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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  x                        Filed by a Party other than the Registrant  ¨

Check the appropriate box:

EXTERRAN HOLDINGS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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EXTERRAN HOLDINGS, INC.

Dear Fellow Stockholder:

You are invited to attend the 2012 Annual Meeting of Stockholders of Exterran Holdings, Inc. on April 24, 2012, in Houston, Texas. Your attendance at the meeting will give you the opportunity to meet members of our Board of Directors as well as our senior management team.

The formal notice of the Annual Meeting, Proxy Statement and form of proxy that follow provide important information regarding the matters to be voted on at the meeting as well as information regarding other items of interest to our stockholders.

Your vote counts. Your broker cannot vote your shares on certain matters without your instructions. Regardless of the size of your stockholdings, we want to see your shares represented at the Annual Meeting. Please vote your shares by one of the methods offered and explained in the Proxy Statement and on the enclosed proxy card. If you have access to the Internet, we urge you to vote your shares electronically.

We look forward to seeing your ownership of Exterran represented at the 2012 Annual Meeting.

Sincerely,

Gordon T. Hall

Chairman of the Board

March 16, 2012

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EXTERRAN HOLDINGS, INC.

NOTICE OF 2012 ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Exterran Holdings, Inc.:

The 2012 Annual Meeting of Stockholders of Exterran Holdings, Inc., a Delaware corporation, will be held at 11:30 a.m. central time on Tuesday, April 24, 2012, at the corporate offices of Exterran located at 16666 Northchase Drive, Houston, Texas 77060, for the following purposes:

The Board of Directors has set the close of business on March 1, 2012, as the record date for determining the stockholders who are entitled to notice of and to vote at the meeting and at any postponement or adjournment of the meeting.

We encourage you to sign and return your proxy card, use the telephone or Internet voting procedures or attend the meeting in person so that your shares are represented.

By Order of the Board of Directors,

Donald C. Wayne

Secretary

Houston, Texas

March 16, 2012

Important Notice Regarding the Availability of Proxy Materials for the 2012 Annual Meeting of Stockholders to be held on April 24, 2012

The Proxy Statement and annual report to stockholders are available at www.exterran.com.

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2012 PROXY STATEMENT

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EXTERRAN HOLDINGS, INC.

16666 Northchase Drive

Houston, Texas 77060

PROXY STATEMENT FOR 2012 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD

APRIL 24, 2012

GENERAL INFORMATION

The Board of Directors has sent these proxy materials to you to solicit your vote at the 2012 Annual Meeting of Stockholders (the “2012 Stockholders’ Meeting”). The meeting will begin promptly at 11:30 a.m. central time on Tuesday, April 24, 2012, at Exterran’s corporate offices located at 16666 Northchase Drive, Houston, Texas 77060. This Proxy Statement and form of proxy are first being sent to stockholders on or about March 16, 2012, and are accompanied by our 2011 Annual Report. Exterran Holdings, Inc., a Delaware corporation, is also referred to in this Proxy Statement as “we,” “us,” “our,” “Exterran” or the “Company.”

Agenda

The 2012 Stockholders’ Meeting will be held for the following purposes:

All of these items are discussed in more detail in this Proxy Statement.

Stockholders Entitled to Vote

Owners of our common stock, $0.01 par value per share, as of the close of business on March 1, 2012, are entitled to receive notice of and to vote at the 2012 Stockholders’ Meeting. At the close of business on March 1, 2012, there were 64,272,709 shares of common stock outstanding. Each share of common stock entitles the holder to one vote on all matters submitted to a vote at the 2012 Stockholders’ Meeting and any adjournment or postponement of the meeting. A complete list of the stockholders entitled to vote will be available for examination at the meeting and for at least 10 days prior to the meeting at our corporate offices located at 16666 Northchase Drive, Houston, Texas 77060.

Quorum and Required Votes

A quorum of stockholders is necessary for a valid meeting. The presence in person or by proxy of the holders of a majority of the outstanding shares of our common stock will constitute a quorum for the 2012 Stockholders’ Meeting. Under our Second Amended and Restated Bylaws and under Delaware law, abstentions and “broker non-votes” are counted as present in determining whether the quorum requirement is satisfied. A “broker non-vote” occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power for that proposal and has not received instructions from the beneficial owner. Under the rules of the New York Stock Exchange (“NYSE”), brokers do not have discretionary authority to vote shares in connection with non-routine matters without instructions from the beneficial owner. Therefore, if you hold your shares in the name of a bank, broker or other holder of record, for your vote to be counted on Proposals 1 and 3, you will need to communicate your voting decisions to your bank, broker or other holder of record before April 24, 2012.

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Each proposal to be voted on at the 2012 Stockholders’ Meeting is described in this Proxy Statement, as is the vote required to approve each proposal. For any other matters that may be properly presented for consideration at the 2012 Stockholders’ Meeting, the persons named as proxies will have discretion to vote on those matters according to their best judgment to the same extent as the person delivering the proxy would be entitled to vote. As of the date of this Proxy Statement, we do not anticipate that any other matters will be properly presented for consideration at the 2012 Stockholders’ Meeting.

How to Vote Your Proxy

Because many stockholders cannot attend the 2012 Stockholders’ Meeting in person, it is necessary that a large number of stockholders be represented by proxy. You can vote your proxy by one of the following three methods:

You may receive more than one proxy card, depending on how you hold your shares. You should vote each proxy card provided to you using one of the above methods. Please refer to your proxy card or the information forwarded by your bank, broker or other nominee to determine which options are available for voting the proxy. The Internet and telephone voting procedures are designed to authenticate stockholders by use of a control number and to allow you to confirm that your instructions have been properly recorded.

Revocation of a Proxy

A proxy may be revoked at any time before it is voted by sending written notice of revocation to our Secretary, by delivering a later dated proxy (by one of the methods described above) or by voting in person at the meeting. The Secretary may be contacted at the following address: Exterran Holdings, Inc., 16666 Northchase Drive, Houston, Texas 77060, Attention: Secretary.

Proxy Solicitation

This solicitation is made on behalf of the Board of Directors. We will pay the cost of soliciting proxies. Proxies are being solicited by mail and may be solicited by telephone, facsimile or in person by our employees, who will not receive additional compensation for any such solicitation. MacKenzie Partners, Inc. has been retained to assist in the solicitation of proxies for a fee of $20,000, plus reimbursement for out-of-pocket expenses. We will also request brokers and other fiduciaries to forward proxy soliciting materials to the beneficial owners of shares of our common stock that are held of record by such brokers and fiduciaries, and we will reimburse their reasonable out-of-pocket expenses.

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PROPOSAL 1

ELECTION OF DIRECTORS

Eight directors are nominated to be elected to the Board of Directors (the “Board”) at the 2012 Stockholders’ Meeting, to hold office until our next annual meeting of stockholders or until their respective successors are duly elected and qualified. Each nominee has consented to serve as a director if elected.

Board of Directors’ Recommendation

THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD AS SET FORTH IN THIS PROPOSAL.

Vote Required

A plurality of the votes present in person or by proxy and entitled to vote is required to elect each director nominee; however, our Corporate Governance Principles require that any nominee who receives a greater number of “withheld” votes than “for” votes must submit his resignation for consideration by our Board. Broker non-votes will not have any effect on the election of directors.

Please note that the election of directors is not considered a “routine” matter and, therefore, if a brokerage firm holds your shares, it will not have discretionary authority to vote your shares for the election of directors unless you provide instructions using one of the methods described in this Proxy Statement.

Nominees for Director

Information concerning the name, age and background of each of the nominees for election to the Board is set forth below. Ages are stated as of March 1, 2012. Certain of the nominees listed below previously served as directors of Hanover Compressor Company (“Hanover”) or Universal Compression Holdings, Inc. (“Universal”) and were appointed to our Board on August 20, 2007, the effective date of a series of mergers among Hanover, Universal and certain of their subsidiaries that resulted in Hanover and Universal becoming our wholly owned subsidiaries.

Uriel E. Dutton, 81, has served as a director since February 2001, initially as a designee of WEUS Holding, Inc. following the acquisition of Weatherford Global Compression Services, L.P. Mr. Dutton has been counsel to and a partner with the law firm of Fulbright & Jaworski L.L.P. for over 50 years. He also served for approximately 20 years on the board of directors of Grey Wolf Drilling Company (a private oil and gas drilling services provider) prior to its acquisition by Grey Wolf, Inc. in 1997 and for 12 years on the board of directors of EVI, Inc. (a manufacturer and supplier of engineered oilfield tools and equipment) prior to its merger with Weatherford Enterra, Inc. in 1998. Mr. Dutton serves as a director and Vice President of the M.D. Anderson Foundation (a charitable organization). Mr. Dutton received his J.D. from Baylor University.

Mr. Dutton’s experience representing clients in the oil and gas industry brings an understanding of the operational and jurisdictional challenges of an international energy services company. In addition, the length and depth of his experience have afforded him the opportunity to work with a wide variety of companies in our industry. As an attorney, Mr. Dutton has an understanding of the importance of sound corporate governance, as well as other issues relating to law, compliance and regulatory matters. We believe this knowledge and experience make Mr. Dutton well qualified to serve as a member of our Board and as chair of our Nominating and Corporate Governance Committee.

