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Supplemental Guarantors Consolidating Condensed Financial Information
9 Months Ended
Sep. 30, 2017
Supplemental Guarantors Consolidating Condensed Financial Information [Abstract]  
Supplemental Guarantors Consolidating Condensed Financial Information
SUPPLEMENTAL GUARANTORS CONSOLIDATING CONDENSED FINANCIAL INFORMATION
On March 20, 2013, the Company completed a private placement of 9½% Senior Notes in the aggregate principal amount of $250.0 million. The Company’s payment obligations under the 9½% Senior Notes are jointly and severally guaranteed on a senior basis by substantially all of the Company’s significant 100% owned U.S. subsidiaries (“Guarantor Subsidiaries”). All subsidiaries of the Company that do not guarantee the 9½% Senior Notes are referred to as Non-Guarantor Subsidiaries.
The indenture governing the 9½% Senior Notes provides that the guarantees by the Guarantor Subsidiaries will be released in the following customary circumstances: (i) upon a sale or other disposition, whether by merger, consolidation or otherwise, of the equity interests of that guarantor to a person that is not the Company or a restricted subsidiary of the Company; (ii) the guarantor sells all or substantially all of its assets to a person that is not the Company or a restricted subsidiary of the Company; (iii) the guarantor is properly designated as an unrestricted subsidiary or ceases to be a restricted subsidiary; (iv) upon legal defeasance of the 9½% Senior Notes or satisfaction and discharge of the indenture governing the 9½% Senior Notes; (v) the guarantor becomes an immaterial subsidiary or (vi) the guarantor, having also been a guarantor under a credit facility, is released from its guarantee obligations under a credit facility and does not guarantee any indebtedness of the Company or the Guarantor Subsidiaries.
The consolidating condensed financial statements are presented below and should be read in connection with the condensed consolidated financial statements of the Company. Separate financial statements of the Guarantor Subsidiaries are not presented because (i) the Guarantor Subsidiaries are wholly-owned and have fully and unconditionally guaranteed the 9½% Senior Notes on a joint and several basis and (ii) the Company’s management has determined such separate financial statements are not material to investors.
The following consolidating condensed financial information presents the consolidating condensed balance sheets as of September 30, 2017 and December 31, 2016, the consolidating condensed statements of operations and statements of comprehensive income (loss) for the three and nine months ended September 30, 2017 and September 30, 2016 and the consolidating condensed statements of cash flows for the nine months ended September 30, 2017 and 2016 of (a) the Company; (b) the Guarantor Subsidiaries; (c) the Non-Guarantor Subsidiaries; (d) elimination entries; and (e) the Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis.
Investments in subsidiaries are accounted for under the equity method. The principal elimination entries eliminate investments in subsidiaries, intercompany balances, intercompany transactions and intercompany sales.

CONSOLIDATING CONDENSED BALANCE SHEET
As of September 30, 2017
(In thousands)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
55,172

 
$
25,101

 
$

 
$
80,273

Receivables
 
 
 
 
 
 
 
 
 
Trade, net

 
10,258

 
2,382

 

 
12,640

Notes and other

 
48

 
290

 

 
338

Due from Seitel Holdings, Inc.

 
1,188

 

 

 
1,188

Intercompany receivables (payables)
(63,673
)
 
61,602

 
2,071

 

 

Investment in subsidiaries
409,475

 
425,303

 
649

 
(835,427
)
 

Net seismic data library

 
65,920

 
16,999

 

 
82,919

Net property and equipment

 
522

 
1,069

 

 
1,591

Prepaid expenses, deferred charges and other
94

 
1,225

 
909

 

 
2,228

Intangible assets, net
900

 

 

 

 
900

Goodwill

 
107,688

 
79,970

 

 
187,658

Deferred income taxes

 
99

 
185

 

 
284

TOTAL ASSETS
$
346,796

 
$
729,025

 
$
129,625

 
$
(835,427
)
 
$
370,019

LIABILITIES AND STOCKHOLDER’S EQUITY
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
10,945

 
$
11,468

 
$
2,262

 
$

 
$
24,675

Income taxes payable

 
24

 
2,495

 

 
2,519

Senior Notes
247,809

 

 

 

 
247,809

Obligations under capital leases

 

 
1,438

 

 
1,438

Deferred revenue

 
10,344

 
1,832

 

