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, 2014 and December 31, 2013, and the consolidating condensed statements of income, statements of comprehensive income (loss) and statements of cash flows for the years ended December 31, 2014, 2013 and 2012 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, 2014

(In thousands)



	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
ASSETS
Cash and cash equivalents	$	—		$	48,525	$	10,650		$	—		$	59,175
Receivables
Trade, net	—			41,386		11,864			—			53,250
Notes and other, net	—			29		1,669			—			1,698
Due from Seitel Holdings, Inc.	—			1,143		—			—			1,143
Intercompany receivables (payables)	2,803			13,666		(16,469		)	—			—
Investment in subsidiaries	497,151			427,481		692			(925,324		)	—
Net seismic data library	—			113,930		51,290			(141		)	165,079
Net property and equipment	—			1,848		2,009			—			3,857
Prepaid expenses, deferred charges and other	5,751			3,994		330			—			10,075
Intangible assets, net	900			6,826		2,287			—			10,013
Goodwill	—			107,688		86,034			—			193,722
Deferred income taxes	—			81,744		—			—			81,744
TOTAL ASSETS	$	506,605		$	848,260	$	150,356		$	(925,465	)	$	579,756
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable and accrued liabilities	$	5,007		$	22,841	$	6,552		$	—		$	34,400
Income taxes payable	197			—		—			—			197
Senior Notes	250,000			—		—			—			250,000
Obligations under capital leases	—			18		2,201			—			2,219
Deferred revenue	—			29,822		4,695			—			34,517
Deferred income taxes	—			—		5,334			—			5,334
TOTAL LIABILITIES	255,204			52,681		18,782			—			326,667
STOCKHOLDER’S EQUITY
Common stock	—			—		—			—			—
Additional paid-in capital	400,177			—		—			—			400,177
Parent investment	—			764,105		156,152			(920,257		)	—
Retained earnings (deficit)	(148,776		)	31,474		(26,248		)	(5,226		)	(148,776		)
Accumulated other comprehensive income	—			—		1,670			18			1,688
TOTAL STOCKHOLDER’S EQUITY	251,401			795,579		131,574			(925,465		)	253,089
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	506,605		$	848,260	$	150,356		$	(925,465	)	$	579,756

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 earnings (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 STATEMENT OF INCOME

For the Year Ended December 31, 2014

(In thousands)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
REVENUE	$	—		$	153,125		$	46,287		$	(1,375	)	$	198,037
EXPENSES:
Depreciation and amortization	—			80,835			40,246			(58		)	121,023
Cost of sales	—			284			20			—			304
Selling, general and administrative	2,130			19,304			9,740			(1,375		)	29,799
	2,130			100,423			50,006			(1,433		)	151,126
INCOME (LOSS) FROM OPERATIONS	(2,130		)	52,702			(3,719		)	58			46,911
Interest expense, net	(21,407		)	(2,360		)	(1,262		)	—			(25,029		)
Foreign currency exchange gains (losses)	—			3			(1,977		)	—			(1,974		)
Other income (loss)	(14		)	71			6			—			63
Income (loss) before income taxes and equity in income (loss) of subsidiaries	(23,551		)	50,416			(6,952		)	58			19,971
Provision (benefit) for income taxes	(9,270		)	21,063			(1,500		)	—			10,293
Equity in income (loss) of subsidiaries	23,959			(5,452		)	—			(18,507		)	—
NET INCOME (LOSS)	$	9,678		$	23,901		$	(5,452	)	$	(18,449	)	$	9,678

CONSOLIDATING CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Year Ended December 31, 2014

(In thousands)



	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Eliminations			Consolidated Total
Net income (loss)	$	9,678	$	23,901	$	(5,452	)	$	(18,449	)	$	9,678
Foreign currency translation adjustments	—		—		(12,096		)	15			(12,081		)
Comprehensive income (loss)	$	9,678	$	23,901	$	(17,548	)	$	(18,434	)	$	(2,403	)

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 CASH FLOWS

For the Year Ended December 31, 2014

(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	$	(25,125	)	$	103,252		$	46,218		$	—	$	124,345
Cash flows from investing activities:
Cash invested in seismic data	—			(68,714		)	(24,968		)	—		(93,682		)
Cash paid to acquire property, equipment and other	—			(1,705		)	(256		)	—		(1,961		)
Advances to Seitel Holdings, Inc.	—			(13		)	—			—		(13		)
Net cash used in investing activities	—			(70,432		)	(25,224		)	—		(95,656		)
Cash flows from financing activities:
Principal payments on capital lease obligations	—			(32		)	(217		)	—		(249		)
Intercompany transfers	25,125			(9,125		)	(16,000		)	—		—
Net cash provided by (used in) financing activities	25,125			(9,157		)	(16,217		)	—		(249		)
Effect of exchange rate changes	—			3			(621		)	—		(618		)
Net increase in cash and cash equivalents	—			23,666			4,156			—		27,822
Cash and cash equivalents at beginning of period	—			24,859			6,494			—		31,353
Cash and cash equivalents at end of period	$	—		$	48,525		$	10,650		$	—	$	59,175

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		)
Debt transaction costs	(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