CGGVeritas Announces Second Quarter 2010 Results

Published on Friday, 30 July 2010 01:33 Written by TradersHuddle Staff

PARIS-( Business Wire )-

Regulatory News:

CGGVeritas (ISIN: 0000120164 - Paris:GA - NYSE:CGV) announced today its non-audited second quarter 2010 consolidated results. All comparisons are made on a year-on-year basis unless stated otherwise. All 2009 results are reported before restructuring and impairment.

• Group revenue was $647m, down 17% year-on-year with the vessel reduction plan realized Sequentially, Group revenue was down 7% as a result of Arctic land crew demobilization and reduced multi-client sales in the Gulf-of-Mexico and Brazil
• Group operating margin was 6%, with Sercel performance increasing to 27% and Services maintaining a slightly positive margin while operating in a low priced marine market and with low multi-client contributions
• Net income was $8m
• Net debt to equity ratio at 39%
• Backlog as of July 1^st was stable sequentially at $1.5 billion

Second Quarter 2010 key figures

In million $		First Quarter 2010		Second Quarter
				2010		2009
Group Revenue		696		647		779
Sercel		222		247		239
Services		511		460		558
Group Operating Income		37		37		67
margin		5%		6%		9%
Sercel		50		66		57
margin		22%		27%		24%
Services		14		5		36
margin		3%		1%		6%
Net Income		1		8		23
margin		0%		1%		3%
Net Debt		1,343		1,452		1,499
Net Debt to Equity ratio		35%		39%		36%

CGGVeritas CEO, Jean-Georges Malcor commented:

“Our 2010 second quarter results were in-line with our expectations despite the situation in the Gulf-of-Mexico and delays in the publication of pre-salt regulations in Brazil which impacted our marine multi-client sales. Sercel further strengthened this quarter, especially in marine, as streamer demand for both new builds and upgrades of existing configurations increased.

Looking forward, land and marine sales in Sercel are expected to remain at high levels driven by increased technology intensity requirements for high resolution imaging. In Services, commercial activity is increasingly supported by new opportunities in most regions. However, uncertainty in the Gulf-of-Mexico could continue to impact multi-client sales and probably will delay the balancing of supply and demand in contract marine if vessels relocate to other basins worldwide.

With our new organization we will focus on improving the operational performance of each of our activities, accelerating the continuous advance of technology and utilizing our full breadth to develop innovative solutions for our clients. BroadSeis, our new patented broadband marine solution launched last month saw excellent market take-up with multiple client tests already requested worldwide.”

Second Quarter 2010 Financial Results

Group Revenue

Group Revenue was down 17% in $ and 13% in € year-on-year mainly due to fleet capacity adjustments. Group Revenue was down 7% sequentially in $.

In millions		First Quarter		Second Quarter					Second Quarter
		2010 ($)		2010 ($)		2009 ($)			2010 (€)		2009 (€)
Group Revenue		696		647		779			498		573
Sercel Revenue		222		247		239			191		175
Services Revenue		511		460		558			353		409
Eliminations		-37		-60		-17			-46		-12
Marine contract		203		195		261			150		191
Land contract		114		79		83			62		61
Processing		94		94		97			72		72
Multi-client		100		92		116			70		86
MC marine		74		60		103			46		76
MC land		26		32		13			24		10

Sercel

Year-on-year, revenue was up 3% in $ and 9% in €. Sequentially, revenue was up 11% in $ and operating margin increased 5 points to 27% confirming the early recovery of the equipment market and the technology leadership of Sercel.

Sentinel^® solid steamer demand for new builds and vessel upgrades, along with increased technology take-up of SeaRay^® OBC systems, drove marine sales higher this quarter. In Land, sales remained strong on demand for increasing channel counts and regional activity.

During the quarter, deployment began on our industry first fiber-optic permanent monitoring solution with Optowave^TM in the North Sea, and the first sales of our Metrolog downhole pressure and temperature gauges in China were delivered.

