8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report: (Date of earliest event reported): August 4, 2010

ION Geophysical Corporation

(Exact name of registrant as specified in its charter)

Delaware	1-12691	22-2286646
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. Employer Identification No.)

2105 CityWest Blvd, Suite 400
Houston, Texas 77042-2839
(Address of principal executive offices, including Zip Code)

(281) 933-3339
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

     On August 4, 2010, ION Geophysical Corporation (the “Company”) issued a press release containing information regarding the Company’s results of operations for the quarter ended June 30, 2010. A copy of the press release is furnished as Exhibit 99.1 hereto.

Item 7.01. Regulation FD Disclosure

     In conjunction with the above press release, the Company has scheduled a conference call, which will be broadcast live over the Internet, for Thursday, August 5 at 10:00 a.m. Eastern Time (9:00 a.m. Central). The information for accessing the conference call is included in the press release. The webcast of the conference call will be accompanied by a slide presentation, a copy of which is furnished as Exhibit 99.2 hereto.

     The information contained in Items 2.02 and 7.01 and the Exhibits of this report (i) is not to be considered “filed” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (ii) shall not be incorporated by reference into any previous or future filings made by or to be made by the Company with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended, or the Exchange Act.

     The information contained in this report and the attached exhibits contains certain 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. These forward-looking statements include statements concerning future sales and market growth, future cash needs and future sources of cash, including availability under our revolving line of credit facility, future compliance with our debt financial covenants, benefits expected to result from the BGP joint venture transactions and other statements that are not of historical fact. Actual results may vary materially from those described in these forward-looking statements. All forward-looking statements reflect numerous assumptions and involve a number of risks and uncertainties. These risks and uncertainties include risks of audit adjustments and other modifications to the Company’s financial statements not currently foreseen; risks associated with the timing and development of the Company’s products and services and market acceptance of the Company’s new and revised product offerings; risks associated with the economic downturn and the volatile credit environment; risks associated with the BGP joint venture; risks associated with the Company’s level of indebtedness, including compliance with debt covenants; risks associated with competitors’ product offerings and pricing pressures resulting therefrom; risks that sources of capital may not prove adequate; risks related to collection of receivables; and risks related to technological and marketplace changes affecting the Company’s product line. Additional risk factors, which could affect actual results, are disclosed by the Company from time to time in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2009, and its Quarterly Reports on Form 10-Q filed during 2010.

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

     Not applicable.

2

(b) Pro forma financial information.

     Not applicable.

(c) Shell company transactions.

     Not applicable.

(d)Exhibits.

Exhibit Number	Description
99.1	Press Release dated August 4, 2010.
99.2	August 5, 2010 Conference Call Presentation Slides.

3

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 hereunto duly authorized.

Date: August 4, 2010	ION GEOPHYSICAL CORPORATION
	By:	/s/ R. BRIAN HANSON
		R. Brian Hanson
		Executive Vice President and Chief Financial Officer

4

EXHIBIT INDEX

Exhibit Number
99.1	Press Release dated August 4, 2010.
99.2	August 5, 2010 Conference Call Presentation Slides.

5

EX-99.1

Exhibit 99.1

ION Reports Improved Second Quarter 2010 Results
Second Quarter EPS of $0.01

     HOUSTON — August 4, 2010 — ION Geophysical Corporation (NYSE: IO) today reported second quarter 2010 revenues of $75.4 million, resulting in net income of $1.1 million, or $0.01 per diluted share. In the second quarter of 2009, ION’s net loss was ($16.6) million, or ($0.16) per share, on revenues of $89.3 million.

