations

The following table summarizes the payments due in specific periods related to our contractual obligations as of March 31, 2012 (amounts in millions):

	Total		Within 1 Year		1-3 Years		3-5 Years		After 5 Years
Debt obligations	$	289,017	$	14,357	$	24,460	$	200	$	250,000
Capital lease obligations		8,093		6,682		1,411		-		-
Operating lease obligations		2,093		926		1,050		117		-
	$	299,203	$	21,965	$	26,921	$	317	$	250,000

24

Off Balance Sheet Arrangements

We do not currently have any off balance sheet arrangements.

Backlog

The Company’s Backlog as of March 31, 2012 was approximately $206 million ($137 million Multi-client Services pre-commitments; $69 million Proprietary Services) compared to $278 million as of March 31, 2011. Backlog as of December 31, 2011 was approximately $201 million.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The primary sources of market risk are the volatility of oil and gas prices and the concentration of our clients in the oil and gas industry. The volatility of oil and gas prices may have a positive or negative effect on demand and pricing for our services. The concentration of substantially all of our clients in the oil and gas industry may have a positive or negative effect on our exposure to credit risk since all of our clients are similarly affected by changes in industry and economic conditions. We regularly maintain deposits in our bank accounts in excess of the $250,000 guaranteed by the Federal Deposit Insurance Corporation. We are subject to market risk exposure related to changes in interest rates on our outstanding floating rate debt. Borrowings under our Revolving Credit Facility bear floating-rate interest, at our option, based on LIBOR or the prime rate. We do not enter into interest rate hedges or other derivatives for speculative purposes.

Financial instruments, which potentially subject us to concentration of credit risk, consist primarily of unsecured trade receivables. In the normal course of business, we provide credit terms to our clients. Accordingly, we perform ongoing credit evaluations of our clients and maintain allowances for possible losses.

We conduct business in many foreign countries. We are subject to foreign exchange risks because our contracts may, from time-to-time, be denominated in currencies other than the U.S. dollar while a significant portion of our operating expenses and income taxes accrue in other currencies. Movements in the exchange rates between the U.S. dollar and other currencies may adversely affect our financial results. Historically, we have not attempted to hedge foreign exchange risk. For the three months ended March 31, 2012, approximately 38% of our revenues were recorded in foreign currencies, and we recorded net foreign exchange loss of $0.1 million. We attempt to match our foreign currency revenues and expenses in order to balance our net position of receivables and payables in foreign currency. Nevertheless, during the past three years, foreign-denominated revenues have exceeded foreign-denominated payables primarily as a result of contract terms required by our national oil company clients. Our management believes that this will continue to be the case in the future.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer, principal financial officer, and principal accounting officer, we have evaluated the effectiveness of the Company disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of March 31, 2012.  Based on that evaluation, the Company’s principal executive, principal financial officer, and principal accounting officer have concluded that these controls and procedures were effective as of March 31, 2012.

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

25

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

Neither the Company nor any of its subsidiaries is a party to any pending legal proceedings other than certain routine litigation that is incidental to the Company’s business and that the Company believes is unlikely to materially impact the Company.  Moreover, the Company is not aware of any such legal proceedings that are contemplated by governmental authorities with respect to the Company, any of its subsidiaries, or any of their respective properties.

Item 1A.  Risk Factors

There has been no material changes in the risk factors included in our form 10-K (Commission file number: 001-34709).

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None

26

Item6.  Exhibits (items indicated by an (*) are filed herewith)

Exhibit No.	Description
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.3*	Certification of Chief Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3*	Certification of Chief Accounting Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GLOBAL GEOPHYSICAL SERVICES, INC.
Date:  May 4, 2012	/s/ Richard A. Degner
	Richard A. Degner
	President and Chief Executive Officer
	(Principal Executive Officer)
Date:  May 4, 2012	/s/ P. Mathew Verghese
	P. Mathew Verghese
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)
Date:  May 4, 2012	/s/ Jesse Perez, III
	Jesse Perez, III
	Chief Accounting Officer
	(Principal Accounting Officer)

 28

EX-31.1

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Richard A. Degner, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Global Geophysical Services, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 4, 2012	/s/ Richard A. Degner
	Richard A. Degner
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, P. Mathew Verghese, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Global Geophysical Services, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 4, 2012	/s/ P. Mathew Verghese
	P. Mathew Verghese
	Senior Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION BY CHIEF ACCOUNTING OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Jesse Perez, III, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Global Geophysical Services, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 4, 2012	/s/ Jesse Perez, III
	Jesse Perez, III
	Chief Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. § 1350

(Section 906 of Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report of Global Geophysical Services, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard A. Degner, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Dated:  May 4, 2012	/s/ Richard A. Degner
	Richard A. Degner
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. § 1350

(Section 906 of Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report of Global Geophysical Services, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, P. Mathew Verghese, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Dated:  May 4, 2012	/s/ P. Mathew Verghese
	P. Mathew Verghese
	Senior Vice President and Chief Financial Officer

EX-32.3

Exhibit 32.3

CERTIFICATION OF CHIEF ACCOUNTING OFFICER PURSUANT TO 18 U.S.C. § 1350

(Section 906 of Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report of Global Geophysical Services, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jesse Perez, III, Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Dated:  May 4, 2012	/s/ Jesse Perez, III
	Jesse Perez, III
	Chief Accounting Officer

XML

Note 3 - Multi-Client Services Library

3 Months Ended

Mar. 31, 2012

Multi Client Library [Text Block]

NOTE 3 - MULTI-CLIENT SERVICES LIBRARY

Multi-client Services library consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Multi-client library, at cost	$	519,228	$	475,379
Less: accumulated amortization		265,500		243,144
Multi-client library, net	$	253,728	$	232,235

Multi-client Services library amortization expense for the three months ended March 31, 2012 and 2011 was $22.4 million and $25.5 million, respectively.

