ION Geophysical Corporation Barclays Select Series 2013: Select Growth Conference Greg Heinlein SVP and Chief Financial Officer November 19, 2013
Todays Discussion Overview of ION Financial Results 3
ION Geophysical Technology Company Driven to Solve the Toughest E&P Challenges Technology Company 45 Founded in 1968 as Input / Output, Years of technology firsts: Full-wave imaging, under-ice acquisition, cableless…
ION Strategy Aligning Our Focus With Major Industry Growth Areas Adding the Greatest Value in Every Stage of the Geophysical Cycle: Planning Technology & Equipment Acquisition Processing & Interpretation Reservoir Monitoring…
Robust E&P & Seismic Industry Growth Growth Trends Expected to Continue Actual Projected 900 18 ION solutions align with 800 16 areas of highest industry 700 14 growth Seismic Spend (B) E&P Spend (B) 600 12…
Business Segments Overview YTD September 30, 2013 Revenues Adjusted OI Adjusted OM (M) Solutions Services High Growth 87% of YTD 13 revenues from E&P (29)% 10 Multi-client (New Venture Programs and Data Library Sales) 5 67%…
Solutions Segment Diversifying the Portfolio Across the E&P Lifecycle ION Solutions Segment ION Solutions Revenue Revenue Mix Mix Data Processing Relevant across all phases of the E&P lifecycle Expect multiple increase in…
Multi-client Revenues Aligned with International Exploration Activity Europe +6.3% Canada -2.4% Russia +10% 38 44 47 2011 2012 2013E 38 43 42 2011 2012 2013E 43 45 50 2011 2012 2013E U.S. Middle East +3.4% +28.3%…
Multi-client Data Library Positioned for Licensing Rounds Canada Nova Scotia: Greenland: Rounds expected in 2014 & 2015 Kanumas round awards expected soon Canada Labrador: Ordinary round closed, awards H1 2014 Round expected…
ION Multi-client Data Library NBV Geographic Composition Arctic NBV: 77M North America NBV: 73M Europe NBV: 28M Asia NBV: 18M Africa NBV: 16M South America NBV: 31M Total Net Book Value 9/30/13: 243M 11
ION Multi-client Data Library 2012 Results from Library 4 Years Old Arctic NBV: 77M Library Rev: 10M 4Yrs: 63% North America Europe NBV: 73M NBV: 28M Library Rev: 7M Library Rev: 3M 4Yrs: 54% 4Yrs: 0% Asia NBV: 18M…
ION Multi-client Data Library Lifetime Revenues Arctic NBV: 77M LTD Revs: 335M North America Europe NBV: 73M NBV: 28M LTD Revs: 180M LTD Revs: 42M Asia Africa NBV: 18M NBV: 16M LTD Revs: 131M LTD Revs: 334M South…
ION Multi-client Data Library 2007 Assets on Shelf, A Case Study 2007 Assets put on Shelf 2007 Investment to Revenue Profile Investments: 58M 100.00 90.00 80.00 (In millions) 70.00 Pre 2007 programs placed in library 60.00…
IONs Arctic Solution Big Challenge Big Reward The Opportunity ION Solution Near-ice and unique Alaska Russia under-ice seismic 25% Est. 25% of 61% acquisition undiscovered reserves are in the technologies Arctic Canada Proven…
3D Multi-client Seismic Programs Regionally-calibrated 3D Seismic The Opportunity ION Solution Recently announced Growing demand alliance with for 3D Polarcus for joint 3D broadband multi- client seismic & Multi-client…
ResSCAN 3D Land Programs Reducing Risk and Uncertainty in Unconventional Reservoirs The Opportunity ION Solution ResSCAN 48 Major Shale programs 3D Gas Basins in 32 multicomponent Countries seismic delivering rock properties…
Software Segment Steady Growth Increasing E&P Focus ION Software Segment Revenue Mix E&P Software Solutions NarwhalTM for Ice Expect significant increase Management in Software segment revenue 2012 - 2017 Optimization…
Narwhal for Ice Management Improving Safety and Efficiency in Arctic Operations The Opportunity ION Solution Vast Narwhal for Ice hydrocarbon Management potential in the Arctic Tracks and forecasts ice threats Helps ensure…
Systems Segment Restructured for Profitability Focus on Seabed Restructured segment for long- term profitability Reduced cost structure within legacy towed streamer product line Reduced annual operating costs by 12 million…
ION Seabed JV Integrated Seabed Seismic Offering Geophysical company specializing in multicomponent seismic seabed acquisition Joint venture of ION (30%) and Georadar (70%) Formerly known as GeoRXT Provides high-value…
ION Seabed JV Growing Demand for Seabed Seismic Seabed Acquisition Services Expenditure M Seabed growth outpacing 20062013e: OBS revenues +286% towed streamer 1200 1000 Market share 2006 to 2013 800 600 grew from 6 to 13% 400…
Summary Restructured Systems segment to operate more profitably Sharpened focus on seabed market Expanding E&P-facing offerings in Software segment with launch of Narwhal Disciplined investment in multi-client business;…
Todays Discussion Overview of ION Financial Results 24
Financial Overview of Special Items Q3 13 Q3-13 Special Q3-13 As Reported Items As Adjusted 1. 25M Systems inventory write-downs Net Revenues 79,838 79,838 and severance charges, and 6M Cost of sales 94,942 (30,541) 1 64,401…
Financial Overview Q3 13 Revenue M Adjusted Op. Margin % Total revenues down 41% Y/Y 125 20% Solutions down 53% 100 10% 75 Systems down 16% 50 0% 25 Software down 23% -10% - Q3 12 Q3 13 -20% Q3 12 Q3 13 Solutions Systems…
ION Historical Financial Results 2009 3Q13 ( in Thousands) Revenue Adj. EBITDA and Adj. EBITDA Margins Legacy Land Operations Legacy Land Operations 190,057 526,317 163,810 503,560 155,894 444,322 454,621 419,781 116,079…
Financial Overview Cash Flow ( in Thousands) SUMMARIZED CASH FLOW 2011 2012 YTD Q313 Cash from operations 134,893 184,386 36,661 Working capital (5,092) (15,086) 41,246 Multi-client investment (143,782) (145,627) (86,346)…
Financial Overview Balance Sheet as of Sept 30, 2013 Capital Employed M Capital Book Value M 700 700 600 600 500 500 227M 400 400 243M 300 300 200 200 100 100 184M 186M 110M 89M 74M 97M 0 0 Q2 13 Q3 13 Q2 13 Q3 13…
Appendix 30
WesternGeco Litigation Update M In October, the Judge entered Order: 192 Awarded supplemental damages 200 14 calculated by combining the jurys 13 previous reasonable royalty with lost 150 profits damages awards per unit 72 Ruled…
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