Edgar Filing: CORE LABORATORIES N V

clb-10q_1q2010.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

OR

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ______________

Commission File Number: 001-14273

CORE LABORATORIES N.V.
(Exact name of registrant as specified in its charter)

The Netherlands		Not Applicable
(State of other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

Herengracht 424
1017 BZ Amsterdam
The Netherlands		Not Applicable
(Address of principal executive offices)		(Zip Code)

(31-20) 420-3191
(Registrant's telephone number, including area code)

None
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

The number of common shares of the registrant, par value EUR 0.04 per share, outstanding at April 28, 2010 was 22,326,027.

CORE LABORATORIES N.V.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2010

INDEX

		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets (Unaudited) at March 31, 2010 and December 31, 2009	1

	Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2010 and 2009	2

	Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2010 and 2009	3

	Notes to the Unaudited Consolidated Interim Financial Statements	4

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4.	Controls and Procedures	21


PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 6.	Exhibits	24

	Signature	25

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CORE LABORATORIES N.V.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31,			December 31,
	2010			2009
ASSETS	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	138,768		$	181,045
Accounts receivable, net of allowance for doubtful accounts of $3,757 and
$3,202 at 2010 and 2009, respectively		130,986			133,758
Inventories, net		32,652			32,184
Prepaid expenses and other current assets		33,371			43,550
TOTAL CURRENT ASSETS		335,777			390,537

PROPERTY, PLANT AND EQUIPMENT, net		99,668			98,784
INTANGIBLES, net		9,469			6,520
GOODWILL		154,217			148,600
OTHER ASSETS		15,019			13,725
TOTAL ASSETS	$	614,150		$	658,166

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	36,526		$	33,009
Accrued payroll and related costs		24,302			24,368
Taxes other than payroll and income		6,791			8,183
Unearned revenues		23,616			16,528
Income tax payable		15,444			15,433
Short-term debt		212,915			-
Other accrued expenses		9,215			8,887
TOTAL CURRENT LIABILITIES		328,809			106,408

LONG-TERM DEBT		-			209,112
DEFERRED COMPENSATION		17,896			16,866
DEFERRED TAX LIABILITIES		7,528			7,692
OTHER LONG-TERM LIABILITIES		33,204			36,330
COMMITMENTS AND CONTINGENCIES		-			-

EQUITY:
Preference shares, EUR 0.04 par value;
3,000,000 shares authorized, none issued or outstanding		-			-
Common shares, EUR 0.04 par value;
100,000,000 shares authorized, 25,519,956 issued and 22,312,593 outstanding at 2010
and 25,519,956 issued and 22,986,704 outstanding at 2009		1,430			1,430
Additional paid-in capital		61,048			61,719
Retained earnings		498,963			469,454
Accumulated other comprehensive (loss)		(6,451	)		(6,536	)
Treasury shares (at cost), 3,207,363 at 2010 and 2,533,252 at 2009		(330,748	)		(246,699	)
Total Core Laboratories N.V. shareholders' equity		224,242			279,368
Non-controlling interest		2,471			2,390
TOTAL EQUITY		226,713			281,758
TOTAL LIABILITIES AND EQUITY	$	614,150		$	658,166

The accompanying notes are an integral part of these consolidated financial statements.

CORE LABORATORIES N.V.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended March 31,
	2010			2009
	(Unaudited)
REVENUES:
Services	$	143,442		$	141,692
Product sales		44,895			37,184
		188,337			178,876
OPERATING EXPENSES:
Cost of services, exclusive of depreciation expense shown below		95,357			88,296
Cost of product sales, exclusive of depreciation expense shown below		30,231			27,736
General and administrative expenses		6,380			9,274
Depreciation		5,419			5,527
Amortization		335			181
Other expense (income), net		(798	)		1,243
OPERATING INCOME		51,413			46,619
Interest expense		4,059			3,800
Income before income tax expense		47,354			42,819
Income tax expense		15,068			13,580
Net income		32,286			29,239
Net income attributable to non-controlling interest		81			47
Net income attributable to Core Laboratories N.V.	$	32,205		$	29,192

EARNINGS PER SHARE INFORMATION:
Basic earnings per share attributable to Core Laboratories N.V.	$	1.44		$	1.27

Diluted earnings per share attributable to Core Laboratories N.V.	$	1.38		$	1.26

Cash dividends per share	$	0.12		$	0.10

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		22,418			22,970

Diluted		23,410			23,210

The accompanying notes are an integral part of these consolidated financial statements.

