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

September 30, 2013

(In thousands)

	Parent		Guarantor Subsidiaries		Other Subsidiaries		Eliminations			Consolidation
ASSETS

Current assets	$	200	$	758,384	$	544,563	$	—		$	1,303,147
Current assets associated with discontinued operations	—		—		102		—			102
Total current assets	200		758,384		544,665		—			1,303,249
Property, plant and equipment, net	—		1,165,504		1,667,458		—			2,832,962
Investments in affiliates	1,815,122		1,482,558		—		(3,297,680		)	—
Intangible and other assets, net	21,845		31,618		144,117		(12,060		)	185,520
Intercompany receivables	652,671		79,452		495,326		(1,227,449		)	—
Total long-term assets	2,489,638		2,759,132		2,306,901		(4,537,189		)	3,018,482
Total assets	$	2,489,838	$	3,517,516	$	2,851,566	$	(4,537,189	)	$	4,321,731

LIABILITIES AND EQUITY

Current liabilities	$	14,111	$	415,519	$	301,122	$	—		$	730,752
Current liabilities associated with discontinued operations	—		—		2,364		—			2,364
Total current liabilities	14,111		415,519		303,486		—			733,116
Long-term debt	844,220		270		719,818		—			1,564,308
Intercompany payables	—		1,147,997		79,452		(1,227,449		)	—
Other long-term liabilities	—		138,608		104,439		(12,060		)	230,987
Long-term liabilities associated with discontinued operations	—		—		396		—			396
Total liabilities	858,331		1,702,394		1,207,591		(1,239,509		)	2,528,807
Total equity	1,631,507		1,815,122		1,643,975		(3,297,680		)	1,792,924
Total liabilities and equity	$	2,489,838	$	3,517,516	$	2,851,566	$	(4,537,189	)	$	4,321,731

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 September 30, 2013

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	465,950		$	372,682		$	(62,629	)	$	776,003
Costs of sales (excluding depreciation and amortization expense)	—			340,418			253,433			(62,629		)	531,222
Selling, general and administrative	45			43,951			49,727			—			93,723
Depreciation and amortization	—			31,252			50,053			—			81,305
Long-lived asset impairment	—			3,737			3,188			—			6,925
Interest expense	18,775			391			9,716			—			28,882
Intercompany charges, net	(8,701		)	7,562			1,139			—			—
Equity in income of affiliates	(47,564		)	(24,351		)	(4,778		)	71,915			(4,778		)
Other (income) expense, net	10			(1,736		)	(2,721		)	—			(4,447		)
Income before income taxes	37,435			64,726			12,925			(71,915		)	43,171
Provision for (benefit from) income taxes	(3,542		)	17,162			1,801			—			15,421
Income from continuing operations	40,977			47,564			11,124			(71,915		)	27,750
Income from discontinued operations, net of tax	—			—			17,511			—			17,511
Net income	40,977			47,564			28,635			(71,915		)	45,261
Less: Net income attributable to the noncontrolling interest	—			—			(4,284		)	—			(4,284		)
Net income attributable to Exterran stockholders	40,977			47,564			24,351			(71,915		)	40,977
Other comprehensive income attributable to Exterran stockholders	7,511			6,984			7,105			(14,089		)	7,511
Comprehensive income attributable to Exterran stockholders	$	48,488		$	54,548		$	31,456		$	(86,004	)	$	48,488

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended September 30, 2012

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	463,900		$	290,123		$	(35,319	)	$	718,704
Costs of sales (excluding depreciation and amortization expense)	—			366,858			176,485			(35,319		)	508,024
Selling, general and administrative	299			40,899			44,338			—			85,536
Depreciation and amortization	—			32,306			52,942			—			85,248
Long-lived asset impairment	—			—			3,204			—			3,204
Restructuring charges	—			527			988			—			1,515
Interest expense	23,269			2,089			6,365			—			31,723
Intercompany charges, net	(13,136		)	9,290			3,846			—			—
Equity in income of affiliates	(119,600		)	(111,038		)	(4,793		)	230,638			(4,793		)
Other (income) expense, net	10			(2,431		)	971			—			(1,450		)
Income before income taxes	109,158			125,400			5,777			(230,638		)	9,697
Provision for (benefit from) income taxes	(4,208		)	5,800			(325		)	—			1,267
Income from continuing operations	113,366			119,600			6,102			(230,638		)	8,430
Income from discontinued operations, net of tax	—			—			110,916			—			110,916
Net income	113,366			119,600			117,018			(230,638		)	119,346
Less: Net income attributable to the noncontrolling interest	—			—			(5,980		)	—			(5,980		)
Net income attributable to Exterran stockholders	113,366			119,600			111,038			(230,638		)	113,366
Other comprehensive income attributable to Exterran stockholders	8,257			6,396			3,942			(10,338		)	8,257
Comprehensive income attributable to Exterran stockholders	$	121,623		$	125,996		$	114,980		$	(240,976	)	$	121,623

