CGGVeritas Announces Third Quarter 2009 Results
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Free Cash Flow at $148m
Group EBITDAs margin at 32%
Backlog at $1.65B
PARIS--(BUSINESS WIRE)--
Regulatory News:
CGGVeritas (Paris: GA) (NYSE: CGV) announced today its non-audited third quarter 2009 consolidated results. All comparisons are made on a year-on-year basis unless stated otherwise. All results are reported after restructuring charges unless stated otherwise.
Results in line with expectations
-- Group revenue was $731m down 31% from a record quarter last year and
reflecting current market conditions
-- Group operating margin was 8% and EBITDAs margin was 32% with a
resilient Sercel EBIT margin, good vessel performance in oversupplied
market and sequentially stable multi-client sales with a higher
amortization rate
-- Net income was $12m
-- Free cash flow at $148m this quarter following a significant reduction
of working capital
-- Net debt to equity reduced to 32%
-- Long term marine contract awarded by Pemex. Backlog as of November 1st
increased sequentially to $1.65 billion
Cost reduction and marine adjustment plans on track
-- Disciplined capital spending with a 25% reduction year to date
-- Fleet reduction from 27 to 20 vessels progressing with three 3D vessels
decommissioned to date. All related restructuring charges were accrued
in Q2
Third Quarter 2009 key figures
In M$ Third Quarter Variance Third Quarter
2009 2008
Group Revenue 731 -31% 1062
Sercel 203 -35% 314
Services 571 -25% 762
Group Operating Income 58 -78% 265
Margin 8% 25%
Sercel 37 -64% 103
Margin 18% 33%
Services 33 -81% 173
Margin 6% 23%
Net Income 12 -93% 162
Margin 2% 15%
Cash Flow from Operations 303 298
Net Debt 1,371 (Sept 30th09) -4% 1,432 (Dec 31st08)
Net Debt to Equity ratio 32% 35%
CGGVeritas Chairman & CEO, Robert Brunck commented:
"As expected, the positive contribution of higher margin 2008 backlog coming to an end, led to a more difficult quarter. Nevertheless, we delivered solid free cash flow thanks to strong and disciplined actions across the company.
In the current economic environment Sercel, with its leading technology and manufacturing excellence, exhibited a resilient margin. Services reinforced their high-end positioning with increased prefunding of new multi-client projects, continued interest for its advanced depth imaging and through its high-resolution land seismic surveys. In marine, the industry began capacity adjustments but oversupply still prevails, translating into lower pricing and increased vessel transits for some of the new contracts.
Looking forward in the context of relatively high and stable oil prices, we expect oil and gas fundamentals to strengthen and demand for high-end seismic technology, especially around reservoir optimization, to continue to increase. CGGVeritas is well positioned to take full advantage of its technological strength and its well balanced portfolio."
Third Quarter 2009 Financial Results
Group Revenue
Group Revenue was down 31% in $ and 26% in EUR
from a record quarter last year, reflecting weak market conditions.
Third Third Third Third Quarter
In millions Quarter variance Quarter Quarter variance 2008 (EUR)
2009 ($) 2008 ($) 2009 (EUR)
Group 731 -31% 1062 512 -26% 692
Revenue
Sercel 203 -35% 314 143 -30% 204
Revenue
Services 571 -25% 762 400 -19% 496
Revenue
Eliminations -43 -13 -31 -9
Marine 271 -15% 320 189 -9% 208
contract
Land 85 -35% 131 59 -30% 85
contract
Processing 101 1% 99 71 9% 65
Multi-client 114 -46% 212 81 -41% 138
MC marine 77 -54% 169 54 -51% 110
MC land 37 -16% 44 27 -4% 28
Sercel
Revenue was down 35% in $ and 30% in EUR from a
record third quarter last year with an increased contribution from
marine with sales of two SeaRay OBC systems and one Nautilus for
acoustic positioning and streamer control. Internal sales represented
21% of revenue.