CORE LABORATORIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended March 31,
	2010			2009
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	32,286		$	29,239
Adjustments to reconcile net income to net cash provided by operating activities:
Net provision for (recoveries of) doubtful accounts		752			424
Provisions for inventory obsolescence		222			22
Equity in earnings of affiliates		(113	)		(48	)
Stock-based compensation		1,613			1,322
Depreciation and amortization		5,754			5,708
Non-cash interest expense		3,839			3,574
Gain on sale of assets		(30	)		(77	)
Realization of pension obligation		85			58
(Increase) decrease in value of life insurance policies		(513	)		603
Deferred income taxes		428			(3,638	)
Changes in assets and liabilities:
Accounts receivable		2,020			12,312
Inventories		(690	)		1,840
Prepaid expenses and other current assets		9,587			1,127
Other assets		(263	)		85
Accounts payable		3,517			(14,370	)
Accrued expenses		5,969			5,327
Other long-term liabilities		(2,097	)		6,610
Net cash provided by operating activities		62,366			50,118
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(6,155	)		(2,655	)
Patents and other intangibles		(84	)		(96	)
Acquisitions		(9,000	)		-
Proceeds from sale of assets		66			86
Premiums on life insurance		(441	)		(582	)
Net cash used in investing activities		(15,614	)		(3,247	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock options exercised		274			169
Excess tax benefits from stock-based compensation		(140	)		45
Dividends paid		(2,696	)		(2,302	)
Repurchase of common shares		(86,467	)		(7,885	)
Net cash used in financing activities		(89,029	)		(9,973	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(42,277	)		36,898
CASH AND CASH EQUIVALENTS, beginning of period		181,045			36,138
CASH AND CASH EQUIVALENTS, end of period	$	138,768		$	73,036

The accompanying notes are an integral part of these consolidated financial statements.

CORE LABORATORIES N.V.

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the accounts of Core Laboratories N.V. and its subsidiaries for which we have a controlling voting interest and/or a controlling financial interest. These financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information using the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnote disclosures required by U.S. GAAP and should be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2009.

Core Laboratories N.V. uses the equity method of accounting for investments in which it has less than a majority interest and over which it does not exercise control. Non-controlling interest has been recorded to reflect outside ownership attributable to consolidated subsidiaries that are less than 100% owned. In the opinion of management, all adjustments considered necessary for the periods presented have been included in these financial statements. Furthermore, the operating results presented for the three months ended March 31, 2010 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2010.

Core Laboratories N.V.'s balance sheet information for the year ended December 31, 2009 was derived from the 2009 audited consolidated financial statements but does not include all disclosures in accordance with GAAP.

References to "Core Lab", "we", "our", and similar phrases are used throughout this Quarterly Report on Form 10-Q and relate collectively to Core Laboratories N.V. and its consolidated subsidiaries.

2. INVENTORIES

Inventories consist of the following (in thousands):

	March 31,		December 31,
	2010		2009
	(Unaudited)
Finished goods	$	23,019	$	22,161
Parts and materials		8,386		8,756
Work in progress		1,247		1,267
Total inventories, net	$	32,652	$	32,184

We include freight costs incurred for shipping inventory to customers in the Cost of Sales line of the Consolidated Statements of Operations.

3. GOODWILL AND INTANGIBLES

We account for intangible assets with indefinite lives, including goodwill, in accordance with the accounting guidance, which requires us to evaluate these assets for impairment annually, or more frequently if an indication of impairment has occurred. Based upon our most recent evaluation, we did not identify a triggering event; therefore, we have determined that goodwill is not impaired. We amortize intangible assets with a defined term on a straight-line basis over their respective useful lives.