Gordon T. Hall, 52, has served as a director since March 2002 and Chairman of the Board since May 2005. Prior to his election as a director, Mr. Hall was a Managing Director at Credit Suisse (a brokerage services and investment banking firm). While at Credit Suisse, Mr. Hall served as Senior Oil Field Services Analyst and Co-Head of the Global Energy Group. Mr. Hall joined Credit Suisse in 1987 as a technology analyst. Mr. Hall

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was a director of Hydril Company (an oil and gas service company specializing in pressure control equipment and premium connections for casing and tubing) from March 2002 until its merger with Tenaris S.A. in May 2007 and was a director of Grant Prideco, Inc. (a drill technology and manufacturing company) from November 2007 until its acquisition by National Oilwell Varco, Inc. in April 2008. Mr. Hall is currently a director and member of the audit committee of Noble Corporation (a global offshore drilling contractor for the oil and gas industry), the Chairman of the Board of Theatrics.com LLC (a private entertainment media company), and is involved in several non-profit organizations. He holds a S.M. from the M.I.T. Sloan School of Management.

As Chairman of the Board of Hanover from May 2005, and continuing in that role following the merger of Hanover and Universal in August 2007, Mr. Hall has developed a thorough understanding of our operational and strategic opportunities and challenges. Mr. Hall’s prior experience as a research analyst covering oil field services companies gives him a broad-based understanding of the industry, our customers and our competitors, as well as mergers and acquisitions and capital market transactions. We believe this knowledge and experience, together with Mr. Hall’s former and current experience as a member of the boards, including the audit committees, of other public oil and gas companies, make him well qualified to serve as Chairman of the Board.

J.W.G. “Will” Honeybourne, 60, has served as a director since April 2006. Mr. Honeybourne has been Managing Director of First Reserve Corporation (a private equity firm) since January 1999, where he is responsible for deal origination, investment structuring and monitoring, with a particular emphasis on the equipment, manufacturing and services sector, upstream oil and gas and international markets. Prior to joining First Reserve, Mr. Honeybourne served as Senior Vice President of Western Atlas International (a seismic and wireline-logging company) from 1996 to 1998. Mr. Honeybourne currently serves as a director of Acteon Group (a U.K.-based offshore and subsea services company), non-executive Chairman of KrisEnergy (a Singapore-based upstream oil and gas company), and director of Barra Energia Petróleo e Gás (a private Brazilian oil and gas exploration and production company). He has previously served as a director of the following private companies: Abbott Group (a U.K.-based drilling company) from March 2008 to December 2009, Red Technology Alliance (a First Reserve joint venture with Halliburton Company) from December 2006 to January 2010, Caledonia Oil and Gas (an acquirer and developer of North Sea natural gas reserves) from October 2003 to November 2005, and CiDRA (a provider of flow monitoring to a diverse range of industrial applications) from April 1999 to May 2006. Mr. Honeybourne holds a B.Sc. in Oil Technology from Imperial College, London University and is a member of the Society of Petroleum Engineers and the Society of Exploration Geophysicists. He is also a director of the Petroleum Equipment Suppliers Association.

Mr. Honeybourne’s technical background in petroleum engineering and his experience as Managing Director of a private equity firm focused on the international oil and gas industry result in a valuable combination of skills for a member of our Board. Mr. Honeybourne’s current and former service as a director of various oil and gas companies located outside the United States, including his service as non-executive Chairman of KrisEnergy, brings an understanding of the challenges and opportunities of international markets and operations. We believe these skills and experience make Mr. Honeybourne well qualified to serve as a member of our Board.

Mark A McCollum, 52, has served as a director since May 2009. Mr. McCollum is Executive Vice President and Chief Financial Officer of Halliburton Company (an energy services company that provides well construction, well completion and reservoir engineering). He served as Senior Vice President and Chief Accounting Officer of Halliburton from August 2003 until assuming his current position in December 2007. Mr. McCollum was a director of Exterran GP LLC from October 2006 until his appointment to our Board in May 2009. Mr. McCollum also served as a director of KBR, Inc. (a global engineering, procurement and construction company) from June 2006 to April 2007. Mr. McCollum’s service with non-profit and/or private organizations includes: as Chairman and Trustee of the Star of Hope Mission, as Trustee of The Center Foundation, as a member of the Advisory Board of Aid Sudan and as a member of the Board of Regents of Baylor University. He is a member of the AICPA, the Texas Society of CPAs, Financial Executives International and the Institute of Management Accountants. Mr. McCollum, a Certified Public Accountant, received his B.B.A. from Baylor University.

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Through Mr. McCollum’s experience as the Chief Financial Officer of an international energy services company, he brings to the Board extensive financial and accounting expertise. In addition, his tenure as a director of Exterran GP LLC, the managing general partner of Exterran Partners, L.P., a master limited partnership in which we own an equity interest, provides him with an understanding of our U.S. contract compression operations and overall strategy with respect to our ownership of Exterran Partners, L.P. We believe this knowledge and experience make Mr. McCollum well qualified to serve as a member of our Board.

William C. Pate, 48, has served as a director since January 2007. Mr. Pate is a Co-President of Equity Group Investments, L.L.C. (“EGI,” a private investment firm), and serves as a member of the board of directors of certain private affiliates of EGI. Prior to joining EGI in 1994, Mr. Pate was an associate with The Blackstone Group (a global asset management and advisory services firm) and served in the mergers and acquisitions group of Credit Suisse (a brokerage services and investment banking firm). Mr. Pate also serves as a director and chairman of the audit committee of Covanta Holding Corporation (an owner and operator of energy-from-waste and power generation projects). Mr. Pate previously served as a director of Middlebrook Pharmaceuticals, Inc. (a pharmaceutical company) from 2008 to 2010 and Adams Respiratory Therapeutics, Inc. (a specialty pharmaceutical company) from 1999 to 2007. Mr. Pate received a B.A. from Harvard University and a J.D. from the University of Chicago Law School.

Mr. Pate has extensive experience with the private and public capital markets as well as complex corporate transactions, including mergers and acquisitions. He has served on the boards of other public companies in a variety of industries and currently serves as chairman of the audit committee of Covanta. We believe this knowledge and experience make Mr. Pate well qualified to serve as a member of our Board.

Stephen M. Pazuk, 68, has served as a director since February 2004. Mr. Pazuk is the Chief Financial Officer and Treasurer of Drive Thru Technology, Inc. (a provider of computer-based surveillance equipment, systems and monitoring), a position he has held since 2000. He has also been involved in venture capital investments and real estate development in Boston, Massachusetts, and Fresno and Clovis, California, since his retirement as Senior Vice President, Treasurer and Partner of Wellington Management Company, LLP (a global investment advisor) in June 2000. Mr. Pazuk began his career with Wellington in 1968 and held various positions during his tenure, including Treasurer of Wellington Trust Company NA and President of Wellington Sales Company. Mr. Pazuk currently serves on the board of several privately-held companies.

Through his treasury and finance background, management experience and service on the boards of several privately-held companies, Mr. Pazuk has an understanding of financial transactions, management dynamics and cost structures. In addition, prior to the merger of Hanover and Universal, Mr. Pazuk served as a member of Hanover’s audit committee and as the chairman of its compensation committee, which gave him insight into our operations and compensation philosophy and practices. We believe Mr. Pazuk’s background and experience make him well qualified to serve as a member of our Board and as chair of our Compensation Committee.

Christopher T. Seaver, 63, has served as a director since October 2008. Mr. Seaver was appointed Chairman of the Board of Hydril Company (an oil and gas service company specializing in pressure control equipment and premium connections for casing and tubing) in 2006, CEO and Director in 1997 and President in 1993, and served in such capacities until the company’s acquisition by Tenaris S.A. and his retirement in May 2007. Mr. Seaver joined Hydril in 1985 and held a series of domestic and international management positions until his appointment as President in 1993. Prior to joining Hydril, Mr. Seaver was a corporate and securities attorney for the law firm of Paul, Hastings, Janofsky & Walker LLP, and was a Foreign Service Officer in the U.S. State Department, with postings in Kinshasa, Republic of Congo, and Bogota, Colombia. Mr. Seaver currently serves as a director and member of the audit committee of Oil States International, Inc. (an oil service company specializing in remote accommodations, manufacturing of products for offshore production and drilling, OCTG distribution, rental tools and US land drilling services) and McCoy Corporation (a Canadian oil service company principally providing power tongs and related equipment). Mr. Seaver was a director of Innovative Wireline Solutions Inc. (a start-up Canadian wireline services company) from July 2010 to October 2011. He has been a director and officer of the Petroleum Equipment Suppliers Association, a director of the American Petroleum

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Institute, and a director and chairman of the National Ocean Industries Association. Mr. Seaver holds an A.B. in economics from Yale University and J.D. and M.B.A. degrees from Stanford University.

Through his former roles as President, Chief Executive Officer and Chairman of the Board of a publicly-traded oil and gas services company, Mr. Seaver brings to our Board both the perspective of an executive officer as well as that of a director. He has both domestic and international management and operations experience and has been heavily involved in many industry trade and professional organizations. His tenure with the U.S. State Department makes him well-versed in international cultures and the challenges and opportunities presented by conducting business in developing countries. We believe this knowledge and experience, together with his service on the boards of other energy services companies, make Mr. Seaver well qualified to serve as a member of our Board.

Mark R. Sotir, 48, was appointed to the Board on November 1, 2011 and was appointed Executive Vice Chairman effective December 12, 2011. Mr. Sotir has been a Managing Director of Equity Group Investments, L.L.C. (“EGI”, a private investment firm) since November 2006. While at EGI, he served as the interim president of Tribune Interactive, a division of Tribune Company (a media conglomerate) from December 2007 until April 2008. In December 2008, the Tribune Company filed for protection under Chapter 11 of the Bankruptcy Code. Prior to joining EGI, Mr. Sotir was the Chief Executive Officer of Sunburst Technology Corporation (an independent distributor of educational software to public schools) from August 2003 to November 2006. Prior to joining Sunburst, Mr. Sotir held various positions with the Budget Group, Inc. (a national car and truck rental business) from 1995 to 2003, including as President and Chief Operating Officer from 2000 to 2003. Budget Group, Inc. filed for protection under Chapter 11 of the Bankruptcy Code in July 2002. Mr. Sotir serves on the board of several EGI portfolio companies, including Rewards Network Inc. (a dining rewards company), WRS Holding Company (an environmental remediation and construction company) and SIRVA Inc. (a provider of moving and relocation services). He served as a director of VIA Wines Group (a Chilean wine producer and marketer) from 2007 to January 2012. Mr. Sotir holds a B.A. in economics from Amherst College and an M.B.A. from Harvard Business School.

