18. Supplemental Guarantor Financial Information

Exterran Holdings, Inc. (“Parent”) is the issuer of our 7.25% senior notes with an aggregate principal amount of $350.0 million due December 2018 (the “7.25% Notes”). EESLP, 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 on a joint and several senior unsecured basis 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, 2014

(In thousands)

	Parent		Guarantor Subsidiaries		Other Subsidiaries		Eliminations			Consolidation
ASSETS

Current assets	$	7,722	$	686,801	$	569,599	$	—		$	1,264,122
Current assets associated with discontinued operations	—		—		293		—			293
Total current assets	7,722		686,801		569,892		—			1,264,415
Property, plant and equipment, net	—		1,141,207		2,034,042		—			3,175,249
Investments in affiliates	1,755,649		1,825,985		—		(3,581,634		)	—
Intangible and other assets, net	6,981		28,117		168,660		—			203,758
Intercompany receivables	811,968		13,218		619,103		(1,444,289		)	—
Long-term assets associated with discontinued operations	—		—		19,695		—			19,695
Total long-term assets	2,574,598		3,008,527		2,841,500		(5,025,923		)	3,398,702
Total assets	$	2,582,320	$	3,695,328	$	3,411,392	$	(5,025,923	)	$	4,663,117

LIABILITIES AND EQUITY

Current liabilities	$	2,589	$	328,664	$	256,443	$	—		$	587,696
Current liabilities associated with discontinued operations	—		—		2,215		—			2,215
Total current liabilities	2,589		328,664		258,658		—			589,911
Long-term debt	809,500		1,332		1,041,736		—			1,852,568
Intercompany payables	—		1,431,071		13,218		(1,444,289		)	—
Other long-term liabilities	—		178,612		93,648		—			272,260
Long-term liabilities associated with discontinued operations	—		—		307		—			307
Total liabilities	812,089		1,939,679		1,407,567		(1,444,289		)	2,715,046
Total equity	1,770,231		1,755,649		2,003,825		(3,581,634		)	1,948,071
Total liabilities and equity	$	2,582,320	$	3,695,328	$	3,411,392	$	(5,025,923	)	$	4,663,117

Condensed Consolidating Balance Sheet

December 31, 2013

(In thousands)

	Parent		Guarantor Subsidiaries		Other Subsidiaries		Eliminations			Consolidation
ASSETS

Current assets	$	141	$	710,801	$	509,747	$	—		$	1,220,689
Current assets associated with discontinued operations	—		—		442		—			442
Total current assets	141		710,801		510,189		—			1,221,131
Property, plant and equipment, net	—		1,143,111		1,677,161		—			2,820,272
Investments in affiliates	1,851,131		1,680,215		—		(3,531,346		)	—
Intangible and other assets, net	20,060		29,555		126,451		(11,230		)	164,836
Intercompany receivables	536,382		14,818		633,678		(1,184,878		)	—
Long-term assets associated with discontinued operations	—		—		20,918		—			20,918
Total long-term assets	2,407,573		2,867,699		2,458,208		(4,727,454		)	3,006,026
Total assets	$	2,407,714	$	3,578,500	$	2,968,397	$	(4,727,454	)	$	4,227,157

LIABILITIES AND EQUITY

Current liabilities	$	2,963	$	369,829	$	264,681	$	—		$	637,473
Current liabilities associated with discontinued operations	—		—		3,233		—			3,233
Total current liabilities	2,963		369,829		267,914		—			640,706
Long-term debt	742,661		1,539		757,955		—			1,502,155
Intercompany payables	—		1,170,060		14,818		(1,184,878		)	—
Other long-term liabilities	—		185,941		95,710		(11,230		)	270,421
Long-term liabilities associated with discontinued operations	—		—		447		—			447
Total liabilities	745,624		1,727,369		1,136,844		(1,196,108		)	2,413,729
Total equity	1,662,090		1,851,131		1,831,553		(3,531,346		)	1,813,428
Total liabilities and equity	$	2,407,714	$	3,578,500	$	2,968,397	$	(4,727,454	)	$	4,227,157

