Condensed Consolidating Financial Information

3 Months Ended

Mar. 31, 2018

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

The Second Lien Notes were issued by ION Geophysical Corporation and the Second Lien Notes are guaranteed by the Guarantors, all of which are wholly-owned subsidiaries. The Guarantors have fully and unconditionally guaranteed the payment obligations of ION Geophysical Corporation with respect to the Second Lien 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. For additional information pertaining to the Notes, See Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this Form 10-Q.

	March 31, 2018
Balance Sheet	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	41,380		$	—		$	9,370		$	—		$	50,750
Accounts receivable, net	8			7,762			21,980			—			29,750
Unbilled receivables	—			7,654			8,695			—			16,349
Inventories	—			9,094			5,634			—			14,728
Prepaid expenses and other current assets	2,057			1,015			2,682			—			5,754
Total current assets	43,445			25,525			48,361			—			117,331
Deferred income tax asset	1,263			—			614			—			1,877
Property, plant, equipment and seismic rental equipment, net	306			6,744			42,957			—			50,007
Multi-client data library, net	—			57,895			26,538			—			84,433
Investment in subsidiaries	693,059			329,545			—			(1,022,604		)	—
Goodwill	—			—			25,188			—			25,188
Intangible assets, net	—			1,374			—			—			1,374
Intercompany receivables	—			106,721			104,895			(211,616		)	—
Other assets	518			145			180			—			843
Total assets	$	738,591		$	527,949		$	248,733		$	(1,234,220	)	$	281,053
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	824		$	190		$	—		$	—		$	1,014
Accounts payable	3,195			17,247			2,375			—			22,817
Accrued expenses	11,450			8,154			6,591			—			26,195
Accrued multi-client data library royalties	—			28,109			215			—			28,324
Deferred revenue	—			2,749			8,581			—			11,330
Total current liabilities	15,469			56,449			17,762			—			89,680
Long-term debt, net of current maturities	116,916			—			—			—			116,916
Intercompany payables	545,556			—			—			(545,556		)	—
Other long-term liabilities	448			5,997			6,493			—			12,938
Total liabilities	678,389			62,446			24,255			(545,556		)	219,534
Equity:
Common stock	139			290,460			49,394			(339,854		)	139
Additional paid-in capital	950,464			180,701			202,290			(382,991		)	950,464
Accumulated earnings (deficit)	(873,347		)	245,094			68,288			(313,382		)	(873,347		)
Accumulated other comprehensive income (loss)	(17,054		)	4,324			(17,947		)	13,623			(17,054		)
Due from ION Geophysical Corporation	—			(255,076		)	(78,864		)	333,940			—
Total stockholders’ equity	60,202			465,503			223,161			(688,664		)	60,202
Noncontrolling interest	—			—			1,317			—			1,317
Total equity	60,202			465,503			224,478			(688,664		)	61,519
Total liabilities and equity	$	738,591		$	527,949		$	248,733		$	(1,234,220	)	$	281,053

