FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

Compagnie Générale de Géophysique-Veritas

(Translation of registrant’s name into English)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ Form 40-F o

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes o No þ

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82 -                     .)

 

 

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS			3
Item 1 FINANCIAL STATEMENTS			5
Interim Consolidated Balance Sheets as of September 30, 2009 (unaudited) and December 31, 2008			5
Unaudited Interim Consolidated Statements of Operations for the three months ended September 30, 2009 and 2008 and for the nine months ended September 30, 2009 and 2008			6
Unaudited Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008			8
Unaudited Interim Consolidated Statements of Comprehensive Income (loss) for the nine months ended September 30, 2009 and 2008			9
Notes to Unaudited Interim Consolidated Financial Statements			10
Item 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			22
Item 3 CONTROLS AND PROCEDURES			35

FORWARD-LOOKING STATEMENTS

          This document includes “forward-looking statements”. We have based these forward-looking statements on our current views and assumptions about future events.

          These forward-looking statements involve certain risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, the following factors:

	•		the impact of the current economic and credit environment;
	•		developments affecting our international operations;
	•		the social, political and economic risks of our global operations;
	•		our ability to develop an integrated strategy for CGGVeritas;
	•		difficulties and delays in achieving synergies and cost savings;
	•		our ability to integrate successfully the businesses or assets we acquire;
	•		any write-downs of goodwill on our balance sheet;
	•		our ability to sell our seismic data library;
	•		exposure to foreign exchange rate risk;
	•		our ability to finance our operations on acceptable terms;
	•		exposure to the credit risk of customers;
	•		the timely development and acceptance of our new products and services;
	•		ongoing operational risks and our ability to have adequate insurance against such risks;
	•		difficulties and costs in protecting intellectual property rights and exposure to infringement claims by others;
	•		difficulties in temporarily or permanently reducing the capacity of our fleet;
	•		changes in international economic and political conditions and, in particular, in oil and gas prices;
	•		our clients’ ability to unilaterally terminate certain contracts in our backlog;
	•		the effects of competition;
	•		the level of capital expenditures by the oil and gas industry and changes in demand for seismic products and services;
	•		the seasonal nature of our revenues;
	•		the costs of compliance with governmental regulation, including environmental, health and safety laws;
	•		our substantial indebtedness and the restrictive covenants in our debt agreements;
	•		our ability to access the debt and equity markets during the periods covered by the forward-looking statements, which will depend on general market conditions, including the ongoing crisis in the financial markets, and on our credit ratings for our debt obligations;
	•		exposure to interest rate risk; and
	•		our success at managing the foregoing risks.

     We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document might not occur.

     Certain of these risks are described in our annual report on Form 20-F for the year ended December 31, 2008 that we filed with the SEC on April 22, 2009. Our annual report on Form 20-F is available on our website at www.cggveritas.com or on the website maintained by the SEC at www.sec.gov. You may request a copy of our annual report on Form 20-F, which includes our complete audited financial statements, at no charge, by calling our investor relations department at + 33 1 6447 3831, sending an electronic message to invrelparis@cggveritas.com or invrelhouston@cggveritas.com or writing to CGG Veritas – Investor Relations Department, Tour Maine Montparnasse – 33, avenue du Maine – 75015 Paris, France.

Item 1: FINANCIAL STATEMENTS

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE-VERITAS, S.A.

CONSOLIDATED BALANCE SHEETS

		September 30, 2009								December 31, 2008
		(unaudited)
amounts in millions of		€				US$ (1)				€				US$ (2)
ASSETS
Cash and cash equivalents			559.5				819.3				516.9				719.4
Trade accounts and notes receivable, net			591.9				866.7				712.3				991.4
Inventories and work-in-progress, net			218.0				319.2				287.9				400.7
Income tax assets			61.9				90.7				102.2				142.2
Other current assets, net			88.7				129.8				101.5				141.2
Assets held for sale, net			8.0				11.6				7.6				10.6
Total current assets			1,528.0				2,237.3				1,728.4				2,405.5
Deferred tax assets			79.7				116.7				109.2				151.9
Investments and other financial assets, net			37.1				54.3				26.2				36.4
Investments in companies under equity method			78.8				115.3				72.9				101.5
Property, plant and equipment, net			752.1				1,101.3				822.4				1,144.5
Intangible assets, net			828.8				1,213.7				820.0				1,141.2
Goodwill			1,977.0				2,894.9				2,055.1				2,860.1
Total non-current assets			3,753.5				5,496.2				3,905.8				5,435.6
TOTAL ASSETS			5,281.5				7,733.5				5,634.2				7,841.1
LIABILITIES AND SHAREHOLDERS’ EQUITY
Bank overdrafts			6.5				9.5				8.2				11.4
Current portion of financial debt			124.7				182.5				241.5				336.1
Trade accounts and notes payable			205.9				301.5				282.2				398.4
Accrued payroll costs			116.6				170.8				144.3				200.8
Income taxes liability			42.3				62.0				85.5				119.0
Advance billings to customers			24.4				35.7				43.5				60.5
Provisions — current portion			47.7				69.8				20.7				28.8
Other current liabilities			145.4				212.9				173.3				241.2
Total current liabilities			713.5				1,044.7				1,003.2				1,396.2
Deferred tax liabilities			146.4				214.3				223.8				311.5
Provisions — non-current portion			80.7				118.1				82.4				114.6
Financial debt			1,364.5				1,998.1				1,296.3				1,804.0
Other non-current liabilities			32.1				46.9				29.9				41.6
Total non-current liabilities			1,623.7				2,377.4				1,632.4				2,271.7
Common stock 216,486,213 shares authorized and 150,993,469 shares with a €0.40 nominal value issued and outstanding at September 30, 2009 and 150, 617,709 at December 31, 2008			60.4				88.4				60.2				83.8
Additional paid-in capital			1,964.8				2,877.1				1,964.7				2,734.2
Retained earnings			1,137.3				1,665.4				799.4				1,112.6
Treasury shares			(13.2)				(19.2)				(18.1)				(25.1)
Net income (loss) for the period — Attributable to the Group			32.6				47.8				332.8				463.1
Income and expense recognized directly in equity			3.3				4.7				(2.5)				(3.5)
Cumulative translation adjustment			(278.1)				(407.3)				(176.4)				(245.5)
Total shareholders’ equity			2,907.1				4,256.9				2,960.1				4,119.6
Minority interests			37.2				54.5				38.5				53.6
Total shareholders’ equity and minority interests			2,944.3				4,311.4				2,998.6				4,173.2
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			5,281.5				7,733.5				5,634.2				7,841.1

