16. Supplemental Guarantor Financial Information

Exterran Holdings, Inc. (“Parent”) is the issuer of the 7.25% Notes. Exterran Energy Solutions, L.P., EES Leasing LLC, EXH GP LP LLC and EXH MLP LP LLC (each a 100% owned subsidiary; together, the “Guarantor Subsidiaries”), have agreed to fully and unconditionally guarantee Parent’s obligations relating to 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. The Other Subsidiaries column includes financial information for those subsidiaries that do not guarantee the 7.25% Notes.

Condensed Consolidating Balance Sheet

June 30, 2013

(In thousands)

	Parent		Guarantor Subsidiaries		Other Subsidiaries		Eliminations			Consolidation
ASSETS

Current assets	$	51	$	806,027	$	529,903	$	—		$	1,335,981
Current assets associated with discontinued operations	—		—		23,290		—			23,290
Total current assets	51		806,027		553,193		—			1,359,271
Property, plant and equipment, net	—		1,171,225		1,664,622		—			2,835,847
Investments in affiliates	1,749,550		1,544,979		—		(3,294,529		)	—
Intangible and other assets, net	26,812		31,874		131,907		(16,071		)	174,522
Intercompany receivables	733,708		78,127		558,340		(1,370,175		)	—
Total long-term assets	2,510,070		2,826,205		2,354,869		(4,680,775		)	3,010,369
Total assets	$	2,510,121	$	3,632,232	$	2,908,062	$	(4,680,775	)	$	4,369,640

LIABILITIES AND EQUITY

Current liabilities	$	3,300	$	460,973	$	276,998	$	—		$	741,271
Current liabilities associated with discontinued operations	—		—		9,657		—			9,657
Total current liabilities	3,300		460,973		286,655		—			750,928
Long-term debt	927,841		324		714,682		—			1,642,847
Intercompany payables	—		1,292,048		78,127		(1,370,175		)	—
Other long-term liabilities	—		129,337		109,483		(16,071		)	222,749
Long-term liabilities associated with discontinued operations	—		—		938		—			938
Total liabilities	931,141		1,882,682		1,189,885		(1,386,246		)	2,617,462
Total equity	1,578,980		1,749,550		1,718,177		(3,294,529		)	1,752,178
Total liabilities and equity	$	2,510,121	$	3,632,232	$	2,908,062	$	(4,680,775	)	$	4,369,640

Condensed Consolidating Balance Sheet

December 31, 2012

(In thousands)

	Parent		Guarantor Subsidiaries		Other Subsidiaries		Eliminations			Consolidation
ASSETS

Current assets	$	142	$	754,303	$	461,810	$	(33	)	$	1,216,222
Current assets associated with discontinued operations	—		—		21,746		—			21,746
Total current assets	142		754,303		483,556		(33		)	1,237,968
Property, plant and equipment, net	—		1,299,797		1,542,234		—			2,842,031
Investments in affiliates	1,631,185		1,145,551		—		(2,776,736		)	—
Intangible and other assets, net	33,234		37,748		123,681		(19,815		)	174,848
Intercompany receivables	704,319		83,362		419,108		(1,206,789		)	—
Total long-term assets	2,368,738		2,566,458		2,085,023		(4,003,340		)	3,016,879
Total assets	$	2,368,880	$	3,320,761	$	2,568,579	$	(4,003,373	)	$	4,254,847

LIABILITIES AND EQUITY

Current liabilities	$	5,844	$	462,668	$	294,529	$	(74	)	$	762,967
Current liabilities associated with discontinued operations	—		—		11,572		—			11,572
Total current liabilities	5,844		462,668		306,101		(74		)	774,539
Long-term debt	884,423		—		680,500		—			1,564,923
Intercompany payables	—		1,123,427		83,362		(1,206,789		)	—
Other long-term liabilities	—		103,481		128,375		(19,774		)	212,082
Long-term liabilities associated with discontinued operations	—		—		1,044		—			1,044
Total liabilities	890,267		1,689,576		1,199,382		(1,226,637		)	2,552,588
Total equity	1,478,613		1,631,185		1,369,197		(2,776,736		)	1,702,259
Total liabilities and equity	$	2,368,880	$	3,320,761	$	2,568,579	$	(4,003,373	)	$	4,254,847