	December 31, 2017
Balance Sheet	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	39,344		$	—		$	12,712		$	—		$	52,056
Accounts receivable, net	50			9,374			10,054			—			19,478
Unbilled receivables	—			16,666			20,638			—			37,304
Inventories	—			8,686			5,822			—			14,508
Prepaid expenses and other current assets	2,427			769			4,447			—			7,643
Total current assets	41,821			35,495			53,673			—			130,989
Deferred income tax asset	1,264			—			489			—			1,753
Property, plant, equipment and seismic rental equipment, net	511			7,170			44,472			—			52,153
Multi-client data library, net	—			62,438			26,862			—			89,300
Investment in subsidiaries	693,679			321,934			—			(1,015,613		)	—
Goodwill	—			—			24,089			—			24,089
Intangible assets, net	—			1,666			—			—			1,666
Intercompany receivables	—			132,184			90,227			(222,411		)	—
Other assets	686			145			288			—			1,119
Total assets	$	737,961		$	561,032		$	240,100		$	(1,238,024	)	$	301,069
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	39,774		$	250		$	—		$	—		$	40,024
Accounts payable	1,774			20,982			2,195			—			24,951
Accrued expenses	12,284			15,601			10,812			—			38,697
Accrued multi-client data library royalties	—			26,824			211			—			27,035
Deferred revenue	—			3,201			5,709			—			8,910
Total current liabilities	53,832			66,858			18,927			—			139,617
Long-term debt, net of current maturities	116,691			29			—			—			116,720
Intercompany payables	537,417			—			—			(537,417		)	—
Other long-term liabilities	454			6,084			7,388			—			13,926
Total liabilities	708,394			72,971			26,315			(537,417		)	270,263
Equity:
Common stock	120			290,460			49,394			(339,854		)	120
Additional paid-in capital	903,247			180,701			202,290			(382,991		)	903,247
Accumulated earnings (deficit)	(854,921		)	248,770			59,307			(308,077		)	(854,921		)
Accumulated other comprehensive income (loss)	(18,879		)	4,372			(19,681		)	15,309			(18,879		)
Due from ION Geophysical Corporation	—			(236,242		)	(78,764		)	315,006			—
Total stockholders’ equity	29,567			488,061			212,546			(700,607		)	29,567
Noncontrolling interest	—			—			1,239			—			1,239
Total equity	29,567			488,061			213,785			(700,607		)	30,806
Total liabilities and equity	$	737,961		$	561,032		$	240,100		$	(1,238,024	)	$	301,069

	Three Months Ended March 31, 2018
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	11,788		$	21,720		$	—		$	33,508
Cost of sales	—			16,795			9,860			—			26,655
Gross profit (loss)	—			(5,007		)	11,860			—			6,853
Total operating expenses	8,909			6,994			3,590			—			19,493
Income (loss) from operations	(8,909		)	(12,001		)	8,270			—			(12,640		)
Interest expense, net	(3,883		)	(6		)	53			—			(3,836		)
Intercompany interest, net	273			(2,319		)	2,046			—			—
Equity in earnings (losses) of investments	(4,915		)	10,220			—			(5,305		)	—
Other income (expense)	(188		)	65			(668		)	—			(791		)
Net income (loss) before income taxes	(17,622		)	(4,041		)	9,701			(5,305		)	(17,267		)
Income tax expense (benefit)	804			(365		)	633			—			1,072
Net income (loss)	(18,426		)	(3,676		)	9,068			(5,305		)	(18,339		)
Net income attributable to noncontrolling interest	—			—			(87		)	—			(87		)
Net income (loss) attributable to ION	$	(18,426	)	$	(3,676	)	$	8,981		(5,305		)	$	(18,426	)
Comprehensive net income	$	(16,601	)	$	(3,724	)	$	10,802		$	(6,991	)	$	(16,514	)
Comprehensive income attributable to noncontrolling interest	—			—			(87		)	—			(87		)
Comprehensive net income (loss) attributable to ION	$	(16,601	)	$	(3,724	)	$	10,715		$	(6,991	)	$	(16,601	)

	Three Months Ended March 31, 2017
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	13,034		$	19,522		$	—		$	32,556
Cost of sales	—			17,587			8,868			—			26,455
Gross profit (loss)	—			(4,553		)	10,654			—			6,101
Total operating expenses	9,340			6,159			4,514			—			20,013
Income (loss) from operations	(9,340		)	(10,712		)	6,140			—			(13,912		)
Interest expense, net	(4,460		)	(27		)	23			—			(4,464		)
Intercompany interest, net	328			(1,497		)	1,169			—			—
Equity in earnings (losses) of investments	(5,044		)	8,776			—			(3,732		)	—
Other income (expense)	(4,759		)	(339		)	30			—			(5,068		)
Net income (loss) before income taxes	(23,275		)	(3,799		)	7,362			(3,732		)	(23,444		)
Income tax expense (benefit)	67			(42		)	(443		)	—			(418		)
Net income (loss)	(23,342		)	(3,757		)	7,805			(3,732		)	(23,026		)
Net income attributable to noncontrolling interest	—			—			(316		)	—			(316		)
Net income (loss) attributable to ION	$	(23,342	)	$	(3,757	)	$	7,489		(3,732		)	$	(23,342	)
Comprehensive net income (loss)	$	(22,825	)	$	(3,805	)	$	8,054		$	(3,933	)	$	(22,509	)
Comprehensive income attributable to noncontrolling interest	—			—			(316		)	—			(316		)
Comprehensive net income (loss) attributable to ION	$	(22,825	)	$	(3,805	)	$	7,738		$	(3,933	)	$	(22,825	)

