16. Supplemental Condensed Consolidating Financial Information

MarkWest Energy Partners L.P. has no significant operations independent of its subsidiaries. As of September 30, 2015, the Partnership’s obligations under the outstanding Senior Notes (See Note 10) were fully, jointly and severally guaranteed, by all of the subsidiaries that are owned 100% by the Partnership, other than MarkWest Liberty Midstream and its subsidiaries and MarkWest Panola Pipeline, L.L.C. The guarantees are unconditional except for certain customary circumstances in which a subsidiary would be released from the guarantee under the indentures (See Note 18 to the Consolidated Financial Statements included in Item 8 of the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014 for discussion of these circumstances). Subsidiaries that are not 100% owned by the Partnership do not guarantee the Senior Notes. For the purpose of the following financial information, the Partnership’s investments in its subsidiaries and the guarantor subsidiaries’ investments in their subsidiaries are presented in accordance with the equity method of accounting. The co-issuer, MarkWest Energy Finance Corporation, has no independent assets or operations. Condensed consolidating financial information for the Partnership and its combined guarantor and combined non-guarantor subsidiaries as of September 30, 2015 and December 31, 2014 and for the three and nine months ended September 30, 2015 and 2014 is as follows (in thousands):

Condensed Consolidating Balance Sheets

	As of September 30, 2015
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	2	$	28,065	$	—		$	28,067
Restricted cash	—		—		10,000		—			10,000
Receivables and other current assets	4,336		153,697		170,967		—			329,000
Receivables from unconsolidated affiliates, net	—		7,388		10,686		—			18,074
Intercompany receivables	160,829		15,580		46,550		(222,959		)	—
Fair value of derivative instruments	—		13,138		4,939		—			18,077

Total current assets	165,165		189,805		271,207		(222,959		)	403,218
Total property, plant and equipment, net	9,928		2,222,107		7,215,447		(26,998		)	9,420,484
Other long-term assets:
Investment in unconsolidated affiliates	—		83,792		842,349		(9,810		)	916,331
Investment in consolidated affiliates	9,158,016		7,243,734		—		(16,401,750		)	—
Intangibles, net of accumulated amortization	—		494,633		250,625		—			745,258
Fair value of derivative instruments	—		16,686		177		—			16,863
Intercompany notes receivable	238,500		—		—		(238,500		)	—
Other long-term assets	53,944		26,592		76,617		—			157,153

Total assets	$	9,625,553	$	10,277,349	$	8,656,422	$	(16,900,017	)	$	11,659,307

LIABILITIES AND EQUITY
Current liabilities:
Intercompany payables	$	446	$	214,478	$	8,035	$	(222,959	)	$	—
Fair value of derivative instruments	—		781		73		—			854
Payables to unconsolidated affiliates	14		820		5,100		—			5,934
Other current liabilities	64,983		179,530		269,326		(2,624		)	511,215

Total current liabilities	65,443		395,609		282,534		(225,583		)	518,003
Deferred income taxes	4,097		344,468		—		—			348,565
Fair value of derivative instruments	—		20		—		—			20
Long-term intercompany financing payable	—		238,500		93,064		(331,564		)	—
Long-term debt, net of discounts	4,755,352		—		—		—			4,755,352
Other long-term liabilities	8,873		140,736		10,641		—			160,250
Equity:
Common Units	4,490,775		9,158,016		8,270,183		(17,362,757		)	4,556,217
Class B Units	301,013		—		—		—			301,013
Non-controlling interest in consolidated subsidiaries	—		—		—		1,019,887			1,019,887

Total equity	4,791,788		9,158,016		8,270,183		(16,342,870		)	5,877,117

Total liabilities and equity	$	9,625,553	$	10,277,349	$	8,656,422	$	(16,900,017	)	$	11,659,307

	As of December 31, 2014
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—	$	108,887	$	—		$	108,887
Restricted cash	—		—		20,000		—			20,000
Receivables and other current assets	1,219		225,695		153,834		—			380,748
Receivables from unconsolidated affiliates, net	247		3,001		3,849		—			7,097
Intercompany receivables	633,994		24,683		178,109		(836,786		)	—
Fair value of derivative instruments	—		17,386		3,535		—			20,921