Services
Revenue was down 25% in $ and 19% in EUR with
good vessel utilization despite increasing standby between contracts.
Revenue was also supported by strong processing performance, while
marine multi-client revenue decreased year on year following the
reduction of our multi-client investments. Amortization rates of our
multi-client library were higher this quarter at 75% mainly due to a
different sales mix with lower fully depreciated data and higher onshore
contribution. We anticipate the full year 2009 amortization rate to be
around 65%.
Marine capacity adjustments: The Fohn and the Orion 3D vessels were decommissioned this quarter. Following contract completion, another 2D vessel will be de-rigged in the fourth quarter 2009. Three additional 2D vessels are scheduled for decommissioning in 2010.
-- Marine contract revenue was down 15% in $ and 9% in EUR. The vessel
availability rate1 was 90%, including a 7% impact related to standby
between contracts and the production rate2 was 93%. 86% of the 3D fleet
operated on contract. With the end of 2008 higher margin backlog, we saw
the impact of lower pricing. The industry first Arctic Beaufort Sea
acquisition project was completed with excellent results and one vessel
was equipped with Nautilus for integrated acoustic positioning and
streamer control.
-- Land contract revenue was down 35% in $ and 30% in EUR, mainly in North
American land as activity remained slow with gas prices continuing to
stagnate. We operated 12 crews worldwide, including Argas crews in Saudi
Arabia and our large high-density contracts in Qatar and Oman where we
continue to operate near record levels with promising results. In
Canada, we successfully completed a 4D SeisMovie reservoir monitoring
acquisition.
-- Processing & Imagingrevenue was up 1% in $ and 9% in EUR as the
performance and demand for our high-end innovative imaging products,
especially in the Gulf of Mexico remained robust. The latest releases
include AGORA our ground roll attenuation and TTI RTM, our leading edge
depth migration technology. During the quarter, we were awarded a new
dedicated center in Brazil and two dedicated center contracts were
renewed, one in the Netherlands, the other in France.
-- Multi-clientrevenue was down 46% in $ and 41% in EUR following our
decreasing Capex spending. The amortization rate averaged 75%, with 78%
in land and 74% in marine, a high amortization rate due to a sales mix
of less fully depreciated data and an increasing contribution from land.
Net Book Value of the library at the end of September was stable at $828
million.
Multi-client marine revenue was down 54% in $ and 51% in EUR as Capex was reduced 59% year on year in $ to $48 million (EUR33 million). Prefunding was $54 million (EUR38 million), up sequentially with a rate of 112%. In Brazil the extension of our Santos cluster survey around the Tupi discovery continued to progress well and we completed our programs offshore Australia and in the North Sea. After-sales worldwide were down 47% in $ and 45% in EUR at $23 million (EUR16 million).
Multi-client land revenue was down 16% in $ and 4% in EUR. Capex was reduced 26% year on year at $20 million (EUR14 million). Prefunding was high during the quarter, at $25 million (EUR18 million). Prefunding rate increased year on year and sequentially to 121% reflecting the strong interest for our Haynesville program where we operated two crews this quarter on the 3D multi-client Tri-Parish Line survey in northern Louisiana. After-sales were at $13 million (EUR9 million).
1 - The vessel availability rate, a metric measuring the structural availability of our vessels to meet demand; this metric is related to the entire fleet, and corresponds to the total vessel time reduced by the sum of the standby time between contracts, of the shipyard time and the steaming time (the "available time"), all divided by total vessel time;
2 - The vessel production rate, a metric measuring the effective utilization of the vessels once available; this metric is related to the entire fleet, and corresponds to the available time reduced by the operational downtime, all then divided by available time.
Group EBITDAs was $231 million (EUR163 million), a margin of 32%.
Third Third Third Third Quarter
In million Quarter variance Quarter Quarter variance 2008 (EUR)
2009 ($) 2008 ($) 2009 (EUR)
Group 231 -50% 467 163 -47% 304
EBITDAs
margin 32% 44% 32% 44%
Sercel 47 -58% 112 32 -55% 73
EBITDAs
margin 23% 36% 23% 36%
Services 203 -45% 367 143 -40% 239
EBITDAs
margin 36% 48% 36% 48%
Group Operating Income was $58 million, with a margin of 8% based on resilient performance of Sercel while weaker marine prices impacted Services.
