Supplemental Guarantor Financial Information | Note 17 - Supplemental Guarantor Financial Information In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. (together, the “Issuers”) issued the 2017 Notes, which consists of $375.0 million aggregate principal amount senior unsecured notes. The 2017 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by Exterran Corporation (the “Parent Guarantor” or “Parent”). All other consolidated subsidiaries of Exterran are collectively referred to as the “Non-Guarantor Subsidiaries.” As a result of the Parent’s guarantee, we are presenting the following condensed consolidating financial information pursuant to Rule 3-10 of Regulation S-X, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered . These schedules are presented using the equity method of accounting for all periods presented. For purposes of the following condensed consolidating financial information, the Parent Guarantor’s investments in its subsidiaries, the Issuers’ investments in the Non-Guarantors Subsidiaries and the Non-Guarantor Subsidiaries’ investments in the Issuers are accounted for under the equity method of accounting. 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, 2019 (In thousands) Non- Guarantor Subsidiaries Parent Guarantor Issuers Eliminations Consolidation ASSETS Cash and cash equivalents $ 27 $ 1,116 $ 17,433 $ — $ 18,576 Restricted cash — — 178 — 178 Accounts receivable, net — 97,099 169,187 — 266,286 Inventory, net — 97,037 69,854 — 166,891 Contract assets — 47,380 23,256 — 70,636 Intercompany receivables — 172,543 385,986 (558,529 ) — Other current assets — 6,970 33,203 — 40,173 Current assets associated with discontinued operations — — 8,570 — 8,570 Total current assets 27 422,145 707,667 (558,529 ) 571,310 Property, plant and equipment, net — 311,674 631,814 — 943,488 Operating lease right-of-use assets — 12,374 17,408 — 29,782 Investment in affiliates 543,275 886,456 (343,181 ) (1,086,550 ) — Deferred income taxes — 5,493 6,531 — 12,024 Intangible and other assets, net — 31,847 52,482 — 84,329 Long-term assets associated with discontinued operations — — 1,629 — 1,629 Total assets $ 543,302 $ 1,669,989 $ 1,074,350 $ (1,645,079 ) $ 1,642,562 LIABILITIES AND EQUITY Accounts payable, trade $ — $ 142,709 $ 45,400 $ — $ 188,109 Accrued liabilities 386 33,979 78,904 — 113,269 Contract liabilities — 77,426 62,549 — 139,975 Current operating lease liabilities — 1,967 4,771 — 6,738 Intercompany payables 5,732 385,986 166,811 (558,529 ) — Current liabilities associated with discontinued operations — — 11,713 — 11,713 Total current liabilities 6,118 642,067 370,148 (558,529 ) 459,804 Long-term debt — 433,952 — — 433,952 Deferred income taxes — — 6,762 — 6,762 Long-term contract liabilities — 22,851 112,146 — 134,997 Long-term operating lease liabilities — 16,484 11,793 — 28,277 Other long-term liabilities — 11,360 24,461 — 35,821 Long-term liabilities associated with discontinued operations — — 5,765 — 5,765 Total liabilities 6,118 1,126,714 531,075 (558,529 ) 1,105,378 Total equity 537,184 543,275 543,275 (1,086,550 ) 537,184 Total liabilities and equity $ 543,302 $ 1,669,989 $ 1,074,350 $ (1,645,079 ) $ 1,642,562 Condensed Consolidating Balance Sheet December 31, 2018 (In thousands) Non- Guarantor Subsidiaries Parent Guarantor Issuers Eliminations Consolidation ASSETS Cash and cash equivalents $ 46 $ 1,185 $ 18,069 $ — $ 19,300 Restricted cash — — 178 — 178 Accounts receivable, net — 92,880 155,587 — 248,467 Inventory, net — 87,972 62,717 — 150,689 Contract assets — 67,323 