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SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

3 Months Ended

Mar. 31, 2012

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

16. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

Exterran Energy Corp. (Subsidiary Issuer), our 100% owned subsidiary, is the issuer of the 4.75% Notes. Exterran Holdings, Inc. (Parent) has agreed to fully and unconditionally guarantee the obligations of Exterran Energy Corp. relating to our 4.75% Notes. There are no other subsidiaries of the Parent that have provided guarantees to the 4.75% Notes. The Guarantor Subsidiaries and Other Subsidiaries columns represent non-guarantor subsidiaries for the 4.75% Notes.

We are the issuer of the 7.25% Notes. Exterran Energy Solutions, L.P., EES Leasing LLC, EXH GP LP LLC, and EXH MLP LP LLC (all our 100% owned subsidiaries; together the Guarantor Subsidiaries), have agreed to fully and unconditionally guarantee our obligations relating to the 7.25% Notes. There is no subsidiary issuer for the 7.25% debt; that debt was issued solely by the Parent. The Subsidiary Issuer and Other Subsidiaries columns represent non-guarantor subsidiaries for the 7.25% Notes.

As a result of these guarantees, we are presenting the following condensed consolidating financial information pursuant to Rule 3-10 of Regulation S-X. These schedules are presented using the equity method of accounting for all periods presented. Under this method, investments in subsidiaries are recorded at cost and adjusted for our share in the subsidiaries’ cumulative results of operations, capital contributions and distributions and other changes in equity. Elimination entries relate primarily to the elimination of investments in subsidiaries and associated intercompany balances and transactions.

Condensed Consolidating Balance Sheet

March 31, 2012

(In thousands)

	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Other Subsidiaries		Eliminations			Consolidation
ASSETS

Current assets	$	271	$	—	$	592,451	$	540,554	$	427		$	1,133,703
Current assets associated with discontinued operations	—		—		—		3,871		—			3,871
Total current assets	271		—		592,451		544,425		427			1,137,574
Property, plant and equipment, net	—		—		1,387,294		1,625,287		—			3,012,581
Investments in affiliates	1,896,309		1,857,520		1,624,916		—		(5,378,745		)	—
Intangible and other assets, net	15,977		38,788		74,959		138,205		(38,788		)	229,141
Intercompany receivables	794,740		916,255		88,142		518,797		(2,317,934		)	—
Total long-term assets	2,707,026		2,812,563		3,175,311		2,282,289		(7,735,467		)	3,241,722
Total assets	$	2,707,297	$	2,812,563	$	3,767,762	$	2,826,714	$	(7,735,040	)	$	4,379,296

LIABILITIES AND EQUITY

Current liabilities	$	6,832	$	1,440	$	345,541	$	307,693	$	(13,250	)	$	648,256
Current liabilities associated with discontinued operations	—		—		—		6,044		—			6,044
Total current liabilities	6,832		1,440		345,541		313,737		(13,250		)	654,300
Long-term debt	930,109		143,750		—		635,592		—			1,709,451
Intercompany payables	—		771,064		1,435,051		111,819		(2,317,934		)	—
Other long-term liabilities	2,391		—		129,650		126,188		(25,111		)	233,118
Long-term liabilities associated with discontinued operations	—		—		—		14,462		—			14,462
Total liabilities	939,332		916,254		1,910,242		1,201,798		(2,356,295		)	2,611,331
Total equity	1,767,965		1,896,309		1,857,520		1,624,916		(5,378,745		)	1,767,965
Total liabilities and equity	$	2,707,297	$	2,812,563	$	3,767,762	$	2,826,714	$	(7,735,040	)	$	4,379,296

Condensed Consolidating Balance Sheet

December 31, 2011

(In thousands)

	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Other Subsidiaries		Eliminations			Consolidation
ASSETS

Current assets	$	93	$	—	$	563,927	$	555,882	$	12		$	1,119,914
Current assets associated with discontinued operations	—		—		—		4,013		—			4,013
Total current assets	93		—		563,927		559,895		12			1,123,927
Property, plant and equipment, net	—		—		1,513,366		1,491,086		—			3,004,452
Investments in affiliates	1,813,197		1,774,029		1,687,806		—		(5,275,032		)	—
Intangible and other assets, net	18,389		39,168		78,836		134,678		(38,788		)	232,283
Intercompany receivables	945,401		1,068,746		99,075		637,165		(2,750,387		)	—
Total long-term assets	2,776,987		2,881,943		3,379,083		2,262,929		(8,064,207		)	3,236,735
Total assets	$	2,777,080	$	2,881,943	$	3,943,010	$	2,822,824	$	(8,064,195	)	$	4,360,662

