|
Delaware
|
|
47-3282259
|
(State or Other Jurisdiction of
|
|
(I.R.S. Employer
|
Incorporation or Organization)
|
|
Identification No.)
|
|
|
|
4444 Brittmoore Road
|
|
|
Houston, Texas
|
|
77041
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
|
|
Non-accelerated filer
x
|
|
Smaller reporting company
o
|
(Do not check if a smaller reporting company)
|
|
|
|
|
Page
|
|
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
|
As Restated
(Note 2) |
||||
ASSETS
|
|
|
|
||||
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
32,053
|
|
|
$
|
29,032
|
|
Restricted cash
|
1,082
|
|
|
1,490
|
|
||
Accounts receivable, net of allowance of $4,784 and $2,868, respectively
|
237,654
|
|
|
363,581
|
|
||
Inventory (Note 4)
|
164,330
|
|
|
208,081
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts (Note 5)
|
41,811
|
|
|
65,311
|
|
||
Other current assets
|
51,121
|
|
|
53,866
|
|
||
Current assets associated with discontinued operations (Note 3)
|
22
|
|
|
32,923
|
|
||
Total current assets
|
528,073
|
|
|
754,284
|
|
||
Property, plant and equipment, net (Note 6)
|
807,610
|
|
|
858,188
|
|
||
Deferred income taxes (Note 13)
|
4,773
|
|
|
86,110
|
|
||
Intangible and other assets, net
|
63,064
|
|
|
51,533
|
|
||
Long-term assets associated with discontinued operations (Note 3)
|
—
|
|
|
38,281
|
|
||
Total assets
|
$
|
1,403,520
|
|
|
$
|
1,788,396
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS
’
EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable, trade
|
$
|
72,510
|
|
|
$
|
86,727
|
|
Accrued liabilities
|
170,527
|
|
|
175,841
|
|
||
Deferred revenue
|
30,983
|
|
|
31,675
|
|
||
Billings on uncompleted contracts in excess of costs and estimated earnings (Note 5)
|
30,976
|
|
|
37,908
|
|
||
Current liabilities associated with discontinued operations (Note 3)
|
1,005
|
|
|
13,645
|
|
||
Total current liabilities
|
306,001
|
|
|
345,796
|
|
||
Long-term debt (Note 8)
|
372,574
|
|
|
525,593
|
|
||
Deferred income taxes
|
15,138
|
|
|
22,519
|
|
||
Long-term deferred revenue
|
101,594
|
|
|
59,769
|
|
||
Other long-term liabilities
|
22,619
|
|
|
22,708
|
|
||
Long-term liabilities associated with discontinued operations (Note 3)
|
2
|
|
|
6,075
|
|
||
Total liabilities
|
817,928
|
|
|
982,460
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $0.01 par value per share; 50,000,000 shares authorized; zero issued
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value per share; 250,000,000 shares authorized; 35,635,832 and 35,153,358 shares issued, respectively
|
356
|
|
|
352
|
|
||
Additional paid-in capital
|
767,403
|
|
|
805,755
|
|
||
Accumulated deficit
|
(230,478
|
)
|
|
(29,315
|
)
|
||
Treasury stock — 152,151 and 5,776 common shares, at cost, respectively
|
(1,498
|
)
|
|
(54
|
)
|
||
Accumulated other comprehensive income
|
49,809
|
|
|
29,198
|
|
||
Total stockholders’ equity (Note 15)
|
585,592
|
|
|
805,936
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,403,520
|
|
|
$
|
1,788,396
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
As Restated
(Note 2) |
|
|
|
As Restated
(Note 2) |
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Contract operations
|
$
|
99,143
|
|
|
$
|
114,104
|
|
|
$
|
298,591
|
|
|
$
|
350,045
|
|
Aftermarket services
|
26,590
|
|
|
25,272
|
|
|
91,499
|
|
|
95,547
|
|
||||
Oil and gas product sales—third parties
|
73,685
|
|
|
217,141
|
|
|
314,684
|
|
|
729,176
|
|
||||
Oil and gas product sales—affiliates (Note 14)
|
—
|
|
|
36,551
|
|
|
—
|
|
|
146,263
|
|
||||
Belleli EPC product sales
|
29,740
|
|
|
18,105
|
|
|
93,161
|
|
|
70,743
|
|
||||
|
229,158
|
|
|
411,173
|
|
|
797,935
|
|
|
1,391,774
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales (excluding depreciation and amortization expense):
|
|
|
|
|
|
|
|
||||||||
Contract operations
|
36,056
|
|
|
41,114
|
|
|
110,955
|
|
|
130,198
|
|
||||
Aftermarket services
|
19,046
|
|
|
18,336
|
|
|
65,483
|
|
|
67,820
|
|
||||
Oil and gas product sales
|
70,074
|
|
|
214,357
|
|
|
290,165
|
|
|
736,302
|
|
||||
Belleli EPC product sales
|
29,104
|
|
|
26,292
|
|
|
93,953
|
|
|
103,483
|
|
||||
Selling, general and administrative
|
37,864
|
|
|
54,202
|
|
|
124,250
|
|
|
167,452
|
|
||||
Depreciation and amortization
|
28,183
|
|
|
36,083
|
|
|
106,533
|
|
|
110,151
|
|
||||
Long-lived asset impairment (Note 10)
|
5,358
|
|
|
3,775
|
|
|
6,009
|
|
|
14,264
|
|
||||
Restatement charges (Note 11)
|
12,298
|
|
|
—
|
|
|
20,149
|
|
|
—
|
|
||||
Restructuring and other charges (Note 12)
|
2,239
|
|
|
7,150
|
|
|
25,442
|
|
|
17,697
|
|
||||
Interest expense
|
8,254
|
|
|
581
|
|
|
25,596
|
|
|
1,407
|
|
||||
Equity in income of non-consolidated affiliates (Note 7)
|
—
|
|
|
(5,084
|
)
|
|
(10,403
|
)
|
|
(15,152
|
)
|
||||
Other (income) expense, net
|
(3,349
|
)
|
|
28,102
|
|
|
(13,160
|
)
|
|
39,280
|
|
||||
|
245,127
|
|
|
424,908
|
|
|
844,972
|
|
|
1,372,902
|
|
||||
Income (loss) before income taxes
|
(15,969
|
)
|
|
(13,735
|
)
|
|
(47,037
|
)
|
|
18,872
|
|
||||
Provision for (benefit from) income taxes (Note 13)
|
16,343
|
|
|
(4,137
|
)
|
|
120,687
|
|
|
24,555
|
|
||||
Loss from continuing operations
|
(32,312
|
)
|
|
(9,598
|
)
|
|
(167,724
|
)
|
|
(5,683
|
)
|
||||
Income (loss) from discontinued operations, net of tax (Note 3)
|
19,652
|
|
|
18,275
|
|
|
(33,439
|
)
|
|
36,414
|
|
||||
Net income (loss)
|
$
|
(12,660
|
)
|
|
$
|
8,677
|
|
|
$
|
(201,163
|
)
|
|
$
|
30,731
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common share (Note 17):
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations per common share
|
$
|
(0.93
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(4.85
|
)
|
|
$
|
(0.16
|
)
|
Income (loss) from discontinued operations per common share
|
0.56
|
|
|
0.53
|
|
|
(0.97
|
)
|
|
1.06
|
|
||||
Net income (loss) per common share
|
$
|
(0.37
|
)
|
|
$
|
0.25
|
|
|
$
|
(5.82
|
)
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income (loss) per common share (Note 17):
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations per common share
|
$
|
(0.93
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(4.85
|
)
|
|
$
|
(0.16
|
)
|
Income (loss) from discontinued operations per common share
|
0.56
|
|
|
0.53
|
|
|
(0.97
|
)
|
|
1.06
|
|
||||
Net income (loss) per common share
|
$
|
(0.37
|
)
|
|
$
|
0.25
|
|
|
$
|
(5.82
|
)
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding used in net income (loss) per common share (Note 17):
|
|
|
|
|
|
|
|
||||||||
Basic
|
34,632
|
|
|
34,286
|
|
|
34,550
|
|
|
34,286
|
|
||||
Diluted
|
34,632
|
|
|
34,286
|
|
|
34,550
|
|
|
34,286
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
As Restated
(Note 2) |
|
|
|
As Restated
(Note 2) |
||||||||
Net income (loss)
|
$
|
(12,660
|
)
|
|
$
|
8,677
|
|
|
$
|
(201,163
|
)
|
|
$
|
30,731
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|||||||
Foreign currency translation adjustment
|
16,412
|
|
|
8,638
|
|
|
20,611
|
|
|
4,218
|
|
||||
Comprehensive income (loss)
|
$
|
3,752
|
|
|
$
|
17,315
|
|
|
$
|
(180,552
|
)
|
|
$
|
34,949
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Treasury Stock
|
|
Parent Equity
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
|
||||||||||||||
Balance, January 1, 2015 (As Restated)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,337,590
|
|
|
$
|
26,745
|
|
|
$
|
1,364,335
|
|
Net income (As Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
30,731
|
|
|
|
|
|
30,731
|
|
|||||||
Net distributions to parent (As Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
(27,331
|
)
|
|
|
|
|
(27,331
|
)
|
|||||||
Foreign currency translation adjustment (As Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,218
|
|
|
4,218
|
|
|||||||
Balance, September 30, 2015 (As Restated)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,340,990
|
|
|
$
|
30,963
|
|
|
$
|
1,371,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, January 1, 2016 (As Restated)
|
$
|
352
|
|
|
$
|
805,755
|
|
|
$
|
(29,315
|
)
|
|
$
|
(54
|
)
|
|
$
|
—
|
|
|
$
|
29,198
|
|
|
$
|
805,936
|
|
Net loss
|
|
|
|
|
|
|
(201,163
|
)
|
|
|
|
|
|
|
|
|
|
|
(201,163
|
)
|
|||||||
Options exercised
|
|
|
|
694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
694
|
|
|||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,611
|
|
|
20,611
|
|
|||||||
Cash transfer to Archrock, Inc. (Note 18)
|
|
