Exterran Holdings Reports Second-Quarter 2012 Results

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Exterran Holdings’ Annual Report on Form 10-K for the year ended December 31, 2011, and those set forth from time to time in Exterran Holdings’ filings with the Securities and Exchange Commission, which are currently available at www.exterran.com. Except as required by law, Exterran Holdings expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

(Tables Follow)

EXTERRAN HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
		Three Months Ended
		June 30,				March 31,				June 30,
		2012				2012				2011
Revenues:
North America contract operations		$	148,564			$	150,588			$	146,581
International contract operations			112,628				112,786				110,944
Aftermarket services			101,902				89,645				84,812
Fabrication			267,641				262,222				301,731
			630,735				615,241				644,068
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):
North America contract operations			70,423				74,236				73,906
International contract operations			47,092				43,889				49,766
Aftermarket services			77,528				71,731				77,647
Fabrication			241,357				235,602				269,352
Selling, general and administrative			94,134				94,839				90,450
Depreciation and amortization			88,909				85,111				90,412
Long-lived asset impairment			128,543				4,122				2,063
Restructuring charges			1,266				3,047				-
Interest expense			36,968				37,991				34,586
Equity in income of non-consolidated affiliates			(4,728	)			(37,339	)			-
Other (income) expense, net			8,752				(6,094	)			(2,853	)
			790,244				607,135				685,329
Income (loss) before income taxes			(159,509	)			8,106				(41,261	)
Benefit from income taxes			(35,502	)			(343	)			(14,113	)
Income (loss) from continuing operations			(124,007	)			8,449				(27,148	)
Loss from discontinued operations, net of tax			(42,891	)			(1,162	)			(3,076	)
Net income (loss)			(166,898	)			7,287				(30,224	)
Less: Net (income) loss attributable to the noncontrolling interest			14,290				(1,792	)			2,198
Net income (loss) attributable to Exterran stockholders		$	(152,608	)		$	5,495			$	(28,026	)
Basic income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders		$	(1.73	)		$	0.10			$	(0.40	)
Loss from discontinued operations attributable to Exterran stockholders			(0.67	)			(0.01	)			(0.05	)
Net income (loss) attributable to Exterran stockholders		$	(2.40	)		$	0.09			$	(0.45	)
Diluted income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders		$	(1.73	)		$	0.10			$	(0.40	)
Loss from discontinued operations attributable to Exterran stockholders			(0.67	)			(0.01	)		$	(0.05	)
Net income (loss) attributable to Exterran stockholders		$	(2.40	)		$	0.09			$	(0.45	)
Weighted average common and equivalent shares outstanding:
Basic			63,478				64,515				62,669
Diluted			63,478				64,596				62,669
Income (loss) attributable to Exterran stockholders:
Income (loss) from continuing operations		$	(109,717	)		$	6,657			$	(24,950	)
Loss from discontinued operations, net of tax			(42,891	)			(1,162	)			(3,076	)
Net income (loss) attributable to Exterran stockholders		$	(152,608	)		$	5,495			$	(28,026	)

EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except percentages)
		Three Months Ended
		June 30,				March 31,				June 30,
		2012				2012				2011
Revenues:
North America contract operations		$	148,564			$	150,588			$	146,581
International contract operations			112,628				112,786				110,944
Aftermarket services			101,902				89,645				84,812
Fabrication			267,641				262,222				301,731
Total		$	630,735			$	615,241			$	644,068
Gross Margin (1):
North America contract operations		$	78,141			$	76,352			$	72,675
International contract operations			65,536				68,897				61,178
Aftermarket services			24,374				17,914				7,165
Fabrication			26,284				26,620				32,379
Total		$	194,335			$	189,783			$	173,397
Selling, General and Administrative		$	94,134			$	94,839			$	90,450
% of Revenues			15	%			15	%			14	%
EBITDA, as adjusted (1)		$	101,457			$	96,151			$	82,786
% of Revenues			16	%			16	%			13	%
Capital Expenditures		$	112,382			$	115,472			$	53,884
Less: Proceeds from Sale of PP&E			(16,248	)			(9,785	)			(3,134	)
Net Capital Expenditures		$	96,134			$	105,687			$	50,750
Gross Margin Percentage:
North America contract operations			53	%			51	%			50	%
International contract operations			58	%			61	%			55	%
Aftermarket services			24	%			20	%			8	%
Fabrication			10	%			10	%			11	%
Total			31	%			31	%			27	%
Total Available Horsepower (at period end):
North America contract operations			3,285				3,558				3,605
International contract operations			1,254				1,257				1,196
Total			4,539				4,815				4,801
Total Operating Horsepower (at period end):
North America contract operations			2,811				2,825				2,784
International contract operations			996				957				980
Total			3,807				3,782				3,764
Total Operating Horsepower (average):
North America contract operations			2,820				2,827				2,782
International contract operations			989				956				978
Total			3,809				3,783				3,760
Horsepower Utilization (at period end):
North America contract operations			86	%			79	%			77	%
International contract operations			79	%			76	%			82	%
Total			84	%			79	%			78	%
Fabrication Backlog:
Compression & accessory		$	297,012			$	330,992			$	221,014
Production & processing equipment			677,629				551,975				487,760
Installation			311,737				72,364				27,413
Total		$	1,286,378			$	955,331			$	736,187
Debt to Capitalization:
Debt		$	1,803,906			$	1,709,451			$	1,704,200
Exterran stockholders' equity			1,351,212				1,500,005				1,712,861
Capitalization		$	3,155,118			$	3,209,456			$	3,417,061
Total Debt to Capitalization			57	%			53	%			50	%