XML

Note 2 - Selected Balance Sheet Accounts

3 Months Ended

Mar. 31, 2012

Supplemental Balance Sheet Disclosures [Text Block]

NOTE 2 - SELECTED BALANCE SHEET ACCOUNTS

Restricted cash investments (in thousands): 

	March 31, 2012		December 31, 2011
	(unaudited)
Pledged for letters of credit	$	2,821	$	5,639
	$	2,821	$	5,639

Prepaid expenses and other current assets included the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Mobilization costs, net	$	3,539	$	4,220
Prepaid expenses		503		862
Note receivable, current portion		92		968
	$	4,134	$	6,050

Accounts receivable, net included the following (in thousands):

	March 31, 2012			December 31, 2011
	(unaudited)
Accounts receivable, trade	$	58,357		$	65,019
Unbilled		27,826			25,355
Allowance for doubtful accounts		(4,929	)		(3,485	)
	$	81,254		$	86,889

The Company sometimes experiences disagreements or disputes with customers relating to the Company's charges. At December 31, 2011, the Company had disputes of approximately $4.8 million in net receivables which relate to charges for the Company's services with certain customers. As of March 31, 2012, the company recorded a net charge of $2.7 million as bad debt expense toward the resolution of certain disputes. Bad debt expense for the three months ended March 31, 2012 and 2011 was $2.9 million and $0, respectively.

Other assets included the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Debt issuance costs, net	$	6,068	$	4,877
Investment in unconsoliated subsidiary		809		741
Other	$	1,047	$	627
	$	7,924	$	6,245

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Consolidated Balance Sheets (March 31, 2012 Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
CURRENT ASSETS
Cash and cash equivalents	$ 26,988	$ 21,525
Restricted cash investments	2,821	5,639
Accounts receivable, net	81,254	86,889
Income and other taxes receivable	6,197	7,060
Prepaid expenses and other current assets	4,134	6,050
TOTAL CURRENT ASSETS	121,394	127,163
MULTI-CLIENT LIBRARY, net	253,728	232,235
PROPERTY AND EQUIPMENT, net	113,456	118,420
GOODWILL	12,381	12,381
INTANGIBLE ASSETS, net	14,714	9,929
OTHER ASSETS	7,924	6,245
TOTAL ASSETS	523,597	506,373
CURRENT LIABILITIES
Accounts payable and accrued expenses	53,946	55,764
Current portion of long-term debt	14,357	11,416
Current portion of capital lease obligations	6,682	7,256
Income and other taxes payable	2,551	5,169
Deferred revenue	43,711	39,560
Other payables	3,749	821
TOTAL CURRENT LIABILITIES	124,996	119,986
DEFERRED INCOME TAXES, net	6,122	2,120
LONG-TERM DEBT, net of current portion and unamortized discount	266,908	265,873
CAPITAL LEASE OBLIGATIONS, net of current portion	1,411	2,613
NON-CONTROLLING INTERESTS	1,259	1,469
OTHER LIABILITIES	750	750
TOTAL LIABILITIES	401,446	392,811
STOCKHOLDERS’ EQUITY
Common Stock, $0.01 par value, 100.0 million shares authorized, 46.8 million shares and 46.7 million shares issued and 37.1 million shares and 37.0 million shares outstanding at March 31, 2012 and December 31, 2011, respectively	468	467
Additional paid-in capital	247,763	246,104
Accumulated deficit	(29,554)	(36,484)
	218,677	210,087
Less: treasury stock, at cost, 9.7 million shares and 9.7 million shares at March 31, 2012 and December 31, 2011, respectively	96,526	96,525
TOTAL STOCKHOLDERS’ EQUITY	122,151	113,562
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 523,597	$ 506,373

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Consolidated Statements Of Stockholders' Equity (Unaudited) (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2011	$ 467	$ 246,104	$ (96,525)	$ (36,484)	$ 113,562
Issuance of common stock	1	218			219
Compensation expense associated with stock grants		1,389			1,389
Charitable contribution expense associated with stock grant		52			52
Purchase of treasury stock			(1)		(1)
Net income				6,930	6,930
Balance at Mar. 31, 2012	$ 468	$ 247,763	$ (96,526)	$ (29,554)	$ 122,151

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Note 16 - Subsequent Events

3 Months Ended

Mar. 31, 2012

Subsequent Events [Text Block]

NOTE 16 - SUBSEQUENT EVENTS

The Company evaluates events and transactions that occur after the balance sheet date but before the consolidated financial statements are issued. The Company evaluated such events and transactions through the date when the consolidated financial statements were filed electronically with the Securities and Exchange Commission.

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Note 1 - Basis of Presentation

3 Months Ended

Mar. 31, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 - BASIS OF PRESENTATION

The consolidated financial statements of Global Geophysical Services, Inc. and Subsidiaries (the “Company”) included herein are unaudited and have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2011.  In the opinion of management, the accompanying unaudited financial information includes all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the interim financial information.  Operating results for the interim periods are not necessarily indicative of the results of any subsequent periods.  Certain information in the footnote disclosures normally included in annual financial statements has been condensed or omitted for the interim periods presented.  These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2011. Certain amounts in the 2011 consolidated financial statements have been reclassified to conform to the classifications in the 2012 consolidated financial statements.