     Bob Peebler, ION’s Chief Executive Officer, said, “We were pleased to regain profitability, and even though we had an exceptionally weak quarter for our multi-client business, our other divisions’ results were strong enough to drive our consolidated results into positive territory. Our data library sales for the quarter were lower than expected due to the impact of the Gulf of Mexico oil spill and other timing issues, and we had lower than normal revenues from our new ventures programs, as a significant portion of our 2010 programs began acquisition in the third quarter. We view the quarter as an anomaly for our multi-client business and we expect a substantial improvement during the third quarter, where we have two significant underwritten arctic programs now in progress. We also expect to see improvements in data library sales for the balance of the year. Second quarter highlights include another record performance for both our data processing and Concept systems businesses and a solid performance by our marine business. We saw continued strength in both DigiFIN^™ and Orca^® sales and signed the contract with BGP to equip their new 12 streamer vessel with our latest offering, DigiSTREAMER^™. While the equipment related to the BGP sale will be delivered later this year, we expect to recognize the revenue on this sale in 2011.

     “Another bright spot for the quarter includes having our land equipment joint venture, INOVA Geophysical, fully operational with the management team in place. In addition, the team is making progress on both the R&D and marketing and sales front. On the business side, the land equipment business is still anemic, with an estimated total market reduction of nearly 40% in 2009 and a continued slow down extending into 2010. We do believe that overall activity for land contractors has improved somewhat, and INOVA’s equipment business had some revenue growth year over year, but not sufficient to regain profitability. There is growing interest in FireFly^®, particularly in difficult terrain such as the Marcellus shale plays in the northeast United States and

parts of Mexico. We expect slow improvement for INOVA moving into 2011, but it will likely be late 2011 before we can expect the land equipment business to return to a more normal pace.”

CHANGE IN SEGMENTATION

     As a result of the formation of INOVA Geophysical, the Company has adjusted its financial reporting segments, such that it reports three primary segments: Systems, Software (formerly Data Management Solutions) and Solutions. These three segments represent the main product and service offerings of the Company, from the manufacturing of seismic equipment to the software and processing necessary to understand the results. The historical land business that was contributed to the INOVA Geophysical joint venture is now referred to as our Legacy Land Systems (INOVA).

SECOND QUARTER 2010

     Total revenues in the second quarter of 2010 decreased 16% to $75.4 million compared to $89.3 million a year ago. Excluding the 2009 second quarter revenues of the Legacy Land Systems (INOVA) segment, total revenues decreased 6%. The Systems and Solutions segments experienced lower revenues by 12% and 3%, respectively, while the Software division experienced a 10% increase in revenues. A reconciliation of results excluding the Legacy Land Systems (INOVA) segment can be found in the financial tables of this press release.

     Adjusted for the Legacy Land Systems (INOVA) 2009 results, the Systems segment generated sales of $29.8 million in the second quarter compared to $34.0 million in the same period in 2009, a decrease of $4.2 million primarily due to lower geophone sales.

     The Software segment’s revenues increased to a second quarter record of $10.1 million compared to $9.2 million a year ago, as a result of the continued success of converting vessels to the ORCA software platform.

     The Solutions group generated $35.5 million in revenues compared to $36.7 million in the same period a year ago. The decrease was primarily driven by reductions in new venture program revenues, mostly offset by continued robust data processing services. The decrease in new venture revenues was as a result of the timing of 2010

programs scheduled to occur in the second half of the year. ION’s Data Processing services group continues to experience strong demand, with revenues increasing by 50% in the second quarter of 2010 as compared to the same period in 2009.

     Consolidated gross margins for the second quarter of 2010 increased to 37% from 34% in the second quarter of 2009 and from 25% in the first quarter of 2010. The increase in gross margin was primarily due to the contribution of the Company’s lower margin land business to INOVA Geophysical in March 2010. Adjusting for the Legacy Land Systems (INOVA) 2009 results, operating expenses for the second quarter of 2010 decreased by $5.5 million compared to the prior year period. As a percentage of revenue, operating expenses during the quarter improved to 29% compared to 34% in the prior year period. Adjusted EBITDA for the second quarter increased to $16.0 million compared to $5.3 million in the second quarter of 2009. A reconciliation of Adjusted EBITDA to reported earnings can be found in the financial tables of this press release.

