Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

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. For additional information pertaining to the Notes, See Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Exchange Offer” in Part II of this Form 10-Q.

	September 30, 2016
Balance Sheet	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	25,658		$	—		$	36,878		$	—		$	62,536
Accounts receivable, net	2,479			10,313			21,894			—			34,686
Unbilled receivables	—			16,619			7,061			—			23,680
Inventories	—			9,676			23,632			—			33,308
Prepaid expenses and other current assets	3,101			578			6,231			—			9,910
Total current assets	31,238			37,186			95,696			—			164,120
Property, plant, equipment and seismic rental equipment, net	2,205			13,505			37,814			—			53,524
Multi-client data library, net	—			102,791			9,914			—			112,705
Investment in subsidiaries	661,892			255,554			—			(917,446		)	—
Goodwill	—			—			23,412			—			23,412
Intangible assets, net	—			3,387			139			—			3,526
Intercompany receivables	—			30,609			—			(30,609		)	—
Other assets	2,008			145			242			—			2,395
Total assets	$	697,343		$	443,177		$	167,217		$	(948,055	)	$	359,682
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	14,533		$	4,374		$	319		$	—		$	19,226
Accounts payable	2,894			18,925			10,215			—			32,034
Accrued expenses	12,330			11,395			9,028			—			32,753
Accrued multi-client data library royalties	—			22,344			—			—			22,344
Deferred revenue	—			3,013			1,382			—			4,395
Total current liabilities	29,757			60,051			20,944			—			110,752
Long-term debt, net of current maturities	143,713			586			—			—			144,299
Intercompany payables	463,282			—			20,799			(484,081		)	—
Other long-term liabilities	486			34,255			9,416			—			44,157
Total liabilities	637,238			94,892			51,159			(484,081		)	299,208
Equity:
Common stock	118			290,460			19,138			(309,598		)	118
Additional paid-in capital	898,238			180,700			232,590			(413,290		)	898,238
Accumulated earnings (deficit)	(818,188		)	216,453			(6,428		)	(210,025		)	(818,188		)
Accumulated other comprehensive income (loss)	(20,063		)	4,420			(19,886		)	15,466			(20,063		)
Due from ION Geophysical Corporation	—			(343,748		)	(109,725		)	453,473			—
Total stockholders’ equity	60,105			348,285			115,689			(463,974		)	60,105
Noncontrolling interests	—			—			369			—			369
Total equity	60,105			348,285			116,058			(463,974		)	60,474
Total liabilities and equity	$	697,343		$	443,177		$	167,217		$	(948,055	)	$	359,682

	December 31, 2015
Balance Sheet	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	33,734		$	—		$	51,199		$	—		$	84,933
Accounts receivable, net	—			35,133			9,232			—			44,365
Unbilled receivables	—			19,046			891			—			19,937
Inventories	—			10,939			21,782			—			32,721
Prepaid expenses and other current assets	5,435			1,458			7,914			—			14,807
Total current assets	39,169			66,576			91,018			—			196,763
Property, plant, equipment and seismic rental equipment, net	4,521			21,072			46,434			—			72,027
Multi-client data library, net	—			120,550			11,687			—			132,237
Investment in subsidiaries	680,508			243,319			—			(923,827		)	—
Goodwill	—			—			26,274			—			26,274
Intangible assets, net	—			4,523			287			—			4,810
Intercompany receivables	75,641			—			—			(75,641		)	—
Other assets	1,724			146			1,107			—			2,977
Total assets	$	801,563		$	456,186		$	176,807		$	(999,468	)	$	435,088
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	486		$	6,856		$	570		$	—		$	7,912
Accounts payable	2,086			19,839			7,874			—			29,799
Accrued expenses	11,199			16,200			6,888			—			34,287
Accrued multi-client data library royalties	—			25,045			—			—			25,045
Deferred revenue	—			5,071			1,489			—			6,560
Total current liabilities	13,771			73,011			16,821			—			103,603
Long-term debt, net of current maturities	171,672			3,408			—			—			175,080
Intercompany payables	503,621			68,286			7,355			(579,262		)	—
Other long-term liabilities	540			33,305			10,520			—			44,365
Total liabilities	689,604			178,010			34,696			(579,262		)	323,048
Equity:
Common stock	107			290,460			19,138			(309,598		)	107
Additional paid-in capital	894,715			180,700			234,234			(414,934		)	894,715
Accumulated earnings (deficit)	(759,531		)	231,208			(21,729		)	(209,479		)	(759,531		)
Accumulated other comprehensive income (loss)	(14,781		)	4,420			(14,604		)	10,184			(14,781		)
Due from ION Geophysical Corporation	—			(428,612		)	(75,009		)	503,621			—
Treasury stock	(8,551		)	—			—			—			(8,551		)
Total stockholders’ equity	111,959			278,176			142,030			(420,206		)	111,959
Noncontrolling interests	—			—			81			—			81
Total equity	111,959			278,176			142,111			(420,206		)	112,040
Total liabilities and equity	$	801,563		$	456,186		$	176,807		$	(999,468	)	$	435,088