Mr. Sotir brings to our Board extensive operational experience, gained by serving in key management and leadership roles in a wide range of industries. His operational experience includes brand management, sales, marketing and distributions, as well as finance and workouts. In addition, Mr. Sotir serves as a director for several companies representing a diversity of industries. We believe Mr. Sotir’s operational experience in key leadership and director roles make him well qualified to serve as a member of our Board.

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INFORMATION REGARDING CORPORATE GOVERNANCE, THE BOARD OF

DIRECTORS AND COMMITTEES OF THE BOARD

Governance

The Board has designated an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee to assist in the discharge of the Board’s responsibilities. The Board and the committees of the Board are governed by our Code of Business Conduct, Corporate Governance Principles and committee charters, each of which are available to the public on our website at www.exterran.com or in print by submitting a written request to Exterran Holdings, Inc., 16666 Northchase Drive, Houston, Texas 77060, Attention: Secretary.

Director Independence

Our Code of Business Conduct requires all employees, officers and non-employee directors to avoid situations that may impact their ability to carry out their duties in an independent and objective fashion. Any circumstance that has the potential to compromise their ability to perform independently must be disclosed. This policy is made available to all employees. In addition, we distribute director and officer questionnaires at least

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annually to elicit related-party information. The questionnaire requires that responses be updated throughout the year to the extent circumstances change.

The Nominating and Corporate Governance Committee assesses director independence each year by considering all direct and indirect business relationships between Exterran and each director (including his immediate family), as well as relationships with other for-profit concerns and charitable organizations. With the Nominating and Corporate Governance Committee’s recommendation, the Board makes a determination relating to the independence of each member, which is based on applicable laws, regulations, our Corporate Governance Principles and the rules of the NYSE.

During the Nominating and Corporate Governance Committee’s most recent review of independence, the committee was provided information regarding transactions with any related parties as determined through a search of our accounting records as well as the responses to the director and officer questionnaires; as a result, the relationships described in this Proxy Statement under the section titled “Certain Relationships and Related Transactions” were reviewed by the Nominating and Corporate Governance Committee and approved by the Audit Committee.

Based on the recommendation of the Nominating and Corporate Governance Committee, the Board determined that the following directors are independent: Messrs. Dutton, Hall, Honeybourne, McCollum, Pate, Pazuk and Seaver.

Board Leadership Structure

We separate the roles of Chairman of the Board and Chief Executive Officer. We believe this structure is currently in the best interests of our stockholders because by separating these positions:

The Board recognizes the time, effort and energy that our Chief Executive Officer is required to devote to his position, as well as the commitment required to serve as our Chairman. The Board believes this structure is appropriate for the Company because of the size and composition of the Board, the scope and complexity of our operations and the responsibilities of the Board and management.

The Board has adopted procedures for the timely and efficient transfer of our Chief Executive Officer’s responsibilities in the event of an emergency or his sudden incapacitation or departure.

Mr. Hall serves as Chairman of the Board and presides over the regular sessions of the Board and the executive sessions of the Board, held at every regularly scheduled Board meeting, that are attended only by independent directors.

Communication with the Board

Stockholders or other interested parties may communicate with the entire Board or any individual member of the Board by writing to us at the following address: Exterran Holdings, Inc., 16666 Northchase Drive, Houston, Texas 77060, Attention: Secretary. All written inquiries will be immediately forwarded as directed. In addition, any concern or inquiry may be communicated to the Audit Committee or the Board by calling our compliance hotline at 1-800-281-5439 (within the U.S. and Canada) or 1-832-554-4859 (outside the U.S. and Canada).

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Committees of the Board

Members of each committee are elected by the Board at its first meeting following the annual meeting of stockholders to serve for one-year terms. The current members of our committees are indicated in the following chart:

Audit Committee

The Audit Committee has been appointed by the Board to assist the Board in its oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the independence, qualifications and performance of the independent auditor, the performance of our internal audit function and the independent auditor and our systems of disclosure controls and procedures and internal controls over financial reporting. The Board has determined that each member of the Audit Committee is independent and possesses the requisite financial literacy to serve on the Audit Committee. The Board has also determined that each member qualifies as an “audit committee financial expert” as that term is defined by the Securities and Exchange Commission (“SEC”). No member of the Audit Committee serves on the audit committee of more than two other public companies. The Report of the Audit Committee is included in this Proxy Statement on page 18.

Compensation Committee

The Compensation Committee has been appointed by the Board to oversee the development and implementation of our compensation philosophy and strategy with the goals of attracting and retaining the executive talent required to achieve corporate objectives and linking pay and performance. The Board has determined that each member of the Compensation Committee is independent. The Compensation Committee Report is included in this Proxy Statement on page 37.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee has been appointed by the Board to identify qualified individuals to become Board members, determine whether existing Board members should be nominated for re-election, review the composition of the Board and its committees, oversee the evaluation of the Board and review and implement our Corporate Governance Principles. The Board has determined that each member of the Nominating and Corporate Governance Committee is independent.

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Attendance at Meetings

The Board and its committees held the following number of meetings and acted by unanimous written consent the following number of times during 2011:

We expect members of the Board to attend all meetings. The directors attended, as a group, 97% of the meetings of the Board and Board committees on which they served during calendar year 2011. Each director attended at least 89% of the meetings of the Board and Board committees on which he or she served during 2011. Directors are also encouraged to attend the annual meeting of stockholders, and in 2011, all of our directors attended the meeting.

Director Qualifications, Nominations and Diversity

Stockholders may propose director nominees to the Nominating and Corporate Governance Committee (for consideration for election at the 2013 Annual Meeting of Stockholders) by submitting, within the time frame set forth in this Proxy Statement on page 57, the names and supporting information (including confirmation of the nominee’s willingness to serve as a director) to: Exterran Holdings, Inc., 16666 Northchase Drive, Houston, Texas 77060, Attention: Secretary. See the section titled “General Information — 2013 Annual Meeting of Stockholders.” Any stockholder-recommended nominee will be evaluated in the context of our director qualification standards and the existing size and composition of the Board.

The Nominating and Corporate Governance Committee believes that all Board candidates should be selected for their character, judgment, ethics, integrity, business experience, time commitment and acumen. The Board, as a whole, through its individual members, seeks to have competence in areas of particular importance to us such as finance, accounting, international business and relevant technical expertise. The Nominating and Corporate Governance Committee also considers issues of diversity in the director identification and nomination process. While the Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity, it seeks nominees with a broad diversity of experience, professions, skills, education and backgrounds. The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The Nominating and Corporate Governance Committee believes that backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. Nominees are not discriminated against on the basis of race, color, religion, sex, age, national origin, citizenship, veteran status, disability, sexual orientation, gender identity, genetic information or any other basis proscribed by law.

Directors must be committed to enhancing the long-term interests of our stockholders as a whole and should not be biased toward the interests of any particular segment of the stockholder or employee population. Board members should also be prepared to travel to personally attend meetings of the Board and its committees and should be ready to dedicate sufficient time to prepare in advance of such meetings to allow them to make an effective contribution to the meetings. Further, Board members should ensure that they are not otherwise committed to other activities which would make a commitment to the Board impractical or unadvisable and should satisfy the independence, qualification and composition requirements of the Board and its committees, as required by applicable law, regulation and the rules of the NYSE, our certificate of incorporation, our bylaws and our Corporate Governance Principles.

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The Board’s Role in Risk Oversight

The Board has an active role, as a whole and through its committees, in overseeing management of the Company’s risks. The Board’s role in the risk oversight process includes receiving regular reports from members of senior management on areas of material risk to us, including operational, financial and strategic risks. Also, the involvement of the Board in reviewing, approving and monitoring our fundamental financial and business strategies, as contemplated by our Corporate Governance Principles, is important to the determination of the types and appropriate levels of risk we undertake. The Board’s committees, all comprised solely of independent directors, assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Compensation Committee oversees the management of risks relating to our executive compensation plans and arrangements. The Nominating and Corporate Governance Committee manages risks associated with the composition of the Board and other types of risks within its areas of responsibility. The Audit Committee oversees the management of financial risks and also receives regular quarterly reports from our Director of Internal Audit and our Chief Compliance Officer. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports about such risks. This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.

Risk Assessment Related to Our Compensation Structure

We believe our compensation practices reflect sound risk management practices and are not reasonably likely to result in a material adverse effect on us. For example, our Compensation Committee and management set performance goals in light of past performance, future expectations and market conditions that they believe do not encourage the taking of unreasonable risks. Our Compensation Committee believes its practice of considering non-financial and other qualitative factors in determining compensation awards discourages excessive risk taking and encourages good judgment. In addition, we believe employee compensation is allocated between cash and equity-based awards, between fixed and variable awards, and between short-term and long-term focused compensation in a manner that encourages decision-making that balances short-term goals with long-term goals and thereby reduces the likelihood of excessive risk taking. Finally, our Compensation Committee has established (a) short-term incentives that balance various Company objectives and provide for maximum payouts, and (b) long-term incentive awards with three-year vesting periods and we believe these program features further balance short- and long-term objectives and encourages employee behavior designed to achieve sustained profitability and growth.