See notes to Interim Consolidated Financial Statements

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE-VERITAS, S.A.

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

		Three months ended September 30,
		2009								2008
except per share data, amounts in millions of		€				US$ (1)				€				US$ (1)
Operating revenues			512.2				731.4				691.6				1,062.2
Other income from ordinary activities			5.1				7.0				0.4				0.5
Total income from ordinary activities			517.3				738.4				692.0				1,062.7
Cost of operations			(412.8)				(587.4)				(445.1)				(683.7)
Gross profit			104.5				151.0				246.9				379.0
Research and development expenses, net			(15.1)				(21.5)				(11.3)				(17.4)
Selling, general and administrative expenses			(52.9)				(75.5)				(59.5)				(91.5)
Other revenues (expenses), net			4.2				3.7				(1.3)				(2.0)
Operating income before reduction of goodwill			40.7				57.7				174.8				268.1
Reduction of goodwill			-				-				(2.0)				(3.0)
Operating income			40.7				57.7				172.8				265.1
Expenses related to financial debt			(26.9)				(38.1)				(21.8)				(33.4)
Income provided by cash and cash equivalents			0.3				0.5				3.1				4.8
Cost of financial debt, net			(26.6)				(37.6)				(18.7)				(28.6)
Other financial income (loss)			(6.9)				(9.5)				4.0				6.1
Income of consolidated companies before income taxes			7.2				10.6				158.1				242.6
Deferred taxes on currency translation			2.6				3.7				(4.6)				(7.1)
Other income taxes			(4.3)				(6.1)				(47.5)				(72.9)
Total income taxes			(1.7)				(2.4)				(52.1)				(80.0)
Net income from consolidated companies			5.5				8.2				106.0				162.6
Equity in income of investees			2.9				4.0				(0.6)				(0.9)
Net income			8.4				12.2				105.4				161.7
Attributable to :
Shareholders			7.7				11.2				102.1				156.6
Minority interest			0.7				1.0				3.3				5.1
Weighted average number of shares outstanding			150,629,662				150,629,662				137,687,693				137,687,693
Dilutive potential shares from stock-options			366,871				366,871				596,184				596,184
Dilutive potential shares from free shares			243,000				243,000				648,938				648,938
Adjusted weighted average number of shares and assumed option exercises when dilutive			151,239,533				151,239,533				138,932,815				138,932,815
Net earning per share attributable to shareholders
Basic			0.05				0.07				0.74				1.14
Diluted			0.05				0.07				0.73				1.13

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE-VERITAS, S.A.

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

		Nine months ended September 30,
		2009								2008
except per share data, amounts in millions of		€				US$ (1)				€				US$ (2)
Operating revenues			1,733.3				2,361.4				1,835.6				2,809.1
Other income from ordinary activities			6.7				9.1				0.7				1.1
Total income from ordinary activities			1,740.0				2,370.5				1,836.3				2,810.2
Cost of operations			(1,320.6)				(1,799.2)				(1,233.3)				(1,887.3)
Gross profit			419.4				571.3				603.0				922.9
Research and development expenses, net			(45.1)				(61.5)				(35.5)				(54.3)
Selling, general and administrative expenses			(180.5)				(246.0)				(182.5)				(279.4)
Other revenues (expenses), net			(69.3)				(94.4)				9.2				14.0
Operating income before reduction of goodwill			124.5				169.4				394.2				603.2
Reduction of goodwill			-				-				(2.0)				(3.0)
Operating income			124.5				169.4				392.2				600.2
Expenses related to financial debt			(79.6)				(108.5)				(67.1)				(102.7)
Income provided by cash and cash equivalents			1.7				2.3				7.3				11.0
Cost of financial debt, net			(77.9)				(106.2)				(59.8)				(91.7)
Variance on derivative on convertible bonds			-				-				-				-
Other financial income (loss)			(9.9)				(13.2)				2.9				4.5
Income of consolidated companies before income taxes			36.7				50.0				335.3				513.0
Deferred taxes on currency translation			8.3				11.3				(4.7)				(7.1)
Other income taxes			(13.3)				(18.2)				(111.8)				(171.1)
Total income taxes			(5.0)				(6.9)				(116.5)				(178.2)
Net income from consolidated companies			31.7				43.1				218.8				334.8
Equity in income of investees			5.3				7.3				2.4				3.7
Net income			37.0				50.4				221.2				338.5
Attributable to :
Shareholders			32.6				44.4				213.5				326.7
Minority interest			4.4				6.0				7.7				11.8
Weighted average number of shares outstanding			150,797,818				150,797,818				137,498,471				137,498,471
Dilutive potential shares from stock-options			320,760				320,760				692,047				692,047
Dilutive potential shares from free shares			243,000				243,000				648,938				648,938
Adjusted weighted average number of shares and assumed option exercises when dilutive			151,361,578				151,361,578				138,839,456				138,839,456
Net earning per share attributable to shareholders
Basic			0.22				0.29				1,55				2.38
Diluted			0.22				0.29				1,54				2.35