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Nine Months Ended September 30, 2013

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	1,515,558		$	1,132,519		$	(223,353	)	$	2,424,724
Costs of sales (excluding depreciation and amortization expense)	—			1,162,518			758,839			(223,353		)	1,698,004
Selling, general and administrative	205			134,473			135,141			—			269,819
Depreciation and amortization	—			96,720			147,982			—			244,702
Long-lived asset impairment	—			9,326			17,736			—			27,062
Interest expense	57,698			1,709			27,599			—			87,006
Intercompany charges, net	(26,785		)	22,820			3,965			—			—
Equity in income of affiliates	(121,084		)	(77,640		)	(14,165		)	198,724			(14,165		)
Other (income) expense, net	29			(8,353		)	(13,171		)	—			(21,495		)
Income before income taxes	89,937			173,985			68,593			(198,724		)	133,791
Provision for (benefit from) income taxes	(10,580		)	52,901			12,100			—			54,421
Income from continuing operations	100,517			121,084			56,493			(198,724		)	79,370
Income from discontinued operations, net of tax	—			—			49,186			—			49,186
Net income	100,517			121,084			105,679			(198,724		)	128,556
Less: Net income attributable to the noncontrolling interest	—			—			(28,039		)	—			(28,039		)
Net income attributable to Exterran stockholders	100,517			121,084			77,640			(198,724		)	100,517
Other comprehensive income attributable to Exterran stockholders	4,861			4,769			5,351			(10,120		)	4,861
Comprehensive income attributable to Exterran stockholders	$	105,378		$	125,853		$	82,991		$	(208,844	)	$	105,378

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Nine Months Ended September 30, 2012

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	1,205,153		$	894,737		$	(135,210	)	$	1,964,680
Costs of sales (excluding depreciation and amortization expense)	—			939,077			566,016			(135,210		)	1,369,883
Selling, general and administrative	640			135,434			138,435			—			274,509
Depreciation and amortization	—			102,847			156,421			—			259,268
Long-lived asset impairment	—			100,542			35,327			—			135,869
Restructuring charges	—			3,475			2,353			—			5,828
Interest expense	78,506			8,885			19,291			—			106,682
Intercompany charges, net	(47,006		)	40,241			6,765			—			—
Equity in (income) loss of affiliates	13,303			(63,382		)	(46,860		)	50,079			(46,860		)
Other (income) expense, net	30			(6,427		)	7,604			—			1,207
Income (loss) before income taxes	(45,473		)	(55,539		)	9,385			(50,079		)	(141,706		)
Provision for (benefit from) income taxes	(11,726		)	(42,236		)	19,384			—			(34,578		)
Loss from continuing operations	(33,747		)	(13,303		)	(9,999		)	(50,079		)	(107,128		)
Income from discontinued operations, net of tax	—			—			66,863			—			66,863
Net income (loss)	(33,747		)	(13,303		)	56,864			(50,079		)	(40,265		)
Less: Net loss attributable to the noncontrolling interest	—			—			6,518			—			6,518
Net income (loss) attributable to Exterran stockholders	(33,747		)	(13,303		)	63,382			(50,079		)	(33,747		)
Other comprehensive income attributable to Exterran stockholders	14,526			10,449			782			(11,231		)	14,526
Comprehensive income (loss) attributable to Exterran stockholders	$	(19,221	)	$	(2,854	)	$	64,164		$	(61,310	)	$	(19,221	)