Compensation Committee Interlocks and Insider Participation

Each of Messrs. Hall, Honeybourne, McCollum, Pate, Pazuk and Sotir served on the Compensation Committee of the Board during all or a portion of 2011. There are no matters relating to interlocks or insider participation that we are required to report.

EXECUTIVE OFFICERS

The following provides information regarding our executive officers as of March 1, 2012. Certain of our executive officers also serve as officers of Exterran GP LLC, the managing general partner of Exterran Partners, L.P., a master limited partnership in which we own an equity interest (the “Partnership”).

William M. Austin, 65, was appointed Executive Vice President and Chief Financial Officer in December 2011. Prior to joining Exterran, Mr. Austin served as President of Austin Lee Ventures LTD (an investment company) since April 2010. From June 2009 to April 2010, he served as Senior Vice President and CFO of Valerus Compression Services, L.P. (a natural gas services, production and processing company). He was Senior Vice President and CFO of Key Energy Services (a publicly traded oilfield services firm) from January 2005 to February 2009. Prior to Key Energy Services, he worked in various senior operating and financial management positions across numerous industries, which included the following positions to assist with

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restructurings: Executive Vice President and then Chief Executive Officer of Cable & Wireless/Exodus Communications, Inc. (a provider of web-hosting services) from June 2001 to September 2002, which filed for protection under Chapter 11 of the Bankruptcy Code in September 2002, and Chief Restructuring Officer of Northwestern Corporation (a regional electrical and natural gas provider) from April 2003 to August 2004, prior to its bankruptcy filing in September 2004. Mr. Austin serves on the board and as chairman of the audit committee of IROC Energy Services Corp (a TSX-listed oilfield services company operating in Canada), and as a director of Express Energy LLC (a private oilfield services company). From 2009 to 2011, Mr. Austin served as a director of myDIALS Inc. (a private company and a provider of business analytics tools). Mr. Austin holds a B.S in Electrical Engineering from Brown University, an M.S. in Computer Science from Stevens Institute of Technology and an M.B.A. from Columbia University.

Kenneth R. Bickett, 50, is Vice President and Controller, positions he assumed in November 2011. He was also appointed Vice President and Controller of Exterran GP LLC in November 2011. Mr. Bickett held the titles of Vice President, Finance and Accounting from 2009 to November 2011 with Exterran and Exterran GP LLC and Vice President and Controller from 2007 to 2009 with Exterran and from 2006 to 2009 with Exterran GP LLC. Prior to the merger of Hanover and Universal and from July 2005, Mr. Bickett served as Vice President, Accounting and Corporate Controller of Universal. Mr. Bickett previously served as Vice President and Assistant Controller for Reliant Energy, Inc. (an electricity and energy services provider). Prior to joining Reliant Energy in 2002, Mr. Bickett was employed by Azurix Corp. from 1998, most recently as Vice President and Controller. Mr. Bickett also serves as an officer of certain other Exterran majority-owned subsidiaries. Mr. Bickett is a Certified Public Accountant and holds a B.S. in accounting from the University of Kentucky.

D. Bradley Childers, 47, was elected President and Chief Executive Officer effective December 12, 2011, having served as Interim President and Chief Executive Officer since November 1, 2011. Mr. Childers was also elected President, Chief Executive Officer and Chairman of the Board of Exterran GP LLC effective December 12, 2011, having served as Interim President, Chief Executive Officer and Chairman of the Board since November 1, 2011. Prior to these elections, Mr. Childers was Senior Vice President of Exterran since August 2007, President, North America of Exterran Energy Solutions, L.P. (“EESLP,” our wholly owned subsidiary) since March 2008, and Senior Vice President of Exterran GP LLC since June 2006 as well as director of Exterran GP LLC since May 2008. Prior to the merger of Hanover and Universal in August 2007, Mr. Childers was Senior Vice President of Universal and President of the International Division of Universal Compression, Inc. (Universal’s wholly owned subsidiary), positions he held from July 2006. He served as Senior Vice President, Business Development, General Counsel and Secretary of Universal beginning in April 2005 and as Senior Vice President, General Counsel and Secretary of Universal beginning in September 2002. Prior to joining Universal, he held various positions with Occidental Petroleum Corporation (an international oil and gas exploration and production company) and its subsidiaries from 1994 to 2002, including Vice President, Business Development at Occidental Oil and Gas Corporation and corporate counsel. Mr. Childers also serves as an officer and director of certain other Exterran majority-owned subsidiaries. Mr. Childers holds a B.A. from Claremont McKenna College and a J.D. from the University of Southern California.

Joseph G. Kishkill, 47, is Senior Vice President, a position he assumed in February 2009. He also serves as President, Eastern Hemisphere of Exterran Energy Solutions, L.P., having served as President, Latin America from March 2008 to November 2009. Prior to the merger of Hanover and Universal in August 2007, Mr. Kishkill held the position of Vice President, Latin America with Universal. Mr. Kishkill joined Universal in 2002 as a General Manager in South America. Mr. Kishkill held positions of increasing responsibility with Enron Corporation from 1990 to 2001, advancing to Chief Executive Officer for South America. During his career, Mr. Kishkill has been based in Dubai, Brazil and Argentina and has provided management services for energy projects and pipelines throughout South America. Mr. Kishkill also serves as an officer of certain other Exterran majority-owned subsidiaries. Mr. Kishkill holds a B.S. in electrical engineering from Brown University and an M.B.A. from Harvard University.

Ronaldo Reimer, 49, is Senior Vice President, a position he assumed in June 2010. He also serves as President, Latin America of Exterran Energy Solutions, L.P. Mr. Reimer joined Exterran in June 2010, after

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concluding 25 years of service with the Robert Bosch Corporation. Mr. Reimer held a number of management and leadership positions with Bosch, including President of the Chassis Systems Control Product Division in North America, Senior Vice President of the Diesel Systems Division in South America and Technical Plant Manager of the Curitiba Plant in Curitiba, Brazil. During his tenure with Bosch, he served in engineering, project and operations manager and manufacturing director positions in Brazil, France, Germany and the United States. Mr. Reimer holds a mechanical engineering degree from The University of Sao Paulo, Brazil.

Robert E. Rice, 46, was elected Senior Vice President in December 2011, and at that time he was also appointed Senior Vice President of Exterran GP LLC and President, North America of Exterran Energy Solutions, L.P. Previously, Mr. Rice was Regional Vice President for the U.S. Gulf Coast Region of EESLP. Prior to the merger of Hanover and Universal, Mr. Rice held the following positions at Hanover: Vice President, Gulf Coast Business Unit, from September 2003 to August 2007; Vice President, Health, Safety & Environmental, from October 2002 to September 2003; and Director, Corporate Development, from January 2002 to October 2002. During his career, Mr. Rice has been based in Argentina and Australia and has developed detailed experience in analyzing, structuring and growing businesses in domestic and international energy markets. Mr. Rice also served as a Flight Test Engineer with the United States Air Force. Mr. Rice holds a B.S. in electrical engineering from Louisiana Tech University.

Daniel K. Schlanger, 38, is Senior Vice President, Operations Services, a position he assumed in February 2009. He also serves as Senior Vice President and director of Exterran GP LLC, positions he has held since June 2006 and October 2006, respectively, and served as Chief Financial Officer of Exterran GP LLC from June 2006 through March 2009. From May 2006 until the merger of Hanover and Universal, Mr. Schlanger served as Vice President, Corporate Development of Universal Compression, Inc. (a wholly owned subsidiary of Universal). From August 1996 through May 2006, Mr. Schlanger was employed as an investment banker with Merrill Lynch & Co. where he focused on the energy sector. Mr. Schlanger also serves as an officer of certain other Exterran majority-owned subsidiaries. Mr. Schlanger holds a B.S. in economics from the University of Pennsylvania.

Donald C. Wayne, 45, is Senior Vice President, General Counsel and Secretary, positions he assumed in August 2007. He also serves as Senior Vice President and General Counsel of Exterran GP LLC, a position he has held since August 2006. Prior to the merger of Hanover and Universal, Mr. Wayne served as Vice President, General Counsel and Secretary of Universal, a position he held since joining Universal in August 2006. Prior to joining Universal, he served as Vice President, General Counsel and Secretary of U.S. Concrete, Inc. (a producer of ready-mixed concrete and concrete-related products) from 1999 to August 2006. Prior to joining U.S. Concrete in 1999, Mr. Wayne served as an attorney with the law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P. Mr. Wayne also serves as an officer and director of certain other Exterran majority-owned subsidiaries. Mr. Wayne holds a B.A. from Tufts University and a J.D. and an M.B.A. from Washington University (St. Louis).

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BENEFICIAL OWNERSHIP OF COMMON STOCK

Security Ownership of Certain Beneficial Owners

The following table provides information about beneficial owners, known by us as of March 1, 2012, of 5% or more of our outstanding common stock (the “5% Stockholders”). Unless otherwise noted in the footnotes to the table, the 5% Stockholders named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them.

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Security Ownership of Management

The following table provides information, as of March 1, 2012, regarding the beneficial ownership of our common stock by each of our directors, each of our Named Executive Officers (as identified on page 20 of this Proxy Statement), and all of our current directors and executive officers as a group. Unless otherwise noted in the footnotes to the table, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Unless otherwise noted, the address for each executive officer and director listed below is c/o Exterran Holdings, Inc., 16666 Northchase Drive, Houston, Texas 77060.