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2013

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	514,181		$	380,966		$	(57,803	)	$	837,344
Costs of sales (excluding depreciation and amortization expense)	—			392,652			245,836			(57,803		)	580,685
Selling, general and administrative	58			44,833			46,226			—			91,117
Depreciation and amortization	—			31,436			49,315			—			80,751
Long-lived asset impairment	—			3,694			12,880			—			16,574
Interest expense	18,900			833			10,517			—			30,250
Intercompany charges, net	(8,999		)	7,111			1,888			—			—
Equity in income of affiliates	(15,817		)	(101		)	(4,722		)	15,918			(4,722		)
Other (income) expense, net	10			390			(7,639		)	—			(7,239		)
Income before income taxes	5,848			33,333			26,665			(15,918		)	49,928
Provision for (benefit from) income taxes	(3,487		)	17,516			9,820			—			23,849
Income from continuing operations	9,335			15,817			16,845			(15,918		)	26,079
Loss from discontinued operations, net of tax	—			—			(1,575		)	—			(1,575		)
Net income	9,335			15,817			15,270			(15,918		)	24,504
Less: Net income attributable to the noncontrolling interest	—			—			(15,169		)	—			(15,169		)
Net income attributable to Exterran stockholders	9,335			15,817			101			(15,918		)	9,335
Other comprehensive income attributable to Exterran stockholders	2,793			3,120			3,109			(6,229		)	2,793
Comprehensive income attributable to Exterran stockholders	$	12,128		$	18,937		$	3,210		$	(22,147	)	$	12,128

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2012

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	411,262		$	257,037		$	(37,564	)	$	630,735
Costs of sales (excluding depreciation and amortization expense)	—			315,099			158,865			(37,564		)	436,400
Selling, general and administrative	133			45,184			48,817			—			94,134
Depreciation and amortization	—			34,278			54,631			—			88,909
Long-lived asset impairment	—			97,626			30,917			—			128,543
Restructuring charges	—			746			520			—			1,266
Interest expense	26,554			3,743			6,671			—			36,968
Intercompany charges, net	(16,595		)	16,149			446			—			—
Equity in (income) loss of affiliates	146,205			85,477			(4,728		)	(231,682		)	(4,728		)
Other (income) expense, net	10			(1,945		)	10,687			—			8,752
Loss before income taxes	(156,307		)	(185,095		)	(49,789		)	231,682			(159,509		)
Provision for (benefit from) income taxes	(3,699		)	(38,890		)	7,087			—			(35,502		)
Loss from continuing operations	(152,608		)	(146,205		)	(56,876		)	231,682			(124,007		)
Loss from discontinued operations, net of tax	—			—			(42,891		)	—			(42,891		)
Net loss	(152,608		)	(146,205		)	(99,767		)	231,682			(166,898		)
Less: Net loss attributable to the noncontrolling interest	—			—			14,290			—			14,290
Net loss attributable to Exterran stockholders	(152,608		)	(146,205		)	(85,477		)	231,682			(152,608		)
Other comprehensive loss attributable to Exterran stockholders	(259		)	(1,103		)	(4,391		)	5,494			(259		)
Comprehensive loss attributable to Exterran stockholders	$	(152,867	)	$	(147,308	)	$	(89,868	)	$	237,176		$	(152,867	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Six months Ended June 30, 2013