|
|
(49,176
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(49,176
|
)
|
|||||||
Treasury stock purchased
|
|
|
|
|
|
|
|
|
|
(1,444
|
)
|
|
|
|
|
|
|
|
(1,444
|
)
|
|||||||
Stock-based compensation, net of forfeitures
|
4
|
|
|
10,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,161
|
|
|||||||
Income tax benefit from stock-based compensation expenses
|
|
|
|
(27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27
|
)
|
|||||||
Balance, September 30, 2016
|
$
|
356
|
|
|
$
|
767,403
|
|
|
$
|
(230,478
|
)
|
|
$
|
(1,498
|
)
|
|
$
|
—
|
|
|
$
|
49,809
|
|
|
$
|
585,592
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
As Restated
(Note 2) |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(201,163
|
)
|
|
$
|
30,731
|
|
Adjustments to reconcile net income (loss) to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
106,533
|
|
|
110,151
|
|
||
Long-lived asset impairment
|
6,009
|
|
|
14,264
|
|
||
Amortization of deferred financing costs
|
3,453
|
|
|
—
|
|
||
(Income) loss from discontinued operations, net of tax
|
33,439
|
|
|
(36,414
|
)
|
||
Provision for doubtful accounts
|
2,101
|
|
|
1,612
|
|
||
Gain on sale of property, plant and equipment
|
(2,354
|
)
|
|
(1,160
|
)
|
||
Equity in income of non-consolidated affiliates
|
(10,403
|
)
|
|
(15,152
|
)
|
||
(Gain) loss on remeasurement of intercompany balances
|
(9,922
|
)
|
|
35,550
|
|
||
Loss on foreign currency derivatives
|
587
|
|
|
—
|
|
||
Stock-based compensation expense
|
10,161
|
|
|
5,358
|
|
||
Deferred income tax provision (benefit)
|
73,092
|
|
|
(18,660
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable and notes
|
127,751
|
|
|
41,071
|
|
||
Inventory
|
44,861
|
|
|
29,017
|
|
||
Costs and estimated earnings versus billings on uncompleted contracts
|
16,578
|
|
|
(22,521
|
)
|
||
Other current assets
|
6,470
|
|
|
(4,240
|
)
|
||
Accounts payable and other liabilities
|
(25,733
|
)
|
|
(69,691
|
)
|
||
Deferred revenue
|
25,083
|
|
|
(8,533
|
)
|
||
Other
|
6,477
|
|
|
1,578
|
|
||
Net cash provided by continuing operations
|
213,020
|
|
|
92,961
|
|
||
Net cash provided by (used in) discontinued operations
|
(2,284
|
)
|
|
6,950
|
|
||
Net cash provided by operating activities
|
210,736
|
|
|
99,911
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(47,689
|
)
|
|
(122,097
|
)
|
||
Proceeds from sale of property, plant and equipment
|
972
|
|
|
5,275
|
|
||
Return of investments in non-consolidated affiliates
|
10,403
|
|
|
15,185
|
|
||
Proceeds received from settlement of note receivable
|
—
|
|
|
5,357
|
|
||
Settlement of foreign currency derivatives
|
(396
|
)
|
|
—
|
|
||
(Increase) decrease in restricted cash
|
408
|
|
|
(1
|
)
|
||
Cash invested in non-consolidated affiliates
|
—
|
|
|
(33
|
)
|
||
Net cash used in continuing operations
|
(36,302
|
)
|
|
(96,314
|
)
|
||
Net cash provided by discontinued operations
|
36,734
|
|
|
31,273
|
|
||
Net cash provided by (used in) investing activities
|
432
|
|
|
(65,041
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from borrowings of long-term debt
|
353,758
|
|
|
—
|
|
||
Repayments of long-term debt
|
(508,948
|
)
|
|
—
|
|
||
Cash transfer to Archrock, Inc. (Note 18)
|
(49,176
|
)
|
|
—
|
|
||
Net distributions to parent
|
—
|
|
|
(40,811
|
)
|
||
Payments for debt issuance costs
|
(779
|
)
|
|
(498
|
)
|
||
Proceeds from stock options exercised
|
694
|
|
|
—
|
|
||
Purchase of treasury stock
|
(1,444
|
)
|
|
—
|
|
||
Stock-based compensation excess tax benefit
|
16
|
|
|
—
|
|
||
Net cash used in financing activities
|
(205,879
|
)
|
|
(41,309
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(2,268
|
)
|
|
(976
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
3,021
|
|
|
(7,415
|
)
|
||
Cash and cash equivalents at beginning of period
|
29,032
|
|
|
39,361
|
|
||
Cash and cash equivalents at end of period
|
$
|
32,053
|
|
|
$
|
31,946
|
|
•
|
Our condensed consolidated statements of operations and comprehensive income (loss) for the three and
nine
months ended
September 30, 2016
and our condensed consolidated statements of cash flows and stockholders’ equity for the
nine
months ended
September 30, 2016
consist entirely of our consolidated results. Our condensed combined statements of operations and comprehensive income (loss) for the three and
nine
months ended
September 30, 2015
and our condensed combined statements of cash flows and stockholders’ equity for the
nine
months ended
September 30, 2015
consist entirely of the combined results of Archrock’s international services and product sales businesses.
|
•
|
Our condensed consolidated balance sheets at
September 30, 2016
and December 31, 2015 consist entirely of our consolidated balances.
|
|
December 31, 2015
|
||||||||||||||
|
As Previously Reported
|
|
Restatement Adjustments
|
|
Reclassification Adjustments (1)
|
|
As Restated and Reclassified
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
29,032
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,032
|
|
Restricted cash
|
1,490
|
|
|
—
|
|
|
—
|
|
|
1,490
|
|
||||
Accounts receivable, net of allowance
|
372,105
|
|
|
(714
|
)
|
|
(7,810
|
)
|
|
363,581
|
|
||||
Inventory
|
210,554
|
|
|
(2,042
|
)
|
|
(431
|
)
|
|
208,081
|
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
119,621
|
|
|
(36,644
|
)
|
|
(17,666
|
)
|
|
65,311
|
|
||||
Other current assets
|
60,896
|
|
|
(205
|
)
|
|
(6,825
|
)
|
|
53,866
|
|
||||
Current assets associated with discontinued operations
|
191
|
|
|
—
|
|
|
32,732
|
|
|
32,923
|
|
||||
Total current assets
|
793,889
|
|
|
(39,605
|
)
|
|
—
|
|
|
754,284
|
|
||||
Property, plant and equipment, net
|
899,402
|
|
|
(2,940
|
)
|
|
(38,274
|
)
|
|
858,188
|
|
||||
Deferred income taxes
|
86,807
|
|
|
(697
|
)
|
|
—
|
|
|
86,110
|
|
||||
Intangible and other assets, net
|
62,261
|
|
|
(10,721
|
)
|
|
(7
|
)
|
|
51,533
|
|
||||
Long-term assets associated with discontinued operations
|
—
|
|
|
—
|
|
|
38,281
|
|
|
38,281
|
|
||||
Total assets
|
$
|
1,842,359
|
|
|
$
|
(53,963
|
)
|
|
$
|
—
|
|
|
$
|
1,788,396
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable, trade
|
$
|
94,353
|
|
|
$
|
213
|
|
|
$
|
(7,839
|
)
|
|
$
|
86,727
|
|
Accrued liabilities
|
129,880
|
|
|
48,517
|
|
|
(2,556
|
)
|
|
175,841
|
|
||||
Deferred revenue
|
31,675
|
|
|
—
|
|
|
—
|
|
|
31,675
|
|
||||
Billings on uncompleted contracts in excess of costs and estimated earnings
|
38,666
|
|
|
1,243
|
|
|
(2,001
|
)
|
|
37,908
|
|
||||
Current liabilities associated with discontinued operations
|
1,249
|
|
|
—
|
|
|
12,396
|
|
|
13,645
|
|
||||
Total current liabilities
|
295,823
|
|
|
49,973
|
|
|
—
|
|
|
345,796
|
|
||||
Long-term debt
|
525,593
|
|
|
—
|
|
|
—
|
|
|
525,593
|
|
||||
Deferred income taxes
|
22,531
|
|
|
(13
|
)
|
|
1
|
|
|
22,519
|
|
||||
Long-term deferred revenue
|
59,769
|
|
|
—
|
|
|
—
|
|
|
59,769
|
|
||||
Other long-term liabilities
|
28,626
|
|
|
—
|
|
|
(5,918
|
)
|
|
22,708
|
|
||||
Long-term liabilities associated with discontinued operations
|
158
|
|
|
—
|
|
|
5,917
|
|
|
6,075
|
|
||||
Total liabilities
|
932,500
|
|
|
49,960
|
|
|
—
|
|
|
982,460
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
||||||||
Common stock
|
352
|
|
|
—
|
|
|
—
|
|
|
352
|
|
||||
Additional paid-in capital
|
932,058
|
|
|
(126,303
|
)
|
|
—
|
|
|
805,755
|
|
||||
Accumulated deficit
|
(36,483
|
)
|
|
7,168
|
|
|
—
|
|
|
(29,315
|
)
|
||||
Treasury stock
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
||||
Accumulated other comprehensive income
|
13,986
|
|
|
15,212
|
|
|
—
|
|
|
29,198
|
|
||||
Total stockholders’ equity
|
909,859
|
|
|
(103,923
|
)
|
|
—
|
|
|
805,936
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
1,842,359
|
|
|
$
|
(53,963
|
)
|
|
$
|
—
|
|
|
$
|
1,788,396
|
|
|
(1)
|
As discussed in
Note 3
, in the first quarter of 2016, we committed to a plan to exit the critical process equipment business, which provided engineering, procurement and manufacturing services related to the manufacture of critical process equipment for refinery and petrochemical facilities (referred to as “Belleli CPE” or the “Belleli CPE business” herein). We completed the sale of our Belleli CPE business in August 2016. The results of our Belleli CPE business have been reclassified to discontinued operations in our financial statements for all periods presented.