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), directors, officers and beneficial owners of 10% or more of our common stock (“Reporting Persons”) are required to report to the SEC on a timely basis the initiation of their status as a Reporting Person and any changes with respect to their beneficial ownership of our common stock. Based solely on a review of Forms 3, 4 and 5 (and any amendments thereto) furnished to us, we have concluded that no Reporting Persons were delinquent with respect to their reporting obligations, as set forth in Section 16(a) of the Exchange Act.

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PROPOSAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

Deloitte & Touche LLP (“Deloitte”) served as our independent registered public accounting firm for the fiscal year ended December 31, 2011. The Audit Committee has selected Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2012. We are submitting the selection of Deloitte for stockholder ratification at the 2012 Stockholders’ Meeting.

Representatives of Deloitte attended all meetings of the Audit Committee in 2011. For additional information concerning the Audit Committee and its activities with Deloitte, see “Pre-Approval Policy” below and “Report of the Audit Committee“ on page 18. We expect that a representative of Deloitte will attend the annual meeting, and the representative will have an opportunity to make a statement if he or she so chooses. The representative will also be available to respond to appropriate questions from stockholders.

Board of Directors’ Recommendation

THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE REAPPOINTMENT OF DELOITTE & TOUCHE LLP.

Vote Required

Ratification requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the meeting. Abstentions will be treated as votes cast and will have the same effect as a vote against the proposal. Broker non-votes will have no effect on the outcome of the vote.

Our organizational documents do not require that our stockholders ratify the selection of our independent registered public accounting firm. We are requesting such ratification because we believe it is a matter of good corporate practice. If our stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Deloitte. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of us and our stockholders.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional services rendered by Deloitte and its member firms and respective affiliates on our behalf for calendar years 2011 and 2010:

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In considering the nature of the services provided by Deloitte, the Audit Committee determined that such services are compatible with the provision of independent audit services. The Audit Committee discussed these services with Deloitte and our management to determine that they are permitted under the rules and regulations concerning auditor independence promulgated by (i) the SEC to implement the Sarbanes-Oxley Act of 2002, and (ii)  the American Institute of Certified Public Accountants.

Pre-Approval Policy

The Audit Committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. This policy generally provides that we will not engage our independent registered public accounting firm to render audit or non-audit services, and will not engage any other independent registered public accounting firm to render audit services, unless the service is specifically approved in advance by the Audit Committee.

The Audit Committee’s practice is to consider for approval, at its regularly scheduled meetings, all audit and non-audit services proposed to be provided by our independent registered public accounting firm. In situations where a matter cannot wait until the next regularly scheduled committee meeting, the chair of the Audit Committee has been delegated authority to consider and, if appropriate, approve audit and non-audit services. Approval of services and related fees by the Audit Committee chair is reported to the full Audit Committee at the next regularly scheduled meeting. All services performed by our independent registered public accounting firm in 2011 were pre-approved by the Audit Committee.

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REPORT OF THE AUDIT COMMITTEE

The purpose of the Audit Committee is to assist the Board of Directors in its general oversight of Exterran’s financial reporting, internal controls and audit functions. The Audit Committee Charter describes in greater detail the full responsibilities of the Audit Committee and is available on Exterran’s website at www.exterran.com.

The Audit Committee has reviewed and discussed the consolidated financial statements and management’s assessment and report on internal controls over financial reporting with management and Deloitte & Touche LLP (“Deloitte”), the Company’s independent registered public accounting firm. The Audit Committee also reviewed and discussed with Deloitte its review and report on Exterran’s internal control over financial reporting. Exterran published these reports in its Annual Report on Form 10-K for the year ended December 31, 2011, which it filed with the SEC on February 24 , 2012. Management is responsible for the preparation, presentation and integrity of financial statements and the reporting process, including the system of internal controls. Deloitte is responsible for performing an independent audit of Exterran’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and issuing a report thereon, as well as expressing an opinion on the effectiveness of Exterran’s internal control over financial reporting. The Audit Committee monitors these processes.

The Audit Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the independent auditors. The Audit Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and the independent auditors on the basis of the information it receives, discussions with management and the independent auditors, and the experience of the Audit Committee’s members in business, financial and accounting matters. In accordance with law, the Audit Committee has ultimate authority and responsibility for selecting, compensating, evaluating, and, when appropriate, replacing Exterran’s independent audit firm. The Audit Committee has the authority to engage its own outside advisers, including experts in particular areas of accounting, as it determines appropriate, apart from counsel or advisers hired by management.

In this context, the Audit Committee discussed with Exterran’s internal auditors and Deloitte the overall scope and plans for their respective audits. The Audit Committee met with the internal auditors and Deloitte, with and without management present, to discuss the results of their examinations, their evaluations of Exterran’s internal controls, and the overall quality of Exterran’s financial reporting. Management represented to the Audit Committee that Exterran’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee reviewed and discussed the consolidated financial statements with management and Deloitte. The Audit Committee also discussed with Deloitte the matters required to be discussed by Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU 380), as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

In addition, the Audit Committee discussed with Deloitte its independence, considered the compatibility of non-audit services with the auditors’ independence and received the written disclosures and letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to Exterran’s Board of Directors, and the Board has concurred, that (i) the audited financial statements be included in Exterran’s Annual Report on Form 10-K for the twelve months ended December 31, 2011, for filing with the Securities and Exchange Commission; (ii) Deloitte meets the requirements for independence; and (iii) the appointment of Deloitte for 2012 be submitted to the stockholders for ratification.

Submitted by the Audit Committee

of the Board of Directors

Mark A. McCollum, Chair

Gordon T. Hall

Christopher T. Seaver

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PROPOSAL 3

ADVISORY VOTE TO APPROVE

THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act added Section 14A to the Exchange Act, which requires that we provide our stockholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. This proposal gives stockholders the opportunity to approve, reject or abstain from voting with respect to the compensation provided to our Named Executive Officers for 2011, as described this Proxy Statement.

As discussed in the Compensation Discussion and Analysis section of this Proxy Statement, our executive compensation program is designed to attract and retain individuals with the level of expertise and experience needed to help achieve the business objectives intended to drive both short- and long-term success and stockholder value. You are encouraged to read the detailed information concerning our executive compensation program and policies contained in the Compensation Discussion and Analysis beginning on page 20 of this Proxy Statement, as well as the compensation-related tabular and other disclosure following the Compensation Discussion and Analysis.

Board of Directors’ Recommendation

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE FOLLOWING RESOLUTION:

“RESOLVED, that the stockholders of Exterran Holdings, Inc. approve, on an advisory basis, the compensation paid to its Named Executive Officers for 2011, as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”

Vote Required

Approval of Proposal 3 requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the meeting. Abstentions and broker non-votes will have no effect on the outcome of the vote.

Please note that Proposal 3 is not considered a “routine” matter and, therefore, if a brokerage firm holds your shares, it will not have discretionary authority to vote your shares unless you provide instructions to your broker using one of the methods described in this Proxy Statement.

Because the vote on this proposal is advisory in nature, the outcome will not be binding on the Company, the Board or the Compensation Committee and will not affect compensation already paid or awarded. However, the Board and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of the vote when considering future compensation arrangements for our Named Executive Officers.

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

This compensation discussion and analysis provides information about our compensation objectives and policies for our named executive officers identified below. Our executive compensation program is designed (i) to align our executive officers’ pay with individual and company performance, with the goal of achieving growth, profitability and return for our stockholders, and (ii) to utilize compensation as a tool to attract and retain talented executives who are critical to our short- and long-term success.

The key elements of our named executive officers’ compensation, along with the primary objectives of each element, are set forth below:

To serve the foregoing objectives, our compensation program is designed to be flexible. In alignment with the foregoing objectives, the Compensation Committee determines the overall compensation of our named executive officers identified below and its allocation among the elements above, taking into consideration the advice and analyses provided by our compensation consultant and input provided by our management team, including our Chief Executive Officer.

2011 Leadership Team

The following discussion and analysis provides information about our compensation objectives and policies with respect to our principal executive officer, principal financial officer and certain of our other highly compensated executive officers, including Mr. Danner, whose employment with us concluded in October 2011, and Mr. Anderson, who ceased serving as our Senior Vice President, Chief Financial Officer and Chief of Staff in December 2011 (collectively, our “Named Executive Officers” and, excluding Messrs. Danner and Anderson, our “current Named Executive Officers”). This discussion and analysis provides additional context for the numbers presented in the compensation tables that follow. For 2011, our Named Executive Officers were:

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Changes to Our Leadership Team for 2012

In connection with our financial performance during 2011, certain key management changes were made and, in December 2011, we announced the following changes to complement our existing leadership team intended to drive improved Company performance for 2012 and beyond. Effective December 12, 2011:

2011 Executive Compensation Program Reflects Best Practices

The Compensation Committee believes that our compensation program provides balanced incentives, while managing compensation risks appropriately in the context of our business objectives. To ensure that our program continues to meet these objectives, the Compensation Committee periodically evaluates market best practices in executive compensation, and makes appropriate modifications to our program intended to support our Company’s strategies and to appropriately balance risk and reward. Following are the significant compensation governance practices the Compensation Committee has incorporated into our executive compensation program:

Additional Best Practices Adopted in Response to the 2011 Say on Pay Vote

At our May 2011 annual meeting, a majority of our stockholders voted to approve our 2010 executive compensation program. Although the “Say on Pay” vote is advisory in nature, the Board and the Compensation Committee value the opinions of our stockholders and considered the outcome of the vote when determining compensation arrangements for our Named Executive Officers for the remainder of 2011 and for 2012. In addition, we contacted several of our largest institutional shareholders to solicit input regarding our executive

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compensation program and practices. While changes to the 2011 compensation program were necessarily limited because the stockholder vote was received after the Compensation Committee had established our 2011 compensation program, the Board and the Compensation Committee did adopt a number of significant changes in our compensation practices, including the following:

Compensation Actions Related to New 2012 Leadership Team

2011. In connection with the December 2011 management changes discussed above, the Compensation Committee took the following one-time compensation actions:

Each of these actions has been included as required in our Summary Compensation Table for 2011, below. However, because these actions were one-time events necessitated by our management changes, we do not believe the amounts listed in the Summary Compensation Table’s “Total” column for 2011 for each of Messrs. Childers, Danner and Austin accurately reflect the Compensation Committee’s intentions with respect to 2011 executive compensation. Specifically:

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2012. As shown in the following table, the Compensation Committee has considered the outcome of our stockholders’ say-on-pay vote and set the 2012 total target compensation for our new President and Chief Executive Officer, Mr. Childers, at a lower rate overall than the 2011 total target compensation for his predecessor, Mr. Danner.