     The Company accounts for its 49% interest in INOVA Geophysical as an equity method investment on a one fiscal quarter-lag basis. Thus, the Company’s share of INOVA Geophysical’s first full quarterly results will be included in the Company’s financial results for the three months ending September 30, 2010. For the three and six months ended June 30, 2010, the Company recognized a loss on its equity investment of ($0.2) million, which represents five days of activity between the closing of the joint venture on March 25, 2010 and March 31, 2010.

YEAR-TO-DATE 2010

     Consolidated revenues for the first six months of 2010 decreased 16% to $164.1 million compared to $196.1 million for the same period in 2009. Excluding the results of our Legacy Land Systems (INOVA) segment in 2009 and 2010, revenues for the first six months decreased 6% or $10.1 million. The Software segment revenues increased $1.6 million or 10% over prior year, while the Solutions segment revenues remained consistent at $83.6 million. Systems segment revenues decreased $11.7 million to $45.9 million primarily as a result of softness in both land geophone sales and general marine purchasing activity. Gross margins for the first six months of 2010 remained essentially constant at 31% compared to 32% for 2009. Excluding the 2009 and first quarter 2010

results of our Legacy Land Systems (INOVA) segment, operating expenses as a percentage of revenues for the first six months of 2010 decreased to 32% compared to 37% in the prior year period due primarily to one-time items in 2009. The Company’s effective tax rate during the first six months of 2010 was 26.0% (provision on a loss) compared to 25.7% (benefit on a loss) for 2009. The increase in effective tax rate relates primarily to the transactions involved in the closing of the INOVA Geophysical joint venture and to changes in the distribution of earnings between U.S. and foreign jurisdictions.

     Loss from operations for the first half of 2010 totaled ($5.0) million compared to ($52.1) million in the prior period. Excluding the first quarter 2010 results of our Legacy Land Systems (INOVA) segment, income from operations was $4.6 million.

     For the first six months of 2010, the Company reported a net loss of ($70.7) million, or ($0.52) per share, compared to ($55.0) million, or ($0.54) per share, in 2009. Excluding the after-tax impact of the special items as noted in the table below, the Company reported a net loss of ($10.2) million, or ($0.07) per share for the first six months of 2010. Adjusted EBITDA for the period increased 37% to $31.9 million compared to $23.3 million in 2009.

OUTLOOK

     Brian Hanson, Executive Vice President and Chief Financial Officer, commented, “We communicated during our first quarter earnings call that we expected our first quarter results to be the low point for the year, and we strongly believe that the second half of 2010 will be considerably better than the first half. We continue to anticipate a profitable year for ION in 2010, excluding any one-time charges. Our current expectations are that we will experience increasing momentum in all of our businesses as the year unfolds, which will likely carry into 2011.”

CONFERENCE CALL

     ION has scheduled a conference call for Thursday, August 5, 2010, at 10:00 a.m. Eastern Time. To participate in the conference call, dial 480-629-9692 at least 10 minutes before the call begins and ask for the ION conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be

accessible until August 19, 2010. To access the replay, dial 303-590-3030 and use pass code 4331111#.

     Investors, analysts and the general public will also have the opportunity to listen to the conference call live over the Internet by visiting www.iongeo.com. Also, an archive of the web cast will be available shortly after the call on the Company’s website.

About ION

     ION Geophysical Corporation is a leading provider of geophysical technology, services, and solutions for the global oil & gas industry. ION’s offerings allow E&P operators to obtain higher resolution images of the subsurface to reduce the risk of exploration and reservoir development, and enable seismic contractors to acquire geophysical data more efficiently. Additional information about ION is available at www.iongeo.com.