On January 15, 2010, we acquired assets associated with the fracture diagnostics business of Gray Wireline Service, Inc. for $9 million in cash. The acquisition was recorded in the Production Enhancement business segment and resulted in an increase of $5.6 million in goodwill and an increase of $3.2 million in intangible assets. The intangible assets will be amortized over a period of 36 to 60 months. The acquisition did not have a material impact to the Production Enhancement business segment or Consolidated operating results for the quarter ended March 31, 2010. The remaining composition of goodwill by business segment at March 31, 2010 is consistent with the amounts disclosed in our Annual Report on Form 10-K as of December 31, 2009.

4. DEBT AND CAPITAL LEASE OBLIGATIONS

Debt is summarized in the following table (in thousands):

	March 31,			December 31,
	2010			2009
	(Unaudited)
Senior exchangeable notes	$	238,658		$	238,658
Discount on senior exchangeable notes		(25,743	)		(29,546	)
Net senior exchangeable notes	$	212,915		$	209,112

In 2006, Core Laboratories LP, a wholly owned subsidiary of Core Laboratories N.V., issued $300 million aggregate principal amount of Senior Exchangeable Notes (the "Notes") which are fully and unconditionally guaranteed by Core Laboratories N.V. and due November 2011. The Notes bear interest at a rate of 0.25% per year paid on a semi-annual basis.

With the additional amortization of the discount on the Notes, the effective interest rate is 7.48% for the period ended March 31, 2010, which resulted in additional non-cash interest expense of $3.8 million and $3.5 million for the three months ended March 31, 2010 and 2009, respectively. Each Note carries a $1,000 principal amount and is exchangeable into shares of Core Laboratories N.V. under certain circumstances at a conversion rate of $92.49 or 10.8120 per Note. Upon exchange, holders will receive cash up to the principal amount, and any excess exchange value will be delivered in Core Laboratories N.V. common shares. The carrying value of the equity component of the Notes was $84.4 million at March 31, 2010 and December 31, 2009. At March 31, 2010, the Notes were trading at 143.3% of their face value which would result in $103.3 million of value in excess of the principal. At December 31, 2009 the Notes were trading at 134% of their face value which would result in $81.1 million of value in excess of the principal. There were 238,658 Notes outstanding at March 31, 2010.

Under the terms of the Notes, on March 31, 2010, the early conversion option for the holders of the Notes was enabled. As a result, the Notes can be converted during the subsequent quarter and have been reclassified from a long-term liability to a short-term liability.

We maintain a revolving credit facility (the "Credit Facility") that allows for an aggregate borrowing capacity of $100.0 million. The Credit Facility provides an option to increase the commitment under the Credit Facility to $150.0 million, if certain conditions are met. The Credit Facility bears interest at variable rates from LIBOR plus 0.5% to a maximum of LIBOR plus 1.125%. Any outstanding balance under the Credit Facility is due in December 2010 when the Credit Facility matures. Interest payment terms are variable depending upon the specific type of borrowing under this facility. Our available borrowing capacity under the Credit Facility was reduced by outstanding letters of credit and performance guarantees and bonds arranged totaling $12.0 million at March 31, 2010 relating to certain projects in progress. Our available borrowing capacity under the Credit Facility at March 31, 2010 was $88.0 million. As of March 31, 2010, we had $25.2 million of outstanding letters of credit and performance guarantees and bonds in addition to those under the Credit Facility.

5. PENSIONS AND OTHER POSTRETIREMENT BENEFITS

We provide a noncontributory defined benefit pension plan covering substantially all of our Dutch employees (the "Dutch Plan") who were hired prior to 2007 based on years of service and final pay or career average pay, depending on when the employee began participating. Employees are immediately vested in the benefits earned. We fund the future obligations of the Dutch Plan by purchasing investment contracts from a large multi-national insurance company. The investment contracts are purchased annually and expire after five years at which time they are replaced with new contracts that are adjusted to include changes in the benefit obligation for the current year and redemption of the expired contracts. We determine the fair value of these plan assets with the assistance of an actuary using observable inputs (Level 2). We make annual premium payments to the insurance company, based on each employee's age and current salary.