Compensation Committee Overview

The Compensation Committee is comprised of independent, non-employee directors and operates under a charter approved by the full Board of Directors, which is available on our website at www.exterran.com. The fundamental responsibilities of the Compensation Committee are to:

Compensation Philosophy and Objectives

We and the Compensation Committee believe that compensation programs play a vital role in attracting and retaining executives with the level of expertise and experience needed to help achieve the business objectives that

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are intended to ultimately drive both short- and long-term success and stockholder value. To attract, retain and motivate an effective management team, the Compensation Committee has guided management in developing a compensation program linking pay and performance in a manner consistent with our corporate values and operating principles, including integrity, teamwork, accountability, safety and customer service, with the goal of achieving consistent growth, profitability and return for our stockholders.

Our philosophy is to provide total compensation to our management that is competitive with that of similarly-sized companies across a variety of industries and within the oilfield services sector by targeting cash and equity compensation at the 50^th percentile of those groups, as further described below in the section entitled “— How Our Compensation Committee Determines Executive Compensation.” The combination of these target percentiles is intended to position our executives’ compensation competitively relative to the market, while ensuring that overall compensation remains fair and reasonable.

Our emphasis on at-risk compensation is an important component of our overall compensation philosophy. Approximately 75% of our Named Executive Officers’ compensation for 2011 was “at risk,” meaning that the payment of such compensation was contingent upon company performance and individual performance. We believe this emphasis appropriately balances short-term and long-term business objectives and helps to align management’s interest with that of our stockholders. We consider the following components of our executives’ compensation to be “at risk”:

As shown below, in the first quarter of 2011, the Compensation Committee set the total 2011 target compensation for our then-current Named Executive Officers as follows:

CEO Target Compensation Mix* (Includes information for Mr. Danner)				Average NEO Target Compensation Mix* (Includes information for Messrs. Anderson, Childers, Kishkill and Schlanger)
87% at-risk; 70% long-term				73% at-risk; 55% long-term

The composition of the total target compensation package illustrates our emphasis on at-risk and long-term compensation. We believe our emphasis on long-term incentives encourages our executives to act strategically to ensure our sustainable long-term performance and to support our goal of enhancing long-term stockholder value.

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How Our Compensation Committee Determines Executive Compensation

As described above in “Compensation Committee Overview,” the Compensation Committee is responsible for establishing compensation programs that are consistent with our compensation philosophy and values. In carrying out this role, the Compensation Committee reviews each executive officer’s current and past total compensation, including a three-year look-back at base salary, short-term incentive pay, the value of long-term incentives and potential payouts in the event of a termination of employment under various specified circumstances. The Compensation Committee then determines the compensation of our executive officers in its discretion, taking into consideration data and materials received from its compensation consultant and other data and materials made available to the Compensation Committee, as well as the recommendations of our Chief Executive Officer (other than with respect to his own compensation), each as further detailed below.

Consideration of Compensation Consultant Data and Analysis

For 2011, our Compensation Committee engaged Towers Watson, an independent third-party compensation consultant, to:

For 2012, our Compensation Committee has engaged Pearl Meyer, an independent third-party compensation consultant.

Comparative Compensation Data

Towers Watson provided a combination of general industry data and oilfield services data (collectively, the “Comparative Compensation Data”), which the Compensation Committee reviewed to determine the appropriate levels of compensation for 2011, including total compensation and its principal components, for our executive officers. Towers Watson’s Comparative Compensation Data was comprised of the following:

The Compensation Committee believes Towers Watson’s Comparative Compensation Data provides a broad-based view of executive compensation across multiple industry segments based on similar company size. This provides valuable information for structuring an executive compensation program that is generally

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competitive, allows the Compensation Committee to identify a target compensation range and appropriately position executive compensation within that target range, as indicated below, and provides the data necessary to support individual compensation decisions for comparable positions in the general and oilfield services industries.

Peer Group Data

The Compensation Committee also reviews executive compensation data published in the proxy statements of our peer group (the “Peer Group Data”) as an additional source of information in assessing whether our executive compensation program is appropriately positioned and competitive based on our industry and size.

For 2011, the Compensation Committee set our peer group as follows:

This peer group included companies with a large range of revenues and with both domestic and international operations, many of whom are our competitors for managerial talent. The Compensation Committee also considered the market capitalization of such companies. The Compensation Committee believes that a diversity of oilfield services companies provides an enhanced overview of compensation and reflects more completely those companies with which we compete for technical and managerial talent.

How the Compensation Committees Uses the Data

The Compensation Committee used the Comparative Compensation Data for 2011 to consider overall trends in executive compensation and to target executive cash compensation and long-term incentive compensation at the 50^th percentile, which it believes is appropriate to maintain our competitiveness in the market for managerial talent.

The Peer Group Data was used by the Compensation Committee for 2011 to target cash compensation for our then-current Chief Executive Officer (Mr. Danner) at the 25^th to 50^th percentile of our peer group. The Compensation Committee also used the Peer Group Data to target 2012 cash compensation for our new President and Chief Executive Officer, Mr. Childers, below the 25^th percentile of our peer group, and to target 2012 cash compensation for our new Executive Vice President and Chief Financial Officer, Mr. Austin, at the 50^th percentile of our peer group. The Peer Group Data was not used to target the compensation of any other Named Executive Officer.

For 2011, actual cash compensation and long-term equity incentive compensation (based on the grant-date fair value) for our former Chief Executive Officer, Mr. Danner (excluding the impact of the severance payment made pursuant to the terms of his separation agreement with us), fell below the 50^th percentile of the Comparative Compensation Data and the Peer Group Data. Also for 2011, actual cash compensation and long-term equity incentive compensation (based on the grant-date fair value) for our other Named Executive Officers fell around the 50^th percentile and slightly above the 50^th percentile, respectively, of the Comparative Compensation Data (excluding the impact of the December 2011 payment made to Mr. Childers in recognition of his service to us as Interim President and Chief Executive Officer and the December 2011 advanced grant to Mr. Childers of his 2012 long-term equity incentive award (other than performance units) in recognition of his assumption of the role of President and Chief Executive Officer).

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Consideration of Chief Executive Officer Recommendations

The most significant aspects of management’s, including our Chief Executive Officer’s, role in the compensation-setting process are:

Our Chief Executive Officer annually reviews the performance of each of the executive officers other than himself. Based on these performance reviews, he recommends certain salary adjustments, annual cash incentives and long-term incentive awards to the Compensation Committee.

Elements of Compensation

Our executive compensation programs are managed from a “total rewards” perspective, with consideration given to each of the following components:

In addition, our Named Executive Officers are eligible to participate in our standard retirement savings plans, standard employee benefit plans and standard employee health and welfare benefit plans, as further described below. Certain executive officers and key employees, including our current Named Executive Officers, have been provided with severance benefit agreements and change of control arrangements, as further described below. Certain employees who are asked to relocate outside of their home country are provided with an expatriate compensation package, which generally includes assistance with housing and education expenses and, where applicable, a hardship premium.

Base Salaries

Our Compensation Committee annually reviews and sets the base salaries for our Named Executive Officers. The Compensation Committee has determined that, to attract and retain sufficient talent, base pay generally should be set near the median of that for similarly-sized companies in the general industry and the oilfield services industry, as described above. In addition to considering the Comparative Compensation Data in making salary decisions, the Compensation Committee exercises judgment and discretion based upon each executive’s level of responsibility, individual skills, experience in his or her current role, his or her expected future role, performance, internal pay equity and external factors involving competitive positioning and general economic conditions. No specific formula is applied to determine the weight of each of these factors; rather, base salaries are established based on the Compensation Committee’s assessment of all relevant information. Performance evaluations are conducted annually during the first quarter of each year, and the resulting adjustments in base salaries generally are effective following the first quarter of each year.

In February 2011, the Compensation Committee reviewed the annual base salaries of our then-current Named Executive Officers. Our then-current Chief Executive Officer, Mr. Danner, while generally satisfied with

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our performance in the areas of cash flow generation, customer service, employee development and safety, concluded that other financial performance indicators for 2010 fell short of expectations, and thus recommended to the Compensation Committee that no increase be made to the annual base salaries of the Named Executive Officers for 2011. The Compensation Committee determined, based on a review of Company performance, and taking into account Mr. Danner’s recommendations with respect to the Named Executive Officers other than himself, to make no adjustment to the annual base salaries of the Named Executive Officers for 2011.