Condensed Consolidating Statement of Operations and Comprehensive Income

Three Months Ended June 30, 2014

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	377,333		$	427,654		$	(65,717	)	$	739,270
Costs of sales (excluding depreciation and amortization expense)	—			291,922			257,091			(65,717		)	483,296
Selling, general and administrative	104			42,419			53,189			—			95,712
Depreciation and amortization	—			35,204			76,752			—			111,956
Long-lived asset impairment	—			7,856			1,991			—			9,847
Restructuring charges	—			155			198			—			353
Interest expense	17,135			980			14,607			—			32,722
Intercompany charges, net	(9,208		)	8,299			909			—			—
Equity in income of affiliates	(17,607		)	(32,058		)	(4,909		)	49,665			(4,909		)
Other (income) expense, net	10			1,186			(4,867		)	—			(3,671		)
Income before income taxes	9,566			21,370			32,693			(49,665		)	13,964
Provision for (benefit from) income taxes	(2,811		)	3,763			9,918			—			10,870
Income from continuing operations	12,377			17,607			22,775			(49,665		)	3,094
Income from discontinued operations, net of tax	—			—			17,769			—			17,769
Net income	12,377			17,607			40,544			(49,665		)	20,863
Less: Net income attributable to the noncontrolling interest	—			—			(8,486		)	—			(8,486		)
Net income attributable to Exterran stockholders	12,377			17,607			32,058			(49,665		)	12,377
Other comprehensive loss attributable to Exterran stockholders	(1,403		)	(1,842		)	(1,726		)	3,568			(1,403		)
Comprehensive income attributable to Exterran stockholders	$	10,974		$	15,765		$	30,332		$	(46,097	)	$	10,974

Condensed Consolidating Statement of Operations and Comprehensive Income

Three Months Ended June 30, 2013

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	514,181		$	379,528		$	(57,803	)	$	835,906
Costs of sales (excluding depreciation and amortization expense)	—			392,652			245,188			(57,803		)	580,037
Selling, general and administrative	58			44,833			46,114			—			91,005
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			(7,623		)	—			(7,223		)
Income before income taxes	5,848			33,333			25,971			(15,918		)	49,234
Provision for (benefit from) income taxes	(3,487		)	17,516			9,595			—			23,624
Income from continuing operations	9,335			15,817			16,376			(15,918		)	25,610
Loss from discontinued operations, net of tax	—			—			(1,106		)	—			(1,106		)
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

Six months Ended June 30, 2014

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	718,236		$	774,292		$	(110,250	)	$	1,382,278
Costs of sales (excluding depreciation and amortization expense)	—			537,838			465,230			(110,250		)	892,818
Selling, general and administrative	150			88,231			99,909			—			188,290
Depreciation and amortization	—			70,611			126,867			—			197,478
Long-lived asset impairment	—			9,177			4,477			—			13,654
Restructuring charges	—			4,598			577			—			5,175
Interest expense	35,615			1,238			24,177			—			61,030
Intercompany charges, net	(18,171		)	16,542			1,629			—			—
Equity in income of affiliates	(56,429		)	(74,489		)	(9,602		)	130,918			(9,602		)
Other (income) expense, net	20			1,781			(7,906		)	—			(6,105		)
Income before income taxes	38,815			62,709			68,934			(130,918		)	39,540
Provision for (benefit from) income taxes	(6,158		)	6,280			20,157			—			20,279
Income from continuing operations	44,973			56,429			48,777			(130,918		)	19,261
Income from discontinued operations, net of tax	—			—			36,496			—			36,496
Net income	44,973			56,429			85,273			(130,918		)	55,757
Less: Net income attributable to the noncontrolling interest	—			—			(10,784		)	—			(10,784		)
Net income attributable to Exterran stockholders	44,973			56,429			74,489			(130,918		)	44,973
Other comprehensive loss attributable to Exterran stockholders	(85		)	(844		)	(573		)	1,417			(85		)
Comprehensive income attributable to Exterran stockholders	$	44,888		$	55,585		$	73,916		$	(129,501	)	$	44,888