The following table summarizes the components of net periodic pension cost under this plan for the three months ended March 31, 2010 and 2009 (in thousands):

	Three Months Ended March 31,
	2010			2009
	(Unaudited)
Service cost	$	323		$	253
Interest cost		376			324
Expected return on plan assets		(119	)		(178	)
Amortization of transition asset		(22	)		(22	)
Amortization of prior service cost		40			40
Amortization of net loss		94			61
Net periodic pension cost	$	692		$	478

During the three months ended March 31, 2010, we contributed approximately $1.1 million, as determined by the insurance company, to fund the estimated 2010 premiums on investment contracts held by the plan.

We have adopted a non-qualified deferred compensation plan that allows certain highly compensated employees to defer a portion of their salary, commission and bonus, as well as the amount of any reductions in their deferrals under the deferred compensation plan for employees in the United States (the "Deferred Compensation Plan"), due to certain limitations imposed by the U.S. Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"). The Deferred Compensation Plan also provides for employer contributions to be made on behalf of participants equal in amount to certain forfeitures of, and/or reductions in, employer contributions that participants could have received under the 401(k) Plan in the absence of certain limitations imposed by the Internal Revenue Code. Employer contributions to the Deferred Compensation Plan vest ratably over a period of five years. Contributions to the plan are invested in equity and other investment fund assets, and carried on the balance sheet at fair value. The benefits under these contracts are fully vested and payment of benefits generally commences as of the last day of the month following the termination of services except that the payment of benefits for select executives generally commences on the first working day following a six month waiting period following the date of termination.

On a recurring basis, we use the market approach to value certain assets and liabilities at fair value at quoted prices in an active market (Level 1) and certain assets and liabilities using significant other observable inputs (Level 2). We do not have any assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Gains and losses related to the fair value changes in the deferred compensation assets and liabilities are recorded in General and Administrative Expenses in the Consolidated Statements of Operations. The following table summarizes the fair value balances (in thousands):

(Unaudited)			Fair Value Measurement at March 31, 2010
	Total		Level 1		Level 2		Level 3
Assets:
Deferred compensation plan trust assets	$	6,646	$	-	$	6,646	$	-

Liabilities:
Deferred compensation plan	$	10,086	$	1,525	$	8,561	$	-

			Fair Value Measurement at December 31, 2009
	Total		Level 1		Level 2		Level 3
Assets:
Deferred compensation plan trust assets	$	6,193	$	-	$	6,193	$	-

Liabilities:
Deferred compensation plan	$	9,366	$	1,339	$	8,027	$	-

6. COMMITMENTS AND CONTINGENCIES

From time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of business. We believe that the resolution of all litigation currently pending or threatened against us or any of our subsidiaries should not have a material adverse effect on our consolidated financial condition, results of operations or liquidity; however, because of the inherent uncertainty of litigation, we cannot provide assurance that the resolution of any particular claim or proceeding to which we or any of our subsidiaries is a party will not have a material adverse effect on our consolidated results of operations or liquidity for the period in which that resolution occurs.

7. EQUITY

During the three months ended March 31, 2010, we repurchased 703,902 of our common shares for $86.5 million. Included in this total were rights to 3,529 shares valued at $0.4 million that were surrendered to the Company pursuant to the terms of a stock-based compensation plan, in consideration of the participants' tax burdens that may result from the issuance of common shares under this plan. Such common shares, unless cancelled, may be reissued for a variety of purposes such as future acquisitions, settlement of employee stock awards, or possible conversion of the Notes.

During the three months ended March 31, 2010, we recognized tax benefits of $0.1 million, relating to tax deductions in excess of book expense for stock-based compensation awards. These tax benefits are recorded to additional paid-in capital to the extent deductions reduce current taxable income.

On February 25, 2010, we paid a dividend of $0.12 per share of common stock. In addition, on April 16, 2010, we declared a quarterly dividend of $0.12 per share of common stock for shareholders of record on April 27, 2010 and payable on May 27, 2010.