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Consolidated Balance Sheets (March 31, 2012 Unaudited) (Parentheticals) (USD $) In Millions, except Per Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100.0	100.0
Common stock, shares issued	46.8	46.7
Common stock, shares outstanding	37.1	37.0
Less: treasury stock, at cost, shares	9.7	9.7

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Note 11 - Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share Policy, Basic

NOTE 11 - EARNINGS PER SHARE

The Company follows current guidance for share-based payments which are considered as participating securities. All share-based payment awards that contained non-forfeitable rights to dividends, whether paid or unpaid, were designated as participating securities and included in the computation of earnings per share (“EPS”).

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Net income, attributable to common shareholders	$	6,930	$	2,789
Basic weighted average shares outstanding		37,039		36,407
Diluted
Shares issuable from the assumed conversion of stock warrants		-		261
Shares issuable from the assumed conversion of stock options		-		-
Total		37,039		36,668
Basic income per share	$	0.19	$	0.08
Diluted income per share	$	0.19	$	0.08

For the three months ended March 31, 2012, 2,273,200 out-of-the-money stock options have been excluded from diluted earnings per share because they are considered anti-dilutive.

For the three months ended March 31, 2011, 2,814,700 out of the money stock options have been excluded from diluted earnings per share because they are considered anti-dilutive.

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Document And Entity Information	3 Months Ended
	Mar. 31, 2012	May 01, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Global Geophysical Services Inc
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		37,120,986
Amendment Flag	false
Entity Central Index Key	0001311486
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

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Note 12 - Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2012

Supplemental Cash Flow Information Related Text

NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information (in thousands):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Interest paid	$	1,526	$	325
Income taxes paid	$	885	$	1,915

The following is supplemental disclosure of non-cash investing and financing activities (in thousands):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Option payable recorded against additional paid in capital	$	-	$	702
Non-cash Multi-client asset recorded as deferred revenue	$	1,273	$	715
Note payable related to purchase of business	$	-	$	1,000
Original issue discount on notes payable	$	3,000	$	-
Non-cash property and equipment additions associated with swap of property and equipment	$	7,500	$	-
Purchase price not paid at close of acquisition	$	2,993	$	-

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Consolidated Statements Of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
REVENUES	$ 96,111	$ 76,835
OPERATING EXPENSES	60,694	55,075
GROSS PROFIT	35,417	21,760
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES	15,541	11,012
INCOME FROM OPERATIONS	19,876	10,748
OTHER INCOME (EXPENSE)
Interest expense, net	(7,115)	(5,807)
Foreign exchange gain (loss)	(110)	818
Other expense	(182)	(2)
TOTAL OTHER EXPENSE	(7,407)	(4,991)
INCOME BEFORE INCOME TAXES	12,469	5,757
INCOME TAX EXPENSE	5,749	3,012
INCOME AFTER INCOME TAXES	6,720	2,745
NET LOSS, attributable to non-controlling interests	(210)	(44)
NET INCOME, attributable to common shareholders	$ 6,930	$ 2,789
INCOME PER COMMON SHARE
Basic (in Dollars per share)	$ 0.19	$ 0.08
Diluted (in Dollars per share)	$ 0.19	$ 0.08
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic (in Shares)	37,039	36,407
Diluted (in Shares)	37,039	36,668

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Note 6 - Income Taxes

3 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Text Block]

NOTE 6 - INCOME TAXES

The Company provides for income taxes during interim periods based on an estimate of the effective tax rate for the year.  Discrete items and changes in the estimate of the annual effective tax rate are recorded in the period in which they occur.

The Company assesses the likelihood that deferred tax assets will be recovered from the existing deferred tax liabilities or future taxable income in each jurisdiction.  To the extent the Company believes that recovery is not more likely than not, it establishes a valuation allowance.  The Company has recorded valuation allowances in several non-US jurisdictions for its net deferred tax assets since management believes it is more likely than not that these assets will not be realized because the future taxable income necessary to utilize these losses cannot be established, projected, or the Company no longer has operations in these jurisdictions.

The effective income tax rate for the three months ended March 31, 2012 and 2011 was 46.1% and 52.3%, respectively.

The Company’s effective income tax rate in 2012 and 2011 differs from the federal statutory rate primarily due to state income taxes, non-deductible expenses, tax rate differential from non-US operations, and valuation allowances in non-US jurisdictions.

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Note 5 - Goodwill And Other Intangibles

3 Months Ended

Mar. 31, 2012

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 5 - GOODWILL AND OTHER INTANGIBLES

Goodwill and other intangibles included the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Customer list	$	3,984	$	3,984
Trademark		1,759		1,679
Patents		3,913		3,913
Non-compete agreements		1,058		866
Intellectual property		8,171		2,901
		18,885		13,343
Less: accumulated amortization		4,171		3,414
Total intangible assets, net		14,714		9,929
Goodwill		12,381		12,381
Total goodwill and other intangibles	$	27,095	$	22,310

Intangible assets subject to amortization are amortized over their estimated useful lives which are between two and fifteen years.  Amortization expense for the three months ended March 31, 2012 and 2011 was $0.8 million and $0.4 million, respectively. In January 2012 the Company increased $4.4 million in other intangible assets as a result of the acquisition of Sensor Geophysical Ltd. During the three months ended March 31, 2012, the Company capitalized $1.1 million of development costs related to internal use software to other intangible assets.

