Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

In 2013, the Company sold $175.0 million aggregate principal amount of its 8.125% Senior Secured Second-Priority Notes due 2018 (the “Notes”). The Notes were issued by ION Geophysical Corporation and are guaranteed by the Guarantors, all of which are 100-percent-owned subsidiaries. The Guarantors have fully and unconditionally guaranteed the payment obligations of ION Geophysical Corporation with respect to the Notes. The following condensed consolidating financial information presents the results of operations, financial position and cash flows for:

• ION Geophysical Corporation and the Guarantors (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting).

• All other subsidiaries of ION Geophysical Corporation that are not Guarantors.

• The consolidating adjustments necessary to present ION Geophysical Corporation’s results on a consolidated basis.

This condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements and footnotes.

	June 30, 2015
Balance Sheet	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	60,097		$	—		$	56,963		$	—		$	117,060
Accounts receivable, net	(10		)	14,296			12,191			—			26,477
Unbilled receivables	—			11,603			1,778			—			13,381
Inventories	—			4,051			31,896			—			35,947
Prepaid expenses and other current assets	4,019			2,862			7,351			(899		)	13,333
Total current assets	64,106			32,812			110,179			(899		)	206,198
Deferred income tax asset	2,472			8,295			200			(2,537		)	8,430
Property, plant, equipment and seismic rental equipment, net	5,464			27,351			50,674			—			83,489
Multi-client data library, net	—			112,109			15,649			—			127,758
Investment in subsidiaries	700,267			245,983			—			(946,250		)	—
Goodwill	—			—			27,679			—			27,679
Intangible assets, net	—			5,389			422			—			5,811
Intercompany receivables	48,576			—			—			(48,576		)	—
Other assets	8,431			196			1,218			—			9,845
Total assets	$	829,316		$	432,135		$	206,021		$	(998,262	)	$	469,210
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	7,121		$	92		$	—		$	7,213
Accounts payable	2,664			15,920			6,754			—			25,338
Accrued expenses	11,124			21,308			10,679			(52		)	43,059
Accrued multi-client data library royalties	—			17,964			560			—			18,524
Deferred revenue	—			7,405			3,267			—			10,672
Total current liabilities	13,788			69,718			21,352			(52		)	104,806
Long-term debt, net of current maturities	175,000			5,903			52			—			180,955
Intercompany payables	497,966			29,949			18,627			(546,542		)	—
Other long-term liabilities	2,472			31,841			11,349			(3,384		)	42,278
Total liabilities	689,226			137,411			51,380			(549,978		)	328,039
Redeemable noncontrolling interest	—			—			1,080			—			1,080
Equity:
Common stock	1,647			290,460			19,138			(309,598		)	1,647
Additional paid-in capital	890,811			180,700			234,234			(414,934		)	890,811
Accumulated earnings (deficit)	(733,604		)	238,544			(11,538		)	(227,006		)	(733,604		)
Accumulated other comprehensive income (loss)	(12,199		)	6,868			(12,156		)	5,288			(12,199		)
Due from ION Geophysical Corporation	—			(421,848		)	(76,118		)	497,966			—
Treasury stock	(6,565		)	—			—			—			(6,565		)
Total stockholders’ equity	140,090			294,724			153,560			(448,284		)	140,090
Noncontrolling interests	—			—			1			—			1
Total equity	140,090			294,724			153,561			(448,284		)	140,091
Total liabilities and equity	$	829,316		$	432,135		$	206,021		$	(998,262	)	$	469,210

	December 31, 2014
Balance Sheet	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	109,514		$	—		$	64,094		$	—		$	173,608
Accounts receivable, net	123			49,892			64,310			—			114,325
Unbilled receivables	—			18,548			4,051			—			22,599
Inventories	—			4,013			47,149			—			51,162
Prepaid expenses and other current assets	6,692			2,697			8,769			(4,496		)	13,662
Total current assets	116,329			75,150			188,373			(4,496		)	375,356
Deferred income tax asset	(7,852		)	6,675			749			9,032			8,604
Property, plant, equipment and seismic rental equipment, net	6,412			33,065			30,363			—			69,840
Multi-client data library, net	—			96,423			22,246			—			118,669
Investment in subsidiaries	675,499			278,294			—			(953,793		)	—
Goodwill	—			—			27,388			—			27,388
Intangible assets, net	—			6,254			534			—			6,788
Intercompany receivables	29,979			—			—			(29,979		)	—
Other assets	10,191			147			274			—			10,612
Total assets	$	830,558		$	496,008		$	269,927		$	(979,236	)	$	617,257
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	6,965		$	684		$	—		$	7,649
Accounts payable	4,308			12,028			20,527			—			36,863
Accrued expenses	3,904			34,738			21,807			4,815			65,264
Accrued multi-client data library royalties	—			34,624			595			—			35,219
Deferred revenue	—			5,263			2,999			—			8,262
Total current liabilities	8,212			93,618			46,612			4,815			153,257
Long-term debt, net of current maturities	175,000			7,839			106			—			182,945
Intercompany payables	509,124			8,892			21,087			(539,103		)	—
Other long-term liabilities	2,609			130,985			10,489			(279		)	143,804
Total liabilities	694,945			241,334			78,294			(534,567		)	480,006
Redeemable noncontrolling interest	—			—			1,539			—			1,539
Equity:
Common stock	1,645			290,460			19,138			(309,598		)	1,645
Additional paid-in capital	887,749			180,700			234,234			(414,934		)	887,749
Accumulated earnings (deficit)	(734,409		)	208,846			26,981			(235,827		)	(734,409		)
Accumulated other comprehensive income (loss)	(12,807		)	6,229			(12,795		)	6,566			(12,807		)
Due from ION Geophysical Corporation	—			(431,561		)	(77,563		)	509,124			—
Treasury stock	(6,565		)	—			—			—			(6,565		)
Total stockholders’ equity	135,613			254,674			189,995			(444,669		)	135,613
Noncontrolling interests	—			—			99			—			99
Total equity	135,613			254,674			190,094			(444,669		)	135,712
Total liabilities and equity	$	830,558		$	496,008		$	269,927		$	(979,236	)	$	617,257