The following table summarizes our changes in equity for the three months ended March 31, 2010 (in thousands):

									Accumulated
			Additional						Other						Non-
	Common		Paid-In			Retained			Comprehensive			Treasury			Controlling		Total
(Unaudited)	Shares		Capital			Earnings			Income (Loss)			Stock			Interest		Equity

December 31, 2009	$	1,430	$	61,719		$	469,454		$	(6,536	)	$	(246,699	)	$	2,390	$	281,758
Stock options exercised		-		(1,218	)		-			-			1,492			-		274
Stock based-awards		-		687			-			-			926			-		1,613
Tax benefit of stock-based awards issued		-		(140	)		-			-			-			-		(140	)
Repurchase of common shares		-		-			-			-			(86,467	)		-		(86,467	)
Dividends paid		-		-			(2,696	)		-			-			-		(2,696	)
Comprehensive income:
Amortization of pension, net of tax		-		-			-			85			-			-		85
Net income		-		-			32,205			-			-			81		32,286
Total comprehensive income																		32,371

March 31, 2010	$	1,430	$	61,048		$	498,963		$	(6,451	)	$	(330,748	)	$	2,471	$	226,713

Comprehensive Income

The components of comprehensive income consisted of the following (in thousands):

	Three months ended March 31,
	2010		2009
	(Unaudited)
Net income	$	32,286	$	29,239
Realization of pension obligation		85		58
Total comprehensive income	$	32,371	$	29,297

Accumulated other comprehensive income (loss) consisted of the following (in thousands):

	March 31,			December 31,
	2010			2009
	(Unaudited)
Prior service cost	$	(941	)	$	(971	)
Transition asset		373			389
Unrecognized net actuarial loss		(5,883	)		(5,954	)
Total accumulated other comprehensive loss	$	(6,451	)	$	(6,536	)

8. EARNINGS PER SHARE

We compute basic earnings per common share by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common and potential common shares include additional shares in the weighted average share calculations associated with the incremental effect of dilutive employee stock options, restricted stock awards and contingently issuable shares, as determined using the treasury stock method. The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings per share (in thousands):

	Three Months Ended March 31,
	2010		2009
	(Unaudited)
Weighted average basic common shares outstanding		22,418		22,970
Effect of dilutive securities:
Stock options		29		100
Contingent shares		15		13
Restricted stock and other		262		127
Senior exchangeable notes and warrants		686		-
Weighted average diluted common and potential common shares outstanding		23,410		23,210

In 2006, we sold warrants that give the holder the right to acquire up to 3.2 million of our common shares beginning at a current exercise price of $124.52 per share. Included in the table above within the amount for Senior exchangeable notes and warrants line are 14,000 shares which were added to the share count because the average share price exceeded the strike price of the warrants. These shares were included in calculating the impact to our dilutive earnings per share for the three months ended March 31, 2010.

9. OTHER EXPENSE (INCOME), NET

The components of other expense (income), net, were as follows (in thousands):

	Three Months Ended March 31,
	2010			2009
	(Unaudited)
(Gain) loss on sale of assets	$	(31	)	$	(77	)
Foreign exchange loss (gain)		(91	)		1,888
Interest income		(12	)		(39	)
Rents and royalties		(473	)		(341	)
Other, net		(191	)		(188	)
Total other expense (income), net	$	(798	)	$	1,243

Foreign exchange losses (gains) by currency are summarized in the following table (in thousands):

	Three Months Ended March 31,
	2010			2009
	(Unaudited)
British Pound	$	258		$	72
Canadian Dollar		(385	)		348
Euro		(30	)		163
Kazakhstan Tenge		1			167
Malaysian Ringgit		(73	)		136
Mexican Peso		108			132
Russian Ruble		54			596
Other currencies, net		(24	)		274
Total loss (gain)	$	(91	)	$	1,888

10. INCOME TAX EXPENSE

The effective tax rates for the three months ended March 31, 2010 and 2009 were 31.8% and 31.7%, respectively. The higher effective tax rate reflects the change in activity levels between jurisdictions with different tax rates.

11. SEGMENT REPORTING

We operate our business in three reportable segments: (1) Reservoir Description, (2) Production Enhancement and (3) Reservoir Management. These business segments provide different services and utilize different technologies.

*	Reservoir Description: Encompasses the characterization of petroleum reservoir rock, fluid and gas samples. We provide analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry.