|
|
Three Months Ended September 30, 2015
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||||||||||||
|
As Previously Reported
|
|
Restatement Adjustments
|
|
Reclassification Adjustments (1)
|
|
As Restated and Reclassified
|
|
As Previously Reported
|
|
Restatement Adjustments
|
|
Reclassification Adjustments (1)
|
|
As Restated and Reclassified
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contract operations
|
$
|
114,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
114,104
|
|
|
$
|
350,045
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350,045
|
|
Aftermarket services
|
25,272
|
|
|
—
|
|
|
—
|
|
|
25,272
|
|
|
95,547
|
|
|
—
|
|
|
—
|
|
|
95,547
|
|
||||||||
Oil and gas product sales—third parties
|
234,490
|
|
|
—
|
|
|
(17,349
|
)
|
|
217,141
|
|
|
768,339
|
|
|
—
|
|
|
(39,163
|
)
|
|
729,176
|
|
||||||||
Oil and gas product sales—affiliates
|
36,551
|
|
|
—
|
|
|
—
|
|
|
36,551
|
|
|
146,263
|
|
|
—
|
|
|
—
|
|
|
146,263
|
|
||||||||
Belleli EPC product sales
|
26,772
|
|
|
(8,667
|
)
|
|
—
|
|
|
18,105
|
|
|
91,686
|
|
|
(20,943
|
)
|
|
—
|
|
|
70,743
|
|
||||||||
|
437,189
|
|
|
(8,667
|
)
|
|
(17,349
|
)
|
|
411,173
|
|
|
1,451,880
|
|
|
(20,943
|
)
|
|
(39,163
|
)
|
|
1,391,774
|
|
||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of sales (excluding depreciation and amortization expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contract operations
|
41,114
|
|
|
—
|
|
|
—
|
|
|
41,114
|
|
|
130,198
|
|
|
—
|
|
|
—
|
|
|
130,198
|
|
||||||||
Aftermarket services
|
18,336
|
|
|
—
|
|
|
—
|
|
|
18,336
|
|
|
67,820
|
|
|
—
|
|
|
—
|
|
|
67,820
|
|
||||||||
Oil and gas product sales
|
230,708
|
|
|
—
|
|
|
(16,351
|
)
|
|
214,357
|
|
|
772,924
|
|
|
|
|
|
(36,622
|
)
|
|
736,302
|
|
||||||||
Belleli EPC product sales
|
29,840
|
|
|
(3,548
|
)
|
|
—
|
|
|
26,292
|
|
|
96,528
|
|
|
6,955
|
|
|
—
|
|
|
103,483
|
|
||||||||
Selling, general and administrative
|
55,018
|
|
|
—
|
|
|
(816
|
)
|
|
54,202
|
|
|
169,348
|
|
|
—
|
|
|
(1,896
|
)
|
|
167,452
|
|
||||||||
Depreciation and amortization
|
36,837
|
|
|
90
|
|
|
(844
|
)
|
|
36,083
|
|
|
112,418
|
|
|
284
|
|
|
(2,551
|
)
|
|
110,151
|
|
||||||||
Long-lived asset impairment
|
3,775
|
|
|
—
|
|
|
—
|
|
|
3,775
|
|
|
14,264
|
|
|
—
|
|
|
—
|
|
|
14,264
|
|
||||||||
Restructuring and other charges
|
7,150
|
|
|
—
|
|
|
—
|
|
|
7,150
|
|
|
17,697
|
|
|
—
|
|
|
—
|
|
|
17,697
|
|
||||||||
Interest expense
|
581
|
|
|
—
|
|
|
—
|
|
|
581
|
|
|
1,407
|
|
|
—
|
|
|
—
|
|
|
1,407
|
|
||||||||
Equity in income of non-consolidated affiliates
|
(5,084
|
)
|
|
—
|
|
|
—
|
|
|
(5,084
|
)
|
|
(15,152
|
)
|
|
—
|
|
|
—
|
|
|
(15,152
|
)
|
||||||||
Other (income) expense, net
|
27,974
|
|
|
(53
|
)
|
|
181
|
|
|
28,102
|
|
|
39,852
|
|
|
(1,014
|
)
|
|
442
|
|
|
39,280
|
|
||||||||
|
446,249
|
|
|
(3,511
|
)
|
|
(17,830
|
)
|
|
424,908
|
|
|
1,407,304
|
|
|
6,225
|
|
|
(40,627
|
)
|
|
1,372,902
|
|
||||||||
Income (loss) before income taxes
|
(9,060
|
)
|
|
(5,156
|
)
|
|
481
|
|
|
(13,735
|
)
|
|
44,576
|
|
|
(27,168
|
)
|
|
1,464
|
|
|
18,872
|
|
||||||||
Provision for (benefit from) income taxes
|
(2,587
|
)
|
|
(1,550
|
)
|
|
—
|
|
|
(4,137
|
)
|
|
24,215
|
|
|
340
|
|
|
—
|
|
|
24,555
|
|
||||||||
Income (loss) from continuing operations
|
(6,473
|
)
|
|
(3,606
|
)
|
|
481
|
|
|
(9,598
|
)
|
|
20,361
|
|
|
(27,508
|
)
|
|
1,464
|
|
|
(5,683
|
)
|
||||||||
Income from discontinued operations, net of tax
|
18,756
|
|
|
—
|
|
|
(481
|
)
|
|
18,275
|
|
|
37,878
|
|
|
—
|
|
|
(1,464
|
)
|
|
36,414
|
|
||||||||
Net income
|
$
|
12,283
|
|
|
$
|
(3,606
|
)
|
|
$
|
—
|
|
|
$
|
8,677
|
|
|
$
|
58,239
|
|
|
$
|
(27,508
|
)
|
|
$
|
—
|
|
|
$
|
30,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations per common share
|
$
|
(0.19
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.28
|
)
|
|
$
|
0.59
|
|
|
$
|
(0.80
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.16
|
)
|
Income from discontinued operations per common share
|
0.55
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.53
|
|
|
1.11
|
|
|
—
|
|
|
(0.05
|
)
|
|
1.06
|
|
||||||||
Net income per common share
|
$
|
0.36
|
|
|
$
|
(0.11
|
)
|
|
$
|
—
|
|
|
$
|
0.25
|
|
|
$
|
1.70
|
|
|
$
|
(0.80
|
)
|
|
$
|
—
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations per common share
|
$
|
(0.19
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.28
|
)
|
|
$
|
0.59
|
|
|
$
|
(0.80
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.16
|
)
|
Income from discontinued operations per common share
|
0.55
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.53
|
|
|
1.11
|
|
|
—
|
|
|
(0.05
|
)
|
|
1.06
|
|
||||||||
Net income per common share
|
$
|
0.36
|
|
|
$
|
(0.11
|
)
|
|
$
|
—
|
|
|
$
|
0.25
|
|
|
$
|
1.70
|
|
|
$
|
(0.80
|
)
|
|
$
|
—
|
|
|
$
|
0.90
|
|
|
(1)
|
As discussed in
Note 3
, in the first quarter of 2016, we committed to a plan to exit our Belleli CPE business, which provided engineering, procurement and manufacturing services related to the manufacture of critical process equipment for refinery and petrochemical facilities. We completed the sale of our Belleli CPE business in August 2016. The results of our Belleli CPE business have been reclassified to discontinued operations in our financial statements for all periods presented.