	Three Months Ended September 30, 2016
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	30,155		$	48,467		$	—		$	78,622
Cost of sales	—			22,724			24,133			—			46,857
Gross profit	—			7,431			24,334			—			31,765
Total operating expenses	7,692			7,186			5,023			—			19,901
Income (loss) from operations	(7,692		)	245			19,311			—			11,864
Interest expense, net	(4,583		)	(32		)	8			—			(4,607		)
Intercompany interest, net	276			(1,138		)	862			—			—
Equity in earnings of investments	13,494			15,039			—			(28,533		)	—
Other income (expense)	245			948			(3,220		)	—			(2,027		)
Net income before income taxes	1,740			15,062			16,961			(28,533		)	5,230
Income tax expense	41			670			2,605			—			3,316
Net income	1,699			14,392			14,356			(28,533		)	1,914
Net income attributable to noncontrolling interests	—			—			(215		)	—			(215		)
Net income attributable to ION	$	1,699		$	14,392		$	14,141		(28,533		)	$	1,699
Comprehensive net loss	$	616		$	14,392		$	13,058		$	(27,235	)	$	831
Comprehensive income attributable to noncontrolling interest	—			—			(215		)	—			(215		)
Comprehensive net income attributable to ION	$	616		$	14,392		$	12,843		$	(27,235	)	$	616

	Three Months Ended September 30, 2015
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	41,768		$	25,072		$	(166	)	$	66,674
Cost of sales	—			31,712			24,020			(166		)	55,566
Gross profit	—			10,056			1,052			—			11,108
Total operating expenses	3,914			11,266			8,802			—			23,982
Loss from operations	(3,914		)	(1,210		)	(7,750		)	—			(12,874		)
Interest expense, net	(4,769		)	(107		)	22			—			(4,854		)
Intercompany interest, net	184			(806		)	622			—			—
Equity in losses of investments	(14,248		)	(12,141		)	—			26,389			—
Other income (expense)	326			(9		)	(663		)	—			(346		)
Net loss before income taxes	(22,421		)	(14,273		)	(7,769		)	26,389			(18,074		)
Income tax expense (benefit)	(2,038		)	65			4,055			—			2,082
Net loss	(20,383		)	(14,338		)	(11,824		)	26,389			(20,156		)
Net income attributable to noncontrolling interests	—			—			(227		)	—			(227		)
Net loss attributable to ION	$	(20,383	)	$	(14,338	)	$	(12,051	)	26,389			$	(20,383	)
Comprehensive net loss	$	(21,748	)	$	(15,543	)	$	(12,940	)	$	28,710		$	(21,521	)
Comprehensive income attributable to noncontrolling interest	—			—			(227		)	—			(227		)
Comprehensive net loss attributable to ION	$	(21,748	)	$	(15,543	)	$	(13,167	)	$	28,710		$	(21,748	)

	Nine Months Ended September 30, 2016
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	58,907		$	78,532		$	—		$	137,439
Cost of sales	—			67,061			42,690			—			109,751
Gross profit	—			(8,154		)	35,842			—			27,688
Total operating expenses	24,894			21,687			15,960			—			62,541
Income (loss) from operations	(24,894		)	(29,841		)	19,882			—			(34,853		)
Interest expense, net	(13,917		)	(179		)	53			—			(14,043		)
Intercompany interest, net	727			(3,250		)	2,523			—			—
Equity in earnings of investments	(18,617		)	19,163			—			(546		)	—
Other income (expense)	(1,841		)	771			(2,554		)	—			(3,624		)
Net income before income taxes	(58,542		)	(13,336		)	19,904			(546		)	(52,520		)
Income tax expense	115			1,419			4,331			—			5,865
Net income	(58,657		)	(14,755		)	15,573			(546		)	(58,385		)
Net income attributable to noncontrolling interests	—			—			(272		)	—			(272		)
Net income attributable to ION	$	(58,657	)	$	(14,755	)	15,301			$	(546	)	(58,657		)
Comprehensive net income (loss)	$	(63,939	)	$	(14,755	)	$	10,019		$	5,008		$	(63,667	)
Comprehensive income attributable to noncontrolling interest	—			—			(272		)	—			(272		)
Comprehensive net income (loss) attributable to ION	$	(63,939	)	$	(14,755	)	$	9,747		$	5,008		$	(63,939	)