*	Production Enhancement: Includes products and services relating to reservoir well completions, perforations, stimulations and production. We provide integrated services to evaluate the effectiveness of well completions and to develop solutions aimed at increasing the effectiveness of enhanced oil recovery projects.

*	Reservoir Management: Combines and integrates information from reservoir description and production enhancement services to increase production and improve recovery of oil and gas from our clients' reservoirs.

Results for these business segments are presented below. We use the same accounting policies to prepare our business segment results as are used to prepare our Consolidated Financial Statements. We evaluate performance based on income or loss before income tax, interest and other non-operating income (expense). Summarized financial information concerning our segments is shown in the following table (in thousands):

(Unaudited)	Reservoir Description		Production Enhancement		Reservoir Management		Corporate & Other 1			Consolidated
Three Months Ended March 31, 2010
Revenues from unaffiliated customers	$	104,093	$	68,844	$	15,400	$	-		$	188,337
Inter-segment revenues		300		294		288		(882	)		-
Segment operating income (loss)		25,084		20,943		5,620		(234	)		51,413
Total assets		257,184		182,943		18,216		155,807			614,150
Capital expenditures		5,329		672		38		116			6,155
Depreciation and amortization		3,507		1,623		158		466			5,754

Three Months Ended March 31, 2009
Revenues from unaffiliated customers	$	102,523	$	63,100	$	13,253	$	-		$	178,876
Inter-segment revenues		123		361		381		(865	)		-
Segment operating income (loss)		24,752		18,324		3,478		65			46,619
Total assets		253,398		172,345		21,024		96,519			543,286
Capital expenditures		2,063		587		-		5			2,655
Depreciation and amortization		3,357		1,462		177		712			5,708

(1) "Corporate & Other" represents those items that are not directly related to a particular segment and eliminations.

12. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Core Laboratories N.V. has fully and unconditionally guaranteed all of the Notes issued by Core Laboratories LP in 2006. Core Laboratories LP is a wholly owned subsidiary of Core Laboratories N.V.

The following condensed consolidating financial information is included so that separate financial statements of Core Laboratories LP are not required to be filed with the U.S. Securities and Exchange Commission (the "SEC"). The condensed consolidating financial statements present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.

The following condensed consolidating financial information presents: balance sheets as of March 31, 2010 and December 31, 2009, statements of operations for each of the three months ended March 31, 2010 and 2009 and the statements of cash flows for each of the three months ended March 31, 2010 and 2009 of (a) Core Laboratories N.V., parent/guarantor, (b) Core Laboratories LP, issuer of public debt securities guaranteed by Core Laboratories N.V., (c) the non-guarantor subsidiaries, (d) consolidating adjustments necessary to consolidate Core Laboratories N.V. and its subsidiaries and (e) Core Laboratories N.V. on a consolidated basis.

Condensed Consolidating Balance Sheets (Unaudited)

(In thousands)	March 31, 2010
	Core Laboratories N.V. (Parent/ Guarantor)		Core Laboratories LP (Issuer)		Other Subsidiaries (Non- Guarantors)		Consolidating Adjustments			Consolidated Total
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	17,005	$	109,067	$	12,696	$	-		$	138,768
Accounts receivable, net		1		31,136		99,849		-			130,986
Inventories, net		-		2,202		30,450		-			32,652
Prepaid expenses and other current assets		16,723		5,732		10,916		-			33,371
Total current assets		33,729		148,137		153,911		-			335,777

PROPERTY, PLANT AND EQUIPMENT, net		-		21,516		78,152		-			99,668
GOODWILL AND INTANGIBLES, net		46,986		16,519		100,181		-			163,686
INTERCOMPANY RECEIVABLES		37,674		265,369		288,046		(591,089	)		-
INVESTMENT IN AFFILIATES		571,968		-		1,599,556		(2,171,091	)		433
DEFERRED TAX ASSET		2,951		-		7,753		(10,704	)		-
OTHER ASSETS		2,987		9,315		2,284		-			14,586
TOTAL ASSETS	$	696,295	$	460,856	$	2,229,883	$	(2,772,884	)	$	614,150