|
|
Three Months Ended September 30, 2015
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||||||||||||
|
As Previously Reported
|
|
Restatement Adjustments
|
|
Reclassification Adjustments
|
|
As Restated and Reclassified
|
|
As Previously Reported
|
|
Restatement Adjustments
|
|
Reclassification Adjustments
|
|
As Restated and Reclassified
|
||||||||||||||||
Net income
|
$
|
12,283
|
|
|
$
|
(3,606
|
)
|
|
$
|
—
|
|
|
$
|
8,677
|
|
|
$
|
58,239
|
|
|
$
|
(27,508
|
)
|
|
$
|
—
|
|
|
$
|
30,731
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustment
|
4,949
|
|
|
3,689
|
|
|
—
|
|
|
8,638
|
|
|
(1,754
|
)
|
|
5,972
|
|
|
—
|
|
|
4,218
|
|
||||||||
Comprehensive income
|
$
|
17,232
|
|
|
$
|
83
|
|
|
$
|
—
|
|
|
$
|
17,315
|
|
|
$
|
56,485
|
|
|
$
|
(21,536
|
)
|
|
$
|
—
|
|
|
$
|
34,949
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
|
As Previously Reported
|
|
Restatement Adjustments
|
|
Reclassification Adjustments
|
|
As Restated and Reclassified
|
||||||||
Balance, January 1, 2015
|
$
|
1,451,822
|
|
|
$
|
(87,487
|
)
|
|
$
|
—
|
|
|
$
|
1,364,335
|
|
Net income
|
58,239
|
|
|
(27,508
|
)
|
|
—
|
|
|
30,731
|
|
||||
Net distributions to parent
|
(27,331
|
)
|
|
—
|
|
|
—
|
|
|
(27,331
|
)
|
||||
Foreign currency translation adjustment
|
(1,754
|
)
|
|
5,972
|
|
|
—
|
|
|
4,218
|
|
||||
Balance, September 30, 2015
|
$
|
1,480,976
|
|
|
$
|
(109,023
|
)
|
|
$
|
—
|
|
|
$
|
1,371,953
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
|
As Previously Reported
|
|
Restatement Adjustments
|
|
Reclassification Adjustments (1)
|
|
As Restated and Reclassified
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
58,239
|
|
|
$
|
(27,508
|
)
|
|
$
|
—
|
|
|
$
|
30,731
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
112,418
|
|
|
284
|
|
|
(2,551
|
)
|
|
110,151
|
|
||||
Long-lived asset impairment
|
14,264
|
|
|
—
|
|
|
—
|
|
|
14,264
|
|
||||
Income from discontinued operations, net of tax
|
(37,878
|
)
|
|
—
|
|
|
1,464
|
|
|
(36,414
|
)
|
||||
Provision for doubtful accounts
|
1,774
|
|
|
—
|
|
|
(162
|
)
|
|
1,612
|
|
||||
Gain on sale of property, plant and equipment
|
(1,184
|
)
|
|
—
|
|
|
24
|
|
|
(1,160
|
)
|
||||
Equity in income of non-consolidated affiliates
|
(15,152
|
)
|
|
—
|
|
|
—
|
|
|
(15,152
|
)
|
||||
Loss on remeasurement of intercompany balances
|
35,550
|
|
|
—
|
|
|
—
|
|
|
35,550
|
|
||||
Stock-based compensation expense
|
5,358
|
|
|
—
|
|
|
—
|
|
|
5,358
|
|
||||
Deferred income tax benefit
|
(19,000
|
)
|
|
340
|
|
|
—
|
|
|
(18,660
|
)
|
||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable and notes
|
39,714
|
|
|
2,574
|
|
|
(1,217
|
)
|
|
41,071
|
|
||||
Inventory
|
29,054
|
|
|
—
|
|
|
(37
|
)
|
|
29,017
|
|
||||
Costs and estimated earnings versus billings on uncompleted contracts
|
(34,393
|
)
|
|
15,442
|
|
|
(3,570
|
)
|
|
(22,521
|
)
|
||||
Other current assets
|
(9,505
|
)
|
|
187
|
|
|
5,078
|
|
|
(4,240
|
)
|
||||
Accounts payable and other liabilities
|
(75,772
|
)
|
|
9,911
|
|
|
(3,830
|
)
|
|
(69,691
|
)
|
||||
Deferred revenue
|
(8,533
|
)
|
|
—
|
|
|
—
|
|
|
(8,533
|
)
|
||||
Other
|
684
|
|
|
(1,230
|
)
|
|
2,124
|
|
|
1,578
|
|
||||
Net cash provided by continuing operations
|
95,638
|
|
|
—
|
|
|
(2,677
|
)
|
|
92,961
|
|
||||
Net cash provided by discontinued operations
|
4,273
|
|
|
—
|
|
|
2,677
|
|
|
6,950
|
|
||||
Net cash provided by operating activities
|
99,911
|
|
|
—
|
|
|
—
|
|
|
99,911
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
(123,943
|
)
|
|
—
|
|
|
1,846
|
|
|
(122,097
|
)
|
||||
Proceeds from sale of property, plant and equipment
|
5,275
|
|
|
—
|
|
|
—
|
|
|
5,275
|
|
||||
Return of investments in non-consolidated affiliates
|
15,185
|
|
|
—
|
|
|
—
|
|
|
15,185
|
|
||||
Proceeds received from settlement of note receivable
|
5,357
|
|
|
—
|
|
|
—
|
|
|
5,357
|
|
||||
(Increase) decrease in restricted cash
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Cash invested in non-consolidated affiliates
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
||||
Net cash used in continuing operations
|
(98,160
|
)
|
|
—
|
|
|
1,846
|
|
|
(96,314
|
)
|
||||
Net cash provided by discontinued operations
|
33,119
|
|
|
—
|
|
|
(1,846
|
)
|
|
31,273
|
|
||||
Net cash used in investing activities
|
(65,041
|
)
|
|
—
|
|
|
—
|
|
|
(65,041
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Net distributions to parent
|
(40,811
|
)
|
|
—
|
|
|
—
|
|
|
(40,811
|
)
|
||||
Payments for debt issuance costs
|
(498
|
)
|
|
—
|
|
|
—
|
|
|
(498
|
)
|
||||
Net cash used in financing activities
|
(41,309
|
)
|
|
—
|
|
|
—
|
|
|
(41,309
|
)
|
||||
|
|
|
|
|
|
|
|
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
(976
|
)
|
|
—
|
|
|
—
|
|
|
(976
|
)
|
||||
Net decrease in cash and cash equivalents
|
(7,415
|
)
|
|
—
|
|
|
—
|
|
|
(7,415
|
)
|
||||
Cash and cash equivalents at beginning of period
|
39,361
|
|
|
—
|
|
|
—
|
|
|
39,361
|
|
||||
Cash and cash equivalents at end of period
|
$
|
31,946
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,946
|
|
|
(1)
|
As discussed in
Note 3
, in the first quarter of 2016, we committed to a plan to exit our Belleli CPE business, which provided engineering, procurement and manufacturing services related to the manufacture of critical process equipment for refinery and petrochemical facilities. We completed the sale of our Belleli CPE business in August 2016. The results of our Belleli CPE business have been reclassified to discontinued operations in our financial statements for all periods presented.
|
|
Three Months Ended September 30, 2016
|
|
Three Months Ended September 30, 2015
|
||||||||||||||||||||
|
Venezuela
|
|
Belleli CPE
|
|
Total
|
|
Venezuela
|
|
Belleli CPE
|
|
Total
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
4,376
|
|
|
$
|
4,376
|
|
|
$
|
—
|
|
|
$
|
17,349
|
|
|
$
|
17,349
|
|
Cost of sales (excluding depreciation and amortization expense)
|
—
|
|
|
3,887
|
|
|
3,887
|
|
|
—
|
|
|
16,351
|
|
|
16,351
|
|
||||||
Selling, general and administrative
|
47
|
|
|
788
|
|
|
835
|
|
|
132
|
|
|
816
|
|
|
948
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
844
|
|
|
844
|
|
||||||
Recovery attributable to expropriation
|
(16,567
|
)
|
|
—
|
|
|
(16,567
|
)
|
|
(16,541
|
)
|
|
—
|
|
|
(16,541
|
)
|
||||||
Interest expense
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other (income) expense, net
|
(2,941
|
)
|
|
(492
|
)
|
|
(3,433
|
)
|
|
(2,347
|
)
|
|
(181
|
)
|
|
(2,528
|
)
|
||||||
Income (loss) from discontinued operations, net of tax
|
$
|
19,461
|
|
|
$
|
191
|
|
|
$
|
19,652
|
|
|
$
|
18,756
|
|
|
$
|
(481
|
)
|
|
$
|
18,275
|
|
|
Nine Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||||
|
Venezuela
|
|
Belleli CPE
|
|
Total
|
|
Venezuela
|
|
Belleli CPE
|
|
Total
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
28,469
|
|
|
$
|
28,469
|
|
|
$
|
—
|
|
|
$
|
39,163
|
|
|
$
|
39,163
|
|
Cost of sales (excluding depreciation and amortization expense)
|
—
|
|
|
27,323
|
|
|
27,323
|
|
|
—
|
|
|
36,622
|
|
|
36,622
|
|
||||||
Selling, general and administrative
|
125
|
|
|
4,229
|
|
|
4,354
|
|
|
366
|
|
|
1,896
|
|
|
2,262
|
|
||||||
Depreciation and amortization
|
—
|
|
|
861
|
|
|
861
|
|
|
—
|
|
|
2,551
|
|
|
2,551
|
|
||||||
Long-lived asset impairment
|
—
|
|
|
68,780
|
|
|
68,780
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recovery attributable to expropriation
|
(33,124
|
)
|
|
—
|
|
|
(33,124
|
)
|
|
(33,523
|
)
|
|
—
|
|
|
(33,523
|
)
|
||||||
Interest expense
|
—
|
|
|
17
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other (income) expense, net
|
(5,962
|
)
|
|
(341
|
)
|
|
(6,303
|
)
|
|
(4,721
|
)
|
|
(442
|
)
|
|
(5,163
|
)
|
||||||
Income (loss) from discontinued operations, net of tax
|
$
|
38,961
|
|
|
$
|
(72,400
|
)
|
|
$
|
(33,439
|
)
|
|
$
|
37,878
|
|
|
$
|
(1,464
|
)
|
|
$
|
36,414
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Venezuela
|
|
Venezuela
|
|
Belleli CPE
|
|
Total
|
||||||||
Cash
|
$
|
18
|
|
|
$
|
177
|
|
|
$
|
—
|
|
|
$
|
177
|
|
Accounts receivable
|
—
|
|
|
—
|
|
|
7,810
|
|
|
7,810
|
|
||||
Inventory
|
—
|
|
|
—
|
|
|
431
|
|
|
431
|
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
—
|
|
|
—
|
|
|
17,666
|
|
|
17,666
|
|
||||
Other current assets
|
4
|
|
|
14
|
|
|
6,825
|
|
|
6,839
|
|
||||
Total current assets associated with discontinued operations
|
22
|
|
|
191
|
|
|
32,732
|
|
|
32,923
|
|
||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
38,274
|
|
|
38,274
|
|
||||
Intangible and other assets, net
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||