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Note 13 - Segment Information

3 Months Ended

Mar. 31, 2012

Segment Reporting Disclosure [Text Block]

NOTE 13 – SEGMENT INFORMATION

The Company has two reportable segments: Proprietary Services and Multi-client Services.

The following table sets forth significant information concerning the Company’s reportable segments as of and for the three months ended March 31, 2012 and 2011 (in thousands):

	As of and for the Three Month Period Ended March 31, 2012 (unaudited)
	Proprietary Services		Multi-Client Services		Corporate			Total
Revenue	$	64,835	$	31,276	$	-		$	96,111
Segment income (loss)	$	11,757	$	4,974	$	(9,801	)	$	6,930
Segment assets	$	67,485	$	277,717	$	178,395		$	523,597

	As of and for the Three Month Period Ended March 31, 2011 (unaudited)
	Proprietary Services		Multi-Client Services		Corporate			Total
Revenue	$	39,041	$	37,794	$	-		$	76,835
Segment income (loss)	$	4,809	$	7,893	$	(9,913	)	$	2,789
Segment assets	$	49,745	$	213,860	$	176,939		$	440,544

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Note 9 - Fair Values Of Financial Instruments

3 Months Ended

Mar. 31, 2012

Fair Value Disclosures [Text Block]

NOTE 9 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows current guidance as it relates to financial assets and financial liabilities, which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements.  The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements.

This guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.   Hierarchical levels, as defined in this guidance and directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities are as follows:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Inputs that are both significant to the fair value measurement and unobservable.

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the financial instruments that could have been realized as of March 31, 2012 or that will be realized in the future and do not include expenses that could be incurred in an actual sale or settlement.

In the normal course of operations, the Company is exposed to market risks arising from adverse changes in interest rates.  Market risk is defined for these purposes as the potential for change in the fair value of debt instruments resulting from an adverse movement in interest rates.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and current debt approximate their fair value due to the short maturity of those instruments, and therefore, have been excluded from the table below.  The fair value of the Notes is determined by multiplying the principal amount by the market price.  The following table sets forth the level 1 fair value of the Company’s financial assets and liabilities as of March 31, 2012 and December 31, 2011 (in thousands):

	March 31, 2012				December 31, 2011
	(unaudited)
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt	$	195,248	$	198,250	$	195,073	$	187,250
Long-term debt	$	47,000	$	47,000	$	-	$	-

The Company is not a party to any hedge arrangements, commodity swap agreements or other derivative financial instruments.

The Company utilizes foreign subsidiaries and branches to conduct operations outside of the United States. These operations expose the Company to market risks from changes in foreign exchange rates.

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Note 7 - Long-Term Debt

3 Months Ended

Mar. 31, 2012

Long-term Debt [Text Block]

NOTE 7 - LONG-TERM DEBT

Senior Notes: On April 22, 2010, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Banc of America Securities LLC, as representatives of the initial purchasers (the “Initial Purchasers”), relating to the offer and sale by the Company of $200.0 million aggregate principal amount of its 10½% senior notes due 2017 (the “Notes”).  The Company’s net proceeds from the offering were approximately $188.1 million after deducting the Initial Purchasers’ discounts, offering expenses and original issue discount. The issuance of the Notes occurred on April 27, 2010. The Notes were offered and sold to the Initial Purchasers and resold only to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and in offshore transactions in reliance on Regulation S under the Securities Act.

The Notes are a general unsecured, senior obligation of the Company. The Notes are unconditionally guaranteed as to principal, premium, if any, and interest by the Company’s domestic subsidiaries (the “Guarantors”) on a senior unsecured basis. (See Note 15)

The Company used the proceeds from the offering and sale of the Notes to repay outstanding indebtedness and used the remaining proceeds for capital expenditures and for general working capital purposes.

On April 27, 2010, in connection with the offering of the Notes, the Company entered into (i) an Indenture with The Bank of New York Mellon Trust Company, N.A., (the “Trustee”), and (ii) a Registration Rights Agreement with the Initial Purchasers. The following is a brief summary of the material terms and conditions of the Indenture and the Registration Rights Agreement.

The Company and the Guarantors entered into an Indenture with the Trustee, pursuant to which the Company issued the Notes at a price equal to 97.009% of their face value.

On March 23, 2012, the Company entered into a Purchase Agreement (the “New Purchase Agreement”) with Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Citigroup Global Markets, Inc., as representatives of the initial purchasers (the “New Initial Purchasers”), relating to the offer and sale by the Company of $50.0 million aggregate principle amount of its 10½% senior notes due 2017 (the “New Notes”). The Company’s net proceeds from the offering were approximately $47.0 million after deducting the Initial Purchasers’ discounts, offering expenses and original issue discount.  The issuance of the New Notes occurred on March 28, 2012. The New Notes were offered and sold to the Initial Purchasers and resold only to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144Aunder the Securities Act, and in offshore transactions in reliance on Regulation S under the Securities Act.