Third Third Third Third Quarter
In million Quarter variance Quarter Quarter variance 2008 (EUR)
2009 ($) 2008 ($) 2009 (EUR)
Group
Operating 58 -78% 265 41 -76% 173
Income
margin 8% 25% 8% 25%
Sercel Op. 37 -64% 103 25 -62% 67
Income
margin 18% 33% 18% 33%
Services Op. 33 -81% 173 24 -79% 113
Income
margin 6% 23% 6% 23%
Group Net Income was $12 million (EUR8 million), a 2% margin, compared to $162 million (EUR105 million) last year, resulting in an EPS of EUR0.05 per ordinary share and $0.07 per ADS.
Taxes
The effective tax rate was 42%.
Financial Charges
Financial charges were $38 million
(EUR27 million).
Cash Flow
Cash Flow from Operations
Cash flow from operations
was $303 million (EUR217 million) stable year-on-year.
Capex
Global Capex was $148 million (EUR104 million)
this quarter, a reduction of 25% year-on-year.
-- Industrial Capex was $79 million (EUR56 million), up 54% in $, including
a SeaRay and Nautilus system.
-- Multi-client Capex was $68 million (EUR47 million) down 53% in $ with a
prefunding rate of 115% compared to 102% last year.
In million $ Third Quarter variance Third Quarter
2009 2008
Capex 148 -25% 197
Industrial 79 54% 52
Multi-client 68 -53% 146
Free Cash Flow
After interest expenses paid during
the quarter, free cash flow was strong at $148 million up year on year
and sequentially due to strict management of working capital.
Third Quarter 2009 Comparisons with Third Quarter 2008
Third Quarter Third Quarter
Consolidated Statement of Income (in million dollars) (in million euros)
2009 2008 2009 2008
Exchange rate euro/dollar 1.418 1.537 1.418 1.537
Operating Revenue 731.4 1 062.2 512.2 691.6
Sercel 203.3 313.5 142.8 204.1
Services 570.9 761.7 400.0 496.0
Elimination -42.8 -13.1 -30.6 -8.5
Gross Profit* 151 379.0 104.5 246.9
Operating Income* 57.7 265.1 40.7 172.8
Sercel 36.5 102.5 25.2 66.7
Services 33.3 172.9 23.8 112.7
Corporate and Elimination -12.1 -10.1 -8.3 -6.5
Income from Equity Investments 4.0 -0.9 2.9 -0.6
Net Income* 12.2 161.7 8.4 105.4
Earnings per share (EUR) / per ADS ($) 0.07 1.14 0.05 0.74
EBITDAs* 231.3 467.2 162.8 304.3
Sercel 46.8 111.8 32.4 72.8
Services 203.2 367.3 143.4 239.2
Industrial Capex 79.2 51.5 56.2 33.4
Multi-client Capex 68.4 145.8 47.3 94.9
Year to Date 2009 Financial Results
Group Revenue
Group Revenue was down 16% in $ and 6% in EUR,
with lower Sercel sales in line with weaker market conditions while
Services benefited from the addition of Wavefield.
In million YTD 09 variance YTD 08 YTD 09 variance YTD 08
($) ($) (EUR) (EUR)
Group Revenue 2 361 -16% 2 809 1 733 -6% 1 836
Sercel Revenue 643 -27% 876 472 -18% 573
Services Revenue 1 817 -10% 2 021 1 334 1% 1 321
Eliminations -98 -10% -89 -72 -24% -58
Marine contract 905 17% 771 664 32% 504
Land contract 301 -24% 395 221 -15% 258
Processing 299 2% 293 219 15% 192
Multi-client 312 -44% 562 229 -38% 367
MC marine 250 -43% 435 183 -36% 285
MC land 62 -51% 126 46 -46% 83
Sercel
Sercel sales were down 27%, in $ and 18% in EUR.