 
12,176

Deferred income taxes

 

 
1,550

 

 
1,550

TOTAL LIABILITIES
258,754

 
21,836

 
9,577

 

 
290,167

STOCKHOLDER’S EQUITY
 
 
 
 
 
 
 
 
 
Common stock

 

 

 

 

Additional paid-in capital
400,591

 

 

 

 
400,591

Parent investment

 
764,105

 
156,728

 
(920,833
)
 

Retained deficit
(312,549
)
 
(56,916
)
 
(28,138
)
 
85,054

 
(312,549
)
Accumulated other comprehensive loss

 

 
(8,542
)
 
352

 
(8,190
)
TOTAL STOCKHOLDER’S EQUITY
88,042

 
707,189

 
120,048

 
(835,427
)
 
79,852

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY
$
346,796

 
$
729,025

 
$
129,625

 
$
(835,427
)
 
$
370,019



CONSOLIDATING CONDENSED BALANCE SHEET
As of December 31, 2016
(In thousands)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
47,971

 
$
8,026

 
$

 
$
55,997

Receivables
 
 
 
 
 
 
 
 
 
Trade, net

 
14,819

 
9,662

 

 
24,481

Notes and other

 
412

 
24

 

 
436

Due from Seitel Holdings, Inc.

 
1,177

 

 

 
1,177

Intercompany receivables (payables)
(51,982
)
 
51,262

 
720

 

 

Investment in subsidiaries
420,308

 
420,456

 
630

 
(841,394
)
 

Net seismic data library

 
94,039

 
21,907

 
(24
)
 
115,922

Net property and equipment

 
611

 
1,098

 

 
1,709

Prepaid expenses, deferred charges and other
30

 
1,413

 
319

 

 
1,762

Intangible assets, net
900

 
402

 
116

 

 
1,418

Goodwill

 
107,688

 
74,324

 

 
182,012

Deferred income taxes

 
92

 
165

 

 
257

TOTAL ASSETS
$
369,256

 
$
740,342

 
$
116,991

 
$
(841,418
)
 
$
385,171

LIABILITIES AND STOCKHOLDER’S EQUITY
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
5,007

 
$
8,559

 
$
3,441

 
$

 
$
17,007

Income taxes payable

 
24

 
596

 

 
620

Senior Notes
246,857

 

 

 

 
246,857

Obligations under capital leases

 

 
1,510

 

 
1,510

Deferred revenue

 
13,574

 
2,330

 

 
15,904

Deferred income taxes

 

 
2,214

 

 
2,214

TOTAL LIABILITIES
251,864

 
22,157

 
10,091

 

 
284,112

STOCKHOLDER’S EQUITY
 
 
 
 
 
 
 
 
 
Common stock

 

 

 

 

Additional paid-in capital
400,582

 

 

 

 
400,582

Parent investment

 
764,105

 
156,594

 
(920,699
)
 

Retained deficit
(283,190
)
 
(45,920
)
 
(33,120
)
 
79,040

 
(283,190
)
Accumulated other comprehensive loss

 

 
(16,574
)
 
241

 
(16,333
)
TOTAL STOCKHOLDER’S EQUITY
117,392

 
718,185

 
106,900

 
(841,418
)
 
101,059

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY
$
369,256

 
$
740,342

 
$
116,991

 
$
(841,418
)
 
$
385,171




CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
For the Three Months Ended September 30, 2017
(In thousands)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
REVENUE
$

 
$
13,148

 
$
11,405

 
$
(540
)
 
$
24,013

EXPENSES:
 
 
 
 
 
 
 
 
 
Depreciation and amortization

 
14,011

 
3,703

 

 
17,714

Cost of sales

 
244

 
1

 
(214
)
 
31

Selling, general and administrative
169

 
3,916

 
1,290

 
(326
)
 
5,049

 
169

 
18,171

 
4,994

 
(540
)
 
22,794

INCOME (LOSS) FROM OPERATIONS
(169
)
 
(5,023
)
 
6,411

 

 
1,219

Interest income (expense), net
(6,046
)
 
(142
)
 
49

 

 
(6,139
)
Foreign currency exchange losses

 
(2
)
 
(1
)
 

 
(3
)
Income (loss) before income taxes and equity in income (loss) of subsidiaries
(6,215
)
 
(5,167
)
 
6,459

 