The New Notes are a general unsecured, senior obligation of the Company. The New Notes are unconditionally guaranteed as to principal, premium, if any, and interest by the Company’s domestic subsidiaries (the “Guarantors”) on a senior unsecured basis. (See Note 15)

The Company used the proceeds from the offering and sale of the New Notes to repay outstanding indebtedness under its existing Bank of America Revolving Credit Facility.

The New Notes are covered under the terms of the Indenture dated April 27, 2010. The Notes and the New Notes are hereinafter referred to as the “Senior Notes”.

Interest — The Notes and the New Notes will bear interest from April 27, 2010 and from March 28, 2012, respectively, at a rate of 10.5% per annum. The Company will pay interest on the Notes and the New Notes semi-annually, in arrears, on May 1 and November 1 of each year, beginning November 1, 2010 and May 1, 2012, respectively.

Principal and Maturity — The Senior Notes were issued with a $250.0 million aggregate principal amount and will mature on May 1, 2017.

Optional Redemption by the Company — At any time prior to May 1, 2013, the Company may redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of certain equity offerings at a redemption price of 110.500% of the aggregate principal amount of the Senior Notes redeemed if at least 65% of the aggregate principal amount of the Senior Notes remains outstanding immediately after such redemption and the redemption occurs within 90 days of the closing date of such equity offering. On or after May 1, 2014, the Company may redeem the Senior Notes at the following percentages of the original principal amount: (i) 105.250% from May 1, 2014 to April 30, 2015; (ii) 102.625% from May 1, 2015 to April 30, 2016; and (iii) 100% from May 1, 2016 and thereafter.

Repurchase Obligations by the Company — If there is a change of control of the Company (as defined in the Indenture), each holder of the Senior Notes may require the Company to purchase their Senior Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

Events of Default — The Indenture also contains events of default including, but not limited to, the following: (i) nonpayment; (ii) defaults in certain other indebtedness of the Company or the Guarantors; and (iii) the failure of the Company or the Guarantors to comply with their respective covenants in the event of a mandatory redemption, optional redemption, option to repurchase, or a merger, consolidation or sale of assets. Upon an event of default, the holders of the Senior Notes or the Trustee may declare the Senior Notes due and immediately payable. As of March 31, 2012, the Company was in compliance with all respective covenants.

Debt Issuance Costs: The costs related to the issuance of debt are capitalized and amortized to interest expense using the effective interest method over the maturity period of the related debt. Accumulated amortization was $1.2 million and $1.0 million at March 31, 2012 and December 31, 2011, respectively.

Bank of America Revolving Credit Facility: On April 30, 2010, the Company entered into a revolving credit facility under the terms of a Credit Agreement (the “Revolving Credit Facility”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and each lender from time to time party thereto. The Revolving Credit Facility provided for borrowings of up to $50.0 million with a maturity date of April 30, 2013. On June 9, 2011, the Company amended the Revolving Credit Facility to provide for borrowings of up to $70.0 million under substantially similar terms. The loans under the Revolving Credit Facility bear interest at a rate equal to LIBOR plus the Applicable Rate or the Base Rate plus the Applicable Rate. The Base Rate is defined as the higher of (x) the prime rate and (y) the Federal Funds rate plus 0.50%. The Applicable Rate is defined as a percentage determined in accordance with a pricing grid based upon the Company’s leverage ratio, that will decline from LIBOR plus 4.00% or the prime rate plus 3.00% to a minimum rate equal to LIBOR plus 3.50% or the prime rate plus 2.50%. The Company is able to prepay borrowings under the Revolving Credit Facility at any time without penalty or premium, subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings. The Company also pays a commitment fee of 0.75% per annum on the actual daily unused portions of the Revolving Credit Facility.

The Company’s Revolving Credit Facility is secured by a first priority lien on substantially all of the Company’s assets, the assets of the Company’s non-foreign subsidiaries, the stock of the Company’s non-foreign subsidiaries and 66% of the stock of certain of the Company’s foreign subsidiaries. In addition, the Company’s non-foreign subsidiaries will guarantee the Company’s obligations under the Revolving Credit Facility.

The terms of the Revolving Credit Facility limit the Company’s ability and the ability of certain of the Company’s subsidiaries to, among other things: incur or guarantee additional indebtedness; grant additional liens on the Company’s assets; make certain investments or certain acquisitions of substantially all or a portion of another entity’s business or assets; merge with another entity or dispose of the Company’s assets; pay dividends; enter into transactions with affiliates; engage in other lines of business and repurchase stock.

Additionally, the Revolving Credit Facility requires that the Company maintain certain ratios of total senior, secured debt to consolidated EBITDA (as defined therein), and of consolidated EBITDA to consolidated interest. The Revolving Credit Facility includes customary provisions with respect to events of default. Upon the occurrence and continuation of an event of default under the Revolving Credit Facility, the lenders will be able to, among other things, terminate their revolving loan commitments, accelerate the repayment of the loans outstanding and declare the same to be immediately due and payable. As of March 31, 2012, the Company was in compliance with all respective covenants.

Promissory Notes: From time to time, the Company issues short term promissory notes to various foreign financial institutions to finance equipment purchases and working capital needs for our foreign operations.  The balance outstanding under these promissory notes as of March 31, 2012 and December 31, 2011 was $14.1 million and $10.7 million, respectively, at weighted average interest rates of 11.6% and 10.1%, respectively.

In January 2011, the Company issued a non-interest bearing promissory note related to the acquisition of STRM LLC. The balance outstanding under the promissory note as of March 31, 2012 and December 31, 2011 was $0.8 million and $1.0 million, respectively.