Total assets associated with discontinued operations
|
$
|
22
|
|
|
$
|
191
|
|
|
$
|
71,013
|
|
|
$
|
71,204
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,839
|
|
|
$
|
7,839
|
|
Accrued liabilities
|
1,005
|
|
|
1,249
|
|
|
2,556
|
|
|
3,805
|
|
||||
Billings on uncompleted contracts in excess of costs and estimated earnings
|
—
|
|
|
—
|
|
|
2,001
|
|
|
2,001
|
|
||||
Total current liabilities associated with discontinued operations
|
1,005
|
|
|
1,249
|
|
|
12,396
|
|
|
13,645
|
|
||||
Other long-term liabilities
|
2
|
|
|
158
|
|
|
5,917
|
|
|
6,075
|
|
||||
Total liabilities associated with discontinued operations
|
$
|
1,007
|
|
|
$
|
1,407
|
|
|
$
|
18,313
|
|
|
$
|
19,720
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
|
As Restated
|
||||
Parts and supplies
|
$
|
108,033
|
|
|
$
|
133,558
|
|
Work in progress
|
32,750
|
|
|
41,184
|
|
||
Finished goods
|
23,547
|
|
|
33,339
|
|
||
Inventory
|
$
|
164,330
|
|
|
$
|
208,081
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
|
As Restated
|
||||
Costs incurred on uncompleted contracts
|
$
|
532,603
|
|
|
$
|
664,229
|
|
Estimated earnings
|
(3,935
|
)
|
|
44,915
|
|
||
|
528,668
|
|
|
709,144
|
|
||
Less — billings to date
|
(517,833
|
)
|
|
(681,741
|
)
|
||
|
$
|
10,835
|
|
|
$
|
27,403
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
|
As Restated
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
41,811
|
|
|
$
|
65,311
|
|
Billings on uncompleted contracts in excess of costs and estimated earnings
|
(30,976
|
)
|
|
(37,908
|
)
|
||
|
$
|
10,835
|
|
|
$
|
27,403
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
|
As Restated
|
||||
Compression equipment, facilities and other fleet assets (1)
|
$
|
1,478,227
|
|
|
$
|
1,527,328
|
|
Land and buildings
|
111,724
|
|
|
117,247
|
|
||
Transportation and shop equipment
|
144,281
|
|
|
144,413
|
|
||
Other
|
95,593
|
|
|
99,035
|
|
||
|
1,829,825
|
|
|
1,888,023
|
|
||
Accumulated depreciation (1)
|
(1,022,215
|
)
|
|
(1,029,835
|
)
|
||
Property, plant and equipment, net
|
$
|
807,610
|
|
|
$
|
858,188
|
|
(1)
|
During the
nine
months ended
September 30, 2016
, we retired
$81.9 million
of fully depreciated capitalized installation costs relating to a contract operations project in the Eastern Hemisphere that early terminated operations in January 2016.
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Revolving credit facility due November 2020
|
$
|
130,000
|
|
|
$
|
285,000
|
|
Term loan facility due November 2017
|
245,000
|
|
|
245,000
|
|
||
Other, interest at various rates, collateralized by equipment and other assets
|
646
|
|
|
836
|
|
||
Unamortized deferred financing costs
|
(3,072
|
)
|
|
(5,243
|
)
|
||
Long-term debt
|
$
|
372,574
|
|
|
$
|
525,593
|
|
•
|
provides that LIBOR loans will bear interest at LIBOR plus
2.75%
and base rate loans will bear interest at the Base Rate plus
1.75%
until February 28, 2017 (or, if earlier, the date we deliver replacement financial information for our 2015 audited financial statements, together with a replacement compliance certificate);
|
•
|
adds a condition precedent to the borrowing of loans that, after giving effect to the application of the proceeds of each borrowing, our consolidated cash balance (as defined in the Amended Credit Agreement) will not exceed
$30,000,000
plus certain other amounts; and
|
•
|
amends the definition of EBITDA to allow adjustments for certain Restructuring Costs and Restatement Costs (in each case as defined in the Amended Credit Agreement) to the extent such costs were incurred during the years ending December 31, 2016 and 2017.
|
•
|
Level 1
— Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement.
|
•
|
Level 2
— Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or prices vary substantially over time or among brokered market makers.
|
•
|
Level 3
— Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information.
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||||||
Foreign currency derivatives liability
|
$
|
—
|
|
|
$
|
191
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Nine Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||||||
Impaired long-lived assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
684
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
499
|
|
Impaired assets—Discontinued operations
|
—
|
|
|
—
|
|
|
13,859
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Note receivable from the sale of a plant
|
—
|
|
|
—
|
|
|
7,037
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Liability to exit the use of a corporate operating lease—restructuring and other charges
|
—
|
|
|
—
|
|
|
3,580
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Long-term receivable from the sale of our Canadian Operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,100
|
|
|
Restatement Charges
|
||
Beginning balance at January 1, 2016
|
$
|
—
|
|
Additions for costs expensed
|
20,149
|
|
|
Reductions for payments
|
(11,370
|
)
|
|
Ending balance at September 30, 2016
|
$
|
8,779
|
|
|
Three Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2016
|
||||
External accounting costs
|
$
|
10,046
|
|
|
$
|
14,827
|
|
External legal costs
|
1,665
|
|
|
4,387
|
|
||
Other
|
587
|
|
|
935
|
|
||
Total restatement charges
|
$
|
12,298
|
|
|
$
|
20,149
|
|
|
Spin-off
|
|
Cost
Reduction Plan
|
|
Total
|
||||||
Beginning balance at January 1, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions for costs expensed
|
6,700
|
|
|
10,997
|
|
|
17,697
|
|
|||
Less non-cash expense
|
(4,700
|
)
|
|
(4,007
|
)
|
|
(8,707
|
)
|
|||
Reductions for payments
|
(2,000
|
)
|
|
(6,470
|
)
|
|
(8,470
|
)
|
|||
Ending balance at September 30, 2015
|
$
|
—
|
|
|
$
|
520
|
|
|
$
|
520
|
|
|
|
|
|
|
|
||||||
Beginning balance at January 1, 2016
|
$
|
1,083
|
|
|
$
|
565
|
|
|
$
|
1,648
|
|
Additions for costs expensed
|
3,503
|
|
|
22,811
|
|
|
26,314
|
|
|||
Deductions for gains realized
|
—
|
|
|
(872
|
)
|
|
(872
|
)
|
|||
Less non-cash expense
|
(798
|
)
|
|
(437
|
)
|
|
(1,235
|
)
|
|||
Less non-cash income
|
—
|
|
|
872
|
|
|
872
|
|
|||
Reductions for payments
|
(1,488
|
)
|
|
(15,431
|
)
|
|
(16,919
|
)
|
|||
Ending balance at September 30, 2016
|
$
|
2,300
|
|
|
$
|
7,508
|
|
|
$
|
9,808
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Consulting fees
|
$
|
—
|
|
|
$
|
1,329
|
|
|
$
|
22
|
|
|
$
|
1,329
|
|
Start-up of stand-alone functions
|
—
|
|
|
—
|
|
|
887
|
|
|
—
|
|
||||
Retention awards to certain employees
|
725
|
|
|
—
|
|
|
2,616
|
|
|
—
|
|
||||
Chief Executive Officer signing bonus
|
—
|
|
|
2,000
|
|
|
—
|
|
|
2,000
|
|
||||
Non-cash inventory write-downs
|
—
|
|
|
—
|
|
|
—
|
|
|
8,707
|
|
||||
Employee termination benefits
|
1,298
|
|
|
3,821
|
|
|
18,751
|
|
|
5,661
|
|
||||
Net charges to exit the use of a corporate operating lease
|
—
|
|
|
—
|
|
|
2,708
|
|
|
—
|
|
||||
Other
|
216
|
|
|
—
|
|
|
458
|
|
|
—
|
|
||||
Total restructuring and other charges
|
$
|
2,239
|
|
|
$
|
7,150
|
|
|
$
|
25,442
|
|
|
$
|
17,697
|
|
|
Nine Months Ended September 30, 2015
|
||
|
As Restated
|
||
Net distributions to parent per the statements of stockholders
’
equity
|
$
|
(27,331
|
)
|
Stock-based compensation expenses prior to the Spin-off
|
(5,358
|
)
|
|
Stock-based compensation excess tax benefit prior to the Spin-off
|
1,140
|
|
|
Net transfers of property, plant and equipment from parent prior to the Spin-off
|
(9,262
|
)
|
|
Net distributions to parent per statements of cash flows
|
$
|
(40,811
|
)
|
|
Foreign Currency
Translation Adjustment
|
|
||
Accumulated other comprehensive income, January 1, 2015 (As Restated)
|
$
|
26,745
|
|
|
Income recognized in other comprehensive income (loss) (As Restated)
|
4,218
|
|
|
|
Accumulated other comprehensive income, September 30, 2015 (As Restated)
|
$
|
30,963
|
|
|
|
|
|
||
Accumulated other comprehensive income, January 1, 2016
|
$
|
29,198
|
|
|
Income recognized in other comprehensive income (loss)
|
5,452
|
|
|
|
Loss reclassified from accumulated other comprehensive income
|
15,159
|
|
(1)
|
|
Accumulated other comprehensive income, September 30, 2016
|
$
|
49,809
|
|
|
|
(1)
|
During the three and nine months ended September 30, 2016, we reclassified a loss of
$15.2 million
related to foreign currency translation adjustment to income from discontinued operations in our statement of operations. This amount represents cumulative foreign currency translation adjustments associated with our Belleli CPE business that previously had been recognized in accumulated other comprehensive income. See Note 3 for further discussion of the sale of our Belleli CPE business.