Total current assets	635,460		270,765		468,214		(836,786		)	537,653
Total property, plant and equipment, net	9,992		2,140,565		6,550,040		(47,697		)	8,652,900
Other long-term assets:
Investment in unconsolidated affiliates	—		82,616		733,226		(10,209		)	805,633
Investment in consolidated affiliates	7,990,532		6,500,008		—		(14,490,540		)	—
Intangibles, net of accumulated amortization	—		546,637		262,640		—			809,277
Fair value of derivative instruments	—		16,507		—		—			16,507
Intercompany notes receivable	186,100		—		—		(186,100		)	—
Other long-term assets	52,825		29,412		76,571		—			158,808

Total assets	$	8,874,909	$	9,586,510	$	8,090,691	$	(15,571,332	)	$	10,980,778

LIABILITIES AND EQUITY
Current liabilities:
Intercompany payables	$	3,287	$	729,714	$	103,787	$	(836,788	)	$	—
Payables to unconsolidated affiliates	—		—		8,621		—			8,621
Other current liabilities	69,552		177,269		386,821		(2,400		)	631,242

Total current liabilities	72,839		906,983		499,229		(839,188		)	639,863
Deferred income taxes	6,162		351,098		—		—			357,260
Long-term intercompany financing payable	—		186,100		95,061		(281,161		)	—
Long-term debt, net of discounts	3,621,404		—		—		—			3,621,404
Other long-term liabilities	8,794		151,797		8,421		—			169,012
Equity:
Common Units	4,714,191		7,990,532		7,487,980		(15,434,460		)	4,758,243
Class B Units	451,519		—		—		—			451,519
Non-controlling interest in consolidated subsidiaries	—		—		—		983,477			983,477

Total equity	5,165,710		7,990,532		7,487,980		(14,450,983		)	6,193,239

Total liabilities and equity	$	8,874,909	$	9,586,510	$	8,090,691	$	(15,571,332	)	$	10,980,778

Condensed Consolidating Statements of Operations

	Three months ended September 30, 2015
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
Total revenue	$	—		$	231,720		$	248,145	$	(5,574	)	$	474,291
Operating expenses:
Purchased product costs	—			97,935			1,763		—			99,698
Facility expenses	—			39,262			54,219		2,062			95,543
Selling, general and administrative expenses	16,238			14,031			10,138		(4,426		)	35,981
Depreciation and amortization	421			54,239			90,779		(1,012		)	144,427
Other operating expenses	—			187			1,579		—			1,766

Total operating expenses	16,659			205,654			158,478		(3,376		)	377,415


(Loss) income from operations	(16,659		)	26,066			89,667		(2,198		)	96,876

Earnings from consolidated affiliates	92,837			72,525			—		(165,362		)	—
Loss on redemption of debt	(29		)	—			—		—			(29		)
Other (expense) income, net	(53,051		)	(5,034		)	2,937		9,736			(45,412		)

Income before provision for income tax	23,098			93,557			92,604		(157,824		)	51,435
Provision for income tax expense	1,509			720			—		—			2,229

Net income	21,589			92,837			92,604		(157,824		)	49,206
Net income attributable to non-controlling interest	—			—			—		(20,079		)	(20,079		)

Net income attributable to the Partnership’s unitholders	$	21,589		$	92,837		$	92,604	$	(177,903	)	$	29,127

	Three months ended September 30, 2014
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	350,863		$	263,079		$	(6,856	)	$	607,086
Operating expenses:
Purchased product costs	—			164,624			68,613			—			233,237
Facility expenses	—			40,467			43,217			1,023			84,707
Selling, general and administrative expenses	11,552			12,599			8,667			(3,958		)	28,860
Depreciation and amortization	289			50,042			71,976			(922		)	121,385
Other operating expenses (income)	—			213			(811		)	—			(598		)

Total operating expenses	11,841			267,945			191,662			(3,857		)	467,591


(Loss) income from operations	(11,841		)	82,918			71,417			(2,999		)	139,495

Earnings from consolidated affiliates	124,152			57,046			—			(181,198		)	—
Other expense, net	(41,704		)	(5,411		)	(5,757		)	10,455			(42,417		)