Notes payable - insurance: In April 2011, in exchange for insurance services provided, the Company issued two negotiable promissory notes for $1.4 million and $0.5 million at interest rates of 3.05% and 3.19% per annum, respectively. As of March 31, 2012, they were paid in full.

Letter of Credit Facility:  In February 2007, the Company entered into a $10.0 million revolving line of credit which is secured by restricted cash.  The terms of the letter of credit facility as currently written only allow for letters of credit to be drawn on the available credit; however, the cash balance in excess of the total outstanding letters of credit may be withdrawn at any time.  As of March 31, 2012 and December 31, 2011, the letters of credit outstanding were $2.8 million and $5.6 million, respectively.

Long-term debt consisted of the following (in thousands):

	March 31, 2012		December 31, 2011
	(unaudited)
Senior notes	$	250,000	$	200,000
Revolving credit facility		24,060		70,000
Promissory notes		14,957		11,678
Notes payable - insurance		-		538
		289,017		282,216
Less:  unamortized discount		7,752		4,927
		281,265		277,289
Less:  current portion		14,357		11,416
Long-term debt, net of current portion and unamortized discount	$	266,908	$	265,873

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Note 8 - Capital Lease

3 Months Ended

Mar. 31, 2012

Sale Leaseback Transaction Disclosure [Text Block]

NOTE 8 – CAPITAL LEASE

In 2011, the Company entered into various sale and leaseback transactions for certain seismic equipment, computer equipment and vehicles that were accounted for as capital leases, with interest rates ranging from 5.0% to 6.3%. The Company received proceeds of $13.2 million and will make monthly payments until maturity dates ranging from March 2013 to September 2013. The balance as of March 31, 2012 was $7.0 million.

In December 2011, the Company entered into a lease transaction for certain heavy equipment that is accounted for as a capital lease with an interest rate of 5.2%. The equipment leased has an initial value of $1.4 million. The Company will make monthly payments until the maturity date of November 2013. The balance as of March 31, 2012 was $1.1 million.

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Note 10 - Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 10 - STOCK-BASED COMPENSATION

The Company follows the current guidance for share-based payments which requires all stock-based payments, including stock options, to be recognized as an operating expense over the vesting period, based on their grant date fair values.

In July 2006, the Company’s board of directors and stockholders adopted the Global Geophysical Services, Inc. 2006 Incentive Compensation Plan (the “2006 Incentive Plan”).  The 2006 Incentive Plan provides for a variety of incentive awards, including nonstatutory stock options, incentive stock options within the meaning of Section 422 of the Internal Revenue Code, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based awards, and other stock-based awards.  A total of 9,203,058 shares of common stock are reserved for issuance under the 2006 Incentive Plan.  As of March 31, 2012, a total of 4,830,400 options have been granted and 2,557,200 have been forfeited.

Incentive Stock Options:  The Company estimates the fair value of each stock option on the date of grant using the Black-Scholes-Merton valuation model.  The volatility is based on expected volatility over the expected life of eighty-four months.  As the Company has not historically declared dividends, the dividend yield used in the calculation is zero. Actual value realized, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions.  There is no assurance the value realized by an optionee will be at or near the value estimated by the Black-Scholes-Merton model.

The Company did not grant any stock options during the three months ended March 31, 2012. The following assumptions were used for the three month period ended March 31, 2011:

	Three Month Period Ended March 31, 2011
Risk-free interest rates		2.82	%
Expected lives (in years)		7
Expected dividend yield		0.00	%
Expected volatility		59.72	%

The computation of expected volatility during the three months ended March 31, 2011 was based on the historical volatility. Historical volatility was calculated from historical data for the time approximately equal to the expected term of the option award starting from the grant date. The risk-free interest rate assumption is based upon the U.S. Treasury yield curve in effect at the time of grant for the period corresponding with the expected life of the option.

Option activity for the three months ended March 31, 2012 is summarized as follows:

	Number of Optioned Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Weighted Average Optioned Grant Date Fair Value
Balance as of December 31, 2011		2,386,700		$	22.86			$	5.78
Expired
Granted		-		$	-			$	-
Exercised
Forfeited		(113,500	)	$	22.53			$	7.58
Balance as of March 31, 2012		2,273,200		$	22.88		6.37	$	5.69
Exercisable as of March 31, 2012		1,748,525		$	22.93		6.32	$	4.72

Compensation expense associated with stock options for the three months ended March 31, 2012 and 2011 was $0.4 million and $0.5 million, respectively, and is included in selling, general and administrative expenses in the statements of operations. At March 31, 2012 and 2011, the Company had 524,675 and 1,376,075 of nonvested stock option awards, respectively. The total cost of nonvested stock option awards which the Company had not yet recognized was approximately $2.4 million at March 31, 2012.  Such amount is expected to be recognized approximately over a period of 3.25 years from March 31, 2012.