 
(4,923
)
Provision (benefit) for income taxes

 
(5
)
 
1,426

 

 
1,421

Equity in income (loss) of subsidiaries
(129
)
 
5,033

 

 
(4,904
)
 

NET INCOME (LOSS)
$
(6,344
)
 
$
(129
)
 
$
5,033

 
$
(4,904
)
 
$
(6,344
)


CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended September 30, 2017
(In thousands)

 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
Net income (loss)
$
(6,344
)
 
$
(129
)
 
$
5,033

 
$
(4,904
)
 
$
(6,344
)
Foreign currency translation adjustments

 

 
4,752

 

 
4,752

Comprehensive income (loss)
$
(6,344
)
 
$
(129
)
 
$
9,785

 
$
(4,904
)
 
$
(1,592
)


CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
For the Three Months Ended September 30, 2016
(In thousands)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
REVENUE
$

 
$
20,017

 
$
3,557

 
$
(319
)
 
$
23,255

EXPENSES:
 
 
 
 
 
 
 
 
 
Depreciation and amortization

 
15,071

 
3,875

 
(13
)
 
18,933

Cost of sales

 
19

 
1

 
2

 
22

Selling, general and administrative
315

 
3,799

 
1,593

 
(321
)
 
5,386

 
315

 
18,889

 
5,469

 
(332
)
 
24,341

INCOME (LOSS) FROM OPERATIONS
(315
)
 
1,128

 
(1,912
)
 
13

 
(1,086
)
Interest expense, net
(5,732
)
 
(497
)
 
(69
)
 

 
(6,298
)
Foreign currency exchange losses

 

 
(20
)
 

 
(20
)
Other income

 
572

 

 

 
572

Income (loss) before income taxes and equity in income (loss) of subsidiaries
(6,047
)
 
1,203

 
(2,001
)
 
13

 
(6,832
)
Provision (benefit) for income taxes

 
22

 
(1,411
)
 

 
(1,389
)
Equity in income (loss) of subsidiaries
604

 
(590
)
 

 
(14
)
 

NET INCOME (LOSS)
$
(5,443
)
 
$
591

 
$
(590
)
 
$
(1
)
 
$
(5,443
)


CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended September 30, 2016
(In thousands)

 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
Net income (loss)
$
(5,443
)
 
$
591

 
$
(590
)
 
$
(1
)
 
$
(5,443
)
Foreign currency translation adjustments

 

 
(862
)
 
1

 
(861
)
Comprehensive income (loss)
$
(5,443
)
 
$
591

 
$
(1,452
)
 
$

 
$
(6,304
)


CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2017
(In thousands)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
REVENUE
$

 
$
46,241

 
$
23,549

 
$
(1,482
)
 
$
68,308

EXPENSES:
 
 
 
 
 
 
 
 
 
Depreciation and amortization

 
48,493

 
13,478

 
(25
)
 
61,946

Cost of sales

 
571

 
7

 
(504
)
 
74

Selling, general and administrative
429

 
12,553

 
3,696

 
(978
)
 
15,700

 
429

 
61,617

 
17,181

 
(1,507
)
 
77,720

INCOME (LOSS) FROM OPERATIONS
(429
)
 
(15,376
)
 
6,368

 
25

 
(9,412
)
Interest income (expense), net
(17,959
)
 
(608
)
 
31

 

 
(18,536
)
Foreign currency exchange losses

 

 
(88
)
 

 
(88
)
Other income

 

 
96

 

 
96

Income (loss) before income taxes and equity in income (loss) of subsidiaries
(18,388
)
 
(15,984
)
 
6,407

 
25

 
(27,940
)
Provision (benefit) for income taxes

 
(6
)
 
1,425

 

 
1,419

Equity in income (loss) of subsidiaries
(10,971
)
 
4,982

 

 
5,989

 

NET INCOME (LOSS)
$
(29,359
)
 
$
(10,996
)
 
$
4,982

 
$
6,014

 
$
(29,359
)


CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
For the Nine Months Ended September 30, 2017
(In thousands)

 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
Net income (loss)
$
(29,359
)
 
$
(10,996
)
 
$
4,982

 
$
6,014

 
$
(29,359
)
Foreign currency translation adjustments

 

 
8,032

 
111

 
8,143

Comprehensive income (loss)
$
(29,359
)
 
$
(10,996
)
 