|
|
Stock
Options
(in thousands)
|
|
Weighted
Average
Exercise Price
Per Share
|
|
Weighted
Average
Remaining
Life
(in years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Options outstanding, January 1, 2016
|
434
|
|
|
$
|
18.53
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(56
|
)
|
|
12.40
|
|
|
|
|
|
|||
Cancelled
|
(76
|
)
|
|
26.89
|
|
|
|
|
|
|||
Options outstanding, September 30, 2016
|
302
|
|
|
17.56
|
|
|
2.4
|
|
$
|
917
|
|
|
Options exercisable, September 30, 2016
|
290
|
|
|
16.94
|
|
|
2.3
|
|
917
|
|
|
Shares
(in thousands)
|
|
Weighted
Average
Grant-Date
Fair Value
Per Share
|
|||
Non-vested awards, January 1, 2016
|
1,004
|
|
|
$
|
22.17
|
|
Granted
|
773
|
|
|
15.46
|
|
|
Vested
|
(406
|
)
|
|
23.16
|
|
|
Change in expected vesting of performance units
|
172
|
|
|
15.46
|
|
|
Cancelled
|
(84
|
)
|
|
22.30
|
|
|
Non-vested awards, September 30, 2016 (1)
|
1,459
|
|
|
17.54
|
|
(1)
|
Non-vested awards as of
September 30, 2016
are comprised of
25,000
cash settled restricted stock units and cash settled performance units and
1,434,000
restricted shares, restricted stock units and performance units.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
As Restated
|
|
|
|
As Restated
|
||||||||
Numerator for basic and diluted net income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
$
|
(32,312
|
)
|
|
$
|
(9,598
|
)
|
|
$
|
(167,724
|
)
|
|
$
|
(5,683
|
)
|
Income (loss) from discontinued operations, net of tax
|
19,652
|
|
|
18,275
|
|
|
(33,439
|
)
|
|
36,414
|
|
||||
Less: Net income attributable to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) — used in basic and diluted net income (loss) per common share
|
$
|
(12,660
|
)
|
|
$
|
8,677
|
|
|
$
|
(201,163
|
)
|
|
$
|
30,731
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding including participating securities
|
35,562
|
|
|
34,286
|
|
|
35,492
|
|
|
34,286
|
|
||||
Less: Weighted average participating securities outstanding
|
(930
|
)
|
|
—
|
|
|
(942
|
)
|
|
—
|
|
||||
Weighted average common shares outstanding — used in basic net income (loss) per common share
|
34,632
|
|
|
34,286
|
|
|
34,550
|
|
|
34,286
|
|
||||
Net dilutive potential common shares issuable:
|
|
|
|
|
|
|
|
||||||||
On exercise of options and vesting of restricted stock units
|
*
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares outstanding — used in diluted net income (loss) per common share
|
34,632
|
|
|
34,286
|
|
|
34,550
|
|
|
34,286
|
|
||||
Net income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.37
|
)
|
|
$
|
0.25
|
|
|
$
|
(5.82
|
)
|
|
$
|
0.90
|
|
Diluted
|
$
|
(0.37
|
)
|
|
$
|
0.25
|
|
|
$
|
(5.82
|
)
|
|
$
|
0.90
|
|
|
*
|
Excluded from diluted net income (loss) per common share as their inclusion would have been anti-dilutive.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Net dilutive potential common shares issuable:
|
|
|
|
|
|
|
|
||||
On exercise of options where exercise price is greater than average market value for the period
|
216
|
|
|
*
|
|
|
232
|
|
|
*
|
|
On exercise of options and vesting of restricted stock units
|
46
|
|
|
*
|
|
|
51
|
|
|
*
|
|
Net dilutive potential common shares issuable
|
262
|
|
|
—
|
|
|
283
|
|
|
—
|
|
|
*
|
Not applicable for the period.
|
|
Term
|
|
Maximum Potential Undiscounted Payments as of September 30, 2016
|
||
Performance guarantees through letters of credit (1)
|
2016 - 2020
|
|
$
|
154,965
|
|
Standby letters of credit
|
2016 - 2018
|
|
1,298
|
|
|
Bid bonds and performance bonds (1)
|
2016 - 2023
|
|
57,862
|
|
|
Maximum potential undiscounted payments
|
|
|
$
|
214,125
|
|
(1)
|
We have issued guarantees to third parties to ensure performance of our obligations, some of which may be fulfilled by third parties.
|
Three Months Ended
|
|
Contract
Operations
|
|
Aftermarket Services
|
|
Oil and Gas Product Sales
|
|
Belleli EPC Product Sales (1)
|
|
Reportable
Segments
Total (1)(2)
|
||||||||||
September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
99,143
|
|
|
$
|
26,590
|
|
|
$
|
73,685
|
|
|
$
|
29,740
|
|
|
$
|
229,158
|
|
Gross margin (3)
|
|
63,087
|
|
|
7,544
|
|
|
3,611
|
|
|
636
|
|
|
74,878
|
|
|||||
September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
114,104
|
|
|
$
|
25,272
|
|
|
$
|
253,692
|
|
|
$
|
18,105
|
|
|
$
|
411,173
|
|
Gross margin (3)
|
|
72,990
|
|
|
6,936
|
|
|
39,335
|
|
|
(8,187
|
)
|
|
111,074
|
|
Nine Months Ended
|
|
Contract
Operations
|
|
Aftermarket Services
|
|
Oil and Gas Product Sales
|
|
Belleli EPC Product Sales (1)
|
|
Reportable
Segments
Total (1)(2)
|
||||||||||
September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
298,591
|
|
|
$
|
91,499
|
|
|
$
|
314,684
|
|
|
$
|
93,161
|
|
|
$
|
797,935
|
|
Gross margin (3)
|
|
187,636
|
|
|
26,016
|
|
|
24,519
|
|
|
(792
|
)
|
|
237,379
|
|
|||||
September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
350,045
|
|
|
$
|
95,547
|
|
|
$
|
875,439
|
|
|
$
|
70,743
|
|
|
$
|
1,391,774
|
|
Gross margin (3)
|
|
219,847
|
|
|
27,727
|
|
|
139,137
|
|
|
(32,740
|
)
|
|
353,971
|
|
(1)
|
Financial information for the Belleli EPC product sales segment for the three and nine months ended September 30, 2015 has been restated. Refer to
Note 2
for further information regarding the restatement of previously reported financial information.
|
(2)
|
Consolidated and combined gross margin, a non-GAAP financial measure, is reconciled, in total, to income (loss) before income taxes, its most directly comparable measure calculated and presented in accordance with GAAP, below.
|
(3)
|
Gross margin is defined as total revenue less cost of sales (excluding depreciation and amortization expense).
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
As Restated
|
|
|
|
As Restated
|
||||||||
Income (loss) before income taxes
|
$
|
(15,969
|
)
|
|
$
|
(13,735
|
)
|
|
$
|
(47,037
|
)
|
|
$
|
18,872
|
|
Selling, general and administrative
|
37,864
|
|
|
54,202
|
|
|
124,250
|
|
|
167,452
|
|
||||
Depreciation and amortization
|
28,183
|
|
|
36,083
|
|
|
106,533
|
|
|
110,151
|
|
||||
Long-lived asset impairment
|
5,358
|
|
|
3,775
|
|
|
6,009
|
|
|
14,264
|
|
||||
Restatement charges
|
12,298
|
|
|
—
|
|
|
20,149
|
|
|
—
|
|
||||
Restructuring and other charges
|
2,239
|
|
|
7,150
|
|
|
25,442
|
|
|
17,697
|
|
||||
Interest expense
|
8,254
|
|
|
581
|
|
|
25,596
|
|
|
1,407
|
|
||||
Equity in income of non-consolidated affiliates
|
—
|
|
|
(5,084
|
)
|
|
(10,403
|
)
|
|
(15,152
|
)
|
||||
Other (income) expense, net
|
(3,349
|
)
|
|
28,102
|
|
|
(13,160
|
)
|
|
39,280
|
|
||||
Consolidated and combined gross margin
|
$
|
74,878
|
|
|
$
|
111,074
|
|
|
$
|
237,379
|
|
|
$
|
353,971
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
|
As Restated
|
||||
Contract operations
|
$
|
752,997
|
|
|
$
|
790,957
|
|
Aftermarket services
|
32,014
|
|
|
31,614
|
|
||
Oil and gas product sales
|
159,824
|
|
|
230,947
|
|
||
Belleli EPC product sales
|
41,200
|
|
|
46,592
|
|
||
Assets from reportable segments
|
986,035
|
|
|
1,100,110
|
|
||
Other assets (1)
|
417,463
|
|
|
617,082
|
|
||
Assets associated with discontinued operations
|
22
|
|
|
71,204
|
|
||
Total assets
|
$
|
1,403,520
|
|
|
$
|
1,788,396
|
|
(1)
|
Includes corporate related items.
