Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information

Segment Information

NOTE 13: Segment Information

The Company’s reportable segments are strategic business units that offer different services to customers.  The Company has two reportable segments: seismic data acquisition and seismic data processing and integrated reservoir geosciences.  The Company further breaks down its seismic data acquisition reportable segment into three reporting units: North America proprietary seismic data acquisition, international proprietary seismic data acquisition and multi-client seismic data acquisition.  The North America and international proprietary seismic data acquisition reporting units acquire data for customers by conducting specific seismic shooting operations for customers in North America (excluding Mexico) and worldwide.  The multi-client seismic data acquisition business unit licenses fully or partially owned seismic data, covering areas in the United States, Canada and Brazil.  The processing and integrated reservoir geosciences segment operates processing centers in Houston, Texas and London, United Kingdom to process seismic data for oil and gas exploration companies worldwide.

The accounting policies of the Company’s segments are the same as those described in note 2: “Basis of Presentation and Significant Accounting Policies.”  The Company evaluates the performance of each segment based on Adjusted EBITDA, defined below.

The following table sets forth financial information with respect to our reportable segments (in thousands) (1):

	Year Ended December 31,
	2011		2010		2009
Revenue:
Data Acquisition
North America proprietary	172,649		128,833		72,917
International proprietary	462,919		349,201		417,106
Multi-Client	119,516		71,082		10,260
Subtotal Data Acquisition	755,084		549,116		500,283
Data Processing and Integrated Reservoir Geosciences	14,192		11,787		13,178
Eliminations	(5,547	)	(2,769	)	(2,495	)
Total	763,729		558,134		510,966
Direct Operating Expenses:
Data Acquisition
North America proprietary	140,979		118,912		66,185
International proprietary	455,422		326,424		297,986
Multi-Client	470		1,670		2
Subtotal Data Acquisition	596,871		447,006		364,173
Data Processing and Integrated Reservoir Geosciences	11,951		11,662		11,136
Eliminations	(5,547	)	(2,769	)	(2,495	)
Total	603,275		455,899		372,814
Depreciation and Amortization:
Data Acquisition
North America proprietary	13,609		21,089		15,912
International proprietary	55,645		46,061		29,293
Multi-Client	85,021		37,999		6,630
Subtotal Data Acquisition	154,275		105,149		51,835
Data Processing and Integrated Reservoir Geosciences	1,466		1,492		1,574
Corporate	2,647		6,256		3,512
Total	158,388		112,897		56,921
Adjusted EBITDA (2):
Data Acquisition
North America proprietary	24,310		4,143		(189	)
International proprietary	(20,781	)	(4,093	)	98,385
Multi-Client	117,049		68,272		10,258
Subtotal Data Acquisition	120,578		68,322		108,454
Data Processing and Integrated Reservoir Geosciences	2,100		28		1,923
Corporate	(37,832	)	(47,509	)	(27,127	)
Total	84,846		20,841		83,250
Reconciliation of Adjusted EBITDA to Net Loss
Adjusted EBITDA	84,846		20,841		83,250
Provision for income taxes	(2,040	)	(4,810	)	(23,252	)
Interest expense, net of interest income	(47,540	)	(37,827	)	(5,971	)
Other (income) expense (as defined below)	35,825		(3,991	)	(9,441	)
Asset impairments	(134,756	)	—		—
Depreciation and amortization	(158,388	)	(112,897	)	(56,921	)
Net loss	(222,053	)	(138,684	)	(12,335	)
Identifiable Assets (at end of year):
Data Acquisition
North America proprietary	95,350		130,912
International proprietary	304,656		447,190
Multi-Client (3)	71,494		82,197
Subtotal Data Acquisition	471,500		660,299
Data Processing and Integrated Reservoir Geosciences	8,113		8,789
Corporate	34,559		56,076
Total(4)	514,172		725,164

(1)During the fourth quarter of 2011, the Company re-assessed its operating segments and concluded that its multi-client data library business is a separate operating segment.  Accordingly, prior periods have been restated.

(2)The Company defines Adjusted EBITDA as net income (loss) (the most directly generally accepted accounting principle or “GAAP” financial measure) before Interest, Taxes, Other Income (Expense) (including foreign exchange gains/losses, loss on early redemption of debt, gains/losses from changes in fair value of derivative liabilities and other income/expense), Asset Impairments and Depreciation and Amortization.  The Chief Operating Decision Maker (“CODM”) primarily evaluates operating segment profitability through the use of this measure.  However, as the majority of operating costs directly associated with acquiring and processing multi-client data are capitalized and amortized based on a specific formula, the CODM also considers the impact of amortization expense when specifically evaluating multi-client’s segment profitability.

(3)The North America proprietary segment shares certain productive assets used in its operations with the multi-client segment.  Those productive assets are presented as part of the North America segment.  Multi-client assets presented in the table above only include those assets specifically identified with the multi-client seismic data acquisition business such as cash, accounts receivable and the multi-client seismic data library.

(4)During 2011, capital expenditures, including capitalized leases and capitalized depreciation to multi-client, totaled $1.7 million, $21.2 million, $75.7 million and $1.0 million for North America proprietary, international proprietary, multi-client and data processing and integrated reservoir geosciences, respectively.