Internal sales represented 24% of revenue.

Services

Year-on-year, revenue was down 18% in $ and 14% in €. Sequentially revenue was down 10% in $ and operating margin was 1%.

• Marine contract revenue was down 25% year-on-year in $ and 22% in € mainly due to the planned decommissioning of nine of our lower-end vessels which is now complete. Sequentially, revenue was down 4% with good vessel availability¹ and production² rates, both at 92% in a continued low priced market. 73% of the 3D fleet operated on contract, 27% on multi-client.

We are on schedule with the upgrade of six of our high-end vessels to Nautilus^® this year and have initiated the deployment of SeaPro Nav, our integrated navigation and positioning systems for all in water equipment.

The Oceanic Vega was delivered in July and is currently starting its first contract in the North Sea. With a maximum towing capacity of 20 Sercel solid Sentinel streamers and Nautilus streamer steering devices, the Oceanic Vega will be unrivaled in providing high-end marine services including wide-azimuth and BroadSeis^TM acquisition.

• Land contract revenue was down 4% year-on-year in $ and up 2% in €. Sequentially revenue was down 30% in $ as our Arctic crews demobilized. Activity remained high in the Middle East further reinforced by the mobilization of new OBC crews.

The application of our high productivity, high resolution HPVA and V1 solutions continue to expand across our vibroseis land operations and our new land based broadband solution, EmphaSeis, was implemented successfully on two commercial projects.

During the quarter we received our first award for a 3D acquisition project with our new JV partner in Columbia.

SeisMovie^TM, our real-time onshore permanent monitoring solution continues to see increased interest, particularly for heavy oil, CO₂ sequestration and gas storage.

• Processing & Imaging revenue was down 4% year-on-year in $ and stable in €. Sequentially revenue was stable in $ with strong margins. During the quarter we opened new reservoir seismic centers in Europe, Africa and Brazil. Demand for high-end imaging technology for shale prospects further increased. The deployment of geovation, our new processing and imaging platform, will continue to bring the latest technology to our customers.

Recent advances in our TTI RTM workflows uniquely provide the ability to pick 3D surfaces for enhanced tomographic velocity model building, leading to significant improvements in the precision of wide-azimuth depth images.

• Multi-client revenue was down 21% year-on-year in $ and 18% in €. Sequentially, revenue was down 9% in $ mainly impacted by lower marine after-sales. Capex for the second quarter remained sequentially stable at $86 million (€66 million) with prefunding increasing to 67%. The amortization rate averaged 57%, with 66% in land and 53% in marine. Net Book Value of the library at the end of June was at $740 million.

Multi-client marine revenue was sequentially down 19% in $. Capex was at $72 million (€55 million). Prefunding was $42 million (€32 million), a rate of 59%. After-sales worldwide were low at $18 million (€14 million) impacted by the conditions in the Gulf-of-Mexico and the delay of the publication of pre-salt regulations in Brazil. All Gulf-of-Mexico wide-azimuth data will be delivered on schedule.

Off the coast of Gabon, we successfully integrated the high-resolution geologic information of a Gravity Gradiometry survey in our multi-client data to better constrain the salt bodies and potential prospects.

Multi-client land revenue was sequentially up 21% in $. Capex was at $14 million (€11 million). Interest continues to strengthen for our on-shore data in the US, especially the Haynesville survey which was completed in May and our upcoming new Marcellus shale program. Prefunding was $16 million (€12 million), a rate of 112%. After-sales were $17 million (€13 million).