24,279 — 91,602 Intercompany receivables — 158,977 379,628 (538,605 ) — Other current assets — 7,744 36,490 — 44,234 Current assets associated with discontinued operations — — 11,605 — 11,605 Total current assets 46 416,081 688,553 (538,605 ) 566,075 Property, plant and equipment, net — 303,813 597,764 — 901,577 Investment in affiliates 554,207 870,959 (316,752 ) (1,108,414 ) — Deferred income taxes — 5,493 5,877 — 11,370 Intangible and other assets, net — 32,046 54,325 — 86,371 Long-term assets associated with discontinued operations — — 1,661 — 1,661 Total assets $ 554,253 $ 1,628,392 $ 1,031,428 $ (1,647,019 ) $ 1,567,054 LIABILITIES AND EQUITY Accounts payable, trade $ — $ 133,291 $ 32,453 $ — $ 165,744 Accrued liabilities — 47,012 76,323 — 123,335 Contract liabilities — 82,367 71,116 — 153,483 Intercompany payables 1,432 379,628 157,545 (538,605 ) — Current liabilities associated with discontinued operations — — 14,767 — 14,767 Total current liabilities 1,432 642,298 352,204 (538,605 ) 457,329 Long-term debt — 403,810 — — 403,810 Deferred income taxes — — 6,005 — 6,005 Long-term contract liabilities — 17,226 84,137 — 101,363 Other long-term liabilities — 10,851 28,961 — 39,812 Long-term liabilities associated with discontinued operations — — 5,914 — 5,914 Total liabilities 1,432 1,074,185 477,221 (538,605 ) 1,014,233 Total equity 552,821 554,207 554,207 (1,108,414 ) 552,821 Total liabilities and equity $ 554,253 $ 1,628,392 $ 1,031,428 $ (1,647,019 ) $ 1,567,054 Condensed Consolidating Statement of Operations and Comprehensive Loss Three Months Ended March 31, 2019 (In thousands) Non- Guarantor Subsidiaries Parent Guarantor Issuers Eliminations Consolidation Revenues $ — $ 214,790 $ 164,631 $ (27,975 ) $ 351,446 Cost of sales (excluding depreciation and amortization expense) — 185,306 101,513 (27,975 ) 258,844 Selling, general and administrative 297 22,107 21,048 — 43,452 Depreciation and amortization — 14,927 23,290 — 38,217 Restatement related charges — 48 — — 48 Restructuring and other charges — — 384 — 384 Interest expense — 8,470 (307 ) — 8,163 Intercompany charges, net — 1,919 (1,919 ) — — Equity in (income) loss of affiliates 5,097 (15,033 ) 20,130 (10,194 ) — Other (income) expense, net — (41 ) (1,204 ) — (1,245 ) Income (loss) before income taxes (5,394 ) (2,913 ) 1,696 10,194 3,583 Provision for income taxes — 2,184 6,956 — 9,140 Loss from continuing operations (5,394 ) (5,097 ) (5,260 ) 10,194 (5,557 ) Income from discontinued operations, net of tax — — 163 — 163 Net loss (5,394 ) (5,097 ) (5,097 ) 10,194 (5,394 ) Other comprehensive loss (968 ) (968 ) (968 ) 1,936 (968 ) Comprehensive loss attributable to Exterran stockholders $ (6,362 ) $ (6,065 ) $ (6,065 ) $ 12,130 $ (6,362 ) Condensed Consolidating Statement of Operations and Comprehensive Income Three Months Ended March 31, 2018 (In thousands) Non- Guarantor Subsidiaries Parent Guarantor Issuers Eliminations Consolidation Revenues $ — $ 258,316 $ 116,391 $ (24,324 ) $ 350,383 Cost of sales (excluding depreciation and amortization expense) — 218,164 60,778 (24,324 ) 254,618 Selling, general and administrative 283 20,965 22,994 — 44,242 Depreciation and amortization — 9,327 21,702 — 31,029 Long-lived asset impairment — 1,804 — — 1,804 Restatement related charges — 621 — — 621 Interest expense — 7,213 6 — 7,219 Intercompany charges, net — 1,725 (1,725 ) — — Equity in (income) loss of affiliates (5,620 ) (10,054 ) 2,646 13,028 — Other (income) expense, net — (49 ) 1,469 — 1,420 Income before income taxes 5,337 8,600 8,521 (13,028 ) 