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE-VERITAS, S.A.

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

		Nine months ended September 30,
		2009								2008
amounts in millions of		€				US$ (1)				€				US$ (2)
OPERATING
Net income (loss)			37.0				50.4				221.2				338.5
Depreciation and amortization			222.4				303.0				155.0				237.2
Multi-client surveys amortization			150.0				204.4				186.2				284.9
Variance on provisions			34.1				46.5				5.5				8.4
Expense & income calculated on stock-option			9.0				12.3				17.7				27.1
Net gain on disposal of fixed assets			3.6				4.9				(1.4)				(2.1)
Equity in income of affiliates			(5.3)				(7.3)				(2.4)				(3.7)
Dividends received from affiliates			-				-				1.1				1.7
Other non-cash items			(2.8)				(3.8)				(5.5)				(8.4)
Net cash including net cost of financial debt and income taxes			448.0				610.4				577.4				883.6
Less net cost of financial debt			77.9				106.2				59.9				91.7
Less income taxes expenses			5.0				6.9				116.5				178.3
Net cash excluding net cost of financial debt and income taxes			530.9				723.5				753.8				1,153.6
Income taxes paid			(60.5)				(82.4)				(100.9)				(154.5)
Net cash before changes in working capital			470.4				641.1				652.9				999.1
- change in trade accounts and notes receivables			73.3				99.8				(118.5)				(181.3)
- change in inventories and work-in-progress			65.1				88.7				(22.4)				(34.3)
- change in other currents assets			20.8				28.4				28.5				43.6
- change in trade accounts and notes payable			(84.0)				(114.4)				(11.4)				(17.4)
- change in other current liabilities			(59.0)				(80.4)				(12.0)				(18.4)
Impact of changes in exchange rate			(14.4)				(19.8)				11.6				17.8
Net cash provided by operating activities			472.2				643.4				528.7				809.1
INVESTING
Total purchases of tangible and intangible assets (including variation of fixed assets suppliers)			(130.1)				(177.3)				(118.8)				(181.8)
Increase in multi-client surveys			(191.8)				(261.3)				(283.4)				(433.7)
Proceeds from disposals of tangible and intangible			1.5				2.0				0.7				1.1
Total net proceeds from financial assets			-				-				8.8				13.5
Total net acquisition of investments			(65.8)				(89.6)				(21.4)				(32.7)
Impact of changes in consolidation scope			(2.0)				(2.8)
Variation in loans granted			(4.0)				(5.4)				(5.5)				(8.4)
Variation in subsidies for capital expenditures			(0.1)				(0.1)				(0.1)				(0.2)
Variation in other financial assets			(1.0)				(1.5)				(2.0)				(3.1)
Net cash used in investing activities			(393.3)				(536.0)				(421.7)				(645.3)
FINANCING
Repayment of long-term debts			(177.6)				(242.0)				(18.1)				(27.7)
Total issuance of long-term debts			243.5				331.8				37.0				56.6
Reimbursement on leasing			(22.3)				(30.4)				(5.6)				(8.6)
Change in short-term loans			(1.6)				(2.2)				(9.4)				(14.4)
Financial interest paid (3)			(65.3)				(89.0)				(45.5)				(69.6)
Net proceeds from capital increase
- from shareholders			0.3				0.4				2.5				3.8
- from minority interest of integrated companies											(1.4)				(2.1)
Buying & sales of own shares			4.9				6.7				(10.9)				(16.7)
Dividend paid to minority interest			(2.6)				(3.5)
Net cash used in financial activities			(20.7)				(28.2)				(51.4)				(78.7)
Effects of exchange rate changes on cash			(15.6)				20.7				7.6				(5.4)
Net increase (decrease) in cash and cash equivalents			42.6				99.9				63.2				79.7
Cash and cash equivalents at beginning of year			516.9				719.4				254.3				374.4
Cash and cash equivalents at end of period			559.5				819.3				317.5				454.1

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE-VERITAS, S.A.