Condensed Consolidating Statement of Operations and Comprehensive Income

Six months Ended June 30, 2013

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	1,049,608		$	756,918		$	(160,724	)	$	1,645,802
Costs of sales (excluding depreciation and amortization expense)	—			822,100			503,815			(160,724		)	1,165,191
Selling, general and administrative	160			90,522			85,197			—			175,879
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		)	(10,433		)	—			(17,031		)
Income before income taxes	52,502			109,259			54,540			(126,809		)	89,492
Provision for (benefit from) income taxes	(7,038		)	35,739			9,906			—			38,607
Income from continuing operations	59,540			73,520			44,634			(126,809		)	50,885
Income from discontinued operations, net of tax	—			—			32,410			—			32,410
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 Cash Flows

Six months Ended June 30, 2014

(In thousands)

	Parent			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	(7,624	)	$	20,896		$	106,865		$	—		$	120,137
Net cash provided by discontinued operations	—			—			2,466			—			2,466
Net cash provided by (used in) operating activities	(7,624		)	20,896			109,331			—			122,603
Cash flows from investing activities:
Capital expenditures	—			(69,033		)	(169,177		)	—			(238,210		)
Proceeds from sale of property, plant and equipment	—			7,271			6,128			—			13,399
Payment for MidCon acquisition	—			(9,400		)	(351,121		)	—			(360,521		)
Capital distributions received from consolidated subsidiaries	—			26,641			—			(26,641		)	—
Increase in restricted cash	—			—			(245		)	—			(245		)
Return of investments in non-consolidated affiliates	—			—			9,799			—			9,799
Investment in consolidated subsidiaries	—			(11,128		)	—			11,128			—
Cash invested in non-consolidated affiliates	—			—			(197		)	—			(197		)
Return of investments in consolidated subsidiaries	252,482			—			—			(252,482		)	—
Net cash provided by (used in) continuing operations	252,482			(55,649		)	(504,813		)	(267,995		)	(575,975		)
Net cash provided by discontinued operations	—			—			33,276			—			33,276
Net cash provided by (used in) investing activities	252,482			(55,649		)	(471,537		)	(267,995		)	(542,699		)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	825,001			—			564,798			—			1,389,799
Repayments of long-term debt	(769,500		)	—			(281,500		)	—			(1,051,000		)
Payments for debt issuance costs	—			—			(6,923		)	—			(6,923		)
Payments above face value for redemption of convertible debt	(15,007		)	—			—			—			(15,007		)
Payments for settlement of interest rate swaps that include financing elements	—			—			(1,894		)	—			(1,894		)
Net proceeds from the sale of Partnership units	—			—			169,471			—			169,471
Proceeds from stock options exercised	10,767			—			—			—			10,767
Proceeds from stock issued pursuant to our employee stock purchase plan	897			—			—			—			897
Purchases of treasury stock	(6,315		)	—			—			—			(6,315		)
Dividends to Exterran stockholders	(19,990		)	—			—			—			(19,990		)
Stock-based compensation excess tax benefit	7,820			—			—			—			7,820
Distributions to noncontrolling partners in the Partnership	—			—			(61,932		)	26,641			(35,291		)
Net proceeds from sale of general partner units	—			—			3,573			(3,573		)	—
Capital distributions to affiliates	—			(252,482		)	—			252,482			—
Capital contributions received from parent	—			—			7,555			(7,555		)	—
Borrowings (repayments) between consolidated subsidiaries, net	(278,461		)	295,227			(16,766		)	—			—
Net cash provided by (used in) financing activities	(244,788		)	42,745			376,382			267,995			442,334
Effect of exchange rate changes on cash and cash equivalents	—			—			(4,000		)	—			(4,000		)
Net increase in cash and cash equivalents	70			7,992			10,176			—			18,238
Cash and cash equivalents at beginning of period	11			1,554			34,100			—			35,665
Cash and cash equivalents at end of period	$	81		$	9,546		$	44,276		$	—		$	53,903

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		$	37,905		$	—		$	75,095
Net cash provided by discontinued operations	—			—			5,520			—			5,520
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 elements	—			—			(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