	Three Months Ended March 31, 2018
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	$	(13,119	)	$	16,961		$	(3,234	)	$	608
Cash flows from investing activities:
Cash invested in multi-client data library	—			(7,642		)	(1,598		)	(9,240		)
Purchase of property, plant, equipment and seismic rental equipment	—			—			(61		)	(61		)
Net cash used in investing activities	—			(7,642		)	(1,659		)	(9,301		)
Cash flows from financing activities:
Payments under revolving line of credit	(10,000		)	—			—			(10,000		)
Payments on notes payable and long-term debt	(29,054		)	(90		)	—			(29,144		)
Intercompany lending	7,565			(9,229		)	1,664			—
Net proceeds from issuance of stock	47,219			—			—			47,219
Other financing activities	(575		)	—			—			(575		)
Net cash provided by (used in) financing activities	15,155			(9,319		)	1,664			7,500
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash	—			—			(113		)	(113		)
Net increase (decrease) in cash, cash equivalents and restricted cash	2,036			—			(3,342		)	(1,306		)
Cash, cash equivalents and restricted cash at beginning of period	39,707			—			12,712			52,419
Cash, cash equivalents and restricted cash at end of period	$	41,743		$	—		$	9,370		$	51,113

The following table is a reconciliation of cash and cash equivalents to total cash, cash equivalents, and restricted cash:

	Three months ended March 31, 2018
	ION Geophysical Corporation		The Guarantors		All Other Subsidiaries		Consolidating Adjustments
	(In thousands)
Cash and cash equivalents	$	41,380	$	—	$	9,370	$	50,750
Restricted cash included in prepaid expenses and other current assets	60		—		—		60
Restricted cash included in other long-term assets	303		—		—		303
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	41,743	$	—	$	9,370	$	51,113

	Three Months Ended March 31, 2017
Statement of Cash Flows	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Total Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	7,548		$	3,373		$	(9,080	)	$	1,841
Cash flows from investing activities:
Investment in multi-client data library	—			(1,527		)	(1,836		)	(3,363		)
Purchase of property, plant, equipment and seismic rental equipment	—			—			(49		)	(49		)
Net cash used in investing activities	—			(1,527		)	(1,885		)	(3,412		)
Cash flows from financing activities:
Payments on notes payable and long-term debt	(506		)	(1,142		)	(58		)	(1,706		)
Intercompany lending	(1,574		)	(704		)	2,278			—
Other financing activities	(286		)	—			—			(286		)
Net cash provided by (used in) financing activities	(2,366		)	(1,846		)	2,220			(1,992		)
Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash	—			—			409			409
Net increase (decrease) in cash, cash equivalents and restricted cash	5,182			—			(8,336		)	(3,154		)
Cash, cash equivalents and restricted cash at beginning of period	23,823			—			29,610			53,433
Cash, cash equivalents and restricted cash at end of period	$	29,005		$	—		$	21,274		$	50,279

The following table is a reconciliation of cash and cash equivalents to total cash, cash equivalents, and restricted cash:

	Three months ended March 31, 2017
	ION Geophysical Corporation		The Guarantors		All Other Subsidiaries		Consolidating Adjustments
	(In thousands)
Cash and cash equivalents	$	28,366	$	—	$	21,274	$	49,640
Restricted cash included in prepaid expenses and other current assets	285		—		—		285
Restricted cash included in other long-term assets	354		—		—		354
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	29,005	$	—	$	21,274	$	50,279