Income before provision for income tax	70,607			134,553			65,660			(173,742		)	97,078
Provision for income tax expense	629			10,401			—			—			11,030

Net income	69,978			124,152			65,660			(173,742		)	86,048
Net income attributable to non-controlling interest	—			—			—			(8,614		)	(8,614		)

Net income attributable to the Partnership’s unitholders	$	69,978		$	124,152		$	65,660		$	(182,356	)	$	77,434

	Nine months ended September 30, 2015
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	705,633		$	711,992		$	(16,376	)	$	1,401,249
Operating expenses:
Purchased product costs	—			339,565			13,704			—			353,269
Facility expenses	—			116,182			152,395			7,423			276,000
Selling, general and administrative expenses	43,783			43,530			30,743			(12,469		)	105,587
Depreciation and amortization	1,138			156,653			262,713			(3,154		)	417,350
Other operating expenses	—			1,751			2,008			—			3,759
Impairment expense	—			25,523			—			—			25,523

Total operating expenses	44,921			683,204			461,563			(8,200		)	1,181,488


(Loss) income from operations	(44,921		)	22,429			250,429			(8,176		)	219,761

Earnings from consolidated affiliates	216,297			198,106			—			(414,403		)	—
Loss on redemption of debt	(117,889		)	—			—			—			(117,889		)
Other expense, net	(157,260		)	(15,520		)	(2,546		)	28,441			(146,885		)

(Loss) income before provision for income tax	(103,773		)	205,015			247,883			(394,138		)	(45,013		)
Provision for income tax (benefit)	(2,066		)	(11,282		)	—			—			(13,348		)

Net income	(101,707		)	216,297			247,883			(394,138		)	(31,665		)
Net income attributable to non-controlling interest	—			—			—			(49,777		)	(49,777		)

Net (loss) income attributable to the Partnership’s unitholders	$	(101,707	)	$	216,297		$	247,883		$	(443,915	)	$	(81,442	)

	Nine months ended September 30, 2014
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	994,772		$	671,997		$	(28,841	)	$	1,637,928
Operating expenses:
Purchased product costs	—			510,445			154,346			—			664,791
Facility expenses	—			120,067			135,899			(2,232		)	253,734
Selling, general and administrative expenses	35,967			30,910			34,432			(9,458		)	91,851
Depreciation and amortization	857			148,881			213,198			(3,601		)	359,335
Other operating expenses	—			406			5,959			(5,270		)	1,095

Total operating expenses	36,824			810,709			543,834			(20,561		)	1,370,806


(Loss) income from operations	(36,824		)	184,063			128,163			(8,280		)	267,122

Earnings from consolidated affiliates	245,936			98,363			—			(344,299		)	—
Other expense, net	(129,392		)	(16,891		)	(13,691		)	28,500			(131,474		)

Income before provision for income tax	79,720			265,535			114,472			(324,079		)	135,648
Provision for income tax expense	1,037			19,599			—			—			20,636

Net income	78,683			245,936			114,472			(324,079		)	115,012
Net income attributable to non-controlling interest	—			—			—			(16,109		)	(16,109		)

Net income attributable to the Partnership’s unitholders	$	78,683		$	245,936		$	114,472		$	(340,188	)	$	98,903

Condensed Consolidating Statements of Cash Flows

	Nine months ended September 30, 2015
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash (used in) provided by operating activities	$	(197,361	)	$	215,004		$	533,555		$	17,251		568,449

Cash flows from investing activities:
Restricted cash	—			—			10,000			—			10,000
Capital expenditures	(1,091		)	(220,244		)	(991,758		)	(17,886		)	(1,230,979		)
Equity investments in consolidated affiliates	(56,160		)	(1,008,423		)	—			1,064,583			—
Intercompany advances, net	(462,194		)	—			(12,426		)	474,620			—
Investment in unconsolidated affiliates	—			(7,070		)	(138,241		)	—			(145,311		)
Distributions from consolidated affiliates	43,922			482,048			—			(525,970		)	—
Investment in intercompany notes receivable, net	(52,400		)	—			—			52,400			—
Proceeds from disposal of property, plant and equipment	—			397			2,338			—			2,735