9,430 Provision for income taxes — 1,192 2,512 1,788 5,492 Income from continuing operations 5,337 7,408 6,009 (14,816 ) 3,938 Income from discontinued operations, net of tax — — 1,399 — 1,399 Net income 5,337 7,408 7,408 (14,816 ) 5,337 Other comprehensive income 757 757 757 (1,514 ) 757 Comprehensive income attributable to Exterran stockholders $ 6,094 $ 8,165 $ 8,165 $ (16,330 ) $ 6,094 Condensed Consolidating Statement of Cash Flows Three Months Ended March 31, 2019 (In thousands) Non- Guarantor Subsidiaries Parent Guarantor Issuers Eliminations Consolidation Cash flows from operating activities: Net cash provided by (used in) continuing operations $ (48 ) $ (1,302 ) $ 50,375 $ — $ 49,025 Net cash provided by discontinued operations — — 16 — 16 Net cash provided by (used in) operating activities (48 ) (1,302 ) 50,391 — 49,041 Cash flows from investing activities: Capital expenditures — (35,065 ) (41,289 ) — (76,354 ) Proceeds from sale of property, plant and equipment — 721 3,291 — 4,012 Intercompany transfers — (4,300 ) (12,627 ) 16,927 — Settlement of foreign currency derivatives — (207 ) — — (207 ) Net cash used in investing activities — (38,851 ) (50,625 ) 16,927 (72,549 ) Cash flows from financing activities: Proceeds from borrowings of debt — 179,000 — — 179,000 Repayments of debt — (149,113 ) — — (149,113 ) Intercompany transfers 4,300 12,627 — (16,927 ) — Purchases of treasury stock (4,271 ) (2,430 ) — — (6,701 ) Net cash provided by financing activities 29 40,084 — (16,927 ) 23,186 Effect of exchange rate changes on cash, cash equivalents and restricted cash — — (402 ) — (402 ) Net decrease in cash, cash equivalents and restricted cash (19 ) (69 ) (636 ) — (724 ) Cash, cash equivalents and restricted cash at beginning of period 46 1,185 18,247 — 19,478 Cash, cash equivalents and restricted cash at end of period $ 27 $ 1,116 $ 17,611 $ — $ 18,754 Condensed Consolidating Statement of Cash Flows Three Months Ended March 31, 2018 (In thousands) Non- Guarantor Subsidiaries Parent Guarantor Issuers Eliminations Consolidation Cash flows from operating activities: Net cash provided by (used in) continuing operations $ (78 ) $ (22,466 ) $ 26,170 $ — $ 3,626 Net cash used in discontinued operations — — (2,849 ) — (2,849 ) Net cash provided by (used in) operating activities (78 ) (22,466 ) 23,321 — 777 Cash flows from investing activities: Capital expenditures — (17,234 ) (31,985 ) — (49,219 ) Proceeds from sale of property, plant and equipment — — 2,260 — 2,260 Intercompany transfers — (342 ) (2,059 ) 2,401 — Net cash used in continuing operations — (17,576 ) (31,784 ) 2,401 (46,959 ) Net cash provided by discontinued operations — — 66 — 66 Net cash used in investing activities — (17,576 ) (31,718 ) 2,401 (46,893 ) Cash flows from financing activities: Proceeds from borrowings of debt — 66,500 — — 66,500 Repayments of debt — (48,563 ) — — (48,563 ) Intercompany transfers 341 2,060 — (2,401 ) — Payments for debt issuance costs — (47 ) — — (47 ) Proceeds from stock options exercised — 428 — — 428 Purchases of treasury stock — (3,440 ) — — (3,440 ) Net cash provided by financing activities 341 16,938 — (2,401 ) 14,878 Effect of exchange rate changes on cash, cash equivalents and restricted cash — — (571 ) — (571 ) Net increase (decrease) in cash, cash equivalents and restricted cash 263 (23,104 ) (8,968 ) — (31,809 ) Cash, cash equivalents and restricted cash at beginning of period 397 24,195 25,099 — 49,691 Cash, cash equivalents and restricted cash at end of period $ 660 $ 1,091 $ 16,131 $ — $ 17,882 |