Group EBITDAs was $166 million (€128 million), a margin of 26%.
		First Quarter		Second Quarter				Second Quarter
In millions		2010 ($)		2010 ($)		2009 ($)		2010 (€)		2009 (€)
Group EBITDAs		176		166		232		128		170
margin		25%		26%		30%		26%		30%
Sercel EBITDAs		62		78		67		60		49
margin		28%		31%		28%		31%		28%
Services EBITDAs		137		120		188		92		138
margin		27%		26%		34%		26%		34%

Group Operating Income Group Operating Income was $37 million (€29 million), a margin of 6% including a positive impact of non-current items such as disposal of assets and reduction of liabilities. The strengthening performance of Sercel was offset by the continued low priced marine market and low marine multi-client contributions in Services.

		First Quarter		Second Quarter				Second Quarter
In millions		2010 ($)		2010 ($)		2009 ($)		2010 (€)		2009 (€)
Group Operating Income		37		37		67		29		49
margin		5%		6%		9%		6%		9%
Sercel Op. Income		50		66		57		51		42
margin		22%		27%		24%		27%		24%
Services Op. Income*		14		5		36		4		26
margin		3%		1%		6%		1%		6%

Financial Charges

Financial charges were $34 million (€26 million).

Net Income was $8 million (€6 million). After the impact of minority interests of $5 million, EPS was €0.01 per ordinary share and $0.02 per ADS.

Cash Flow

Cash Flow from Operations

Cash flow from operations was $82 million (€65 million) down 62% year-on-year.

Capex

Global Capex was $163 million (€125 million) this quarter, an increase of 11% year-on-year.

• Industrial Capex was $78 million (€59 million)
• Multi-client Capex was $86 million (€66 million) a reduction of 16% in $ with a 67% prefunding rate

In million $		First Quarter		Second Quarter
		2010		2010		2009
Capex		142		163		147
Industrial		55		78		45
Multi-client		87		86		102

Free Cash Flow

After interest expenses paid during the quarter, free cash flow was negative at $127 million.

On July 15, we completed an amendment to our January 2014 term loan B agreement which includes an extension of maturity to 2016 of a $340 million portion of our $515 million outstanding credit facility.

Second Quarter 2010 Comparisons with Second Quarter 2009

Consolidated Income Statement		First Quarter		Second Quarter				Second Quarter
In millions		2010 ($)		2010 ($)		2009 ($)		2010 (€)		2009 (€)
Exchange rate euro/dollar		1.398		1.303		1.335		1.303		1.335
Operating Revenue		696.1		646.9		778.9		498.0		572.6
Sercel		221.9		247.0		238.7		190.6		175.2
Services		511.3		459.8		557.6		353.3		409.3
Elimination		-37.1		-60.1		-17.4		-45.9		-11.9
Gross Profit		148.0		129.4		164.2		99.9		119.7
Operating Income		36.8		37.1		67.1		28.5		48.5
Sercel		49.6		65.8		56.7		50.5		41.9
Services		14.1		5.1		35.9		4.1		25.5
Corporate and Elimination		-26.9		-33.8		-25.5		-26.1		-18.9
Net Financial Costs		-23.9		-23.2		-41.3		-17.8		-30.6
Income Tax		-8.9		-2.7		-12.5		-2.2		-9.0
Deferred Tax on Currency Translation		-3.8		0.4		7.2		0.2		5.4
Income from Equity Investments		0.3		-3.2		2.7		-2.3		2.0
Net Income		0.5		8.3		23.2		6.2		16.5
Earnings per share (€) / per ADS ($)		-0.02		0.02		0.13		0.01		0.09
EBITDAs		175.5		166.4		231.7		128.0		170.0
Sercel		61.7		77.7		66.5		59.7		49.1
Services		136.8		120.2		187.7		92.4		137.6
Industrial Capex		54.9		77.7		45.2		59.1		32.8
Multi-client Capex		87.0		85.7		101.7		65.8		75.0

First Half 2010 Financial Results

Group Revenue

Group Revenue was down 18% both in $ and in € year-on-year, reflecting our marine fleet capacity adjustment program, low priced backlog secured in the second half of 2009 and low marine multi-client sales, masking the strengthening performance of Sercel. Group Revenue was down 9% sequentially in $.

