SUPPLEMENTAL GUARANTORS CONSOLIDATING CONDENSED FINANCIAL INFORMATION

On March 20, 2013, the Company completed a private placement of 9½% Senior Notes in the aggregate principal amount of $250.0 million. The Company’s payment obligations under the 9½% Senior Notes are jointly and severally guaranteed by substantially all of its 100% owned U.S. subsidiaries (“Guarantor Subsidiaries”). All subsidiaries of the Company that do not guarantee the 9½% Senior Notes are referred to as Non-Guarantor Subsidiaries.

The indenture governing the 9½% Senior Notes provides that the guarantees by the Guarantor Subsidiaries will be released in the following customary circumstances: (i) upon a sale or other disposition, whether by merger, consolidation or otherwise, of the equity interests of that guarantor to a person that is not the Company or a restricted subsidiary of the Company; (ii) the guarantor sells all or substantially all of its assets to a person that is not the Company or a restricted subsidiary of the Company; (iii) the guarantor is properly designated as an unrestricted subsidiary or ceases to be a restricted subsidiary; (iv) upon legal defeasance of the 9½% Senior Notes or satisfaction and discharge of the indenture governing the 9½% Senior Notes; (v) the guarantor becomes an immaterial subsidiary or (vi) the guarantor is released from its guarantee obligations under the Credit Facility.

The consolidating condensed financial statements are presented below and should be read in connection with the consolidated financial statements of the Company. Separate financial statements of the Guarantor Subsidiaries are not presented because (i) the Guarantor Subsidiaries are wholly-owned and have fully and unconditionally guaranteed the 9½% Senior Notes on a joint and several basis and (ii) the Company’s management has determined such separate financial statements are not material to investors.

The following consolidating condensed financial information presents the consolidating condensed balance sheets as of December 31, 2013 and December 31, 2012, and the consolidating condensed statements of income, statements of comprehensive income (loss) and statements of cash flows for the years ended December 31, 2013, 2012 and 2011 of (a) the Company; (b) the Guarantor Subsidiaries; (c) the Non-Guarantor Subsidiaries; (d) elimination entries; and (e) the Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis.

Investments in subsidiaries are accounted for under the equity method. The principal elimination entries eliminate investments in subsidiaries, intercompany balances, intercompany transactions and intercompany sales.

CONSOLIDATING CONDENSED BALANCE SHEET

As of December 31, 2013

(In thousands)



	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	24,859	$	6,494		$	—		$	31,353
Receivables
Trade, net	—			22,711		11,905			—			34,616
Notes and other, net	—			4		1,928			—			1,932
Due from Seitel Holdings, Inc.	—			1,130		—			—			1,130
Income tax refund	—			—		7,441			—			7,441
Intercompany receivables (payables)	15,416			14,719		(30,135		)	—			—
Investment in subsidiaries	473,191			433,709		1,335			(908,235		)	—
Net seismic data library	—			116,199		79,794			(215		)	195,778
Net property and equipment	—			2,244		2,367			—			4,611
Prepaid expenses, deferred charges and other	6,841			2,581		422			—			9,844
Intangible assets, net	900			10,038		3,824			—			14,762
Goodwill	—			107,688		93,847			—			201,535
Deferred income taxes	—			92,511		—			—			92,511
TOTAL ASSETS	$	496,348		$	828,393	$	179,222		$	(908,450	)	$	595,513
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable and accrued liabilities	$	5,008		$	16,636	$	16,133		$	—		$	37,777
Income taxes payable	153			634		—			—			787
Senior Notes	250,000			—		—			—			250,000
Obligations under capital leases	—			50		2,626			—			2,676
Deferred revenue	—			38,748		2,991			—			41,739
Deferred income taxes	—			—		7,578			—			7,578
TOTAL LIABILITIES	255,161			56,068		29,328			—			340,557
STOCKHOLDER’S EQUITY
Common stock	—			—		—			—			—
Additional paid-in capital	399,641			—		—			—			399,641
Parent investment	—			764,752		156,924			(921,676		)	—
Retained deficit	(158,454		)	7,573		(20,796		)	13,223			(158,454		)
Accumulated other comprehensive income	—			—		13,766			3			13,769
TOTAL STOCKHOLDER’S EQUITY	241,187			772,325		149,894			(908,450		)	254,956
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	496,348		$	828,393	$	179,222		$	(908,450	)	$	595,513