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

		Nine months ended September 30,
amounts in millions of €		2009				2008
Net income from statements of operations			37.0				221.2
Gain (loss) on cash flow hedges			8.9				(15.4)
Income taxes			(3.1)				5.3
Net gain (loss) on cash flow hedges			5.8				(10.1)
Gain (loss) on available-for-sale investments			-				(22.1)
Income taxes			-				7.6
Net gain (loss) on available-for-sale investments			-				(14.5)
Gain (loss) on actuarial changes on pension plan			-				(0.9)
Income taxes			-				0.3
Net gain (loss) on actuarial changes on pension plan			-				(0.6)
Exchange differences on foreign currency translation			(104.8)				49.9
Other comprehensive income (loss) for the period, net of taxes			(99.0)				24.7
Total net comprehensive income for the period			(62.0)				245.9
Attributable to :
Shareholders			(63.3)				235.4
Minority interest			1.3				10.5

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE-VERITAS, S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1—Summary of significant accounting policies

     Compagnie Générale de Géophysique-Veritas, S.A. (the “Company”) and its subsidiaries (together, the “Group”) is a global participant in the geophysical seismic industry, as a manufacturer of geophysical equipment and providing a wide range of services (seismic data acquisition and related processing and interpretation software) principally to clients in the oil and gas exploration and production business.

     Given that the Company is listed on Euronext Paris and pursuant to European regulation n°1606/2002 dated July 19, 2002, the accompanying interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and its interpretations as issued by the International Accounting Standards Board (“IASB”). These interim consolidated financial statements are also in accordance with IFRS adopted by the European Union at September 30, 2009 which are available on the following web site http://ec.europa.eu/internal_market/accounting/ias_en.htm#adopted-commission.

These interim consolidated financial statements have been authorized by the Audit Committee for issue on November 6, 2009.

     The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

     The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities that have been measured at fair value.

Critical accounting policies

     The interim condensed consolidated financial statements for the nine months ended September 30, 2009 have been prepared in accordance with IAS 34 - Interim Financial Reporting.

     The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual financial statements as at and for the year ended December 31, 2008 included in its report on Form 20-F for the year 2008 filed with the SEC on April 22, 2009.

     The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended December 31, 2008, except for the adoption of the following new Standards and Interpretations:

IFRS 8 - Operating segments
IAS 1 revised - Presentation of Financial Statements (except amendment to IFRS5)
IAS 23 revised - Borrowing costs
IAS 32 Amendment - Puttable Financial Instruments and Obligations Arising on Liquidation
IFRS 2 Amendment - Vesting Conditions and Cancellations
2008 Annual Improvements to IFRS (excepted amendment to IFRS 5)
IFRIC 11 - IFRS 2 - Group and Treasury Share Transactions
IFRIC 13 - Customer loyalty programs
IFRIC 14 - IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

The adoption of these new standards and interpretations did not have any material impact on the Group’s interim financial statements.

     The Group decided not to early adopt those Standards, Amendments and Interpretations that the European Union adopted but that are optional until December 31, 2009, namely:

IFRIC 12 - Service Concession Arrangements - adopted by the European Union in March 2009 and applicable on January 1, 2010
IFRIC 16 - Hedges of a Net Investment in a Foreign Operation - adopted by the European Union in June 2009 and applicable on January 1, 2010
IAS 27 Amendment - Consolidated and Separate Financial Statements - adopted by the European Union in June 2009 but applicable on January 1, 2010
IFRS 3R - Business Combinations - adopted by the European Union in June 2009 but applicable on January 1, 2010
IFRIC 15 - Agreements for the Construction of Real Estate - adopted by the European Union in July 2009 but applicable on January 1, 2010
Amendment to IAS 39 Financial Instruments: Recognition and Measurement: Eligible Hedged Items Combinations - adopted by the European Union in September 2009 but applicable on January 1, 2010.

     At the date of issuance of these financial statements, the following Standards and Interpretations were issued but not yet adopted by the European Union:

Amendments IFRS 5 (2008 annual improvements to IFRS)
Amendments to IFRIC 9 and IAS 39 - Embedded derivatives
IFRIC 17 - Distributions of Non-cash Assets to Owners
IFRIC 18 - Transfers of assets from customers
Amendment to IFRS7 - Improving disclosures about financial instruments
Amendment to IFRS2 - Group cash-settled share-based payment Transactions
Amendment to IAS32 - Classification of rights issues

     The Group has not opted for the early adoption of these Standards, Amendments and Interpretations and it is currently reviewing them to measure the potential impact on the interim condensed consolidated financial statements. At this stage, we do not anticipate any significant impact.

Use of estimates

     Significant estimates in preparing financial statements that could have a material impact on the carrying values of assets and liabilities are:

	•		Amortization of multi-client data library,
	•		Depreciation and, if applicable, impairment of tangible and intangible assets, including goodwill,
	•		Development costs,
	•		Valuation of investments,
	•		Recoverability of goodwill and intangible assets,
	•		Income taxes, and
	•		Employee benefit plans.

Judgments

     The major accounting matters that are subject to management judgments, which have a material effect on the carrying amounts of assets and liabilities recognized in the interim condensed consolidated financial statements, relate to:

	•		Collectibility of accounts receivable,
	•		Recoverability of deferred tax assets,
	•		Fair value of assets and liabilities as part of the different purchase price allocations,
	•		Provision for contingencies, claims and litigations.