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	441	$	5,733	$	30,352	$	-		$	36,526
Short-term debt		-		212,915		-		-			212,915
Other accrued expenses		2,345		30,149		46,874		-			79,368
Total current liabilities		2,786		248,797		77,226		-			328,809

LONG-TERM DEBT		-		-		-		-			-
DEFERRED COMPENSATION		6,199		10,905		792		-			17,896
DEFERRED TAX LIABILITY		-		17,934		298		(10,704	)		7,528
INTERCOMPANY PAYABLES		449,769		24,058		117,262		(591,089	)		-
OTHER LONG-TERM LIABILITIES		13,299		7,152		12,753		-			33,204

SHAREHOLDERS' EQUITY		224,242		152,010		2,019,081		(2,171,091	)		224,242
NON-CONTROLLING INTEREST		-		-		2,471		-			2,471
TOTAL EQUITY		224,242		152,010		2,021,552		(2,171,091	)		226,713

TOTAL LIABILITIES AND EQUITY	$	696,295	$	460,856	$	2,229,883	$	(2,772,884	)	$	614,150

Condensed Consolidating Balance Sheets

(In thousands)	December 31, 2009
	Core Laboratories N.V. (Parent/ Guarantor)		Core Laboratories LP (Issuer)		Other Subsidiaries (Non- Guarantors)		Consolidating Adjustments			Consolidated Total
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	73,998	$	95,048	$	11,999	$	-		$	181,045
Accounts receivable, net		1		29,452		104,305		-			133,758
Inventories, net		-		2,679		29,505		-			32,184
Prepaid expenses and other current assets		11,809		22,209		9,532		-			43,550
Total current assets		85,808		149,388		155,341		-			390,537

PROPERTY, PLANT AND EQUIPMENT, net		-		21,988		76,796		-			98,784
GOODWILL AND INTANGIBLES, net		46,986		7,949		100,185		-			155,120
INTERCOMPANY RECEIVABLES		37,681		216,670		232,802		(487,153	)		-
INVESTMENT IN AFFILIATES		540,724		-		1,387,715		(1,928,118	)		321
DEFERRED TAX ASSET		2,951		4,644		14,359		(21,954	)		-
OTHER ASSETS		2,828		8,770		1,806		-			13,404
TOTAL ASSETS	$	716,978	$	409,409	$	1,969,004	$	(2,437,225	)	$	658,166

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	501	$	6,404	$	26,104	$	-		$	33,009
Other accrued expenses		673		29,738		42,988		-			73,399
Total current liabilities		1,174		36,142		69,092		-			106,408

LONG-TERM DEBT		-		209,112		-		-			209,112
DEFERRED COMPENSATION		6,046		10,094		726		-			16,866
DEFERRED TAX LIABILITY		-		29,646		-		(21,954	)		7,692
INTERCOMPANY PAYABLES		417,618		-		69,535		(487,153	)		-
OTHER LONG-TERM LIABILITIES		12,772		7,702		15,856		-			36,330

SHAREHOLDERS' EQUITY		279,368		116,713		1,811,405		(1,928,118	)		279,368
NON-CONTROLLING INTEREST		-		-		2,390		-			2,390
TOTAL EQUITY		279,368		116,713		1,813,795		(1,928,118	)		281,758

TOTAL LIABILITIES AND EQUITY	$	716,978	$	409,409	$	1,969,004	$	(2,437,225	)	$	658,166

Condensed Consolidating Statements of Operations (Unaudited)

(In thousands)	Three Months Ended March 31, 2010
	Core Laboratories N.V. (Parent/ Guarantor)			Core Laboratories LP (Issuer)		Other Subsidiaries (Non- Guarantors)		Consolidating Adjustments			Consolidated Total
REVENUES
Operating revenues	$	-		$	45,161	$	143,176	$	-		$	188,337
Intercompany revenues		288			4,587		35,509		(40,384	)		-
Earnings from consolidated affiliates		35,189			-		100,759		(135,948	)		-
Total revenues		35,477			49,748		279,444		(176,332	)		188,337

OPERATING EXPENSES
Operating costs		390			24,984		100,214		-			125,588
General and administrative expenses		2,167			4,210		3		-			6,380
Depreciation and amortization		-			1,558		4,196		-			5,754
Other expense (income), net		(135	)		1,591		28,308		(30,562	)		(798	)