CONSOLIDATING CONDENSED BALANCE SHEET

As of December 31, 2012

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	60,533		$	1,358		$	—		$	61,891
Receivables
Trade, net	—			43,806			17,389			—			61,195
Notes and other, net	—			9			2,134			—			2,143
Due from Seitel Holdings, Inc.	—			874			—			—			874
Intercompany receivables (payables)	75,688			(49,827		)	(25,861		)	—			—
Investment in subsidiaries	332,819			432,870			1,590			(767,279		)	—
Net seismic data library	—			100,087			80,030			—			180,117
Net property and equipment	—			2,125			2,693			—			4,818
Prepaid expenses, deferred charges and other	2,644			5,122			3,008			—			10,774
Intangible assets, net	900			13,250			6,678			—			20,828
Goodwill	—			107,688			100,332			—			208,020
Deferred income taxes	—			84			—			—			84
TOTAL ASSETS	$	412,051		$	716,621		$	189,351		$	(767,279	)	$	550,744
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable and accrued liabilities	$	10,049		$	38,179		$	14,555		$	—		$	62,783
Income taxes payable	336			900			2,898			—			4,134
Senior Notes	275,000			—			—			—			275,000
Notes payable	29			—			—			—			29
Obligations under capital leases	—			81			3,032			—			3,113
Deferred revenue	—			45,320			7,537			—			52,857
Deferred income taxes	—			—			2,470			—			2,470
TOTAL LIABILITIES	285,414			84,480			30,492			—			400,386
STOCKHOLDER’S EQUITY
Common stock	—			—			—			—			—
Additional paid-in capital	398,772			—			—			—			398,772
Parent investment	—			764,752			156,918			(921,670		)	—
Retained deficit	(272,135		)	(132,611		)	(21,780		)	154,391			(272,135		)
Accumulated other comprehensive income	—			—			23,721			—			23,721
TOTAL STOCKHOLDER’S EQUITY	126,637			632,141			158,859			(767,279		)	150,358
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	412,051		$	716,621		$	189,351		$	(767,279	)	$	550,744

CONSOLIDATING CONDENSED STATEMENT OF INCOME

For the Year Ended December 31, 2013

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	154,686		$	49,488		$	(1,300	)	$	202,874
EXPENSES:
Depreciation and amortization	—			86,426			35,203			(31		)	121,598
Cost of sales	—			471			4			—			475
Selling, general and administrative	1,587			16,701			8,983			(1,300		)	25,971
	1,587			103,598			44,190			(1,331		)	148,044
INCOME (LOSS) FROM OPERATIONS	(1,587		)	51,088			5,298			31			54,830
Interest expense, net	(23,194		)	(2,945		)	(1,712		)	—			(27,851		)
Foreign currency exchange losses	—			—			(2,222		)	—			(2,222		)
Loss on early extinguishment of debt	(1,504		)	—			—			—			(1,504		)
Other income	—			737			—			(249		)	488
Income (loss) before income taxes and equity in income of subsidiaries	(26,285		)	48,880			1,364			(218		)	23,741
Provision (benefit) for income taxes	—			(90,320		)	380			—			(89,940		)
Equity in income of subsidiaries	139,966			984			—			(140,950		)	—
NET INCOME	$	113,681		$	140,184		$	984		$	(141,168	)	$	113,681

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Year Ended December 31, 2013

(In thousands)



	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
Net income	$	113,681	$	140,184	$	984		$	(141,168	)	$	113,681
Foreign currency translation adjustments	—		—		(9,955		)	3			(9,952		)
Comprehensive income (loss)	$	113,681	$	140,184	$	(8,971	)	$	(141,165	)	$	103,729