In millions		Second Half		First Half				First Half
		2009 ($)		2010 ($)		2009 ($)		2010 (€)		2009 (€)
Group Revenue		1 479		1 343		1 630		996		1 221
Sercel Revenue		418		469		440		350		329
Services Revenue		1 133		971		1 246		719		934
Eliminations		-72		-97		-56		-72		-42
Marine contract		444		398		634		295		475
Land contract		167		193		215		143		161
Processing		205		187		198		139		149
Multi-client		317		192		198		142		148
MC marine		241		134		173		99		130
MC land		77		59		25		43		19

Group EBITDAs was $342 million (€254 million), a margin of 25%.

		Second Half		First Half				First Half
In millions		2009 ($)		2010 ($)		2009 ($)		2010 (€)		2009 (€)
Group EBITDAs		478		342		514		254		385
margin		32%		25%		32%		25%		32%
Sercel EBITDAs		98		139		131		104		98
margin		23%		30%		30%		30%		30%
Services EBITDAs		403		257		431		190		323
margin		36%		26%		35%		26%		35%

Group Operating Income was $74 million (€55 million), a margin of 5%.

		Second Half		First Half				First Half
In millions		2009 ($)		2010 ($)		2009 ($)		2010 (€)		2009 (€)
Group Operating Income		111		74		199		55		149
margin		7%		5%		12%		5%		12%
Sercel Op. Income		75		115		111		86		83
margin		18%		25%		25%		25%		25%
Services Op. Income*		61		19		142		14		106
margin		5%		2%		11%		2%		11%

Financial Charges

Financial charges were $68 million (€50 million).

Net Income was $9 million (€7 million). After the impact of minority interests of $9 million, EPS was €0.00 per ordinary share and $0.00 per ADS.

Cash Flow

Cash Flow from Operations

Cash flow from operations was $233 million (€173 million) down 32% year-on-year.

Capex

Global Capex was $302 million (€224 million) in the first half of the year, a reduction of 6% year-on-year.

• Industrial Capex was $129 million (€96 million)
• Multi-client Capex was $173 million (€128 million) a reduction of 10% in $ with a 62% prefunding rate

In million $		Second Half		First Half
		2009		2010		2009
Capex		264		302		322
Industrial		138		129		129
Multi-client		127		173		193

Free Cash Flow

After interest expenses paid during the first half, free cash flow was negative at $121 million.

Balance Sheet

Net Debt to Equity Ratio

The Group’s gross debt was $1.894 billion at the end of June 2010, corresponding to €1.543 billion following a 1.23 euro/dollar closing exchange rate.

With $442 million (€360 million) in available cash, Group net debt was $1.452 billion (€1.183 billion).

Net debt to equity ratio, at the end of June 2010, was 39%.

First Half 2010 Comparisons with First Half 2009

Consolidated Income Statement		Second Half		First Half				First Half
In millions		2009 ($)		2010 ($)		2009 ($)		2010 (€)		2009 (€)
Exchange rate euro/dollar		1.392		1.348		1.335		1.348		1.335
Operating Revenue		1 479.1		1 343.0		1 630.1		996.0		1 221.1
Sercel		418.2		469.0		439.8		349.5		329.0
Services		1 132.7		970.9		1 245.8		718.8		933.6
Elimination		-71.9		-97.0		-55.5		-72.3		-41.5
Gross Profit		317.9		277.4		420.4		205.8		315.0
Operating Income		110.6		73.8		198.6		54.8		148.7
Sercel		75.3		115.4		111.0		86.0		83.0
Services*		61.3		19.2		142.0		14.2		106.3
Corporate and Elimination*		-26.0		-60.8		-54.3		-45.4		-40.6
Net Financial Costs		-89.4		-47.1		-72.5		-35.0		-54.3
Income Tax		-13.0		-11.7		-43.0		-8.6		-32.2
Deferred Tax on Currency Translation		-0.7		-3.4		7.6		-2.5		5.7
Income from Equity Investments		8.3		-2.8		3.3		-2.1		2.4
Net Income		15.8		8.8		93.9		6.6		70.3
Earnings per share (€) / per ADS ($)		0.09		0.00		0.59		0.00		0.44
EBITDAs		477.5		341.9		514.3		253.6		385.3
Sercel		97.7		139.4		130.7		103.9		97.8
Services		402.9		257.0		430.8		190.3		322.8
Industrial Capex		137.9		129.4		129.1		96.0		96.7
Multi-client Capex		126.5		172.6		192.8		128.0		144.5