Restricted Stock:  To encourage retention and performance, the Company granted certain employees and consultants restricted shares of common stock with a fair value per share determined in accordance with conventional valuation techniques, including but not limited to, arm’s length transactions, net book value or multiples of comparable company earnings before interest, taxes, depreciation and amortization, as applicable. Restricted stock activity for the three months ended March 31, 2012 is summarized as follows:

	Number of Nonvested Restricted Share Awards			Weighted Average Grant Date Fair Value
Balance as of December 31, 2011		994,836		$	10.84
Granted		68,750			9.97
Vested		(92,704	)		11.17
Forfeited		(46,423	)		11.52
Balance as of March 31, 2012		924,459		$	10.71

Compensation / charitable contribution expense associated with restricted stock for the three months ended March 31, 2012 and 2011 was $1.1 million and $0.9 million, respectively, and is included in selling, general and administrative expenses in the statements of operations.  The total cost of non-vested stock awards which the Company has not yet recognized at March 31, 2012 was approximately $6.9 million. This amount is expected to be recognized over the next three years.

Employee Stock Purchase Plan: During the third quarter of 2011, the Company launched an Employee Stock Purchase Plan (“ESPP”). Under the terms of the ESPP, employees can choose to have a portion of their earnings withheld, subject to certain restrictions, to purchase the Company's common stock. The purchase price of the stock is 85% of the lower of the stock price at the beginning or end of the plan period at three-month intervals. The expense related to the ESPP for the three months ended March 31, 2012 was immaterial to our consolidated financial statements. 

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Note 15 - Guarantees Of Registered Securities

3 Months Ended

Mar. 31, 2012

Description of Guarantees Given by Parent Company

NOTE 15 – GUARANTEES OF REGISTERED SECURITIES

On August 3, 2010, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission. Under this registration statement, the Company exchanged $200.0 million of its publicly registered 10½% senior notes due 2017 for a like amount of its privately placed 10½% senior notes due 2017. The debt securities sold are fully and unconditionally guaranteed, on a joint and several bases, by the guarantor subsidiaries which will correspond to all subsidiaries located in the United States. The non-guarantor subsidiaries consist of all subsidiaries outside of the United States.

Separate condensed consolidating financial statement information for the guarantor subsidiaries and non-guarantor subsidiaries as of March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012 and 2011 is as follows (in thousands):

	As of March 31, 2012 (Unaudited)
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	137,840	$	47,686		$	(64,132	)	$	121,394
Multi-client library, net		253,728		-			-			253,728
Property and equipment, net		108,620		4,836			-			113,456
Investment in subsidiaries		1		-			(1	)		-
Intercompany accounts		36,259		(36,259	)		-			-
Other non-current assets		34,887		132			-			35,019
TOTAL ASSETS	$	571,335	$	16,395		$	(64,133	)	$	523,597
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	123,687	$	65,441		$	(64,132	)	$	124,996
Long-term debt and capital lease obligations, net of current portion and unamortized discount		268,319		-			-			268,319
Deferred income tax and other non-current liabilities		8,131		-			-			8,131
TOTAL LIABILITIES		400,137		65,441			(64,132	)		401,446
Stockholders' equity		171,198		(49,046	)		(1	)		122,151
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	571,335	$	16,395		$	(64,133	)	$	523,597

	As of December 31, 2011
	Guarantors		Non-guarantors			Eliminations			Consolidated
BALANCE SHEET
ASSETS
Current assets	$	139,352	$	47,449		$	(59,638	)	$	127,163
Multi-client library, net		232,235		-			-			232,235
Property and equipment, net		113,041		5,379			-			118,420
Investment in subsidiaries		1		-			(1	)		-
Intercompany accounts		30,807		(30,807	)		-			-
Other non-current assets		28,340		215			-			28,555
TOTAL ASSETS	$	543,776	$	22,236		$	(59,639	)	$	506,373
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	116,882	$	62,742		$	(59,638	)	$	119,986
Long-term debt and capital lease obligations, net of current portion and unamortized discount		268,486		-			-			268,486
Deferred income tax and other non-current liabilities		4,339		-			-			4,339
TOTAL LIABILITIES		389,707		62,742			(59,638	)		392,811
Stockholders' equity		154,069		(40,506	)		(1	)		113,562
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	543,776	$	22,236		$	(59,639	)	$	506,373

	Three Month Period Ended March 31, 2012 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	61,003		$	38,125		$	(3,017	)	$	96,111
Operating expenses		26,627			36,702			(2,635	)		60,694
Selling, general and administrative expenses		7,249			8,674			(382	)		15,541
Income (loss) from operations		27,127			(7,251	)		-			19,876
Interest income (expense) , net		(7,117	)		2			-			(7,115	)
Other income (expense), net		(425	)		133			-			(292	)
Income (loss) before income taxes		19,585			(7,116	)		-			12,469
Income tax expense		4,325			1,424			-			5,749
Income (loss) after income taxes		15,260			(8,540	)		-			6,720
Net loss, attributable to noncontrolling interests		(210	)		-			-			(210	)
Net income (loss), attributable to common shareholders	$	15,470		$	(8,540	)	$	-		$	6,930

	Three Month Period Ended March 31, 2011 (Unaudited)
	Guarantors			Non-guarantors			Eliminations			Consolidated
STATEMENTS OF OPERATIONS
Revenues	$	70,045		$	8,342		$	(1,552	)	$	76,835
Operating expenses		48,009			8,327			(1,261	)		55,075
Selling, general and administrative expenses		9,362			1,941			(291	)		11,012
Income (loss) from operations		12,674			(1,926	)		-			10,748
Interest income (expense), net		(5,819	)		12			-			(5,807	)
Other income (expense), net		833			(17	)		-			816
Income (loss) before income taxes		7,688			(1,931	)		-			5,757
Income tax expense		2,900			112			-			3,012
Income (loss) after income taxes		4,788			(2,043	)		-			2,745
Net loss, attributable to noncontrolling interests		(44	)		-			-			(44	)
Net income (loss), attributable to common shareholders	$	4,832		$	(2,043	)	$	-		$	2,789