CONTACTS:

R. Brian Hanson
Chief Financial Officer
+1.281.879.3672

Jack Lascar
DRG&E
+1.713.529.6600

The information included herein contains certain 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. These forward-looking statements include future sales and market growth, timing of sales, future liquidity and cash levels, future estimated revenues and earnings, benefits expected to result from the INOVA Geophysical joint venture and related transactions and other statements that are not of historical fact. Actual results may vary materially from those described in these forward-looking statements. All forward-looking statements reflect numerous assumptions and involve a number of risks and uncertainties. These risks and uncertainties include the timing and development of the Company’s products and services and market acceptance of the Company’s new and revised product offerings; risks associated with the economic downturn and the volatile credit environment; risks associated with the operation of the

INOVA Geophysical joint venture; risks associated with the Company’s level and terms of indebtedness; risks associated with competitors’ product offerings and pricing pressures resulting therefrom; the relatively small number of customers that the Company currently relies upon; the fact that a significant portion of the Company’s revenues is derived from foreign sales; risks that sources of capital may not prove adequate; the Company’s inability to produce products to preserve and increase market share; collection of receivables; and technological and marketplace changes affecting the Company’s product lines. Additional risk factors, which could affect actual results, are disclosed by the Company from time to time in its filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2009 and its Quarterly Reports on Form 10-Q filed during 2010.

Tables to follow

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Product revenues	$	39,433		$	52,038		$	79,675		$111,514
Service revenues		35,953			37,219			84,430			84,633
Total net revenues		75,386			89,257			164,105			196,147
Cost of products		20,576			33,862			51,067			73,893
Cost of services		26,748			25,419			62,610			58,582
Gross profit		28,062			29,976			50,428			63,672
Operating expenses:
Research, development and engineering		5,217			11,793			14,216			23,258
Marketing and sales		5,649			8,438			13,555			18,201
General and administrative		11,212			17,256			27,650			36,256
Impairment of intangible assets		—			—			—			38,044
Total operating expenses		22,078			37,487			55,421			115,759
Income (loss) from operations		5,984			(7,511	)		(4,993	)		(52,087	)
Interest expense, net, including $18.8 million of a debt discount and write-off of debt issuance costs in 1Q 2010		(1,373	)		(6,349	)		(27,016	)		(13,282	)
Loss on disposition of land division		—			—			(38,115	)		—
Fair value adjustment of the warrant		—			—			12,788			—
Equity in losses of INOVA Geophysical		(179	)		—			(179	)		—
Other income (expense)		(799	)		(6,381	)		2,418			(6,403	)
Income (loss) before income taxes		3,633			(20,241	)		(55,097	)		(71,772	)
Income tax expense (benefit)		2,174			(4,510	)		14,334			(18,473	)
Net income (loss)		1,459			(15,731	)		(69,431	)		(53,299	)
Preferred stock dividends		385			875			1,260			1,750
Net income (loss) applicable to common shares	$	1,074		$	(16,606	)	$	(70,691	)	$	(55,049	)
Net income (loss) per share:
Basic	$	0.01		$	(0.16	)	$	(0.52	)	$	(0.54	)
Diluted	$	0.01		$	(0.16	)	$	(0.52	)	$	(0.54	)
Weighted average number of common shares outstanding:
Basic		151,441			105,121			135,962			102,447
Diluted		152,036			105,121			135,962			102,447