CONSOLIDATING CONDENSED STATEMENT OF INCOME

For the Year Ended December 31, 2012

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	157,324		$	84,435		$	(1,301	)	$	240,458
EXPENSES:
Depreciation and amortization	—			88,724			51,030			—			139,754
Cost of sales	—			446			18			—			464
Selling, general and administrative	2,117			17,607			10,665			(1,301		)	29,088
	2,117			106,777			61,713			(1,301		)	169,306
INCOME (LOSS) FROM OPERATIONS	(2,117		)	50,547			22,722			—			71,152
Interest expense, net	(21,542		)	(6,015		)	(1,454		)	—			(29,011		)
Foreign currency exchange gains (losses)	—			(4		)	685			—			681
Gain on sale of marketable securities	—			230			—			—			230
Other income	21			759			—			—			780
Income (loss) before income taxes and equity in income of subsidiaries	(23,638		)	45,517			21,953			—			43,832
Provision for income taxes	—			1,377			5,405			—			6,782
Equity in income of subsidiaries	60,688			16,548			—			(77,236		)	—
NET INCOME	$	37,050		$	60,688		$	16,548		$	(77,236	)	$	37,050

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME

For the Year Ended December 31, 2012

(In thousands)



	Parent		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Eliminations			Consolidated Total
Net income	$	37,050	$	60,688		$	16,548	$	(77,236	)	$	37,050
Unrealized losses on securities held as available for sale, net of tax:
Unrealized net holding losses arising during the period	—		(32		)	—		—			(32		)
Less: Reclassification adjustment for realized gains included in earnings	—		(230		)	—		—			(230		)
Foreign currency translation adjustments	—		—			2,969		—			2,969
Comprehensive income	$	37,050	$	60,426		$	19,517	$	(77,236	)	$	39,757

CONSOLIDATING CONDENSED STATEMENT OF INCOME

For the Year Ended December 31, 2011

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	152,759		$	66,644		$	(1,395	)	$	218,008
EXPENSES:
Depreciation and amortization	—			92,106			50,857			—			142,963
Cost of sales	—			88			12			—			100
Selling, general and administrative	1,503			19,626			11,915			(1,395		)	31,649
	1,503			111,820			62,784			(1,395		)	174,712
INCOME (LOSS) FROM OPERATIONS	(1,503		)	40,939			3,860			—			43,296
Interest expense, net	(14,124		)	(19,805		)	(838		)	—			(34,767		)
Foreign currency exchange gains (losses)	—			4			(730		)	—			(726		)
Loss on early extinguishment of debt	(7,912		)	—			—			—			(7,912		)
Gain on sale of marketable securities	—			2,467			—			—			2,467
Other income	4			67			179			—			250
Income (loss) before income taxes and equity in income of subsidiaries	(23,535		)	23,672			2,471			—			2,608
Provision (benefit) for income taxes	—			(418		)	810			—			392
Equity in income of subsidiaries	25,751			1,661			—			(27,412		)	—
NET INCOME	$	2,216		$	25,751		$	1,661		$	(27,412	)	$	2,216

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Year Ended December 31, 2011

(In thousands)



	Parent		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
Net income	$	2,216	$	25,751		$	1,661		$	(27,412	)	$	2,216
Unrealized losses on securities held as available for sale, net of tax:
Unrealized net holding losses arising during the period	—		(373		)	—			—			(373		)
Less: Reclassification adjustment for realized gains included in earnings	—		(2,467		)	—			—			(2,467		)
Foreign currency translation adjustments	—		(1		)	(3,036		)	—			(3,037		)
Comprehensive income (loss)	$	2,216	$	22,910		$	(1,375	)	$	(27,412	)	$	(3,661	)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2013