Operating revenues

          Operating revenues are recognized when they can be measured reliably, and when it is likely that the economic benefits associated with the transaction will flow to the entity, which is at the point that such revenues have been realized or are considered realizable. For contracts where the percentage of completion method of accounting is being applied, revenues are only recognized

when the costs incurred for the transaction and the cost to complete the transaction can be measured reliably and such revenues are considered earned and realizable.

•

Multi-client surveys

          Multi-client surveys consist of seismic surveys to be licensed to customers on a non-exclusive basis. All costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized into the multi-client surveys. The value of our multi-client library is stated on our balance sheet at the aggregate of those costs less accumulated amortization or at fair value if lower. We review the library for potential impairment of our independent surveys on an ongoing basis.

          Revenues related to multi-client surveys result from (i) pre-commitments and (ii) licenses after completion of the surveys (“after-sales”).

          Pre-commitments — Generally, we obtain commitments from a limited number of customers before a seismic project is completed. These pre-commitments cover part or all of the survey area blocks. In return for the commitment, the customer typically gains the right to direct or influence the project specifications, advance access to data as it is being acquired, and favorable pricing. The Company records payments that it receives during periods of mobilization as advance billing in the balance sheet in the line item “Advance billings to customers”.

          The Company recognizes pre-commitments as revenue when production is begun based on the physical progress of the project.

          After sales — Generally, we grant a license entitling non-exclusive access to a complete and ready-for-use, specifically defined portion of our multi-client data library in exchange for a fixed and determinable payment. We recognize after sales revenue upon the client executing a valid license agreement and having been granted access to the data. Within thirty days of execution and access, the client may exercise our warranty that the medium on which the data is transmitted (a magnetic cartridge) is free from technical defects. If the warranty is exercised, the Company will provide the same data on a new magnetic cartridge. The cost of providing new magnetic cartridges is negligible.

          After sales volume agreements—We enter into a customer arrangement in which we agree to grant licenses to the customer for access to a specified number of blocks of the multi-client library. These arrangements typically enable the customer to select and access the specific blocks for a limited period of time. We recognize revenue when the blocks are selected and the client has been granted access to the data and if the corresponding revenue can be reliably estimated. Within thirty days of execution and access, the client may exercise our warranty that the medium on which the data is transmitted (a magnetic cartridge) is free from technical defects. If the warranty is exercised, the Company will provide the same data on a new magnetic cartridge. The cost of providing new magnetic cartridges is negligible.

•

Exclusive surveys

          In exclusive surveys, we perform seismic services (acquisition and processing) for a specific customer. We recognize proprietary/contract revenues as the services are rendered. We evaluate the progress to date, in a manner generally consistent with the physical progress of the project, and recognize revenues based on the ratio of the project cost incurred during that period to the total estimated project cost. We believe this ratio to be generally consistent with the physical progress of the project.

          The billings and the costs related to the transit of seismic vessels at the beginning of the survey are deferred and recognized over the duration of the contract by reference to the technical stage of completion.

          In some exclusive survey contracts and a limited number of multi-client survey contracts, the Company is required to meet certain milestones. The Company defers recognition of revenue on such contracts until all milestones that provide the customer a right of cancellation or refund of amounts paid have been met.

•

Other geophysical services

          Revenues from our other geophysical services are recognized as the services are performed and, when related to long-term contracts, using the proportional performance method of recognizing revenues.

•

Equipment sales

          We recognize revenues on equipment sales upon delivery to the customer. Any advance billings to customers are recorded in current liabilities.

•

Software and hardware sales

          We recognize revenues from the sale of software and hardware products following acceptance of the product by the customer at which time we have no further significant vendor obligations remaining. Any advance billings to customers are recorded in current liabilities.

          If an arrangement to deliver software, either alone or together with other products or services, requires significant production, modification, or customization of software, the entire arrangement is accounted for as a production-type contract, i.e. using the percentage of completion method.

          If the software arrangement provides for multiple deliverables (e.g. upgrades or enhancements, post-contract customer support such as maintenance, or services), the revenue is allocated to the various elements based on specific objective evidence of fair value, regardless of any separate allocations stated within the contract for each element. Each element is appropriately accounted for under the applicable accounting standard.

          Maintenance revenues consist primarily of post contract customer support agreements and are recorded as advance billings to customers and recognized as revenue on a straight-line basis over the contract period.

Goodwill

     Group management undertakes at least an annual impairment test covering goodwill, intangible assets and indefinite lived assets allocated to the cash generated units to consider whether impairment is required.

     In conjunction with the marine restructuring plan, the evaluation of the recoverable value of the Services segment at December 31, 2008 was subject to a differential analysis at June 30, 2009. This differential analysis aimed at considering the impact of the marine restructuring plan on the recoverable value of cash generating units, with other assumptions made as of December 31, 2008 remaining unchanged (refer to note 11 of the consolidated financial statements in our 20-F for the fiscal year ended December 31, 2008).

     This analysis did not lead to any impairment in the interim condensed consolidated financial statements as of June 30, 2009.