Land equipment sales were down from record sales in 2009 while marine
sales were down as industry future fleet plans were adjusted.
Services
Revenue was down 10% in $ and slightly up in
EUR supported by the addition of Wavefield in marine and strong processing
performance. For the first nine months, fleet availability rate was 90%
and the production rate was 91%. Multi-client revenue was down
44% in $ and 38% in EUR as Capex eased as planned and was down 40% in $ to
$261 million (EUR192 million). The amortization rate averaged 65%, a level
we expect to continue throughout 2009.
Group EBITDAs before restructuring was $746 million (EUR548 million), a margin of 32% mainly based on the impact of lower pricing and particularly the lower contribution from multi-client sales.
Group EBITDAs was $689 million (EUR506 million).
In million YTD 09 YTD 08 YTD 09 YTD 08
($) Variance ($) (EUR) variance (EUR)
before restructuring
Group EBITDAs 746 -35% 1 150 548 -27% 751
margin 32% 41% 32% 41%
Sercel EBITDAs 178 -42% 305 130 -35% 199
margin 28% 35% 28% 35%
Services EBITDAs 634 -31% 921 466 -23% 602
margin 35% 46% 35% 46%
Group Operating Income before restructuring was $256 million (EUR189 million), an 11% margin driven by the industry leading and resilient performance of Sercel while good vessel operational performance was hampered by a decrease in marine prices and lower multi-client contributions.
Group Operating Income was $170 million (EUR125 million).
In million YTD 09 YTD 08 YTD 09 YTD 08
($) variance ($) (EUR) variance (EUR)
before restructuring
Group Operating Income 256 -57% 600 189 -52% 392
Margin 11% 21% 11% 21%
Sercel Op. Income 148 -47% 277 108 -40% 181
Margin 23% 32% 23% 32%
Services Op. Income 161 -59% 389 119 -53% 254
Margin 9% 19% 9% 19%
Taxes
The effective tax rate was 32% and financial
charges were $109 million (EUR80 million).
Group Net Income before restructuring was $106 million (EUR79 million), down 69% in $ and 64% in EUR, resulting in an EPS of EUR0.49 per ordinary share and $0.66 per ADS.
Group Net Income was $50 million (EUR37 million), resulting in an EPS of EUR0.22 per ordinary share and $0.29 per ADS.
Cash Flow
Cash Flow from Operations
Cash flow from operations
was $643 million (EUR472 million) a reduction of 20% year-on-year.
Capex
Global Capex was $470 million (EUR345 million)
end of September, down 25% in $ year-on-year.
-- Industrial Capex was $208 million (EUR153 million),
-- Multi-client Capex was $261 million (EUR192 million), reduced by 40% in
$ year-on-year.
In million $ Year to Date Year to Date
2009 2008
Capex 470 -25% 622
Industrial 208 10% 189
Multi-client 261 -40% 434
Free Cash Flow
After interest expenses paid during
the first 9 months, free cash flow was $130 million stable year on year.
Balance Sheet
Net Debt to Equity Ratio
The Group's gross debt was
reduced to $2.190 billion (EUR1.496 billion) at the end of September 2009.
With $819 million (EUR560 million) in available cash, Group net debt was $1.371 billion (EUR936 million) and the net debt to equity ratio was reduced to 32%.