	Three Month Period Ended March 31, 2012 (Unaudited)
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by (used in) operating activities	$	42,847		$	(3,920	)	$	-	$	38,927
Net cash used in investing activities		(34,284	)		(61	)		-		(34,345	)
Net cash provided by (used in) financing activities		1,470			(589	)		-		881
Net increase (decrease) in cash and cash equivalents	$	10,033		$	(4,570	)	$	-	$	5,463

	Three Month Period Ended March 31, 2011 (Unaudited)
	Guarantors			Non-guarantors			Eliminations		Consolidated
STATEMENTS OF CASH FLOWS
Net cash provided by (used in) operating activities	$	55,264		$	(1,856	)	$	-	$	53,408
Net cash used in investing activities		(62,661	)		(1,230	)		-		(63,891	)
Net cash provided by financing activities		3,107			-			-		3,107
Net decrease in cash and cash equivalents	$	(4,290	)	$	(3,086	)	$	-	$	(7,376	)

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Consolidated Statements Of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income, attributable to common shareholders	$ 6,930	$ 2,789
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation (net) and amortization expense	30,218	33,910
Non-cash revenue from Multi-client data exchange	(932)	(973)
Deferred tax expense	4,002	1,097
Gain on sale of assets	(9,423)	(65)
Other	1,578	1,593
Effects of changes in operating assets and liabilities
Accounts receivable, net	5,636	(4,277)
Prepaid expenses and other current assets	1,415	794
Accounts payable and accrued expenses	(1,818)	5,492
Deferred revenue	2,878	14,105
Other	(1,557)	(1,057)
NET CASH PROVIDED BY OPERATING ACTIVITIES	38,927	53,408
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(9,698)	(8,220)
Investment in Multi-client library	(38,686)	(52,075)
Investment in unconsolidated subsidiary	(250)
Change in restricted cash investments	2,818	(2,662)
Purchase of intangibles	(2,547)	(1,000)
Proceeds from sale of assets	14,018	66
NET CASH USED IN INVESTING ACTIVITIES	(34,345)	(63,891)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of discount	51,433
Principal payments on long-term debt	(1,692)	(2,597)
Net proceeds on revolving credit facility	(45,940)	5,000
Debt issuance costs	(1,364)
Principal payments on capital lease obligations	(1,775)
Purchase of treasury stock		(1)
Issuances of stock, net	219	705
NET CASH PROVIDED BY FINANCING ACTIVITIES	881	3,107
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	5,463	(7,376)
CASH AND CASH EQUIVALENTS, beginning of period	21,525	28,237
CASH AND CASH EQUIVALENTS, end of period	$ 26,988	$ 20,861

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Note 4 - Property And Equipment

3 Months Ended

Mar. 31, 2012

Property, Plant and Equipment Disclosure [Text Block]

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in thousands): 

	March 31, 2012		December 31, 2011
	(unaudited)
Furniture and fixtures	$	143	$	216
Boats		7,174		7,174
Machinery and equipment		307,958		321,342
Computers and software		16,630		17,077
Land		2,157		2,157
Buildings		13,601		13,601
		347,663		361,567
Less: accumulated depreciation		243,200		252,517
		104,463		109,050
Construction in process		8,993		9,370
Net property and equipment	$	113,456	$	118,420

The following table represents an analysis of depreciation expense (in thousands):

	Three Month Period Ended March 31,
	2012		2011
	(unaudited)
Gross depreciation expense	$	10,065	$	12,622
Less: capitalized depreciation for Multi-client library		2,958		4,667
Net depreciation expense	$	7,107	$	7,955

In March 2012, the Company entered into various agreements for the sale of certain assets resulting in total proceeds of $14.0 million. As a result, the Company recognized a gain of $1.9 million.

In March 2012, the Company completed a like-kind equipment exchange resulting in a gain of $7.5 million.

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Note 14 - Recently Issued Accounting Standards

3 Months Ended

Mar. 31, 2012

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

NOTE 14 – RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU 2011-04”). ASU 2011-04 changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to ensure consistency between U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied prospectively. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011, with early adoption permitted. The adoption of this standard did not materially expand our consolidated financial statement footnote disclosures.

In June 2011, FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU 2011-05”). This standard eliminated the option to report other comprehensive income and its components in the statement of changes in equity. Under this standard, an entity can elect to present items of net income and other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, only the format for presentation. The updated guidance and requirements are effective for interim and annual periods beginning after December 15, 2011. The amendments should be applied retrospectively. Early adoption is permitted. In December 2011, the FASB issued ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”). ASU 2011-12 defers the effective date of the requirement in ASU 2011-05 to disclose on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. All other requirements of ASU 2011-05 are not affected by ASU 2011-12. We believe that the adoption of ASU 2011-05 and ASU 2011-12 will not have material impact on our consolidated financial position, results of operations, or cash flows.

In September 2011, the FASB issued ASU No.  2011-08, “Testing Goodwill for Impairment (Topic 350):  Intangibles—Goodwill and Other” (“ASU 2011-08”). ASU 2011-08 amends current goodwill impairment testing guidance by providing entities with an option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Company adopted this provision effective for the fiscal year ended December 31, 2011.