* Starting in 2010, operating income for our Services segment is presented after elimination of amortization expense corresponding to past inter-company capital expenditures between our Equipment segment and Services segment. These eliminations were previously presented in Eliminations and Adjustments. The segment information related to our Services segment for the first and second quarters 2009 was restated to reflect this change in our internal financial reporting.

Other Information

• A French language conference call is scheduled today at 10:00am (Paris), 9:00am (London). To take part in the French language conference, simply dial in 5 to 10 minutes prior to the scheduled start time.

					-		France call-in		+33 1 72 00 13 64
					-		International call-in		+44 203 367 94 59
					-		Replay		+33 1 72 00 15 01 & +44 203 367 94 60
									Code: 270603 #

• An English language conference call is scheduled today 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 5 to 10 minutes prior to the scheduled start time.

					-		US Toll-Free	1-877-485-3104
					-		International call-in	1-201-689-8579
					-		Replay	1-877-660-6853 & 1-201-612-7415
								Event ID: 342 719
					-		You will be asked for the name of the conference: “CGGVeritas Q2 2010 results”.

• The presentation is posted on our website www.cggveritas.com and can be downloaded
• Detailed financial results (6K) are available on our website www.cggveritas.com
• The conference call 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.

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, 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.

CGGVeritas

CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2010

CONSOLIDATED BALANCE SHEET
		June 30, 2010 (unaudited)
amounts in millions of		€		US$ (1)
ASSETS
Cash and cash equivalents		360.1		441.9
Trade accounts and notes receivable, net		598.9		734.9
Inventories and work-in-progress, net		248.6		305.1
Income tax assets		75.3		92.4
Other current assets, net		117.9		144.7
Assets held for sale, net		77.5		95.1
Total current assets		1,478.3		1,814.1
Deferred tax assets		100.4		123.2
Investments and other financial assets, net		36.6		44.9
Investments in companies under equity method		75.2		92.3
Property, plant and equipment, net		759.8		932.4
Intangible assets, net		887.1		1,088.5
Goodwill		2,184.4		2,680.5
Total non-current assets		4,043.5		4,961.8
TOTAL ASSETS		5,521.8		6,775.9
LIABILITIES AND EQUITY Bank overdrafts		5.1		6.3
Current portion of financial debt		56.0		68.7
Trade accounts and notes payable		254.0		311.6
Accrued payroll costs		112.9		138.6
Income taxes liability		28.9		35.5
Advance billings to customers		18.5		22.7
Provisions – current portion		25.5		31.3
Other current liabilities		173.0		212.4
Total current liabilities		673.9		827.1
Deferred tax liabilities		132.1		162.1
Provisions – non-current portion		91.6		112.4
Financial debt		1,482.0		1,818.5
Other non-current liabilities		32.5		39.9
Total non-current liabilities		1,738.2		2,132.9
Common stock 215,096,351 shares authorized and 151,409,611 shares with a €0.40 nominal value issued and outstanding at June 30, 2010; 151,146,594 at December 2009		60.6		74.3
Additional paid-in capital		1,967.5		2,414,3
Retained earnings		879.1		1,078.8
Treasury shares		(16.7)		(20.5)
Net income (loss) for the period – Attributable to the Group		(0.4)		(0.5)
Income and expense recognized directly in equity		(10.5)		(12.9)
Cumulative translation adjustment		180.4		221.4
Equity attributable to owners of CGGVeritas SA		3,060.0		3,754.9
Non controlling interests, presented within equity		49.7		61.0
Total equity		3,109.7		3,815.9
TOTAL LIABILITIES AND EQUITY		5,521.8		6,775.9

______________

(1) Dollar amounts represent euro amounts converted at the exchange rate of US$1.227 per € on the balance sheet date.