|
•
|
conditions in the oil and natural gas industry, including a sustained imbalance in the level of supply or demand for oil or natural gas or a sustained low price of oil or natural gas, which could continue to depress or further decrease the demand or pricing for our natural gas compression and oil and natural gas production and processing equipment and services;
|
•
|
our reduced profit margins or the loss of market share resulting from competition or the introduction of competing technologies by other companies;
|
•
|
our reliance on Archrock, Inc. (named Exterran Holdings, Inc. prior to November 3, 2015) (“Archrock”) and Archrock Partners, L.P. (named Exterran Partners, L.P. prior to November 3, 2015) (“Archrock Partners”) for a significant amount of our oil and gas product sales revenues and our ability to secure new oil and gas product sales customers;
|
•
|
changes in economic or political conditions in the countries in which we do business, including civil uprisings, riots, terrorism, kidnappings, violence associated with drug cartels, legislative changes and the expropriation, confiscation or nationalization of property without fair compensation;
|
•
|
changes in currency exchange rates, including the risk of currency devaluations by foreign governments, and restrictions on currency repatriation;
|
•
|
the inherent risks associated with our operations, such as equipment defects, malfunctions and natural disasters;
|
•
|
the risk that counterparties will not perform their obligations under our financial instruments;
|
•
|
the financial condition of our customers;
|
•
|
our ability to timely and cost-effectively obtain components necessary to conduct our business;
|
•
|
employment and workforce factors, including our ability to hire, train and retain key employees;
|
•
|
our ability to implement certain business and financial objectives, such as:
|
•
|
winning profitable new business;
|
•
|
timely and cost-effective execution of projects;
|
•
|
enhancing our asset utilization, particularly with respect to our fleet of compressors;
|
•
|
integrating acquired businesses;
|
•
|
generating sufficient cash; and
|
•
|
accessing the capital markets at an acceptable cost;
|
•
|
liability related to the use of our products and services;
|
•
|
changes in governmental safety, health, environmental or other regulations, which could require us to make significant expenditures;
|
•
|
our ability to successfully remediate each of the material weaknesses in our internal control environment disclosed in this report within the time periods and in the manner currently anticipated;
|
•
|
the effectiveness of our internal control environment, including the identification of additional control deficiencies;
|
•
|
the results of governmental actions relating to pending investigations;
|
•
|
the results of shareholder actions relating to the restatement of our financial statements;
|
•
|
the agreements related to the spin-off (see “Spin-off” below) thereto and the anticipated effects of restructuring our business; and
|
•
|
our level of indebtedness and ability to fund our business.
|
|
Exterran Corporation Excluding Belleli
|
|
Belleli
|
|
Exterran Corporation Consolidated and Combined
|
||||||||||||
|
|
CPE
|
|
|
|
EPC
|
|
||||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
199,418
|
|
|
$
|
—
|
|
|
|
|
$
|
29,740
|
|
|
$
|
229,158
|
|
Cost of sales (excluding depreciation and amortization expense)
|
125,176
|
|
|
—
|
|
|
|
|
29,104
|
|
|
154,280
|
|
||||
Depreciation and amortization
|
26,388
|
|
|
—
|
|
|
|
|
1,795
|
|
|
28,183
|
|
||||
Loss from continuing operations
|
(28,825
|
)
|
|
—
|
|
|
|
|
(3,487
|
)
|
|
(32,312
|
)
|
||||
Income from discontinued operations, net of tax (1)
|
19,461
|
|
|
191
|
|
|
|
|
—
|
|
|
19,652
|
|
||||
Net income (loss)
|
(9,364
|
)
|
|
191
|
|
|
|
|
(3,487
|
)
|
|
(12,660
|
)
|
||||
Product sales backlog (at period end)
|
153,099
|
|
|
—
|
|
|
|
|
95,366
|
|
(2)
|
248,465
|
|
||||
Third party bookings
|
132,272
|
|
|
—
|
|
|
|
|
19,645
|
|
(2)
|
151,917
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended September 30, 2015 (As Restated)
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
393,068
|
|
|
$
|
—
|
|
|
|
|
$
|
18,105
|
|
|
$
|
411,173
|
|
Cost of sales (excluding depreciation and amortization expense)
|
273,807
|
|
|
—
|
|
|
|
|
26,292
|
|
|
300,099
|
|
||||
Depreciation and amortization
|
33,164
|
|
|
—
|
|
|
|
|
2,919
|
|
|
36,083
|
|
||||
Income (loss) from continuing operations
|
4,497
|
|
|
—
|
|
|
|
|
(14,095
|
)
|
|
(9,598
|
)
|
||||
Income (loss) from discontinued operations, net of tax (1)
|
18,756
|
|
|
(481
|
)
|
|
|
|
—
|
|
|
18,275
|
|
||||
Net income (loss)
|
23,253
|
|
|
(481
|
)
|
|
|
|
(14,095
|
)
|
|
8,677
|
|
||||
Product sales backlog (at period end)
|
301,412
|
|
|
—
|
|
|
(3)
|
|
179,056
|
|
|
480,468
|
|
||||
Third party bookings
|
99,887
|
|
|
—
|
|
|
(3)
|
|
58,850
|
|
|
158,737
|
|
|
Exterran Corporation Excluding Belleli
|
|
Belleli
|
|
Exterran Corporation Consolidated and Combined
|
||||||||||||
|
|
CPE
|
|
|
|
EPC
|
|
||||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
704,774
|
|
|
$
|
—
|
|
|
|
|
$
|
93,161
|
|
|
$
|
797,935
|
|
Cost of sales (excluding depreciation and amortization expense)
|
466,603
|
|
|
—
|
|
|
|
|
93,953
|
|
|
560,556
|
|
||||
Depreciation and amortization
|
100,364
|
|
|
—
|
|
|
|
|
6,169
|
|
|
106,533
|
|
||||
Loss from continuing operations
|
(149,273
|
)
|
|
—
|
|
|
|
|
(18,451
|
)
|
|
(167,724
|
)
|
||||
Income (loss) from discontinued operations, net of tax (1)
|
38,961
|
|
|
(72,400
|
)
|
|
|
|
—
|
|
|
(33,439
|
)
|
||||
Net loss
|
(110,312
|
)
|
|
(72,400
|
)
|
|
|
|
(18,451
|
)
|
|
(201,163
|
)
|
||||
Product sales backlog (at period end)
|
153,099
|
|
|
—
|
|
|
|
|
95,366
|
|
|
248,465
|
|
||||
Third party bookings
|
200,365
|
|
|
—
|
|
|
|
|
26,103
|
|
|
226,468
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2015 (As Restated)
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
1,321,031
|
|
|
$
|
—
|
|
|
|
|
$
|
70,743
|
|
|
$
|
1,391,774
|
|
Cost of sales (excluding depreciation and amortization expense)
|
934,320
|
|
|
—
|
|
|
|
|
103,483
|
|
|
1,037,803
|
|
||||
Depreciation and amortization
|
101,540
|
|
|
—
|
|
|
|
|
8,611
|
|
|
110,151
|
|
||||
Income (loss) from continuing operations
|
44,825
|
|
|
—
|
|
|
|
|
(50,508
|
)
|
|
(5,683
|
)
|
||||
Income (loss) from discontinued operations, net of tax (1)
|
37,878
|
|
|
(1,464
|
)
|
|
|
|
—
|
|
|
36,414
|
|
||||
Net income (loss)
|
82,703
|
|
|
(1,464
|
)
|
|
|
|
(50,508
|
)
|
|
30,731
|
|
||||
Product sales backlog (at period end)
|
301,412
|
|
|
—
|
|
|
(3)
|
|
179,056
|
|
|
480,468
|
|
||||
Third party bookings
|
265,126
|
|
|
—
|
|
|
(3)
|
|
65,061
|
|
|
330,187
|
|
(1)
|
See
Note 3
to the Financial Statements for further discussion regarding discontinued operations.
|
(2)
|
During the first quarter of 2016, we ceased the booking of new orders for our Belleli EPC business. Changes in our Belleli EPC backlog since March 31, 2016 reflect revenue recognized and change orders booked on existing contracts.
|
(3)
|
As of September 30,
2015
product sales backlog for Belleli CPE was
$58.8 million
. Third party bookings for Belleli CPE were
$2.5 million
and
$74.4 million
during the three and nine months ended September 30,
2015
, respectively. As Belleli CPE is no longer a part of our continuing operations, Belleli CPE’s product sales backlog and third party bookings have been excluded from all periods presented. As discussed in
Note 3
to the Financial Statements, we completed the sale of Belleli CPE in August 2016.