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2013

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by continuing operations	$	6,301		$	117,958		$	99,028		$	—		$	223,287
Net cash provided by discontinued operations	—			—			4,951			—			4,951
Net cash provided by operating activities	6,301			117,958			103,979			—			228,238
Cash flows from investing activities:
Capital expenditures	—			(143,823		)	(167,418		)	3,378			(307,863		)
Proceeds from sale of property, plant and equipment	—			21,475			66,001			(3,378		)	84,098
Capital distributions received from consolidated subsidiaries	—			32,612			—			(32,612		)	—
Return of investments in non-consolidated affiliates	—			—			14,165			—			14,165
Investment in consolidated subsidiaries	—			(16,830		)	—			16,830			—
Net cash used in continuing operations	—			(106,566		)	(87,252		)	(15,782		)	(209,600		)
Net cash provided by discontinued operations	—			—			58,329			—			58,329
Net cash used in investing activities	—			(106,566		)	(28,923		)	(15,782		)	(151,271		)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	854,501			—			923,536			—			1,778,037
Repayments of long-term debt	(911,750		)	—			(884,500		)	—			(1,796,250		)
Payments for debt issuance costs	—			—			(11,929		)	—			(11,929		)
Payments for settlement of interest rate swaps that include financing element	—			—			(1,271		)	—			(1,271		)
Proceeds from stock options exercised	5,975			—			—			—			5,975
Proceeds from stock issued pursuant to our employee stock purchase plan	1,213			—			—			—			1,213
Purchases of treasury stock	(3,594		)	—			—			—			(3,594		)
Stock-based compensation excess tax benefit	1,075			—			—			—			1,075
Distributions to noncontrolling partners in the Partnership	—			—			(78,856		)	32,612			(46,244		)
Capital contributions received from parent	—			—			16,830			(16,830		)	—
Borrowings (repayments) between consolidated subsidiaries, net	46,272			(17,339		)	(28,933		)	—			—
Net cash used in financing activities	(6,308		)	(17,339		)	(65,123		)	15,782			(72,988		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(1,516		)	—			(1,516		)
Net increase (decrease) in cash and cash equivalents	(7		)	(5,947		)	8,417			—			2,463
Cash and cash equivalents at beginning of period	24			10,461			24,116			—			34,601
Cash and cash equivalents at end of period	$	17		$	4,514		$	32,533		$	—		$	37,064

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2012

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by continuing operations	$	2,740		$	21,848		$	117,403		$	—		$	141,991
Net cash provided by discontinued operations	—			—			2,392			—			2,392
Net cash provided by operating activities	2,740			21,848			119,795			—			144,383
Cash flows from investing activities:
Capital expenditures	—			(187,882		)	(140,843		)	—			(328,725		)
Contract operations acquisition	—			77,415			(77,415		)	—			—
Proceeds from sale of property, plant and equipment	—			8,986			19,010			—			27,996
Capital distributions received from consolidated subsidiaries	—			22,847			—			(22,847		)	—
Increase in restricted cash	—			—			(163		)	—			(163		)
Return of investments in non-consolidated subsidiaries	—			—			47,084			—			47,084
Cash invested in non-consolidated affiliates	—			—			(224		)	—			(224		)
Investment in consolidated subsidiaries	—			(23,483		)	—			23,483			—
Net cash used in continuing operations	—			(102,117		)	(152,551		)	636			(254,032		)
Net cash provided by discontinued operations	—			—			121,041			—			121,041
Net cash used in investing activities	—			(102,117		)	(31,510		)	636			(132,991		)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	886,000			—			662,000			—			1,548,000
Repayments of long-term debt	(982,150		)	—			(648,471		)	—			(1,630,621		)
Payments for debt issuance costs	—			—			(549		)	—			(549		)
Net proceeds from the sale of Partnership units	—			—			114,530			—			114,530
Proceeds from stock options exercised	119			—			—			—			119
Proceeds from stock issued pursuant to our employee stock purchase plan	1,280			—			—			—			1,280
Purchases of treasury stock	(1,892		)	—			—			—			(1,892		)
Stock-based compensation excess tax benefit	210			—			—			—			210
Distributions to noncontrolling partners in the Partnership	—			—			(64,822		)	22,847			(41,975		)
Net proceeds from sale of general partner units	—			—			2,426			(2,426		)	—
Capital contributions received from parent	—			—			21,057			(21,057		)	—
Borrowings (repayments) between consolidated subsidiaries, net	93,705			78,120			(171,825		)	—			—
Net cash provided by (used in) financing activities	(2,728		)	78,120			(85,654		)	(636		)	(10,898		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(326		)	—			(326		)
Net increase (decrease) in cash and cash equivalents	12			(2,149		)	2,305			—			168
Cash and cash equivalents at beginning of period	93			2,810			19,000			—			21,903
Cash and cash equivalents at end of period	$	105		$	661		$	21,305		$	—		$	22,071