Year to Date 2009 Comparison with 2008
Consolidated Statement of Income Year to Date Year to Date
before restructuring* (in million dollars) (in million euros)
2009 2008 2009 2008
Exchange rate euro/dollar 1.362 1.530 1.362 1.530
Operating Revenue 2 361.4 2 809.1 1 733.3 1 835.6
Sercel 643.1 876.4 471.8 572.7
Services 1 816.7 2 021.5 1 333.6 1 320.9
Elimination -98.3 -88.8 -72.1 -58.0
Gross Profit* 571.4 922.9 419.4 603.0
Operating Income* 256.3 600.2 189.4 392.2
Sercel 147.5 276.6 108.2 180.7
Services 160.6 389.3 119.1 254.4
Corporate and Elimination -51.7 -65.7 -38.0 -42.9
Income from Equity Investments 7.3 3.7 5.3 2.4
Net Income* 106.2 338.5 78.7 221.2
Earnings per share (EUR) / per ADS ($) 0.29 2.38 0.22 1.55
EBITDAs* 745.6 1149.5 548.1 751.1
Sercel 177.5 304.5 130.2 199.0
Services 633.9 920.7 466.2 601.7
Industrial Capex 208.4 188.6 152.9 123.2
Multi-client Capex 261.2 433.7 191.8 283.4
Key Figures
In million YTD variation YTD YTD variation YTD
2009 ($) 2008 ($) 2009 (EUR) 2008 (EUR)
Group EBITDAs
Before
restructuring 746 -35% 1 150 548 -27% 751
costs
margin 32% 41% 32% 41%
After
restructuring 689 -40% 1 150 506 -33% 751
costs
margin 29% 41% 29% 41%
Group
Operating
Income
Before
restructuring 256 -57% 600 189 -52% 392
costs
margin 11% 21% 11% 21%
After
restructuring 170 -72% 600 125 -68% 392
costs
margin 7% 21% 7% 21%
Group Net
Income
Before
restructuring 106 -69% 339 79 -64% 221
costs
margin 4% 12% 4% 12%
After
restructuring 50 -85% 339 37 -83% 221
costs
margin 2% 12% 2% 12%
Earnings per
share (EUR) /
per ADS ($)
Before
restructuring 0.66 -72% 2.38 0.49 -68% 1.55
costs
After
restructuring 0.29 -88% 2.38 0.22 -86% 1.55
costs
Other Information
- Detailed financial results (6K) are available on our website: www.cggveritas.com.
- A French language conference call is scheduled today November 10th, at 9:30am (Paris), 8:30am (London). To take part in the French language conference, simply dial in five to ten minutes prior to the scheduled start time.
- French call-in +33 1 72 00 13 65
- International call-in +44 808 238 1769
- Replay +33 1 72 00 14 59 & +44 207 107 0686
- code 256924#
- An English language conference call is scheduled today November 10th, at 3:00pm (Paris), 2:00pm (London), 8:00am (US CT), 9:00am (US ET). To take part in the English language conference, simply dial in five to ten minutes prior to the scheduled start time.
- US call-in 1 (888) 241-0558
- International call-in 1 (647) 427-3417
- Replay 1 (402) 220-4375 & 1 (888) 567-0351
- code 82646791
You will be asked for the name of the conference: "CGGVeritas Q3 2009 Results".
- A presentation is posted on our website and can be downloaded.
- The conference calls will be broadcast live on our website www.cggveritas.com and a replay will be available for two weeks thereafter.
About CGGVeritas
CGGVeritas (www.cggveritas.com) is a leading international pure-play geophysical company delivering a wide range of technologies, services and equipment through Sercel, to its broad base of customers mainly throughout the global oil and gas industry. CGGVeritas is listed on the Euronext Paris SA (ISIN: 0000120164) and the New York Stock Exchange (in the form of American Depositary Shares, NYSE: CGV).
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 reflect numerous assumptions and involve a number of risks and uncertainties as disclosed by the Company from time to time in its filings with the Securities and Exchange Commission. Actual results may vary materially.