	Three Months Ended June 30, 2015
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	22,465		$	14,765		$	(435	)	$	36,795
Cost of sales	—			28,227			19,138			(435		)	46,930
Gross loss	—			(5,762		)	(4,373		)	—			(10,135		)
Total operating expenses	6,466			12,805			11,283			—			30,554
Loss from operations	(6,466		)	(18,567		)	(15,656		)	—			(40,689		)
Interest expense, net	(4,506		)	(100		)	(1		)	—			(4,607		)
Intercompany interest, net	143			(745		)	602			—			—
Equity in earnings (losses) of investments	66,986			(14,028		)	—			(52,958		)	—
Other income (expense)	(29		)	101,954			(325		)	—			101,600
Net income (loss) before income taxes	56,128			68,514			(15,380		)	(52,958		)	56,304
Income tax expense	59			123			350			—			532
Net income (loss)	56,069			68,391			(15,730		)	(52,958		)	55,772
Net loss attributable to noncontrolling interests	—			—			297			—			297
Net income (loss) attributable to ION	56,069			68,391			(15,433		)	(52,958		)	56,069
Comprehensive net income (loss)	$	58,022		$	70,390		$	(13,731	)	$	(56,956	)	$	57,725
Comprehensive loss attributable to noncontrolling interest	—			—			297			—			297
Comprehensive net income (loss) attributable to ION	$	58,022		$	70,390		$	(13,434	)	$	(56,956	)	$	58,022

	Three Months Ended June 30, 2014
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	47,881		$	74,877		$	(1,278	)	$	121,480
Cost of sales	—			41,018			43,512			(1,278		)	83,252
Gross profit	—			6,863			31,365			—			38,228
Total operating expenses	7,518			15,326			11,599			—			34,443
Income (loss) from operations	(7,518		)	(8,463		)	19,766			—			3,785
Interest expense, net	(4,458		)	(48		)	(428		)	—			(4,934		)
Intercompany interest, net	(210		)	1,388			(1,178		)	—			—
Equity in earnings (losses) of investments	14,838			20,259			—			(36,878		)	(1,781		)
Other income (expense)	(1,711		)	3,572			4,205			—			6,066
Net income before income taxes	941			16,708			22,365			(36,878		)	3,136
Income tax expense (benefit)	(247		)	(133		)	1,033			—			653
Net income	1,188			16,841			21,332			(36,878		)	2,483
Net income attributable to noncontrolling interests	—			—			(1,295		)	—			(1,295		)
Net income attributable to ION	1,188			16,841			20,037			(36,878		)	1,188
Comprehensive net income	$	3,133		$	19,967		$	23,955		$	(42,627	)	$	4,428
Comprehensive income attributable to noncontrolling interest	—			—			(1,295		)	—			(1,295		)
Comprehensive net income attributable to ION	$	3,133		$	19,967		$	22,660		$	(42,627	)	$	3,133

	Six Months Ended June 30, 2015
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	41,314		$	36,900		$	(841	)	$	77,373
Cost of sales	—			53,002			51,135			(841		)	103,296
Gross loss	—			(11,688		)	(14,235		)	—			(25,923		)
Total operating expenses	14,382			25,885			21,188			—			61,455
Loss from operations	(14,382		)	(37,573		)	(35,423		)	—			(87,378		)
Interest expense, net	(9,057		)	(172		)	(3		)	—			(9,232		)
Intercompany interest, net	282			(1,402		)	1,120			—			—
Equity in earnings (losses) of investments	24,129			(32,950		)	—			8,821			—
Other income (expense)	(58		)	101,969			(3,530		)	—			98,381
Net income (loss) before income taxes	914			29,872			(37,836		)	8,821			1,771
Income tax expense	109			174			1,232			—			1,515
Net income (loss)	805			29,698			(39,068		)	8,821			256
Net loss attributable to noncontrolling interests	—			—			549			—			549
Net income (loss) applicable to ION	805			29,698			(38,519		)	8,821			805
Comprehensive net income (loss)	$	1,413		$	30,337		$	(38,429	)	$	7,543		$	864
Comprehensive loss attributable to noncontrolling interest	—			—			549			—			549
Comprehensive net income (loss) attributable to ION	$	1,413		$	30,337		$	(37,880	)	$	7,543		$	1,413