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

	June 30,			December 31,
	2010			2009
ASSETS
Current assets:
Cash and cash equivalents	$	16,288		$	16,217
Restricted cash		1,191			1,469
Accounts receivable, net		52,423			111,046
Receivables and advances to INOVA Geophysical		9,623			—
Current portion notes receivable		—			13,367
Unbilled receivables		29,838			21,655
Inventories, net		52,056			202,601
Deferred income tax asset		6,827			6,001
Prepaid expenses and other current assets		9,776			23,145
Total current assets		178,022			395,501
Deferred income tax asset		15,834			26,422
Property, plant and equipment, net		16,202			78,555
Multi-client data library, net		133,073			130,705
Investment in INOVA Geophysical		118,821			—
Goodwill		50,704			52,052
Intangible assets, net		23,182			61,766
Other assets		4,716			3,185
Total assets	$	540,554		$	748,186
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current maturities of long-term debt	$	6,655		$	271,132
Accounts payable		16,902			40,189
Accrued expenses		39,374			65,893
Accrued multi-client data library royalties		11,920			18,714
Fair value of the warrant		—			44,789
Deferred revenue and other current liabilities		12,231			13,802
Total current liabilities		87,082			454,519
Long-term debt, net of current maturities		104,961			6,249
Non-current deferred income tax liability		5,535			1,262
Other long-term liabilities		8,440			3,688
Total liabilities		206,018			465,718
Stockholders’ equity:
Cumulative convertible preferred stock		27,000			68,786
Common stock		1,523			1,187
Additional paid-in capital		817,740			666,928
Accumulated deficit		(480,979	)		(411,548	)
Accumulated other comprehensive loss		(24,183	)		(36,320	)
Treasury stock		(6,565	)		(6,565	)
Total stockholders’ equity		334,536			282,468
Total liabilities and stockholders’ equity	$	540,554		$	748,186

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Six Months Ended
	June 30,
	2010			2009
Cash flows from operating activities:
Net loss	$	(69,431	)	$	(53,299	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization (other than multi-client data library)		15,766			21,740
Amortization of multi-client data library		18,858			22,021
Stock-based compensation expense related to stock options, nonvested stock and employee stock purchases		3,343			7,406
Bad debt expense		194			2,625
Amortization of debt discount		8,656			—
Write-off of unamortized debt issuance costs		10,121			—
Fair value adjustment of the warrant		(12,788	)		—
Deferred income taxes		8,250			(24,697	)
Loss on disposition of land division		38,115			—
Equity in losses of INOVA Geophysical		179			—
Impairment of intangible assets		—			38,044
Change in operating assets and liabilities:
Accounts and notes receivable		31,088			71,538
Unbilled receivables		(8,183	)		9,112
Inventories		1,153			(10,112	)
Accounts payable, accrued expenses and accrued royalties		(23,568	)		(60,059	)
Deferred revenue		1,768			(438	)
Other assets and liabilities		(3,949	)		14,071
Net cash provided by operating activities		19,572			37,952
Cash flows from investing activities:
Purchase of property, plant and equipment		(2,056	)		(2,007	)
Investment in multi-client data library		(21,226	)		(45,599	)
Cash, net of fees, from disposition of land division		99,790			—
Advances to INOVA Geophysical		(6,500	)		—
Other investing activities		(1,272	)		(208	)
Net cash provided by (used in) investing activities		68,736			(47,814	)
Cash flows from financing activities:
Net proceeds from issuance of debt		105,695			11,785
Net proceeds from issuance of common stock		38,039			38,220
Borrowings under revolving line of credit		85,000			32,000
Repayments under revolving line of credit		(174,429	)		—
Payments on notes payable and long-term debt		(142,047	)		(66,196	)
Costs associated with debt amendments		—			(3,800	)
Payment of preferred dividends		(1,260	)		(1,750	)
Other financing activities		(78	)		234
Net cash (used in) provided by financing activities		(89,080	)		10,493
Effect of change in foreign currency exchange rates on cash and cash equivalents		843			805
Net increase in cash and cash equivalents		71			1,436
Cash and cash equivalents at beginning of period		16,217			35,172
Cash and cash equivalents at end of period	$	16,288		$	36,608