CGGVeritas
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2009
CONSOLIDATED BALANCE SHEETS
September 30, 2009
(unaudited)
in millions of euros in millions of dollars(1)
ASSETS
Cash and cash equivalents 559.5 819.3
Trade accounts and notes 591.9 866.7
receivable, net
Inventories and 218.0 319.2
work-in-progress, net
Income tax assets 61.9 90.7
Other current assets, net 88.7 129.8
Assets held for sale, net 8.0 11.6
Total current assets 1,528.0 2,237.3
Deferred tax assets 79.7 116.7
Investments and other financial 37.1 54.3
assets, net
Investments in companies under 78.8 115.3
equity method
Property, plant and equipment, 752.1 1,101.3
net
Intangible assets, net 828.8 1,213.7
Goodwill 1,977.0 2,894.9
Total non-current assets 3,753.5 5,496.2
TOTAL ASSETS 5,281.5 7,733.5
LIABILITIES AND SHAREHOLDERS'
EQUITY 6.5 9.5
Bank overdrafts
Current portion of financial 124.7 182.5
debt
Trade accounts and notes 205.9 301.5
payable
Accrued payroll costs 116.6 170.8
Income taxes liability 42.3 62.0
Advance billings to customers 24.4 35.7
Provisions - current portion 47.7 69.8
Other current liabilities 145.4 212.9
Total current liabilities 713.5 1,044.7
Deferred tax liabilities 146.4 214.3
Provisions - non-current 80.7 118.1
portion
Financial debt 1,364.5 1,998.1
Other non-current liabilities 32.1 46.9
Total non-current liabilities 1,623.7 2,377.4
Common stock 60.4 88.4
Additional paid-in capital 1,964.8 2,877.1
Retained earnings 1,137.3 1,665.4
Treasury shares (13.2) (19.2)
Net income (loss) for the
period - Attributable to the 32.6 47.8
Group
Income and expense recognized 3.3 4.7
directly in equity
Cumulative translation (278.1) (407.3)
adjustment
Total shareholders' equity 2,907.1 4,256.9
Minority interests 37.2 54.5
Total shareholders' equity and 2,944.3 4,311.4
minority interests
TOTAL LIABILITIES AND 5,281.5 7,733.5
SHAREHOLDERS' EQUITY
(1) Dollar amounts represent euro amounts converted at the exchange rate of US$1.464 per EUR on the balance sheet date.
CONSOLIDATED STATEMENTS OF OPERATIONS
September 30, 2009
(unaudited)
except per share data, in millions in millions
of euros of dollars(1)
Operating revenues 1,733.3 2,361.4
Other income from ordinary activities 6.7 9.1
Total income from ordinary activities 1,740.0 2,370.5
Cost of operations (1,320.6) (1,799.2)
Gross profit 419.4 571.3
Research and development expenses, net (45.1) (61.5)
Selling, general and administrative expenses (180.5) (246.0)
Other revenues (expenses), net (69.3) (94.4)
Operating income before reduction of goodwill 124.5 169.4
Reduction of goodwill - -
Operating income 124.5 169.4
Expenses related to financial debt (79.6) (108.5)
Income provided by cash and cash equivalents 1.7 2.3
Cost of financial debt, net (77.9) (106.2)
Other financial income (loss) (9.9) (13.2)
Income of consolidated companies before income taxes 36.7 50.0
Deferred taxes on currency translation 8.3 11.3
Other income taxes (13.3) (18.2)
Total income taxes (5.0) (6.9)
Net income from consolidated companies 31.7 43.1
Equity in income of investees 5.3 7.3
Net income 37.0 50.4
Attributable to :
Shareholders 32.6 44.4
Minority interest 4.4 6.0
Weighted average number of shares outstanding 150,797,818 150,797,818
Dilutive potential shares from stock-options 320,760 320,760
Dilutive potential shares from free shares 243,000 243,000
Adjusted weighted average number of shares and 151,361,578 151,361,578
assumed option exercises when dilutive
Net earning per share attributable to shareholders
0.22 0.29
Basic
Diluted 0.22 0.29
(1) Dollar amounts represent euro amounts converted at the average exchange rate for the period of US$1.362 per EUR.
CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter ended September 30, 2008
except per share data, in millions in millions
of euros of dollars(1)
Operating revenues 512.2 731.4
Other income from ordinary activities 5.1 7.0
Total income from ordinary activities 517.3 738.4
Cost of operations (412.8) (587.4)
Gross profit 104.5 151.0
Research and development expenses, net (15.1) (21.5)
Selling, general and administrative expenses (52.9) (75.5)
Other revenues (expenses), net 4.2 3.7
Operating income before reduction of goodwill 40.7 57.7
Reduction of goodwill - -
Operating income 40.7 57.7
Expenses related to financial debt (26.9) (38.1)
Income provided by cash and cash equivalents 0.3 0.5
Cost of financial debt, net (26.6) (37.6)
Other financial income (loss) (6.9) (9.5)
Income of consolidated companies before income 7.2 10.6
taxes
Deferred taxes on currency translation 2.6 3.7
Other income taxes (4.3) (6.1)
Total income taxes (1.7) (2.4)
Net income from consolidated companies 5.5 8.2
Equity in income of investees 2.9 4.0
Net income 8.4 12.2
Attributable to :
Shareholders 7.7 11.2
Minority interest 0.7 1.0
Weighted average number of shares outstanding 150,629,662 150,629,662
Dilutive potential shares from stock-options 366,871 366,871
Dilutive potential shares from free shares 243,000 243,000
Adjusted weighted average number of shares and 151,239,533 151,239,533
assumed option exercises when dilutive
Net earning per share attributable to
shareholders 0.05 0.07
Basic
Diluted 0.05 0.07
(1) Corresponding to the nine months ended September 30 in US dollars less the six months ended June 30 in US dollars.
CONSOLIDATED STATEMENTS OF CASH FLOWS
September 30, 2009
(unaudited)
in millions in millions
of euros of dollars(1)
OPERATING
Net income (loss) 37.0 50.4
Depreciation and amortization 222.4 303.0
Multi-client surveys amortization 150.0 204.4
Variance on provisions 34.1 46.5
Expense & income calculated on stock-option 9.0 12.3
Net gain on disposal of fixed assets 3.6 4.9
Equity in income of affiliates (5.3) (7.3)
Dividends received from affiliates - -
Other non-cash items (2.8) (3.8)
Net cash including net cost of financial debt and 448.0 610.4
income taxes
Less net cost of financial debt 77.9 106.2
Less income taxes expenses 5.0 6.9
Net cash excluding net cost of financial debt and 530.9 723.5
income taxes
Income taxes paid (60.5) (82.4)
Net cash before changes in working capital 470.4 641.1
- change in trade accounts and notes receivables 73.3 99.8
- change in inventories and work-in-progress 65.1 88.7
- change in other currents assets 20.8 28.4
- change in trade accounts and notes payable (84.0) (114.4)
- change in other current liabilities (59.0) (80.4)
Impact of changes in exchange rate (14.4) (19.8)
Net cash provided by operating activity 472.2 643.4
INVESTING
Total purchases of tangible and intangible assets (130.1) (177.3)
(including variation of fixed assets suppliers)
Increase in multi-client surveys (191.8) (261.3)
Proceeds from disposals of tangible and intangible 1.5 2.0
Total net proceeds from financial assets - -
Total net acquisition of investments (65.8) (89.6)
Impact of changes in consolidation scope (2.0) (2.8)
Variation in loans granted (4.0) (5.4)
Variation in subsidies for capital expenditures (0.1) (0.1)
Variation in other financial assets (1.0) (1.5)
Net cash from investing activities (393.3) (536.0)
FINANCING
Repayment of long-term debts (177.6) (242.0)
Total issuance of long-term debts 243.5 331.8
Reimbursement on leasing (22.3) (30.4)
Change in short-term loans (1.6) (2.2)
Financial interest paid (3) (65.3) (89.0)
Net proceeds from capital increase
- from shareholders 0.3 0.4
- from minority interest of integrated companies
Buying & sales of own shares 4.9 6.7
Dividend paid to minority interest (2.6) (3.5)
Net cash provided by financial activities (20.7) (28.2)
Effects of exchange rate changes on cash (15.6) 20.7
Net increase (decrease) in cash and cash equivalents 42.6 99.9
Cash and cash equivalents at beginning of year 516.9 719.4
Cash and cash equivalents at end of period 559.5 819.3
(1) Dollar amounts represent euro amounts converted at the average exchange rate for the period of US$1.362 per EUR (except cash/cash equivalents balances converted at the closing exchange rate of US$1.464 per EUR at September 30, 2009 and of US$1.392 per EUR at December 31, 2008).