	Six Months Ended June 30, 2014
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	126,003		$	141,453		$	(1,278	)	$	266,178
Cost of sales	—			85,014			87,360			(1,278		)	171,096
Gross profit	—			40,989			54,093			—			95,082
Total operating expenses	16,539			30,581			24,506			—			71,626
Income (loss) from operations	(16,539		)	10,408			29,587			—			23,456
Interest expense, net	(9,031		)	(90		)	(610		)	—			(9,731		)
Intercompany interest, net	(144		)	953			(809		)	—			—
Equity in earnings (losses) of investments	104,326			24,115			738			(132,648		)	(3,469		)
Other income (expense)	(1,214		)	73,483			2,323			—			74,592
Net income before income taxes	77,398			108,869			31,229			(132,648		)	84,848
Income tax expense	231			199			5,486			—			5,916
Net income	77,167			108,670			25,743			(132,648		)	78,932
Net income attributable to noncontrolling interests	—			—			(1,765		)	—			(1,765		)
Net income applicable to ION	77,167			108,670			23,978			(132,648		)	77,167
Comprehensive net income	$	78,451		$	111,795		$	28,856		$	(138,886	)	$	80,216
Comprehensive income attributable to noncontrolling interest	—			—			(1,765		)	—			(1,765		)
Comprehensive net income attributable to ION	$	78,451		$	111,795		$	27,091		$	(138,886	)	$	78,451

	Six Months Ended June 30, 2015
Statement of Cash Flows	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Total Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(78,847	)	$	46,942		$	9,410		$	(22,495	)
Cash flows from investing activities:
Cash invested in multi-client data library	—			(12,728		)	(870		)	(13,598		)
Purchase of property, plant, equipment and seismic rental equipment	(347		)	(774		)	(16,092		)	(17,213		)
Other investing activities	—			257			—			257
Net cash used in investing activities	(347		)	(13,245		)	(16,962		)	(30,554		)
Cash flows from financing activities:
Payments on notes payable and long-term debt	—			(2,927		)	(633		)	(3,560		)
Intercompany lending	29,755			(30,770		)	1,015			—
Other financing activities	22			—			—			22
Net cash provided by (used in) financing activities	29,777			(33,697		)	382			(3,538		)
Effect of change in foreign currency exchange rates on cash and cash equivalents	—			—			39			39
Net decrease in cash and cash equivalents	(49,417		)	—			(7,131		)	(56,548		)
Cash and cash equivalents at beginning of period	109,514			—			64,094			173,608
Cash and cash equivalents at end of period	$	60,097		$	—		$	56,963		$	117,060

	Six Months Ended June 30, 2014
Statement of Cash Flows	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Total Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	57,755		$	(23,434	)	$	42,417		$	76,738
Cash flows from investing activities:
Investment in multi-client data library	—			(34,203		)	(114		)	(34,317		)
Purchase of property, plant, equipment and seismic rental equipment	(460		)	(2,773		)	(1,310		)	(4,543		)
Repayment of advance to INOVA Geophysical	1,000			—			—			1,000
Net investment in and advances to OceanGeo B.V. prior to its consolidation	—			—			(3,074		)	(3,074		)
Net proceeds from sale of Source product line	—			9,881			4,513			14,394
Other investing activities	579			—			26			605
Net cash provided by (used in) investing activities	1,119			(27,095		)	41			(25,935		)
Cash flows from financing activities:
Payments under revolving line of credit	(50,000		)	—			—			(50,000		)
Borrowings under revolving line of credit	15,000			—			—			15,000
Payments on notes payable and long-term debt	(461		)	(2,862		)	(2,272		)	(5,595		)
Intercompany lending	(46,991		)	53,391			(6,400		)	—
Other financing activities	(339		)	—			—			(339		)
Net cash provided by (used in) financing activities	(82,791		)	50,529			(8,672		)	(40,934		)
Effect of change in foreign currency exchange rates on cash and cash equivalents	—			—			(146		)	(146		)
Net increase (decrease) in cash and cash equivalents	(23,917		)	—			33,640			9,723
Cash and cash equivalents at beginning of period	124,701			—			23,355			148,056
Cash and cash equivalents at end of period	$	100,784		$	—		$	56,995		$	157,779