Multi-client surveys

     Multi-client surveys consist of seismic surveys to be licensed to customers on a non-exclusive basis. All costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized into the multi-client surveys (including transit costs when applicable). The value of our multi-client library is stated on our balance sheet at the aggregate of those costs less accumulated amortization or at fair value if lower. We review the library for potential impairment of our independent surveys on an ongoing basis.

     We amortize the multi-client surveys over the period during which the data is expected to be marketed using a pro-rata method based on recognized revenues as a percentage of total estimated sales.

     In this respect, we use five amortization rates: 50%, 65%, 75%, 80% or 83.3% of revenues depending on the category of the surveys. Multi-client surveys are classified into a same category when they are located in the same area with the same estimated sales ratio, such estimates generally relying on the historical pattern.

     For all categories of surveys and starting from data delivery, a minimum straight-line depreciation scheme is applied over a five-year period, if total accumulated depreciation from the applicable amortization rate is below this minimum level.

     Multi-client surveys acquired as part of the business combination with Veritas and which have been valued for purchase price allocation purposes are amortized based on 65% of revenues and an impairment loss is recognized on a survey-by-survey basis in case of any indication of impairment.

Development costs

          Expenditures on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding are recognized in the income statement as expenses as incurred and are presented as “Research and development expenses, net”.

          Expenditures on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, are capitalized if:

	—		the project is clearly defined, and costs are separately identified and reliably measured,
	—		the product or process is technically and commercially feasible,
	—		we have sufficient resources to complete development, and
	—		the intangible asset is likely to generate future economic benefits, either because it is useful to us or through an existing market for the intangible asset itself or for its products.

          The expenditures capitalized include the cost of materials, direct labor and an appropriate proportion of overhead. Other development expenditures are recognized in the income statement as expenses as incurred and are presented as “Research and development expenses, net”.

          Capitalized development expenditures are stated at cost less accumulated amortization and impairment losses. We amortize capitalized developments costs over 5 years.

          Research & development expenses in our income statement represent the net cost of development costs that are not capitalized, of research costs, offset by government grants acquired for research and development.

Note 2— Acquisitions and divestitures

•

Wavefield Inseis ASA

          In February 2009, Wavefield shares subject to the mandatory offer and the squeeze-out were transferred to CGGVeritas, while compensation of €62 million for those shares was paid after the objection period expired. As a result, the minority interests recognized as a financial debt of €62 million on our balance sheet at December 31, 2008 have been cancelled.

          The preliminary goodwill determined as of December 31, 2008 has been revised for an additional amount of €16.2 million, leading to a total goodwill of €25.0 million at September 30, 2009. Main adjustments were related to Multifield assets, receivables and deferred tax liabilities on equity acquired.

•

Cybernetix

          On January 8, 2009, Cybernetix conducted a €4 million share capital increase that was entirely subscribed by Sercel Holding, bringing its stake to a total of 749,480 shares, representing 46.10% of Cybernetix’s share capital and 43.07% of its voting rights. The French financial markets regulator (Autorité des Marchés Financiers) exempted Sercel Holding from the requirement to conduct a tender offer for all shares when its holding exceeded 33.33%. The consideration for the share capital increase was €2 million in cash and the incorporation of a €2 million cash advance granted by Sercel Holding to Cybernetix in November 2008. Cybernetix is accounted for under the equity method in our financial statements as we do not have the control.

•

Multifield

          On May 29, 2009, Statoil Hydro Venture AS exercised its put option with our subsidiary Wavefield with respect to a 37% stake in Multifield for €2.9 million. As a result, our shareholding in Multifield increased to 80.97%. Multifield is fully consolidated in our financial statements since June 30, 2009.

•

Norfield AS

          Pursuant to the general meeting of Norfield AS’s shareholders held on May 19, 2009, Wavefield subscribed to a capital increase in Norfield for approximately €3.6 million by capitalizing an outstanding long-term loan owed to it by Norfield. The capital increase was pro rata to the shareholders’ existing interests in Norfield. As a result, Wavefield’s interest in Norfield remained unchanged at 33%.

Note 3—Financial debt

     On May 21 and 27, 2009, we amended our US senior facilities agreement and our French revolving facility agreement, respectively. These amendments, in line with our conservative financial policy, were aimed mainly at increasing the Company’s headroom under its financial covenants.

     In consideration of these amendments, we repaid US$100 million of our term loan B under the US senior facilities and increased the applicable bank margin for all borrowings under the US senior facilities and French revolving facility by 1.0%.

     On June 9, 2009, we issued US$350 million principal amount of 9¹/2% senior notes due 2016. The senior notes were issued at a price of 97.0% of their principal amount, resulting in a yield of 10¹/8%. The senior notes will mature on May 15, 2016.

     We used the proceeds from the notes to replace cash used to repay US$100 million of our term loan B facility on May 21, 2009 and to fund the three quarterly US$27.5 million amortization payments due during the remainder of 2009 under our term loan B facility. We also used a portion of the net proceeds to repay US$28 million of indebtedness outstanding under our CGGVeritas Services (Norway) AS (formerly Exploration Resources) credit facility. The remaining net proceeds will be used for general corporate purposes, including the repayment of other indebtedness.

Note 4—Common stock and stock options plans

As of September 30, 2009, the Company’s share capital consisted of 150,993,469 shares, each with a nominal value of €0.40.