ANALYSIS BY OPERATING SEGMENT
Geophysical Geophysical Eliminations and Consolidated
September 30, 2009
Services Equipment Adjustments Total
(in millions of euros)
Revenues from
unaffiliated 1,333.6 399.7 -- 1,733.3
customers
Inter-segment 0.5 72.1 (72.6) --
revenues
Operating revenues 1,334.1 471.8 (72.6) 1,733.3
Other income from 4.2 2.5 -- 6.7
ordinary activities
Total income from 1,338.3 474.3 (72.6) 1,740.0
ordinary activities
Operating income 54.2 108.2 (37.9) 124.5
(loss)
Equity income (loss) 5.3 -- -- 5.3
of investees
Capital expenditures 346.6 26.4 (28.3) 344.7
Depreciation and 366.3 21.0 (14.9) 372.4
amortization
Investments in
companies under - 4.0 - 4.0
equity method
Identifiable assets 4,152.6 728.8 (243.6) 4,637.8
Unallocated and 643.7
corporate assets
Total assets 5,281.5
Geophysical Geophysical Eliminations and Consolidated
September 30, 2009
Services(1) Equipment(2) Adjustments Total(3)
(in millions of dollars)
Revenues from
unaffiliated 1,816.6 544.8 -- 2,361.4
customers
Inter-segment 0.7 98.3 (99.0) --
revenues
Operating revenues 1,817.3 643.1 (99.0) 2,361.4
Other income from 5.7 3.4 -- 9.1
ordinary activities
Total income from 1,823.0 646.5 (99.0) 2,370.5
ordinary activities
Operating income 73.9 147.5 (52.0) 169.4
(loss)
(1) Dollar amounts represent euro amounts converted at the average exchange rate for the period of US$1.3622 per EUR
(2) Dollar amounts were converted at the average rate of US$1.3631 per EUR for the Equipment segment.
(3) Dollar amounts for the Consolidated total were converted at the rate of US$1.3624 per EUR, corresponding to the weighted average based on each segment's operating revenues.
ANALYSIS BY OPERATING SEGMENT
Three months ended Geophysical Geophysical Eliminations and Consolidated
September 30, 2009
Services Equipment Adjustments Total
(in millions of euros)
Revenues from 400.0 112.2 -- 512.2
unaffiliated customers
Inter-segment revenues -- 30.4 (30.4) --
Operating revenues 400.0 142.6 (30.4) 512.2
Other income from 4.1 1.0 -- 5.1
ordinary activities
Total income from 404.1 143.6 (30.4) 517.3
ordinary activities
Operating income 23.8 25.2 (8.3) 40.7
(loss)
Equity income (loss) 2.9 -- -- 2.9
of investees
Capital expenditures 97.1 17.6 (11.2) 103.5
Depreciation and 121.2 7.3 (5.1) 123.7
amortization
Investments in
companies under equity -- -- -- --
method
Three months ended Geophysical Geophysical Eliminations and Consolidated
September 30, 2009
Services Equipment Adjustments Total
(in millions of dollars)(1)
Revenues from 570.9 160.5 -- 731.4
unaffiliated customers
Inter-segment revenues -- 42.8 (42.8) --
Operating revenues 570.9 643.1 (42.8) 731.4
Other income from 5.7 1.3 -- 7.0
ordinary activities
Total income from 576.6 204.6 (42.8) 738.4
ordinary activities
Operating income 33.3 36.5 (12.1) 57.7
(loss)
(1) Corresponding to the nine months ended September 30 in US dollars less the six month ended June in US dollars.
Source: CGGVeritas
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