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	1,049,608		$	759,837		$	(160,724	)	$	1,648,721
Costs of sales (excluding depreciation and amortization expense)	—			822,100			505,406			(160,724		)	1,166,782
Selling, general and administrative	160			90,522			85,414			—			176,096
Depreciation and amortization	—			65,468			97,929			—			163,397
Long-lived asset impairment	—			5,589			14,548			—			20,137
Interest expense	38,923			1,318			17,883			—			58,124
Intercompany charges, net	(18,084		)	15,258			2,826			—			—
Equity in income of affiliates	(73,520		)	(53,289		)	(9,387		)	126,809			(9,387		)
Other (income) expense, net	19			(6,617		)	(10,450		)	—			(17,048		)
Income before income taxes	52,502			109,259			55,668			(126,809		)	90,620
Provision for (benefit from) income taxes	(7,038		)	35,739			10,299			—			39,000
Income from continuing operations	59,540			73,520			45,369			(126,809		)	51,620
Income from discontinued operations, net of tax	—			—			31,675			—			31,675
Net income	59,540			73,520			77,044			(126,809		)	83,295
Less: Net income attributable to the noncontrolling interest	—			—			(23,755		)	—			(23,755		)
Net income attributable to Exterran stockholders	59,540			73,520			53,289			(126,809		)	59,540
Other comprehensive loss attributable to Exterran stockholders	(2,650		)	(2,215		)	(1,754		)	3,969			(2,650		)
Comprehensive income attributable to Exterran stockholders	$	56,890		$	71,305		$	51,535		$	(122,840	)	$	56,890

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Six months Ended June 30, 2012

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	741,253		$	604,614		$	(99,891	)	$	1,245,976
Costs of sales (excluding depreciation and amortization expense)	—			572,219			389,531			(99,891		)	861,859
Selling, general and administrative	341			94,535			94,097			—			188,973
Depreciation and amortization	—			70,541			103,479			—			174,020
Long-lived asset impairment	—			100,542			32,123			—			132,665
Restructuring charges	—			2,948			1,365			—			4,313
Interest expense	55,237			6,796			12,926			—			74,959
Intercompany charges, net	(33,870		)	30,951			2,919			—			—
Equity in (income) loss of affiliates	132,903			47,656			(42,067		)	(180,559		)	(42,067		)
Other (income) expense, net	20			(3,996		)	6,633			—			2,657
Income (loss) before income taxes	(154,631		)	(180,939		)	3,608			180,559			(151,403		)
Provision for (benefit from) income taxes	(7,518		)	(48,036		)	19,709			—			(35,845		)
Loss from continuing operations	(147,113		)	(132,903		)	(16,101		)	180,559			(115,558		)
Loss from discontinued operations, net of tax	—			—			(44,053		)	—			(44,053		)
Net loss	(147,113		)	(132,903		)	(60,154		)	180,559			(159,611		)
Less: Net loss attributable to the noncontrolling interest	—			—			12,498			—			12,498
Net loss attributable to Exterran stockholders	(147,113		)	(132,903		)	(47,656		)	180,559			(147,113		)
Other comprehensive income (loss) attributable to Exterran stockholders	6,269			4,053			(3,160		)	(893		)	6,269
Comprehensive loss attributable to Exterran stockholders	$	(140,844	)	$	(128,850	)	$	(50,816	)	$	179,666		$	(140,844	)