LIABILITIES AND EQUITY

Current liabilities	$	11,122	$	3,147	$	353,827	$	308,320	$	(12,918	)	$	663,498
Current liabilities associated with discontinued operations	—		—		—		6,383		—			6,383
Total current liabilities	11,122		3,147		353,827		314,703		(12,918		)	669,881
Long-term debt	1,083,649		143,750		—		545,640		—			1,773,039
Intercompany payables	—		921,849		1,705,911		122,627		(2,750,387		)	—
Other long-term liabilities	2,267		—		109,243		137,908		(25,858		)	223,560
Long-term liabilities associated with discontinued operations	—		—		—		14,140		—			14,140
Total liabilities	1,097,038		1,068,746		2,168,981		1,135,018		(2,789,163		)	2,680,620
Total equity	1,680,042		1,813,197		1,774,029		1,687,806		(5,275,032		)	1,680,042
Total liabilities and equity	$	2,777,080	$	2,881,943	$	3,943,010	$	2,822,824	$	(8,064,195	)	$	4,360,662

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2012

(In thousands)

	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	—		$	330,028		$	359,142		$	(62,656	)	$	626,514
Costs of sales (excluding depreciation and amortization expense)	—			—			257,120			241,203			(62,656		)	435,667
Selling, general and administrative	119			89			49,439			46,429			—			96,076
Depreciation and amortization	—			—			36,327			50,981			—			87,308
Long-lived asset impairment	—			—			2,916			1,416			—			4,332
Restructuring charges	—			—			—			3,047			—			3,047
Interest expense	26,976			1,707			580			8,728			—			37,991
Other (income) expense:
Intercompany charges, net	(15,568		)	(1,707		)	17,275			—			—			—
Equity in income of affiliates	(13,244		)	(13,302		)	(35,735		)	(37,339		)	62,281			(37,339		)
Other, net	10			—			(2,050		)	(4,743		)	—			(6,783		)
Income before income taxes	1,707			13,213			4,156			49,420			(62,281		)	6,215
Provision for (benefit from) income taxes	(3,788		)	(31		)	(9,146		)	11,268			—			(1,697		)
Income from continuing operations	5,495			13,244			13,302			38,152			(62,281		)	7,912
Loss from discontinued operations, net of tax	—			—			—			(625		)	—			(625		)
Net income	5,495			13,244			13,302			37,527			(62,281		)	7,287
Less: Net income attributable to the noncontrolling interest	—			—			—			(1,792		)	—			(1,792		)
Net income attributable to Exterran stockholders	5,495			13,244			13,302			35,735			(62,281		)	5,495
Other comprehensive income attributable to Exterran stockholders	—			—			5,297			1,231			—			6,528
Comprehensive income attributable to Exterran stockholders	$	5,495		$	13,244		$	18,599		$	36,966		$	(62,281	)	$	12,023

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2011

(In thousands)

	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	—		$	296,372		$	401,107		$	(79,000	)	$	618,479
Costs of sales (excluding depreciation and amortization expense)	—			—			232,976			279,328			(79,000		)	433,304
Selling, general and administrative	48			142			45,248			45,843			—			91,281
Depreciation and amortization	—			—			38,605			51,873			—			90,478
Interest (income) expense	23,662			1,707			(555		)	12,356			—			37,170
Other (income) expense:
Intercompany charges, net	(14,775		)	(1,444		)	16,219			—			—			—
Equity in loss of affiliates	24,299			24,089			3,080			—			(51,468		)	—
Other, net	10			—			(2,972		)	2,548			—			(414		)
Income (loss) before income taxes	(33,244		)	(24,494		)	(36,229		)	9,159			51,468			(33,340		)
Provision for (benefit from) income taxes	(3,214		)	(195		)	(12,140		)	10,535			—			(5,014		)
Loss from continuing operations	(30,030		)	(24,299		)	(24,089		)	(1,376		)	51,468			(28,326		)
Loss from discontinued operations, net of tax	—			—			—			(2,138		)	—			(2,138		)
Net loss	(30,030		)	(24,299		)	(24,089		)	(3,514		)	51,468			(30,464		)
Less: Net loss attributable to the noncontrolling interest	—			—			—			434			—			434
Net loss attributable to Exterran stockholders	(30,030		)	(24,299		)	(24,089		)	(3,080		)	51,468			(30,030		)
Other comprehensive income attributable to Exterran stockholders	—			—			5,317			15,955			—			21,272
Comprehensive income (loss) attributable to Exterran stockholders	$	(30,030	)	$	(24,299	)	$	(18,772	)	$	12,875		$	51,468		$	(8,758	)

Condensed Consolidating Statement of Cash Flows

Three Months Ended March 31, 2012

(In thousands)