ION GEOPHYSICAL CORPORATION AND SUBSIDIARIES
SUMMARY OF SEGMENT INFORMATION
(In thousands)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Net revenues:
Systems	$	29,792		$	33,973		$	45,907		$	57,569
Software (formerly named Data Management Solutions)		10,133			9,217			18,105			16,463
Solutions (formerly named ION Solutions)		35,461			36,654			83,582			83,663
Legacy Land Systems (INOVA)*		—			9,413			16,511			38,452
Total	$	75,386		$	89,257		$	164,105		$	196,147
Gross profit:
Systems	$	12,381		$	14,175		$	17,939		$	23,881
Software		6,811			6,327			12,180			11,251
Solutions		8,870			11,404			21,293			26,290
Legacy Land Systems (INOVA)*		—			(1,930	)		(984	)		2,250
Total	$	28,062		$	29,976		$	50,428		$	63,672
Gross margin:
Systems		41.6	%		41.7	%		39.1	%		41.5	%
Software		67.2	%		68.6	%		67.3	%		68.3	%
Solutions		25.0	%		31.1	%		25.5	%		31.4	%
Legacy Land Systems (INOVA)*		—	%		(20.5	%)		(6.0	%)		5.9	%
Total		37.2	%		33.6	%		30.7	%		32.5	%
Income (loss) from operations:
Systems	$	7,231		$	8,732		$	8,140		$	12,093
Software		6,256			5,818			11,062			10,248
Solutions		2,548			4,603			8,113			9,808
Legacy Land Systems (INOVA)*		—			(11,834	)		(9,623	)		(17,181	)
Corporate and other		(10,051	)		(14,830	)		(22,685	)		(29,011	)
Impairment of intangible assets		—			—			—			(38,044	)
Total	$	5,984		$	(7,511	)	$	(4,993	)	$	(52,087	)

* Represents the historical results of ION’s land businesses, which were contributed to the joint venture (INOVA Geophysical) with BGP.

Summary of Net Revenues by Type
Excluding Legacy Land Systems (INOVA)
(In thousands)
(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
Net revenues by type:
Systems:
Towed Streamer	$	19,677	$	20,021	$	29,910	$	34,645
Ocean Bottom		1,137		495		1,311		844
Other		8,978		13,457		14,686		22,080
Total	$	29,792	$	33,973	$	45,907	$	57,569
Software:
Software Systems	$	9,641	$	8,653	$	17,257	$	15,494
Services		492		564		848		969
Total	$	10,133	$	9,217	$	18,105	$	16,463
Solutions:
Data Processing	$	27,753	$	18,515	$	51,718	$	36,099
New Venture		4,917		13,379		12,343		37,144
Data Library		2,791		4,760		19,521		10,420
Total	$	35,461	$	36,654	$	83,582	$	83,663

Reconciliation of Adjusted EBITDA to Net Income (Loss)
(Non-GAAP Measure)
(In thousands)
(Unaudited)

     Adjusted EBITDA is a Non-GAAP measurement that is presented as an additional indicator of operating performance and is not a substitute for net income (loss) or net income (loss) per share calculated under generally accepted accounting principles (GAAP). We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to service our debt. The calculation of Adjusted EBITDA shown below is based upon amounts derived from the company’s financial statements prepared in conformity with GAAP.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2010		2009			2010			2009
Net income (loss)	$	1,459	$	(15,731	)	$	(69,431	)	$	(53,299	)
Interest expense, net		1,373		6,349			27,016			13,282
Income tax expense (benefit)		2,174		(4,510	)		14,334			(18,473	)
Depreciation and amortization expense		11,004		19,219			34,624			43,761
Impairment of intangible assets		—		—			—			38,044
Loss on disposition of land division		—		—			38,115			—
Fair value adjustment of the warrant		—		—			(12,788	)		—
Adjusted EBITDA	$	16,010	$	5,327		$	31,870		$	23,315

Reconciliation of Special Charges to Diluted Earnings per Share
(Non-GAAP Measure)
(In thousands, except per share data)
(Unaudited)