Condensed Consolidating Statement of Cash Flows

Six months Ended June 30, 2013

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	(3,235	)	$	40,425		$	38,901		$	—		$	76,091
Net cash provided by discontinued operations	—			—			4,524			—			4,524
Net cash provided by (used in) operating activities	(3,235		)	40,425			43,425			—			80,615
Cash flows from investing activities:
Capital expenditures	—			(115,664		)	(102,648		)	3,378			(214,934		)
Proceeds from sale of property, plant and equipment	—			16,934			57,555			(3,378		)	71,111
Capital distributions received from consolidated subsidiaries	—			20,250			—			(20,250		)	—
Return of investments in non-consolidated affiliates	—			—			9,387			—			9,387
Investment in consolidated subsidiaries	—			(9,454		)	—			9,454			—
Net cash used in continuing operations	—			(87,934		)	(35,706		)	(10,796		)	(134,436		)
Net cash provided by discontinued operations	—			—			29,335			—			29,335
Net cash used in investing activities	—			(87,934		)	(6,371		)	(10,796		)	(105,101		)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	631,501			—			842,536			—			1,474,037
Repayments of long-term debt	(599,250		)	—			(808,500		)	—			(1,407,750		)
Payments for debt issuance costs	—			—			(11,929		)	—			(11,929		)
Payments for settlement of interest rate swaps that include financing element	—			—			(314		)	—			(314		)
Proceeds from stock options exercised	5,789			—			—			—			5,789
Proceeds from stock issued pursuant to our employee stock purchase plan	805			—			—			—			805
Purchases of treasury stock	(3,515		)	—			—			—			(3,515		)
Stock-based compensation excess tax benefit	1,026			—			—			—			1,026
Distributions to noncontrolling partners in the Partnership	—			—			(50,929		)	20,250			(30,679		)
Capital contributions received from parent	—			—			9,454			(9,454		)	—
Borrowings (repayments) between consolidated subsidiaries, net	(33,107		)	39,726			(6,619		)	—			—
Net cash provided by (used in) financing activities	3,249			39,726			(26,301		)	10,796			27,470
Effect of exchange rate changes on cash and cash equivalents	—			—			(644		)	—			(644		)
Net increase (decrease) in cash and cash equivalents	14			(7,783		)	10,109			—			2,340
Cash and cash equivalents at beginning of period	24			10,461			24,116			—			34,601
Cash and cash equivalents at end of period	$	38		$	2,678		$	34,225		$	—		$	36,941

Condensed Consolidating Statement of Cash Flows

Six months Ended June 30, 2012

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	2,324		$	(11,787	)	$	62,067		$	—		$	52,604
Net cash provided by discontinued operations	—			—			1,123			—			1,123
Net cash provided by (used in) operating activities	2,324			(11,787		)	63,190			—			53,727
Cash flows from investing activities:
Capital expenditures	—			(143,969		)	(83,885		)	—			(227,854		)
Contract operations acquisition	—			77,415			(77,415		)	—			—
Proceeds from sale of property, plant and equipment	—			7,719			18,314			—			26,033
Capital distributions received from consolidated subsidiaries	—			15,043			—			(15,043		)	—
Increase in restricted cash	—			—			(162		)	—			(162		)
Return of investments in non-consolidated subsidiaries	—			—			42,291			—			42,291
Cash invested in non-consolidated affiliates	—			—			(224		)	—			(224		)
Investment in consolidated subsidiaries	—			(16,552		)	—			16,552			—
Net cash used in continuing operations	—			(60,344		)	(101,081		)	1,509			(159,916		)
Net cash used in discontinued operations	—			—			(973		)	—			(973		)
Net cash used in investing activities	—			(60,344		)	(102,054		)	1,509			(160,889		)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	570,000			—			609,000			—			1,179,000
Repayments of long-term debt	(541,650		)	—			(616,454		)	—			(1,158,104		)
Payments for debt issuance costs	—			—			(549		)	—			(549		)
Net proceeds from the sale of Partnership units	—			—			114,530			—			114,530
Proceeds from stock issued pursuant to our employee stock purchase plan	888			—			—			—			888
Purchases of treasury stock	(1,842		)	—			—			—			(1,842		)
Stock-based compensation excess tax benefit	208			—			—			—			208
Distributions to noncontrolling partners in the Partnership	—			—			(42,060		)	15,043			(27,017		)
Net proceeds from sale of general partner units	—			—			2,426			(2,426		)	—
Capital contributions received from parent	—			—			14,126			(14,126		)	—
Borrowings (repayments) between consolidated subsidiaries, net	(29,744		)	69,909			(40,165		)	—			—
Net cash provided by (used in) financing activities	(2,140		)	69,909			40,854			(1,509		)	107,114
Effect of exchange rate changes on cash and cash equivalents	—			—			(476		)	—			(476		)
Net increase (decrease) in cash and cash equivalents	184			(2,222		)	1,514			—			(524		)
Cash and cash equivalents at beginning of period	93			2,810			19,000			—			21,903
Cash and cash equivalents at end of period	$	277		$	588		$	20,514		$	—		$	21,379