	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	1,863		$	31		$	(13,853	)	$	50,550		$	—		$	38,591
Cash flows from investing activities:
Capital expenditures	—			—			(68,191		)	(48,529		)	—			(116,720		)
Contract operations acquisition	—			—			77,415			(77,415		)	—			—
Proceeds from sale of property, plant and equipment	—			—			4,094			5,858			—			9,952
Capital contributions received from consolidated subsidiaries	—			—			7,373			7,805			(15,178		)	—
Increase in restricted cash	—			—			—			(15		)	—			(15		)
Return of investments in non-consolidated affiliates	—			—			—			37,563			—			37,563
Cash invested in non-consolidated affiliates	—			—			—			(224		)	—			(224		)
Investment in consolidated subsidiaries	—			—			(10,231		)	—			10,231			—
Net cash provided by (used in) investing activities	—			—			10,460			(74,957		)	(4,947		)	(69,444		)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	279,500			—			—			565,000			—			844,500
Repayments of long-term debt	(438,000		)	—			—			(475,048		)	—			(913,048		)
Payments for debt issue costs	—			—			—			(525		)	—			(525		)
Net proceeds from the sale of Partnership units	—			—			—			114,568			—			114,568
Proceeds from stock issued pursuant to our employee stock purchase plan	405			—			—			—			—			405
Purchases of treasury stock	(1,757		)	—			—			—			—			(1,757		)
Stock-based compensation excess tax benefit	194			—			—			—			—			194
Distributions to noncontrolling partners in the Partnership	—			—			—			(19,580		)	7,373			(12,207		)
Net proceeds from the sale of general partner units	—			—			—			2,426			(2,426		)	—
Borrowings (repayments) between consolidated subsidiaries, net	157,973			(31		)	1,691			(159,633		)	—			—
Net cash provided by (used in) financing activities	(1,685		)	(31		)	1,691			27,208			4,947			32,130
Effect of exchange rate changes on cash and cash equivalents	—			—			—			243			—			243
Net increase (decrease) in cash and cash equivalents	178			—			(1,702		)	3,044			—			1,520
Cash and cash equivalents at beginning of year	93			—			2,820			19,126			—			22,039
Cash and cash equivalents at end of year	$	271		$	—		$	1,118		$	22,170		$	—		$	23,559

Condensed Consolidating Statement of Cash Flows

Three Months Ended March 31, 2011

(In thousands)

	Parent			Subsidiary Issuer			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	2,063		$	(68	)	$	(19,477	)	$	42,934		$	—		$	25,452
Net cash provided by discontinued operations	—			—			—			662			—			662
Net cash provided by (used in) operating activities	2,063			(68		)	(19,477		)	43,596			—			26,114
Cash flows from investing activities:
Capital expenditures	—			—			(28,734		)	(22,678		)	—			(51,412		)
Proceeds from sale of property, plant and equipment	—			—			3,999			23,500			—			27,499
Decrease in restricted cash	—			—			—			304			—			304
Capital contributions received from consolidated subsidiaries	—			—			9,535			9,129			(18,664		)	—
Investment in consolidated subsidiaries	—			—			(9,129		)	—			9,129			—
Return on investment in consolidated subsidiaries	53,966			87,419			—			87,419			(228,804		)	—
Net cash provided by (used in) investing activities	53,966			87,419			(24,329		)	97,674			(238,339		)	(23,609		)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	304,766			—			—			300,215			—			604,981
Repayments of long-term debt	(461,961		)	—			—			(305,000		)	—			(766,961		)
Payments for debt issue costs	—			—			—			(980		)	—			(980		)
Net proceeds from the sale of Partnership units	—			—			162,236			—			—			162,236
Proceeds from stock options exercised	239			—			—			—			—			239
Proceeds from stock issued pursuant to our employee stock purchase plan	478			—			—			—			—			478
Purchases of treasury stock	(2,366		)	—			—			—			—			(2,366		)
Stock-based compensation excess tax benefit	869			—			—			—			—			869
Distributions to noncontrolling partners in the Partnership	—			—			—			(16,003		)	9,535			(6,468		)
Capital distribution to consolidated subsidiaries	—			(53,966		)	(87,419		)	(87,419		)	228,804			—
Borrowings (repayments) between consolidated subsidiaries, net	101,819			(33,385		)	(30,845		)	(37,589		)	—			—
Net cash provided by (used in) financing activities	(56,156		)	(87,351		)	43,972			(146,776		)	238,339			(7,972		)
Effect of exchange rate changes on cash and cash equivalents	—			—			—			(1,364		)	—			(1,364		)
Net increase (decrease) in cash and cash equivalents	(127		)	—			166			(6,870		)	—			(6,831		)
Cash and cash equivalents at beginning of year	160			—			1,586			42,870			—			44,616
Cash and cash equivalents at end of year	$	33		$	—		$	1,752		$	36,000		$	—		$	37,785