(1) Management believes disclosure of EBITDA, as adjusted, and Gross Margin, both non-GAAP measures, provides useful information to investors because these measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, management uses EBITDA, as adjusted, as a valuation measure.

EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per share amounts)
		Three Months Ended
		June 30,				March 31,				June 30,
		2012				2012				2011
Reconciliation of GAAP to Non-GAAP Financial Information:
Net income (loss)		$	(166,898	)		$	7,287			$	(30,224	)
Loss from discontinued operations, net of tax			(42,891	)			(1,162	)			(3,076	)
Income (loss) from continuing operations			(124,007	)			8,449				(27,148	)
Depreciation and amortization			88,909				85,111				90,412
Long-lived asset impairment			128,543				4,122				2,063
Restructuring charges			1,266				3,047				-
Investment in non-consolidated affiliates impairment			-				224				-
Proceeds from sale of joint venture assets			(4,728	)			(37,563	)			-
Interest expense			36,968				37,991				34,586
(Gain) loss on currency exchange rate remeasurement of intercompany balances			10,008				(4,887	)			(3,014	)
Benefit from income taxes			(35,502	)			(343	)			(14,113	)
EBITDA, as adjusted (1)			101,457				96,151				82,786
Selling, general and administrative			94,134				94,839				90,450
Equity in income of non-consolidated affiliates			(4,728	)			(37,339	)			-
Investment in non-consolidated affiliates impairment			-				(224	)			-
Proceeds from sale of joint venture assets			4,728				37,563				-
Gain (loss) on currency exchange rate remeasurement of intercompany balances			(10,008	)			4,887				3,014
Other (income) expense, net			8,752				(6,094	)			(2,853	)
Gross Margin (1)		$	194,335			$	189,783			$	173,397
Net income (loss) attributable to Exterran stockholders		$	(152,608	)		$	5,495			$	(28,026	)
Loss from discontinued operations			42,891				1,162				3,076
Charges, after-tax:
Long-lived asset impairment (including the impact on noncontrolling interest)			82,940				2,247				1,193
Restructuring charges			1,005				1,920				-
Investment in non-consolidated affiliates impairment			-				224				-
Proceeds from sale of joint venture assets			(4,728	)			(37,563	)			-
Net loss from continuing operations attributable to Exterran stockholders, excluding charges		$	(30,500	)		$	(26,515	)		$	(23,757	)
Diluted Income (loss) from continuing operations attributable to Exterran stockholders per common share		$	(1.73	)		$	0.10			$	(0.40	)
Adjustment for charges, after-tax, per common share (2)			1.25				(0.52	)			0.02
Diluted net loss from continuing operations attributable to Exterran stockholders per common share, excluding charges (1) (2)		$	(0.48	)		$	(0.42	)		$	(0.38	)

(1) Management believes disclosure of EBITDA, as adjusted, Diluted net income (loss) from continuing operations attributable to Exterran stockholders per common share, excluding charges, and Gross Margin, non-GAAP measures, provides useful information to investors because these measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, management uses EBITDA, as adjusted, as a valuation measure.

(2) The weighted average per common shares outstanding in the diluted income (loss) calculation, excluding charges for the three months ended March 31, 2012 is adjusted to exclude the following shares that are included in the calculation of diluted income (loss) per share as the effects would have been anti-dilutive: 1,330,000 shares of unvested restricted stock, 54,000 shares on the exercise of options and vesting of restricted stock units and 27,000 shares on the settlement of employee stock purchase plan shares.

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