	Nine Months Ended September 30, 2015
Income Statement	ION Geophysical Corporation			The Guarantors			All Other Subsidiaries			Consolidating Adjustments			Total Consolidated
	(In thousands)
Net revenues	$	—		$	83,082		$	61,972		$	(1,007	)	$	144,047
Cost of sales	—			84,715			75,154			(1,007		)	158,862
Gross loss	—			(1,633		)	(13,182		)	—			(14,815		)
Total operating expenses	18,296			37,151			29,990			—			85,437
Loss from operations	(18,296		)	(38,784		)	(43,172		)	—			(100,252		)
Interest expense, net	(13,826		)	(279		)	19			—			(14,086		)
Intercompany interest, net	466			(2,208		)	1,742			—			—
Equity in earnings (losses) of investments	9,881			(45,091		)	—			35,210			—
Other income (expense)	268			101,961			(4,194		)	—			98,035
Net income (loss) before income taxes	(21,507		)	15,599			(45,605		)	35,210			(16,303		)
Income tax expense (benefit)	(1,929		)	239			5,287			—			3,597
Net income (loss)	(19,578		)	15,360			(50,892		)	35,210			(19,900		)
Net loss attributable to noncontrolling interests	—			—			322			—			322
Net income (loss) applicable to ION	$	(19,578	)	15,360			$	(50,570	)	$	35,210		$	(19,578	)
Comprehensive net income (loss)	$	(20,335	)	$	14,794		$	(51,458	)	$	36,342		$	(20,657	)
Comprehensive loss attributable to noncontrolling interest	—			—			322			—			322
Comprehensive net income (loss) attributable to ION	$	(20,335	)	$	14,794		$	(51,136	)	$	36,342		$	(20,335	)

	Nine Months Ended September 30, 2016
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	$	(31,403	)	$	50,669		$	(16,034	)	$	3,232
Cash flows from investing activities:
Cash invested in multi-client data library	—			(10,027		)	(1,574		)	(11,601		)
Purchase of property, plant, equipment and seismic rental equipment	—			(567		)	—			(567		)
Net cash used in investing activities	—			(10,594		)	(1,574		)	(12,168		)
Cash flows from financing activities:
Borrowings under revolving line of credit	15,000			—			—			15,000
Repurchase of common stock	(964		)	—			—			(964		)
Payments on notes payable and long-term debt	(951		)	(5,304		)	(471		)	(6,726		)
Costs associated with issuance of debt	(6,638		)	—			—			(6,638		)
Intercompany lending	31,867			(34,771		)	2,904			—
Payment to repurchase bonds	(15,000		)	—			—			(15,000		)
Other financing activities	13			—			—			13
Net cash provided by (used in) financing activities	23,327			(40,075		)	2,433			(14,315		)
Effect of change in foreign currency exchange rates on cash and cash equivalents	—			—			854			854
Net decrease in cash and cash equivalents	(8,076		)	—			(14,321		)	(22,397		)
Cash and cash equivalents at beginning of period	33,734			—			51,199			84,933
Cash and cash equivalents at end of period	$	25,658		$	—		$	36,878		$	62,536

	Nine Months Ended September 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	$	(414,473	)	$	173,725		$	204,752		$	(35,996	)
Cash flows from investing activities:
Investment in multi-client data library	—			(27,282		)	(870		)	(28,152		)
Purchase of property, plant, equipment and seismic rental equipment	(347		)	(1,162		)	(16,092		)	(17,601		)
Other investing activities	—			1,262			—			1,262
Net cash used in investing activities	(347		)	(27,182		)	(16,962		)	(44,491		)
Cash flows from financing activities:
Payments on notes payable and long-term debt	—			(4,798		)	(633		)	(5,431		)
Intercompany lending	330,828			(141,745		)	(189,083		)	—
Other financing activities	(52		)	—			—			(52		)
Net cash provided by (used in) financing activities	330,776			(146,543		)	(189,716		)	(5,483		)
Effect of change in foreign currency exchange rates on cash and cash equivalents	—			—			601			601
Net decrease in cash and cash equivalents	(84,044		)	—			(1,325		)	(85,369		)
Cash and cash equivalents at beginning of period	109,514			—			64,094			173,608
Cash and cash equivalents at end of period	$	25,470		$	—		$	62,769		$	88,239