$
13,014

 
$
6,125

 
$
(21,216
)


CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2016
(In thousands)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
REVENUE
$

 
$
49,297

 
$
11,279

 
$
(1,031
)
 
$
59,545

EXPENSES:
 
 
 
 
 
 
 
 
 
Depreciation and amortization

 
44,237

 
14,640

 
(38
)
 
58,839

Cost of sales

 
96

 
13

 
(54
)
 
55

Selling, general and administrative
888

 
11,256

 
4,846

 
(977
)
 
16,013

 
888

 
55,589

 
19,499

 
(1,069
)
 
74,907

LOSS FROM OPERATIONS
(888
)
 
(6,292
)
 
(8,220
)
 
38

 
(15,362
)
Interest expense, net
(17,034
)
 
(1,703
)
 
(251
)
 

 
(18,988
)
Foreign currency exchange gains

 

 
143

 

 
143

Other income

 
581

 
1

 

 
582

Loss before income taxes and equity in loss of subsidiaries
(17,922
)
 
(7,414
)
 
(8,327
)
 
38

 
(33,625
)
Provision (benefit) for income taxes

 
11

 
(5,094
)
 

 
(5,083
)
Equity in loss of subsidiaries
(10,620
)
 
(3,233
)
 

 
13,853

 

NET LOSS
$
(28,542
)
 
$
(10,658
)
 
$
(3,233
)
 
$
13,891

 
$
(28,542
)


CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
For the Nine Months Ended September 30, 2016
(In thousands)

 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
Net loss
$
(28,542
)
 
$
(10,658
)
 
$
(3,233
)
 
$
13,891

 
$
(28,542
)
Foreign currency translation adjustments

 

 
5,491

 
84

 
5,575

Comprehensive income (loss)
$
(28,542
)
 
$
(10,658
)
 
$
2,258

 
$
13,975

 
$
(22,967
)



CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2017
(In thousands)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
(12,325
)
 
$
32,878

 
$
23,728

 
$

 
$
44,281

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Cash invested in seismic data

 
(13,081
)
 
(7,437
)
 

 
(20,518
)
Cash paid to acquire property and equipment

 
(260
)
 
(102
)
 

 
(362
)
Cash from sale of property and equipment

 

 
3

 

 
3

Advances to Seitel Holdings, Inc.

 
(11
)
 

 

 
(11
)
Net cash used in investing activities

 
(13,352
)
 
(7,536
)
 

 
(20,888
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Principal payments on capital lease obligations

 

 
(178
)
 

 
(178
)
Intercompany transfers
12,325

 
(12,325
)
 

 

 

Net cash provided by (used in) financing activities
12,325

 
(12,325
)
 
(178
)
 

 
(178
)
Effect of exchange rate changes

 

 
1,061

 

 
1,061

Net increase in cash and cash equivalents

 
7,201

 
17,075

 

 
24,276

Cash and cash equivalents at beginning of period

 
47,971

 
8,026

 

 
55,997

Cash and cash equivalents at end of period
$

 
$
55,172

 
$
25,101

 
$

 
$
80,273



CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2016
(In thousands)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Consolidating
Eliminations
 
Consolidated
Total
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
(12,525
)
 
$
35,409

 
$
6,247

 
$

 
$
29,131

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Cash invested in seismic data

 
(19,141
)
 
(1,558
)
 

 
(20,699
)
Cash paid to acquire property and equipment

 
(173
)
 
(3
)
 

 
(176
)
Cash from sale of property and equipment

 
17

 
1

 

 
18

Advances to Seitel Holdings, Inc.

 
(19
)
 

 

 
(19
)
Net cash used in investing activities

 
(19,316
)
 
(1,560
)
 

 
(20,876
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Principal payments on capital lease obligations

 

 
(152
)
 

 
(152
)
Intercompany transfers
12,525

 
(12,326
)
 
(199
)
 

 

Net cash provided by (used in) financing activities
12,525

 
(12,326
)
 
(351
)
 

 
(152
)
Effect of exchange rate changes

 

 
96

 

 
96

Net increase in cash and cash equivalents

 
3,767

 
4,432

 

 
8,199

Cash and cash equivalents at beginning of period

 
51,192

 
1,483

 

 
52,675

Cash and cash equivalents at end of period
$

 
$
54,959

 
$
5,915

 
$

 
$
60,874