The base salaries in effect for our Named Executive Officers for 2011 were as follows:

Annual Performance-Based Incentive Compensation

In February 2011, the Compensation Committee adopted a short-term incentive program (the “2011 Incentive Program”) under which each Named Executive Officer was eligible to receive a cash award based on 2011 performance. In determining the bonus opportunity for each Named Executive Officer, the Compensation Committee considered his relative responsibility and his potential impact on the achievement of our performance criteria. Bonus targets, expressed as a percentage of each Named Executive Officer’s 2011 base salary, were assigned as follows:

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Under the 2011 Incentive Program, each Named Executive Officer was eligible to receive a cash award, ranging from 0% to 175% of his bonus target, based on the Compensation Committee’s assessment of Company and business group performance for 2011 relative to the key performance indicators discussed below, as well as individual performance and such other factors or criteria that the Compensation Committee could choose to consider, in its discretion. For 2011, while business group performance and Company operational and safety performance were generally acceptable, Company financial performance was below expectations and, on that basis, the Compensation Committee determined to exercise its discretion to reduce the payment under the 2011 Incentive Program to each Named Executive Officer.

The Compensation Committee reviewed the performance of our business groups relative to the financial, people, customer service and safety performance indicators shown in the table below, weighted as shown in the table, and assigned an achievement percentage to each business group based on such assessment.

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The Compensation Committee considered Company performance relative to the financial, operational and safety performance indicators shown in the table below, with no specific weight assigned to any performance indicator.

In addition to reviewing business group performance and Company performance, the Compensation Committee considered each executive’s individual contributions, including demonstrated leadership, implementation of the Company’s business strategy and success at driving employee engagement, as well as the input of our Chief Executive Officer with respect to each executive other than himself, but determined to make no adjustment to the payout for any Named Executive Officer.

No specific weight was made as between Company performance and business group performance. As discussed above, following its assessment of business group performance and downward adjustment based on overall Company financial performance, the Compensation Committee approved the following cash payments under the 2011 Incentive Program.

Long-Term Incentive Compensation

Our Compensation Committee and management believe that our executive officers and other key employees should have an ongoing stake in our success and that these individuals should have a meaningful portion of their

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total compensation tied to the achievement of our strategic objectives and long-term financial and operational performance. Our Compensation Committee believes that:

Equity-based long-term incentive awards (“LTI Awards”) are granted and valued based on the closing market price of our common stock or the Partnership’s common units, as applicable, on the date of approval by the applicable compensation committee (or the last business day immediately preceding such date). Awards other than performance shares generally vest at the rate of one-third per year over a three-year period, subject to continued employment through the vesting date. Performance awards are payable based on achievement of certain specified company performance indicators, and may be paid out at 0% to 200% of the number of shares or units granted. Payout amounts under the performance awards are determined following the conclusion of the performance period, which is generally the previous fiscal year. Performance shares vest on the third anniversary of the grant date and may be settled in shares of our common stock or in cash, in the Compensation Committee’s discretion.

The Compensation Committee’s practice is to grant equity-based awards once a year, generally in late February or early March after fourth quarter earnings information for the prior year has been released for at least two full trading days. The schedule for making equity-based awards is typically established several months in advance, and is not set based on knowledge of material nonpublic information or in response to our stock price. This practice results in awards being granted on a regular, predictable annual cycle, after annual earnings information has been disseminated to the marketplace. Equity-based awards are occasionally granted at other times during the year, such as upon the hiring of a new employee or following the promotion of an employee. In some instances, the Compensation Committee may be aware, at the time grants are made, of matters or potential developments that are not ripe for public disclosure at that time but that may result in public announcement of material information at a later date.

2011 LTI Awards

In addition to targeting total long-term incentive compensation at the 50^th percentile, as discussed above under “How Our Compensation Committee Determines Executive Compensation — Consideration of Compensation Consultant Data and Analysis,” in determining the LTI Awards made to our Named Executive Officers for 2011, the Compensation Committee also reviewed share utilization with respect to the Exterran Holdings, Inc. Amended and Restated 2007 Stock Incentive Plan (as amended, the “Stock Incentive Plan”), potential overhang and burn rate under various award scenarios, as well as the total compensation paid to executives over the past three years. Consistent with the Compensation Committee’s compensation philosophy discussed above under “Compensation Philosophy and Objectives,” the Compensation Committee believes it is important to place a significant percentage of each Named Executive Officer’s compensation “at risk.”

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On average, the long-term equity incentive compensation awarded during the first quarter of 2011 to our then-current Named Executive Officers for 2011 comprised approximately 58% of their total target compensation for 2011. Please see the Summary Compensation Table for 2011 and the Grants of Plan-Based Awards Table for 2011 below for more information regarding the LTI Awards granted to our Named Executive Officers in 2011.

The following awards were also granted to certain of our Named Executive Officers in 2011 for the reasons described:

2011 Performance Shares

The performance shares awarded to the Named Executive Officers in 2011 (the “2011 Performance Shares”) were payable based on achievement of economic profit during the performance period from January 1, 2011 through December 31, 2011, and could be paid out at 0% to 200% of the number of shares granted. The following table shows the economic profit target range for payout under the 2011 Performance Shares and the results achieved by the Company for the year ended December 31, 2011 (dollars in millions):

Based on the economic profit threshold not being met for the year ended December 31, 2011, the Compensation Committee determined that no 2011 Performance Shares would be payable to our current Named Executive Officers.

Off-Cycle Equity Grants

In addition to awarding the annual long-term equity incentive award grants during the first quarter of each year, the Compensation Committee has delegated limited authority to a committee of the Board, which is currently comprised of our Executive Vice Chairman, to grant off-cycle equity awards, subject to the following restrictions:

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During 2011, an aggregate of 9,766 stock options, 29,476 shares of restricted stock and 32,440 restricted stock units, which was within the limits discussed above, was granted to our employees pursuant to this delegation of authority by the Compensation Committee.

Other Compensation Programs

Amended and Restated 2007 Stock Incentive Plan

The Stock Incentive Plan is administered by our Compensation Committee and authorizes the issuance of awards, at the discretion of our Compensation Committee, of our stock options, restricted stock, restricted stock units, stock appreciation rights and performance awards to our directors and employees and employees of our subsidiaries. A maximum of 12,500,000 shares of our common stock is available for issuance under the Stock Incentive Plan. At December 31, 2011, approximately 4,537,071 shares remained available for issuance under the Stock Incentive Plan.

Exterran Partners Long-Term Incentive Plan

The Partnership Plan, which is administered by the Partnership’s compensation committee, provides incentive compensation awards based on the value of the Partnership’s common units to management, directors, employees and consultants of our company, the Partnership and our respective affiliates who perform services for the Partnership and its subsidiaries. The Partnership Plan also enhances our ability to attract and retain the services of individuals essential for the Partnership’s growth and profitability and encourages them to devote their best efforts to advancing the Partnership’s business.

The Partnership Plan provides for the grant of up to an aggregate of 1,035,378 common units, restricted units, phantom units, unit options, unit awards or substitute awards and, with respect to unit options and phantom units, the grant of DERs. DERs are credited with an amount equal to any cash distributions the Partnership makes on its common units during the period phantom units are outstanding and are payable upon vesting of the tandem phantom units without interest. Since the inception of the Partnership Plan, the Partnership has awarded only unit options and phantom units. At December 31, 2011, approximately 858,947 units remained available for issuance under the Partnership Plan.

401(k) Retirement and Savings Plan

The Exterran 401(k) Plan provides employees, including our Named Executive Officers, with the opportunity to defer up to 25% of their eligible salary, up to the Internal Revenue Service (“IRS”) maximum deferral amount, on a pre-tax basis. This is accomplished through contributions to an account maintained by an independent trustee. We generally match 100% of an employee’s contribution to a maximum of 1% of the employee’s annual eligible compensation, plus 50% of an employee’s contribution from 2% to a maximum of 6% of the employee’s annual eligible compensation.

The employee directs how contributions to the 401(k) Plan are invested. Employees vest in our matching contributions after two years of service. The Exterran 401(k) Plan includes a sunset provision that requires employees to divest their Plan holdings of our common stock by December 31, 2012.

Deferred Compensation Plan

Under the Exterran Deferred Compensation Plan (the “Deferred Compensation Plan”), key management and highly compensated employees, including our Named Executive Officers, may (i) defer receipt of their

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compensation, including up to 100% of their salaries and up to 100% of their bonuses, and (ii) be credited with company contributions that are designed to serve as a make-up for the portion of the employer-matching contribution that cannot be made under the Exterran 401(k) Plan due to qualified plan limits under the Internal Revenue Code (the “Code”). We may, but have no obligation to, make discretionary contributions on behalf of a participant, in such form and amount as our Compensation Committee deems appropriate, in its sole discretion.

Participant elections with respect to deferrals of compensation and plan distributions generally must be made in the year preceding that in which the compensation is earned, except that our Compensation Committee may permit a newly eligible participant to make deferral elections up to 30 days after he or she first becomes eligible to participate in the Deferred Compensation Plan. The Deferred Compensation Plan is an “unfunded” plan for state and federal tax purposes, and participants have the rights of our unsecured creditors with respect to their Deferred Compensation Plan accounts.

An employee’s contributions to the Deferred Compensation Plan are self-directed investments in the various funds that are made available under such plan. There are thus no interest calculations or other earnings measures other than the performance of the investment funds selected by the employee. Employees, including our Named Executive Officers, determine how their contributions are invested and may change these elections at any time.

Participants may elect to receive distributions of their accounts while still employed by us or upon the participant’s separation from service or disability, each as defined in the Deferred Compensation Plan, either in a lump sum or in two to ten annual installments. Distributions will be made in cash, except that participants may elect to have any portion of his or her account that is deemed invested in our common stock distributed in shares of common stock if the distribution is made prior to January 1, 2013.

