ION Earnings Call Q4 2011 Earnings Call Presentation February 16, 2012
Earnings Call Introduction Corporate Participants & Contact Information BRIAN HANSON GREG HEINLEIN Chief Executive Officer Chief Financial Officer CONTACT INFORMATION If you have technical problems during the call, please…
Market Outlook Oil Prices Expect oil prices to remain in the 80 - 100 range, supporting continued frontier exploration in challenging environments, including deepwater and Arctic. Expect natural decline of large global oil…
Market Outlook Natural Gas Prices Expect depressed natural gas prices to cause shift to liquids in North America. Creating increased pressure on shale operators to locate, complete and produce shale gas more efficiently. 5
Market Outlook Marine Seismic -- Towed Streamer Seismic fleet expected to grow, with majority of new vessels 3D. Expect streamer count and length to continue to increase with market move to higher-end 12- to 14-streamer vessels. 6…
Market Outlook Marine Seismic Ocean Bottom Cable Seabed spending has increased 150%, driven by need for higher resolution imaging. Seeing increased OBC activity for 3D/4D surveys. 7 Source: ODS Petrodata, Company Analysis
Market Outlook Summary Land equipment spending slowly improving. North American shale-based seismic equipment spending may be negatively impacted in 2012. Trend toward larger land surveys and increased channel count,…
Market Outlook Summary Expanding exploration cycle. Continued growth in global shale exploration and production. Continued E&P investment in frontier exploration. Slow recovery of land seismic. 9
ION Areas of Focus Challenging Environments Arctic, Shallow/Obstructed Water, Transition Zone and Desert Complex Geologies Subsalt, Sub Basalt, Thrust Belt and Carbonates Unconventional Reservoirs Shales, Tight Gas and Oil…
2011 Highlights Systems segment revenues increased 34%, including 12-streamer sale to BGP. Continued BasinSPAN traction in Arctic, Brazil, East and West Africa. Good progress on ResSCANTM 3D multi- client acquisitions in…
Q4 2011 Highlights ION delivers fourth quarter diluted EPS of 0.15 on net income of 23 million (excluding special items). Consolidated revenues of 160 million for the fourth quarter consistent with the prior year period. Systems…
Financial Overview Year-over-Year Revenue Comparison Including Legacy Land Systems Excluding Legacy Land Systems 500 500 400 400 300 300 Millions Millions 200 200 100 100 - - 2010 2011 2010 2011 Solutions…
Systems Segment Financial Overview Revenue by Type 180 160 140 120 Millions 100 80 60 40 20 - 2010 2011 Towed Streamer Equipment Other 14
Solutions Segment Financial Overview Revenue by Type Multi-client Investments 300 175 150 M 150 125 130 M 250 Millions 100 75 200 50 25 150 - Millions 2010 2011 2012 100 Actual Investment 50 Solutions…
Solutions Revenue vs Backlog Quarterly Trends 140 On average, Quarterly Backlog = 2.3x Quarterly Revenue (Data Processing + New Venture) 120 100 80 Millions 60 40 20 0 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410…
ION Data Library Investment Relative to Revenue Average Per Year FY06 - FY11 MCDL Revenue vs MCDL Investment 200 Strong Investments into 2012 175 150 125 Millions 100 75 50 25 0 FY'06 FY'07 FY'08 FY'09 FY'10…
ION Data Library Investment Relative to Revenue Average Per Quarter (06 11) Multi-Client Data Library Revenue vs. Average Investment 55 Actual Q4 2011 50 investment 45 2x average Q4 40 35 Millions 30 25 20 15 10 5 0…
Software Segment Financial Overview Revenue by Type (GBP) % of Seismic Vessels with Orca 30 25 41% 20 59% 15 Millions 10 Orca-Permanent Other 5 Orca Vessel Conversion - 2011 2010 2011 2010 51 44 vessels…
Financial Overview Adjustments in Q4 Results for 2011 include three special pre-tax items incurred in the fourth quarter: The first item is a 7.7 million charge representing IONs 49% share of a write-down of excess inventory by…
Financial Overview Balance Sheet as of December 31, 2011 Capital Employed Financing 600 600 500 500 400 400 Millions Millions 300 176M 300 200 200 100 100 70M 99M 0 0 Cash & ST Investments Remaining Working…
Financial Overview Liquidity & LT Debt as of December 31, 2011 Liquidity of 170M LT Debt of 99M 6% 59% 41% 94% Undrawn Revolver Cash & ST Investments Term Loan Facility & Equipment Leases Revolver and Term A both…
Financial Overview Cash Flow Year Ended December 31, SUMMARIZED CASH FLOW 2011 2010 Cash from operations 135,307 181,490 Working capital (5,506) (48,050) Multi-client investment (143,782) (64,426) PP&E Capital…
INOVA Geophysical Q4 2011 Financial Overview* FY10 vs FY11 Forecasted Revenues 180 160 Estimated Q4 revenues of 58 to 62 million with operating income of 5 to 8 million. 140 120 Revenue 39% ahead of the same period last…
INOVA Geophysical General Market Observations/Operational Highlights High vibrator sales in Q4 (70 units), including Saudi deliveries for BGP and the first 6 units built in China. Strong ARIES sales in Q4 totaling 13 million.…
Solid Momentum Heading into 2012 Expect the following assumptions for 2012: All business units to see year-over-year growth in 2012. or more of annual earnings in the front half of the year. Data processing business to benefit by…
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