New stock-option plans and performance shares allocation plan

     On March 16, 2009, our Board of Directors allocated 1,327,000 stock options to 149 beneficiaries pursuant to a shareholders’ resolution, including stock options to purchase a total of 260,000 ordinary shares that were allocated to executive officers who were members of the Executive Committee (excluding the Chairman and Chief Executive Officer and the Chief Operating Officer). The exercise price of the stock options is €8.82. The stock options expire on March 15, 2017.

     On March 16, 2009, our Board of Directors allocated 516,250 performance shares to 291 beneficiaries pursuant to a shareholders’ resolution, including 46,250 performance shares that were allocated to executive officers who were members of the Executive Committee (excluding the Chairman and Chief Executive Officer and the Chief Operating Officer).

     On March 16, 2009, our Board of Directors allocated 200,000 stock options to the Chairman and Chief Executive Officer and 125,000 stock options to the Chief Operating Officer. Their exercise price is €8.82. Rights to these options vest by one-third during each of the first three years of the plan. Such vesting is subject to performance conditions based on the fulfillment of one of the following objectives:

	•		a share price performance objective relative to the share price considering the SBF 120 index;
	•		a share price performance objective relative to the ADS price considering the PHLX Oil Services Sector SM (OSX SM) index; or
	•		a financial indicator of EBIT objective expressed in US$ and related to the target for the annual variable part of the compensation of the executive officers.

     The options have an eight-year duration subject to the requirement, for all French residents, to hold the resulting shares in registered form from their purchase date until March 16, 2013, inclusive, except in limited cases listed in the plan regulations.

Consolidated statements of changes in equity

																																						Total
																						Income and																shareholders’
																						expense																equity
		Number of								Additional												recognized				Cumulative				Total								and
		shares				Share				paid-in				Retained				Treasury				directly in				translation				shareholders’				Minority				minority
(Unaudited)		issued				capital				capital				earnings				shares				equity				adjustment				equity				interest				interest
														(amounts in millions of euros, except share data)
Balance at December 31, 2007			137,253,790				54.9				1,820.0				784.1				(3.9)				(5.1)				(248.4)				2,401.6				24.0				2,425.6
Capital increase			436,346				0.2				2.0																				2.2								2.2
Net income															213.5																213.5				7.7				221.2
Cost of share-based payment															17.7																17.7				(1.4)				16.3
Operations on treasury shares																			(11.0)												(11.0)								(11.0)
Actuarial gains and losses of pension plans (1) (a)															(0.6)																(0.6)								(0.6)
Financial instruments: change in fair value and transfer to income statement(2) (a)																							(24.6)								(24.6)								(24.6)
Foreign currency translation: change in fair value and transfer to income statement(3) (a)																											47.1				47.1				2.8				49.9
Income and expense recognized directly in equity (1) + (2) + (3)															(0.6)								(24.6)				47.1				21.9				2.8				24.7
Others																																			5.2				5.2
Balance at September 30, 2008			137,690,136				55.1				1,822.0				1,014.7				(14.9)				(29.7)				(201.3)				2,645.9				38.3				2,684.2
Balance at January 1, 2009			150,617,709				60.2				1,964.7				1,132.2				(18.1)				(2.5)				(176.4)				2,960.1				38.5				2,998.6
Capital increase			375,760				0.2				0.1																				0.3								0.3
Net income															32.6																32.6				4.4				37.0
Cost of share-based payment															9.0																9.0								9.0
Dividends paid																																			(2.6)				(2.6)
Operations on treasury shares																			4.9												4.9								4.9
Actuarial gains and losses of pension plans (1) (a)
Financial instruments: change in fair value and transfer to income statement(2) (a)																							5.8								5.8								5.8
Foreign currency translation: change in fair value and transfer to income statement(3) (a)																											(101.7)				(101.7)				(3.1).				(104.8)
Income and expense recognized directly in equity (1) + (2) + (3)																							5.8				(101.7)				(95.9)				(3.1)				(99.0)
Others															(3.9)																(3.9)								(3.9)
Balance at September 30, 2009			150,993,469				60.4				1,964.8				1,169.9				(13.2)				3.3				(278.1)				2,907.1				37.2				2,944.3

Note 5— Trade accounts and notes receivable

     At June 30, 2009 our trade receivables included a receivable of €97.2 million related to one marine exclusive contract. This contract included a six-month payment term, with a six-month extension option at the discretion of the customer and based on certain conditions. At September 30, 2009 we had received payment from the customer for the major part of the receivable. The six-month extension option was not exercised.

Note 6—Analysis by operating segment and geographic area

     Financial information by operating segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of CGG Veritas. We divide our business into two operating segments, geophysical services and geophysical equipment.

     Our geophysical services segment comprises:

	•		Land contract: seismic data acquisition for land, transition zones and shallow water undertaken by us on behalf of a specific client;
	•		Marine contract: seismic data acquisition offshore undertaken by us on behalf of a specific client;
	•		Multi-client land and marine: seismic data acquisition undertaken by us and licensed to a number of clients on a non-exclusive basis; and
	•		Processing & Imaging: processing and imaging and interpretation of geophysical data, data management and reservoir studies for clients.