     The financial results are reported in accordance with GAAP. However, management believes that certain non-GAAP performance measures may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. One such non-GAAP financial measure is income (loss) from operations or net income (loss) excluding certain charges or amounts. This adjusted income amount is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for operating income (loss), net income (loss) or other income data prepared in accordance with GAAP. See the table below for supplemental financial data and the corresponding reconciliation to GAAP financials for the six months ended June 30, 2010 and 2009:

	Six Months Ended June 30, 2010
	As			Loss on			Write-off of		Adjustments of			As
	Reported			Disposition			Debt Costs*		the Warrant**			Adjusted
Net revenues	$	164,105		$	—		$	—	$	—		$	164,105
Cost of sales		113,677			—			—		—			113,677
Gross profit		50,428			—			—		—			50,428
Operating expenses		55,421			—			—		—			55,421
Loss from operations		(4,993	)		—			—		—			(4,993	)
Interest expense, net		(27,016	)		—			10,121		8,656			(8,239	)
Loss on disposition of land division		(38,115	)		38,115			—		—			—
Fair value adjustment of the warrant		12,788			—			—		(12,788	)		—
Equity in losses of INOVA Geophysical		(179	)		—			—		—			(179	)
Other income		2,418			—			—		—			2,418
Income tax expense (benefit)		14,334			(19,954	)		3,542		—			(2,078	)
Net loss		(69,431	)		58,069			6,579		(4,132	)		(8,915	)
Preferred stock dividends		1,260			—			—		—			1,260
Net loss applicable to common shares	$	(70,691	)	$	58,069		$	6,579	$	(4,132	)	$	(10,175	)
Basic and diluted earnings per share	$	(0.52	)									$	(0.07	)
Weighted average number of basic and diluted common shares outstanding		135,962											135,962

*	Relates to the write-off of unamortized debt issuance costs relating to our first quarter 2010 re-financings.
**	Relates to the non-cash debt discount and fair value adjustment to the warrant from January 1, 2010 through March 25, 2010, the date of the closing of INOVA Geophysical.

	Six Months Ended June 30, 2009
									Out-of-Period
							F/X		Stock-Based
	As			Impairment			Exchange		Compensation			As
	Reported			Charges			Rate Losses		Expense			Adjusted
Net revenues	$	196,147		$	—		$	—	$	—		$	196,147
Cost of sales		132,475			—			—		—			132,475
Gross profit		63,672			—			—		—			63,672
Operating expenses		115,759			(38,044	)		—		(3,267	)		74,448
Loss from operations		(52,087	)		38,044			—		3,267			(10,776	)
Interest expense, net		(13,282	)		—			—		—			(13,282	)
Other income (expense)		(6,403	)		—			6,657		—			254
Income tax (benefit) expense		(18,473	)		11,033			1,365		1,143			(4,932	)
Net loss		(53,299	)		27,011			5,292		2,124			(18,872	)
Preferred stock dividends		1,750			—			—		—			1,750
Net loss applicable to common shares	$	(55,049	)	$	27,011		$	5,292	$	2,124		$	(20,622	)
Basic and diluted earnings per share	$	(0.54	)									$	(0.20	)
Weighted average number of basic and diluted common shares outstanding		102,447											102,447

Reconciliation of Income (Loss) from Operations Excluding our
Legacy Land Systems (INOVA) Segment
(Non-GAAP Measure)
(In thousands)
(Unaudited)

          The financial results are reported in accordance with GAAP. However, management believes that certain non-GAAP performance measures may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. One such non-GAAP financial measure is our income (loss) from operations excluding our Legacy Land Systems (INOVA) segment. This segment was contributed to our joint venture (INOVA Geophysical) on March 25, 2010. Therefore, beginning on March 26, 2010, this contributed business is no longer consolidated into our results of operations. This adjusted income amount is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for operating income (loss) or other income data prepared in accordance with GAAP. See the table below for supplemental financial data and the corresponding reconciliation to GAAP financials for the six months ended June 30, 2010 and for the three and six months ended June 30, 2009:

	Six Months Ended June 30, 2010
				Excluding
	As			Legacy Land			As
	Reported			Systems			Adjusted
Net revenues	$	164,105		$	(16,511	)	$	147,594
Cost of sales		113,677			(17,495	)		96,182
Gross profit		50,428			984			51,412
Operating expenses		55,421			(8,639	)		46,782
Income (loss) from operations	$	(4,993	)	$	9,623		$	4,630
	Six Months Ended June 30, 2009
				Excluding
	As			Legacy Land			As
	Reported			Systems			Adjusted
Net revenues	$	196,147		$	(38,452	)	$	157,695
Cost of sales		132,475			(36,202	)		96,273
Gross profit		63,672			(2,250	)		61,422
Operating expenses (including impairment of intangibles)		115,759			(57,475	)		58,284
Income (loss) from operations	$	(52,087	)	$	55,225		$	3,138
	Three Months Ended June 30, 2009
				Excluding
	As			Legacy Land			As
	Reported			Systems			Adjusted
Net revenues	$	89,257		$	(9,413	)	$	79,844
Cost of sales		59,281			(11,343	)		47,938
Gross profit		29,976			1,930			31,906
Operating expenses		37,487			(9,904	)		27,583
Income (loss) from operations	$	(7,511	)	$	11,834		$	4,323

EX-99.2

Exhibit 99.2

ION Earnings Call Q2 2010 Earnings Call Presentation August 5, 2010 CHARGED WITH INNOVATION

Earnings Call Introduction Corporate Participants & Contact Information CONTACT INFORMATION If you have technical problems during the call, please contact 713 529 6600. If you would like to listen to a replay of today's call, it will be available via webcast in the Investor Relations section of the Company's website - www.iongeo.com for approximately 12 months. BOB PEEBLER ION Geophysical Corporation CEO BRIAN HANSON ION Geophysical Corporation CFO

Earnings Call Introduction FORWARD-LOOKING STATEMENT The information included herein contains 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. Actual results may vary fundamentally from those described in these forward-looking statements. All forward-looking statements reflect numerous assumptions and involve a number of risks and uncertainties. These risks and uncertainties include risk factors that are disclosed by ION from time to time in its filings with the Securities and Exchange Commission.

Impact of the Gulf of Mexico Oil Spill Q2 2010

Quarterly Highlights Q2 2010 Regained profitability Record performance by our Concept Systems and data processing divisions Significant backlog in our data processing business Solid performance by our marine business Signed contract with BGP to equip their new 12 streamer vessel with DigiSTREAMER Seeing some recovery in the land market as the North American shale plays continue to expand INOVA Geophysical fully operational with management team in place

Financial Overview Three New Primary Segments Former Data Management Solutions segment Former ION Solutions segment Marine and remaining land equipment businesses SOFTWARE SOLUTIONS SYSTEMS

Financial Overview Trailing Twelve Month (TTM) Revenue Comparison $ Millions [ 13 ] Including Land Legacy Systems Excluding Land Legacy Systems Solutions Systems Software $ Millions

Software Segment £ Millions Revenue by Type (GBP) Services Software Systems % of Seismic Vessels with Orca Orca Vessel Conversion 32 vessels 42 vessels 2009 2010 Other Orca 34% 66%

Solutions Segment Revenue by Type Multi-client CapEx Investment Solutions Backlog $ Millions $ Millions Q2 2010 $118 M Q2 2009 $86 M Actual Investment Forecasted Investment Data Processing Data Libraries New Ventures

Systems Segment $ Millions Revenue by Type Towed Streamer Equipment OBC Other

INOVA Geophysical $ Millions Q209 Actual Revenues vs Q210 Forecasted Revenues Estimated Q210 Results for INOVA* Revenues: $17 to $19 million Operating Loss: $14 to $16 million Net Loss: $11 to $13 million * ION to share in 49% of these estimated results.

Q&A Session Q2 2010