Employee Stock Purchase Plan

The Exterran Holdings, Inc. Employee Stock Purchase Plan (the “ESPP”) provides our eligible employees, including our Named Executive Officers, an option to purchase our common stock through payroll deductions and is designed to comply with Section 423 of the Code. Our Compensation Committee, which administers the ESPP, has the discretion to set the purchase price at 85% to 100% of the fair market value of a share of our common stock on one of the following dates: (i) the offering date, (ii) the purchase date or (iii) the offering date or the purchase date, whichever is lower. For 2011, employees who elected to participate in the ESPP could purchase a share of our common stock at the lesser of (i) 95% of the fair market value of a share of common stock on the offering date or (ii) 95% of the fair market value of a share of common stock on the purchase date. Offering periods consist of three-month periods, or such other periods as may be determined from time to time by our Compensation Committee. A total of 1,000,000 shares of our common stock has been authorized and reserved for issuance under the ESPP. At December 31, 2011, approximately 491,533 shares remained available for purchase under the ESPP.

2011 Employment Inducement Long-Term Equity Plan

In anticipation of certain key management changes discussed above, in November 2011, the Board approved the Exterran Holdings, Inc. 2011 Employment Inducement Long-Term Equity Plan (the “Employment Inducement Plan”), which is administered by the Compensation Committee and authorizes the issuance of awards of non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights and performance awards to certain newly-hired employees of us or our affiliates. A maximum of 1,000,000 shares of our common stock is available for issuance under the Employment Inducement Plan. The Employment Inducement Plan is only available to grant awards to an individual, as a material inducement to such individual to enter into employment with us, who (i) has not previously been an employee of us or our affiliates or (ii) is rehired following a bona fide period of non-employment with us and our affiliates. In December 2011, as a material inducement to his entering into employment with us, Mr. Austin was awarded 131,342 shares of restricted stock and 328,676 stock options under the Employment Inducement Plan. We do not intend to issue

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any additional equity under the Employment Inducement Plan, other than as necessary to materially induce a high-level executive to enter employment with us.

Medical Expense Reimbursement Plan

The Medical Expense Reimbursement Plan (“MERP”) was a plan made available to certain of our executive officers (including our Named Executive Officers) that supplemented the standard medical and dental benefit plans available to all our employees. During 2011, the MERP provided for reimbursement, in an amount up to $10,000, of certain out-of-pocket medical costs incurred by the executive or his dependents that were not covered by our standard medical and dental plans. As part of our ongoing effort to ensure our compensation program reflects best practices, the MERP was terminated effective December 31, 2011.

Benefits and Perquisites

We maintain a standard complement of health benefit plans for our employees, including our Named Executive Officers, that provide medical, dental and vision benefits, flexible spending accounts, short-term and long-term disability insurance, accidental death and dismemberment insurance and life insurance coverage. These benefits are generally provided to our Named Executive Officers on the same terms and conditions as they are provided to our other employees.

We made limited use of perquisites during 2011. A taxable benefit of tax preparation and planning services was made available to certain of our executive officers. The MERP, which provided for additional medical, dental, and vision benefits to certain of our executive officers during 2011, was terminated effective December 31, 2011. Certain employees who are asked to relocate outside of their home country are provided with an expatriate compensation package, which generally includes assistance with housing and education expenses and, where applicable, a hardship premium. In early 2009, the Compensation Committee established a policy prohibiting tax gross-ups on perquisites, except for gross-ups provided pursuant to an expatriate tax equalization plan, policy or arrangement.

Severance Benefit and Change of Control Arrangements

We have entered into severance benefit and change of control agreements with each of our current Named Executive Officers. Our Compensation Committee considers the provision of such agreements for our executive officers to be a customary part of executive compensation and, therefore, necessary to attracting and retaining executive talent. Our change of control agreements are structured as “double trigger” agreements. In other words, the change of control does not itself trigger benefits; rather, benefits are paid only if the executive’s employment terminates within a specified period following a change of control. We also believe that the vulnerability to termination of employment at a management level creates uncertainty for our Named Executive Officers, which is appropriately addressed by providing severance protections, both within and outside of the change of control context.

The change of control agreements for our Named Executive Officers provide that if the executive is terminated other than for cause, death or disability within 18 months after a change of control occurs, or if during that period the executive terminates his employment for good reason (each, a “qualifying termination”), he will be entitled to (i) a payment equal to a multiple of two times the executive’s annual base salary and two times target bonus (three times base salary and three times target bonus, in the case of Mr. Childers), (ii) a payment equal to his target bonus, prorated to the date of termination, (iii) health and welfare benefits for up to two years following such termination, and (iv) certain other forms of remuneration. A more specific description of the terms of the change of control agreements, together with an estimate of the payouts in connection with such agreements, is provided under “Information Regarding Executive Compensation — Potential Payments upon Termination or Change of Control — Change of Control Agreements,” below.

The severance benefit agreements for our Named Executive Officers provide that if the executive’s employment is terminated by us without cause or by such executive with good reason at any time through the

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term of the agreement, he will be entitled to (i) a payment equal to the sum of his annual base salary and his target bonus, (ii) a payment equal to his target bonus, prorated to the date of separation, multiplied by the greater of 50% or the actual performance percentage achieved as of the separation date, (iii) health and welfare benefits for up to one year following such termination, and (iv) certain other forms of remuneration. A more specific description of the terms of the severance benefit agreements, together with an estimate of the payouts in connection with such agreements, is provided under “Information Regarding Executive Compensation — Potential Payments upon Termination or Change of Control — Severance Benefit Agreements,” below.

In early 2009, the Compensation Committee established a policy prohibiting tax gross-ups on income attributable to change of control agreements and other executive benefit agreements entered into in the future, and no such agreement entered into since that date has included this provision. As a recent example, upon his promotion as our President and Chief Executive Officer in December 2011, Mr. Childers’ previous change of control agreement with us, which predated the policy change and thus provided for tax gross-ups, was replaced with a new change of control agreement that does not provide for tax gross-ups. Currently, Mr. Schlanger is our only Named Executive Officer with a change of control agreement that provides for tax gross-ups, because his change of control agreement predates this policy change and has not been materially amended or modified since.

The Stock Incentive Plan and the Partnership Plan each permit the accelerated vesting of outstanding equity awards in the event of a change of control. The award agreements for all awards made under the Stock Incentive Plan, however, provide that, upon a change of control that is not followed by a qualifying termination, only the portion of the award that would have vested on the next vesting date will fully vest as of the date of the change of control, and the remaining portion of the award will continue to be subject to the original vesting schedule. See “Information Regarding Executive Compensation — Potential Payments upon Termination or Change of Control,” below, for more information concerning equity vesting under various circumstances. The Exterran 401(k) Plan provides for accelerated vesting of all company matching contributions in the event of a change of control.

Stock Ownership Requirements

In July 2011, the Compensation Committee implemented a stock ownership policy for our officers. The Compensation Committee believes that, by requiring our officers and directors to have a meaningful ownership stake in our company, stock ownership requirements serve to more closely align our officers’ and directors’ interests with those of our stockholders.

Each of our current Named Executive Officers is required to hold an amount of our common stock with a market value of at least three times his annual base salary (five times his annual base salary in the case of our Chief Executive Officer). Each Named Executive Officer other than Mr. Childers has until the later of September 1, 2016 and five years after the date on which he became subject to the stock ownership requirement to meet this requirement. Mr. Childers has until December 31, 2016 to meet this requirement.

Each of our directors is required to hold an amount of our common stock with a market value of at least five times his or her annual base retainer (which currently amounts to $250,000 of our common stock). Each director has until three years after his or her date of election to the Board of Directors to meet this stock ownership requirement.

Prohibition on Hedging

We have adopted a policy that prohibits our employees, including our Named Executive Officers, and directors from entering into any transaction that is designed to hedge or offset any decrease in the market value of our equity securities, including by way of purchasing financial instruments (such as variable forward contracts, equity swaps, collars or exchange funds), or otherwise trading in market options (such as puts or calls), warrants, or other derivative instruments of our equity securities.

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Other Considerations

Section 162(m) of the Code

Section 162(m) of the Code generally disallows the deductibility of certain compensation expenses in excess of $1,000,000 to any one executive officer in any fiscal year. Compensation that is “performance-based” is excluded from this limitation. For compensation to be “performance-based,” it must meet certain criteria, including performance goals approved by our stockholders and, in certain cases, objective targets based on performance goals approved by our stockholders. We believe that maintaining the discretion to evaluate the performance of our executive officers is an important part of our responsibilities and benefits our stockholders. The Compensation Committee, in coordination with management, periodically assesses the potential application of Section 162(m) on incentive compensation awards and other compensation decisions.

Section 280G of the Code

Section 280G of the Code disallows a tax deduction with respect to excess parachute payments to certain executives of companies which undergo a change in control. In addition, Section 4999 of the Code imposes a 20% excise tax on the individual with respect to the excess parachute payment. Parachute payments are compensation linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans including stock options and other equity-based compensation. Excess parachute payments are parachute payments that exceed a threshold determined under Section 280G of the Code based on the executive’s prior compensation.

Section 409A of the Code

Section 409A of the Code requires that “nonqualified deferred compensation” be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees and other service providers to accelerated income tax liabilities, substantial additional taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefit plans and arrangements for all of our employees and other service providers, including our Named Executive Officers, so that they are either exempt from, or satisfy the requirements of, Section  409A of the Code.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to Exterran’s Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by the Compensation Committee of the Board of Directors

Stephen M. Pazuk, Chair

Gordon T. Hall

J.W.G. Honeybourne

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INFORMATION REGARDING EXECUTIVE COMPENSATION

Summary Compensation Table for 2011

The following table sets forth certain information with respect to compensation paid during the years shown to each of our Named Executive Officers.