Net cash flows used in investing activities	(527,923		)	(753,292		)	(1,130,087		)	1,047,747			(1,363,555		)


Cash flows from financing activities:

Proceeds from public equity offerings, net	237,929			—			—			—			237,929
Proceeds from Credit Facility	1,844,900			—			—			—			1,844,900
Payments Credit Facility	(1,280,500		)	—			—			—			(1,280,500		)
Proceeds from long-term debt	1,848,875			—			—			—			1,848,875
Payments of long-term debt	(1,280,000		)	—			—			—			(1,280,000		)
Payments of premiums on redemption of long-term debt	(103,209		)	—			—			—			(103,209		)
Payments for debt issue costs and deferred financing costs	(20,558		)	—			—			—			(20,558		)
Payments related to intercompany financing, net	—			52,400			(1,773		)	(50,627		)	—
Proceeds from sale of equity interest in consolidated subsidiary	—			—			11,319			—			11,319
Contributions from non-controlling interest	—			—			30,712			—			30,712
Contributions from parent and affiliates	—			56,160			1,008,423			(1,064,583		)	—
Payments of SMR liability	—			(2,001		)	—			—			(2,001		)
Share-based payment activity	(6,121		)	—			—			—			(6,121		)
Payment of distributions	(516,032		)	(43,922		)	(532,971		)	525,865			(567,060		)
Intercompany advances, net	—			475,653			—			(475,653		)	—

Net cash flows provided by financing activities	725,284			538,290			515,710			(1,064,998		)	714,286


Net increase (decrease) in cash	—			2			(80,822		)	—			(80,820		)
Cash and cash equivalents at beginning of period	—			—			108,887			—			108,887

Cash and cash equivalents at end of period	$	—		$	2		$	28,065		$	—		$	28,067

	Nine months ended September 30, 2014
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash (used in) provided by operating activities	$	(148,607	)	$	349,997		$	283,355		$	11,335		$	496,080

Cash flows from investing activities:
Capital expenditures	(4,581		)	(116,494		)	(1,637,915		)	(12,910		)	(1,771,900		)
Equity investments in consolidated affiliates	(47,498		)	(1,581,300		)	—			1,628,798			—
Intercompany advances, net	(1,006,155		)	—			(48,142		)	1,054,297			—
Investment in unconsolidated affiliates	—			(11,415		)	(194,440		)	—			(205,855		)
Distributions from consolidated affiliates	81,568			247,870			—			(329,438		)	—
Investment in intercompany notes, net	(9,400		)	—			—			9,400			—
Proceeds from disposal of property, plant and equipment	—			4,175			17,398			—			21,573
Proceeds from sale of equity interest in unconsolidated affiliate	—			—			341,137			—			341,137

Net cash flows used in investing activities	(986,066		)	(1,457,164		)	(1,521,962		)	2,350,147			(1,615,045		)


Cash flows from financing activities:
Proceeds from public equity offerings, net	1,054,195			—			—			—			1,054,195
Proceeds from Credit Facility	2,484,400			—			—			—			2,484,400
Payments Credit Facility	(1,958,500		)	—			—			—			(1,958,500		)
Payments related to intercompany financing, net	—			9,400			(1,575		)	(7,825		)	—
Payments for debt issuance costs, deferred financing costs and registration costs	(2,045		)	—			—			—			(2,045		)
Contributions from parent and affiliates	—			47,498			1,581,300			(1,628,798		)	—
Share-based payment activity	(8,947		)	—			—			—			(8,947		)
Payments of distributions	(434,654		)	(81,568		)	(248,800		)	329,438			(435,584		)
Payments of SMR liability	—			(1,823		)	—			—			(1,823		)
Intercompany advances, net	—			1,054,297			—			(1,054,297		)	—

Net cash flows provided by financing activities	1,134,449			1,027,804			1,330,925			(2,361,482		)	1,131,696


Net (decrease) increase in cash and cash equivalents	(224		)	(79,363		)	92,318			—			12,731
Cash and cash equivalents at beginning of period	224			79,363			5,718			—			85,305

Cash and cash equivalents at end of period	$	—		$	—		$	98,036		$	—		$	98,036