Operating income		33,055			17,405		146,723		(145,770	)		51,413
Interest expense		-			4,055		4		-			4,059

Income before income tax expense		33,055			13,350		146,719		(145,770	)		47,354
Income tax expense (benefit)		850			5,482		8,736		-			15,068

Net income		32,205			7,868		137,983		(145,770	)		32,286
Net income attributable to non-controlling interest		-			-		81		-			81

Net income attributable to Core Laboratories	$	32,205		$	7,868	$	137,902	$	(145,770	)	$	32,205

Condensed Consolidating Statements of Cash Flows (Unaudited)

(In thousands)	Three Months Ended March 31, 2010
	Core Laboratories N.V. (Parent/ Guarantor)			Core Laboratories LP (Issuer)			Other Subsidiaries (Non- Guarantors)			Consolidating Adjustments		Consolidated Total

Net cash provided by operating activities	$	32,036		$	25,991		$	4,339		$	-	$	62,366

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		-			(2,520	)		(3,635	)		-		(6,155	)
Patents and other intangibles		-			(20	)		(64	)		-		(84	)
Acquisitions, net of cash		-			(9,000	)		-			-		(9,000	)
Proceeds from sale of assets		-			9			57			-		66
Premiums on life insurance		-			(441	)		-			-		(441	)
Net cash used in investing activities		-			(11,972	)		(3,642	)		-		(15,614	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Stock options exercised		274			-			-			-		274
Excess tax benefit from stock-based payments		(140	)		-			-			-		(140	)
Dividends paid		(2,696	)		-			-			-		(2,696	)
Repurchase of common shares		(86,467	)		-			-			-		(86,467	)
Net cash used in financing activities		(89,029	)		-			-			-		(89,029	)

NET CHANGE IN CASH AND CASH EQUIVALENTS		(56,993	)		14,019			697			-		(42,277	)
CASH AND CASH EQUIVALENTS, beginning of period		73,998			95,048			11,999			-		181,045
CASH AND CASH EQUIVALENTS, end of period	$	17,005		$	109,067		$	12,696		$	-	$	138,768

Condensed Consolidating Statements of Operations (Unaudited)

(In thousands)	Three Months Ended March 31, 2009
	Core Laboratories N.V. (Parent/ Guarantor)			Core Laboratories LP (Issuer)		Other Subsidiaries (Non- Guarantors)		Consolidating Adjustments			Consolidated Total
REVENUES
Operating revenues	$	-		$	45,134	$	133,742	$	-		$	178,876
Intercompany revenues		343			6,599		30,000		(36,942	)		-
Earnings from consolidated affiliates		30,287			-		92,653		(122,940	)		-
Total revenues		30,630			51,733		256,395		(159,882	)		178,876

OPERATING EXPENSES
Operating costs		312			23,605		92,115		-			116,032
General and administrative expenses		3,460			5,810		4		-			9,274
Depreciation and amortization		-			1,369		4,339		-			5,708
Other expense (income), net		(11	)		4,135		27,568		(30,449	)		1,243

Operating income		26,869			16,814		132,369		(129,433	)		46,619
Interest expense		475			3,305		20		-			3,800

Income before income tax expense		26,394			13,509		132,349		(129,433	)		42,819
Income tax expense (benefit)		(2,798	)		4,786		11,592		-			13,580

Net income		29,192			8,723		120,757		(129,433	)		29,239
Net income attributable to non-controlling interest		-			-		47		-			47
NET INCOME ATTRIBUTABLE TO CORE LABORATORIES N.V.	$	29,192		$	8,723	$	120,710	$	(129,433	)	$	29,192

Condensed Consolidating Statements of Cash Flows (Unaudited)

(In thousands)	Three Months Ended March 31, 2009
	Core Laboratories N.V. (Parent/ Guarantor)		Core Laboratories LP (Issuer)		Other Subsidiaries (Non- Guarantors)		Consolidating Adjustments		Consolidated Total

Net cash provided by operating activities	$	18,135	$	30,285	$	1,698	$	-	$	50,118
								-
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		-