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
		Six months ended June 30, 2010
except per share data, amounts in millions of		€		US$ (1)
Operating revenues		996.0		1,343.0
Other income from ordinary activities		1.6		2.1
Total income from ordinary activities		997.6		1,345.1
Cost of operations		(791.8)		(1,067.7)
Gross profit		205.8		277.4
Research and development expenses, net		(28.8)		(38.8)
General and administrative expenses		(96.5)		(130.2)
Marketing and selling expenses		(30.1)		(40.5)
Other revenues (expenses), net		4.4		5.9
Operating income		54.8		73.8
Expenses related to financial debt		(51.7)		(69.7)
Income provided by cash and cash equivalents		1.4		1.9
Cost of financial debt, net		(50.3)		(67.8)
Other financial income (loss)		15.3		20.7
Income of consolidated companies before income taxes		19.8		26.7
Deferred taxes on currency translation		(2.5)		(3.4)
Other income taxes		(8.6)		(11.7)
Total income taxes		(11.1)		(15.1)
Net income from consolidated companies		8.7		11.6
Equity in income of investees		(2.1)		(2.8)
Net income		6.6		8.8
Attributable to :
Owners of CGGVeritas SA		(0.4)		(0.6)
Non controlling interests		7.0		9.4
Weighted average number of shares outstanding		151,275,968		151,275,968
Dilutive potential shares from stock-options		403,108		403,108
Dilutive potential shares from free shares		314,773		314,773
Adjusted weighted average number of shares and assumed option exercises when dilutive		151,993,849		151,993,849
Net income (loss) per share attributable to owners of CGGVeritas SA   Basic		-		-
Diluted		-		-

______________

(1) Dollar amounts represent euro amounts converted at the average exchange rate for the period of US$1.348 per €.

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
		Three months ended June 30, 2010
except per share data, amounts in millions of		€		US$ (1)
Operating revenues		498.0		646.9
Other income from ordinary activities		0.7		0.9
Total income from ordinary activities		498.7		647.8
Cost of operations		(398.9)		(518.4)
Gross profit		99.8		129.4
Research and development expenses, net		(15.5)		(20.2)
General and administrative expenses		(47.2)		(61.2)
Marketing and selling expenses		(13.4)		(17.3)
Other revenues (expenses), net		4.8		6.4
Operating income		28.5		37.1
Expenses related to financial debt		(26.5)		(34.5)
Income provided by cash and cash equivalents		0.7		0.9
Cost of financial debt, net		(25.8)		(33.6)
Other financial income (loss)		7.9		10.3
Income of consolidated companies before income taxes		10.6		13.8
Deferred taxes on currency translation		0.2		0.4
Other income taxes		(2.2)		(2.7)
Total income taxes		(2.0)		(2.3)
Net income from consolidated companies		8.6		11.5
Equity in income of investees		(2.3)		(3.2)
Net income		6.3		8.3
Attributable to :
Owners of CGGVeritas SA		2.2		2.9
Non controlling interests		4.1		5.4
Weighted average number of shares outstanding		151,358,044		151,358,044
Dilutive potential shares from stock-options		410,970		410,970
Dilutive potential shares from free shares		314,773		314,773
Adjusted weighted average number of shares and assumed option exercises when dilutive		152,083,787		152,083,787
Net income (loss) per share attributable to owners of CGGVeritas SA   Basic		0.01		0.02
Diluted		0.01		0.02

______________

(1) Corresponding to the half-year in US dollars less the first quarter in US dollars.