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(32,730	)	$	145,121		$	35,539		$	—	$	147,930
Cash flows from investing activities:
Cash invested in seismic data	—			(114,327		)	(30,230		)	—		(144,557		)
Cash paid to acquire property, equipment and other	—			(583		)	(353		)	—		(936		)
Cash from sale of property, equipment and other	—			61			—			—		61
Advances to Seitel Holdings, Inc.	—			(256		)	—			—		(256		)
Net cash used in investing activities	—			(115,105		)	(30,583		)	—		(145,688		)
Cash flows from financing activities:
Issuance of 9½% Senior Notes	250,000			—			—			—		250,000
Repayment of 9.75% Senior Notes	(275,000		)	—			—			—		(275,000		)
Principal payments on notes payable	(29		)	—			—			—		(29		)
Principal payments on capital lease obligations	—			(31		)	(217		)	—		(248		)
Costs of debt and equity transactions	(7,050		)	—			—			—		(7,050		)
Intercompany transfers	64,809			(65,659		)	850			—		—
Net cash provided by (used in) financing activities	32,730			(65,690		)	633			—		(32,327		)
Effect of exchange rate changes	—			—			(453		)	—		(453		)
Net increase (decrease) in cash and cash equivalents	—			(35,674		)	5,136			—		(30,538		)
Cash and cash equivalents at beginning of period	—			60,533			1,358			—		61,891
Cash and cash equivalents at end of period	$	—		$	24,859		$	6,494		$	—	$	31,353

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2012

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(27,325	)	$	133,731		$	65,075		$	—	$	171,481
Cash flows from investing activities:
Cash invested in seismic data	—			(100,280		)	(82,964		)	—		(183,244		)
Cash paid to acquire property, equipment and other	—			(1,278		)	(144		)	—		(1,422		)
Net proceeds from sale of marketable securities	—			230			—			—		230
Cash from sale of property, equipment and other	—			90			—			—		90
Advances to Seitel Holdings, Inc.	—			(13		)	—			—		(13		)
Net cash used in investing activities	—			(101,251		)	(83,108		)	—		(184,359		)
Cash flows from financing activities:
Principal payments on notes payable	(66		)	—			—			—		(66		)
Principal payments on capital lease obligations	—			(14		)	(198		)	—		(212		)
Intercompany transfers	27,391			(33,541		)	6,150			—		—
Net cash provided by (used in) financing activities	27,325			(33,555		)	5,952			—		(278		)
Effect of exchange rate changes	—			(4		)	157			—		153
Net decrease in cash and cash equivalents	—			(1,079		)	(11,924		)	—		(13,003		)
Cash and cash equivalents at beginning of period	—			61,612			13,282			—		74,894
Cash and cash equivalents at end of period	$	—		$	60,533		$	1,358		$	—	$	61,891

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2011

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations		Consolidated Total
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(39,324	)	$	120,404		$	45,743		$	—	$	126,823
Cash flows from investing activities:
Cash invested in seismic data	—			(68,145		)	(58,834		)	—		(126,979		)
Cash paid to acquire property, equipment and other	—			(1,856		)	(265		)	—		(2,121		)
Net proceeds from sale of marketable securities	—			2,467			—			—		2,467
Cash from sale of property, equipment and other	—			121			1			—		122
Advances to Seitel Holdings, Inc.	—			(755		)	—			—		(755		)
Repayment from Seitel Holdings, Inc.	—			50			—			—		50
Net cash used in investing activities	—			(68,118		)	(59,098		)	—		(127,216		)
Cash flows from financing activities:
Contributed capital	125,000			—			—			—		125,000
Repayment of 9.75% Senior Notes	(131,094		)	—			—			—		(131,094		)
Repayment of 11.75% Senior Notes	(2,000		)	—			—			—		(2,000		)
Principal payments on notes payable	(59		)	—			—			—		(59		)
Principal payments on capital lease obligations	—			—			(164		)	—		(164		)
Borrowings on line of credit	—			—			737			—		737
Payments on line of credit	—			—			(737		)	—		(737		)
Costs of debt and equity transactions	(6,268		)	—			(70		)	—		(6,338		)
Intercompany transfers	53,745			(65,745		)	12,000			—		—
Net cash provided by (used in) financing activities	39,324			(65,745		)	11,766			—		(14,655		)
Effect of exchange rate changes	—			3			(32		)	—		(29		)
Net decrease in cash and cash equivalents	—			(13,456		)	(1,621		)	—		(15,077		)
Cash and cash equivalents at beginning of period	—			75,068			14,903			—		89,971
Cash and cash equivalents at end of period	$	—		$	61,612		$	13,282		$	—	$	74,894