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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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