CONSOLIDATED STATEMENTS OF CASH FLOWS
		June 30, 2010
amounts in millions of		€		US$ (1)
OPERATING
Net income (loss)		6.6		8.9
Depreciation and amortization		111.4		150.2
Multi-client surveys amortization		80.2		108.1
Variance on provisions		(48.6)		(65.5)
Expense & income calculated on stock-option		7.2		9.7
Net gain on disposal of fixed assets		0.2		0.3
Equity in income of affiliates		2.1		2.8
Dividends received from affiliates		2.2		3.0
Other non-cash items		(10.3)		(13.9)
Net cash including net cost of financial debt and income taxes		151.0		203.6
Less net cost of financial debt		50.3		67.8
Less income taxes expenses		11.2		15.1
Net cash excluding net cost of financial debt and income taxes		212.5		286.5
Income taxes paid		(47.5)		(64.0)
Net cash before changes in working capital		165.0		222.5
- change in trade accounts and notes receivables		31.6		42.6
- change in inventories and work-in-progress		(3.5)		(4.7)
- change in other currents assets		(28.5)		(38.4)
- change in trade accounts and notes payable		15.2		20.5
- change in other current liabilities		(30.2)		(40.7)
Impact of changes in exchange rate		23.1		31.1
Net cash provided by operating activity		172.7		232.9
INVESTING
Total purchases of tangible and intangible assets (including variation of fixed assets suppliers)		(86.4)		(116.5)
Increase in multi-client surveys		(128.0)		(172.6)
Proceeds from disposals of tangible and intangible		3.3		4.4
Total net proceeds from financial assets		1.3		1.8
Total net acquisition of investments		(1.2)		(1.6)
Impact of changes in consolidation scope		-		-
Variation in loans granted		(0.4)		(0.5)
Variation in subsidies for capital expenditures		0.8		1.1
Variation in other financial assets		(1.4)		(1.9)
Net cash used in investing activities		(212.0)		(285.8)
FINANCING
Repayment of long-term debts		(42.3)		(57.0)
Total issuance of long-term debts		2.2		3.0
Reimbursement on leasing		(44.6)		(60.1)
Change in short-term loans		2.4		3.2
Financial interest paid		(47.8)		(64.4)
Net proceeds from capital increase
- from shareholders		1.7		2.3
- from non controlling interests of consolidated companies		-		-
Disposal (acquisition) of treasury shares		(3.2)		(4.3)
Dividend paid to non controlling interests		(3.0)		(4.0)
Net cash provided by (used in) financing activities		(134.6)		(181.5)
Effects of exchange rate changes on cash		53.7		(15.6)
Net increase (decrease) in cash and cash equivalents		(120.2)		(250.0)
Cash and cash equivalents at beginning of year		480.3		691.9
Cash and cash equivalents at end of period		360.1		441.9

(1) Dollar amounts represent euro amounts converted at the average exchange rate for the period of US$1.348 per € (except cash and cash equivalents balances converted at the closing exchange rate of US$1.227 per € at June 30, 2010 and of US$1.441 per € at December 31, 2009).

ANALYSIS BY OPERATING SEGMENT
		Six months ended June 30, 2010
(in millions of euros)		Services (a)		Equipment		Eliminations and Adjustments (a)		Consolidated Total
Revenues from unaffiliated customers		718.8		277.2		-		996.0
Inter-segment revenues		0.2		72.3		(72.5)		-
Operating revenues		719.0		349.5		(72.5)		996.0
Other income from ordinary activities		-		1.6		-		1.6
Total income from ordinary activities		719.0		351.1		(72.5)		997.6
Operating income (loss)		14.2		86.0		(45.4)		54.8
Equity in income (loss) of investees		(2.1)		-		-		(2.1)
Capital expenditures		211.7		12.3		-		224.0
Depreciation and amortization		173.7		17.1		0.8		191.6
Investments in companies under equity method		1.2		-		-		1.2
Identifiable assets		4,570.7		797.0		(286.5)		5,081.2
Unallocated and corporate assets								440.6
Total Assets								5,521.8