     Our equipment segment, which we conduct through Sercel Holding S.A. and its subsidiaries, handles our manufacturing and sales activities for seismic equipment used for data acquisition, both on land and offshore.

     Inter-company sales between the two segments are made at prices approximating market prices and relate primarily to equipment sales made by the geophysical equipment segment to the geophysical services segment. These inter-segment sales, the related operating income recognized by the geophysical equipment segment, and the related effect on capital expenditures and depreciation expense of the geophysical services segment are eliminated in consolidation and presented in the column “Eliminations and Adjustments” in the tables that follow.

     Operating income of an industry segment represents operating revenues and other income from ordinary activities less expenses of that segment. It includes non-recurring and unusual items, which are disclosed in the operating segment, if material. General corporate expenses, which include Group management, financing, and legal activities, have been included in the column “Eliminations and Adjustments” in the tables that follow. The Group does not disclose financial expenses or revenues by operating segment because these items are not followed by the segment management and because financing and investment are mainly managed at the corporate level.

     Identifiable assets are those used in the operations of each industry segment. Unallocated and corporate assets consist primarily of financial assets, including cash and cash equivalents.

Due to the constant changes in work locations, the Group does not track its assets based on country of origin or ownership.

The following tables present revenues, operating income and identifiable assets by operating segment, and operating revenues by geographic area (by location of customers).

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE-VERITAS, S.A.

Analysis by operating segment

(Unaudited)		Three months ended September 30,
		2009																2008
										Eliminations																Eliminations
										and				Consolidated												and				Consolidated
(in millions of euros)		Services				Equipment				Adjustments				Total				Services				Equipment				Adjustments				Total
Revenues from unaffiliated customers			400.0				112.2				-				512.2				496.0				195.6				-				691.6
Inter-segment revenues			-				30.4				(30.4)				-				0.6				8.5				(9.1)				-
Operating revenues			400.0				142.6				(30.4)				512.2				496.6				204.1				(9.1)				691.6
Other income from ordinary activities			4.1				1.0				-				5.1				-				0.4				-				0.4
Total income from ordinary activities			404.1				143.6				(30.4)				517.3				496.6				204.5				(9.1)				692.0
Operating income (loss)			23.8				25.2				(8.3	) (a)			40.7				112.7				66.7				(6.6	) (a)			172.8
Equity in income (loss) of investees			2.9				-				-				2.9				(0.2)				(0.4)				-				(0.6)
Capital expenditures (b)			97.1				17.6				(11.2)				103.5				124.1				6.0				(1.8)				128.3
Depreciation and amortization (c)			121.2				7.3				(5.1)				123.7				123.8				5.6				(3.6)				125.8
Investments in companies under equity method			-				-				-				-				-				-				-				-

		Three months ended September 30,
(Unaudited)		2009 (1)																	2008 (1)
										Eliminations																	Eliminations
										and				Consolidated													and				Consolidated
(in millions of US$)		Services				Equipment				Adjustments				Total					Services				Equipment				Adjustments				Total
Revenues from unaffiliated customers			570.9				160.5				-				731.4					761.8				300.4				-				1,062.2
Inter-segment revenues			-				42.8				(42.8)				-					0.9				13.1				(14.0)				-
Operating revenues			570.9				203.3				(42.8)				731.4					762.7				313.5				(14.0)				1,062.2
Other income from ordinary activities			5.7				1.3								7.0					-				0.7				(0.2)				0.5
Total income from ordinary activities			576.6				204.6				(42.8)				738.4					762.7				314.2				(14.2)				1,062.7
Operating income (loss)			33.3				36.5				(12.1)				57.7					172.9				102.5				(10.3)				265.1

(Unaudited)		Nine months ended September 30,
		2009																2008
										Eliminations																Eliminations
										and				Consolidated												and				Consolidated
(in millions of euros)		Services				Equipment				Adjustments				Total				Services				Equipment				Adjustments				Total
Revenues from unaffiliated customers			1,333.6				399.7				-				1,733.3				1,321.0				514.6				-				1,835.6
Inter-segment revenues			0.5				72.1				(72.6)				-				0.6				58.0				(58.6)				-
Operating revenues			1,334.1				471.8				(72.6)				1,733.3				1,321.6				572.6				(58.6)				1,835.6
Other income from ordinary activities			4.2				2.5				-				6.7				(0.2)				1.0				(0.1)				0.7
Total income from ordinary activities			1,338.3				474.3				(72.6)				1,740.0				1,321.4				573.6				(58.7)				1,836.3
Operating income (loss)			54.2				108.2				(37.9)				124.5				254.4				180.7				(42.9	) (a)			392.2
Equity in income (loss) of investees			5.3				-				-				5.3				2.6				(0.2)				-				2.4
Capital expenditures (b)			346.6				26.4				(28.3)				344.7				415.7				14.7				(23.8)				406.6
Depreciation and amortization (c)			366.3				21.0				(14.9)				372.4				339.4				16.4				(14.6)				341.2
Investments in companies under equity method			-				4.0				-				4.0				-				-				-				-
Identifiable assets			4,152.6				728.8				(243.6)				4,637.8				4,140.2				688.6				(186.2)				4,642.7
Unallocated and corporate assets															643.7																370.9
Total Assets															5,281.5																5,013.6