(a) The segment information related to our Services segment reflects the change in our internal financial reporting occurred in 2010: (i) Operating income for our Services segment is presented after elimination of amortization expense corresponding to past inter-company capital expenditures between our Equipment segment and Services segment; (ii) Capital expenditures for our Services segment are presented after elimination of inter-segment margin. These eliminations were previously presented in “Eliminations and Adjustments”.

		Six months ended June 30, 2010
(in millions of US$)		Services (1)		Equipment(2)		Eliminations and Adjustments		Consolidated Total (3)
Revenues from unaffiliated customers		971.0		372.0		-		1,343.0
Inter-segment revenues		0.2		97.0		(97.2)		-
Operating revenues		971.2		469.0		(97.2)		1,343.0
Other income from ordinary activities		-		2.1		-		2.1
Total income from ordinary activities		971.2		471.1		(97.2)		1,345.1
Operating income (loss)		19.2		115.4		(60.8)		73.8

(1) Dollar amounts represent euro amounts converted at the average exchange rate for the period of US$1.351 per € in 2010 for the Services segment.

(2) Dollar amounts were converted at the average exchange rate of US$1.342 per € in 2010 for the Equipment segment.

(3) Dollar amounts for the Consolidated total were converted at the average exchange rate of US$1.348 per € in 2010, corresponding to the weighted average based on each segment’s operating revenues.

ANALYSIS BY OPERATING SEGMENT
		Three months ended June 30, 2010
(in millions of euros)		Services (a)		Equipment		Eliminations and Adjustments (a)		Consolidated Total
Revenues from unaffiliated customers		353.3		144.7		-		498.0
Inter-segment revenues		-		45.9		(45.9)		-
Operating revenues		353.3		190.6		(45.9)		498.0
Other income from ordinary activities		-		0.7		-		0.7
Total income from ordinary activities		353.3		191.3		(45.9)		498.7
Operating income (loss)		4.1		50.5		(26.1)		28.5
Equity in income (loss) of investees		(2.3)		-		-		(2.3)
Capital expenditures		112.9		9.6		-		122.5
Depreciation and amortization		86.8		8.8		0.4		96.0
Investments in companies under equity method		1.2		-		-		1.2

(a) The segment information related to our Services segment for the three months ended June 30, 2010 reflects the change in our internal financial reporting occurred in 2010: (i) Operating income for our Services segment is presented after elimination of amortization expense corresponding to past inter-company capital expenditures between our Equipment segment and Services segment; (ii) Capital expenditures for our Services segment are presented after elimination of inter-segment margin. These eliminations were previously presented in “Eliminations and Adjustments”.

		Three months ended June 30, 2010 (1)
(in millions of US$)		Services		Equipment		Eliminations and Adjustments		Consolidated Total
Revenues from unaffiliated customers		459.9		187.0		-		646.9
Inter-segment revenues		-		60.1		(60.1)		-
Operating revenues		459.9		247.1		(60.1)		646.9
Other income from ordinary activities		-		0.9		-		0.9
Total income from ordinary activities		459.9		248.0		(60.1)		647.8
Operating income (loss)		5.1		65.8		(33.8)		37.1

____________

(1) Corresponding to the half-year in US dollars less the first quarter in US dollars.

CGGVeritasInvestor RelationsParis:Christophe Barnini, +33 1 64 47 38 11invrelparis@cggveritas.comorHouston:Hovey Cox, +1 (832) This e-mail address is being protected from spambots. You need JavaScript enabled to view it.