|
•
|
Our condensed consolidated statements of operations and comprehensive income (loss) for the three and
nine
months ended
September 30, 2016
and our condensed consolidated statements of cash flows and stockholders’ equity for the
nine
months ended
September 30, 2016
consist entirely of our consolidated results. Our condensed combined statements of operations and comprehensive income (loss) for the three and
nine
months ended
September 30, 2015
and our condensed combined statements of cash flows and stockholders’ equity for the
nine
months ended
September 30, 2015
consist entirely of the combined results of Archrock’s international services and product sales businesses.
|
•
|
Our condensed consolidated balance sheets at
September 30, 2016
and December 31, 2015 consist entirely of our consolidated balances.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Total Available Horsepower (at period end)
|
1,192
|
|
|
1,209
|
|
|
1,192
|
|
|
1,209
|
|
Total Operating Horsepower (at period end)
|
944
|
|
|
961
|
|
|
944
|
|
|
961
|
|
Average Operating Horsepower
|
949
|
|
|
952
|
|
|
958
|
|
|
957
|
|
Horsepower Utilization (at period end)
|
79
|
%
|
|
79
|
%
|
|
79
|
%
|
|
79
|
%
|
|
September 30, 2016
|
|
December 31, 2015
|
|
September 30, 2015
|
||||||
|
|
|
As Restated
|
|
As Restated
|
||||||
Product Sales Backlog (1):
|
|
|
|
|
|
||||||
Compressor and Accessory Backlog
|
$
|
86,206
|
|
|
$
|
141,059
|
|
|
$
|
110,586
|
|
Production and Processing Equipment Backlog (2)
|
64,680
|
|
|
118,914
|
|
|
164,407
|
|
|||
Installation Backlog
|
2,213
|
|
|
7,445
|
|
|
26,419
|
|
|||
Belleli EPC Backlog (2)
|
95,366
|
|
|
162,424
|
|
|
179,056
|
|
|||
Total Product Sales Backlog
|
$
|
248,465
|
|
|
$
|
429,842
|
|
|
$
|
480,468
|
|
(1)
|
Our product sales backlog consists of unfilled orders based on signed contracts and does not include potential product sales pursuant to letters of intent received from customers. As Belleli CPE is no longer a part of our continuing operations, Belleli CPE’s product sales backlog has been excluded from all periods presented.
|
(2)
|
Our Belleli EPC product sales backlog was previously included in our production and processing equipment product sales backlog. During the first quarter of 2016, we ceased the booking of new orders for our Belleli EPC business. Changes in our Belleli EPC backlog since March 31, 2016 reflect revenue recognized and change orders booked on existing contracts.
|
|
Three Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
Revenue
|
$
|
99,143
|
|
|
$
|
114,104
|
|
|
(13
|
)%
|
Cost of sales (excluding depreciation and amortization expense)
|
36,056
|
|
|
41,114
|
|
|
(12
|
)%
|
||
Gross margin
|
$
|
63,087
|
|
|
$
|
72,990
|
|
|
(14
|
)%
|
Gross margin percentage (1)
|
64
|
%
|
|
64
|
%
|
|
—
|
%
|
|
Three Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
Revenue
|
$
|
26,590
|
|
|
$
|
25,272
|
|
|
5
|
%
|
Cost of sales (excluding depreciation and amortization expense)
|
19,046
|
|
|
18,336
|
|
|
4
|
%
|
||
Gross margin
|
$
|
7,544
|
|
|
$
|
6,936
|
|
|
9
|
%
|
Gross margin percentage
|
28
|
%
|
|
27
|
%
|
|
1
|
%
|
|
Three Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
Revenue
|
$
|
73,685
|
|
|
$
|
253,692
|
|
|
(71
|
)%
|
Cost of sales (excluding depreciation and amortization expense)
|
70,074
|
|
|
214,357
|
|
|
(67
|
)%
|
||
Gross margin
|
$
|
3,611
|
|
|
$
|
39,335
|
|
|
(91
|
)%
|
Gross margin percentage
|
5
|
%
|
|
16
|
%
|
|
(11
|
)%
|
|
Three Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
|
|
|
As Restated
|
|
|
|||||
Revenue
|
$
|
29,740
|
|
|
$
|
18,105
|
|
|
64
|
%
|
Cost of sales (excluding depreciation and amortization expense)
|
29,104
|
|
|
26,292
|
|
|
11
|
%
|
||
Gross margin
|
$
|
636
|
|
|
$
|
(8,187
|
)
|
|
108
|
%
|
Gross margin percentage
|
2
|
%
|
|
(45
|
)%
|
|
47
|
%
|
|
Three Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
|
|
|
As Restated
|
|
|
|||||
Selling, general and administrative
|
$
|
37,864
|
|
|
$
|
54,202
|
|
|
(30
|
)%
|
Depreciation and amortization
|
28,183
|
|
|
36,083
|
|
|
(22
|
)%
|
||
Long-lived asset impairment
|
5,358
|
|
|
3,775
|
|
|
42
|
%
|
||
Restatement charges
|
12,298
|
|
|
—
|
|
|
n/a
|
|
||
Restructuring and other charges
|
2,239
|
|
|
7,150
|
|
|
(69
|
)%
|
||
Interest expense
|
8,254
|
|
|
581
|
|
|
1,321
|
%
|
||
Equity in income of non-consolidated affiliates
|
—
|
|
|
(5,084
|
)
|
|
(100
|
)%
|
||
Other (income) expense, net
|
(3,349
|
)
|
|
28,102
|
|
|
(112
|
)%
|
|
Three Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
|
|
|
As Restated
|
|
|
|||||
Provision for (benefit from) income taxes
|
$
|
16,343
|
|
|
$
|
(4,137
|
)
|
|
(495
|
)%
|
Effective tax rate
|
(102.3
|
)%
|
|
30.1
|
%
|
|
(132.4
|
)%
|
|
Three Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
Income from discontinued operations, net of tax
|
$
|
19,652
|
|
|
$
|
18,275
|
|
|
8
|
%
|
|
Nine Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
Revenue
|
$
|
298,591
|
|
|
$
|
350,045
|
|
|
(15
|
)%
|
Cost of sales (excluding depreciation and amortization expense)
|
110,955
|
|
|
130,198
|
|
|
(15
|
)%
|
||
Gross margin
|
$
|
187,636
|
|
|
$
|
219,847
|
|
|
(15
|
)%
|
Gross margin percentage (1)
|
63
|
%
|
|
63
|
%
|
|
—
|
%
|
|
Nine Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
Revenue
|
$
|
91,499
|
|
|
$
|
95,547
|
|
|
(4
|
)%
|
Cost of sales (excluding depreciation and amortization expense)
|
65,483
|
|
|
67,820
|
|
|
(3
|
)%
|
||
Gross margin
|
$
|
26,016
|
|
|
$
|
27,727
|
|
|
(6
|
)%
|
Gross margin percentage
|
28
|
%
|
|
29
|
%
|
|
(1
|
)%
|
|
Nine Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
Revenue
|
$
|
314,684
|
|
|
$
|
875,439
|
|
|
(64
|
)%
|
Cost of sales (excluding depreciation and amortization expense)
|
290,165
|
|
|
736,302
|
|
|
(61
|
)%
|
||
Gross margin
|
$
|
24,519
|
|
|
$
|
139,137
|
|
|
(82
|
)%
|
Gross margin percentage
|
8
|
%
|
|
16
|
%
|
|
(8
|
)%
|
|
Nine Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
|
|
|
As Restated
|
|
|
|||||
Revenue
|
$
|
93,161
|
|
|
$
|
70,743
|
|
|
32
|
%
|
Cost of sales (excluding depreciation and amortization expense)
|
93,953
|
|
|
103,483
|
|
|
(9
|
)%
|
||
Gross margin
|
$
|
(792
|
)
|
|
$
|
(32,740
|
)
|
|
98
|
%
|
Gross margin percentage
|
(1
|
)%
|
|
(46
|
)%
|
|
45
|
%
|
|
Nine Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
|
|
|
As Restated
|
|
|
|||||
Selling, general and administrative
|
$
|
124,250
|
|
|
$
|
167,452
|
|
|
(26
|
)%
|
Depreciation and amortization
|
106,533
|
|
|
110,151
|
|
|
(3
|
)%
|
||
Long-lived asset impairment
|
6,009
|
|
|
14,264
|
|
|
(58
|
)%
|
||
Restatement charges
|
20,149
|
|
|
—
|
|
|
n/a
|
|
||
Restructuring and other charges
|
25,442
|
|
|
17,697
|
|
|
44
|
%
|
||
Interest expense
|
25,596
|
|
|
1,407
|
|
|
1,719
|
%
|
||
Equity in income of non-consolidated affiliates
|
(10,403
|
)
|
|
(15,152
|
)
|
|
(31
|
)%
|
||
Other (income) expense, net
|
(13,160
|
)
|
|
39,280
|
|
|
(134
|
)%
|
|
Nine Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
|
|
|
As Restated
|
|
|
|||||
Provision for income taxes
|
$
|
120,687
|
|
|
$
|
24,555
|
|
|
391
|
%
|
Effective tax rate
|
(256.6
|
)%
|
|
130.1
|
%
|
|
(386.7
|
)%
|
|
Nine Months Ended
September 30, |
|
Increase
|
|||||||
|
2016
|
|
2015
|
|
(Decrease)
|
|||||
Income (loss) from discontinued operations, net of tax
|
$
|
(33,439
|
)
|
|
$
|
36,414
|
|
|
(192
|
)%
|
|
Nine Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
|
|
|
As Restated
|
||||
Net cash provided by (used in) continuing operations:
|
|
|
|
||||
Operating activities
|
$
|
213,020
|
|
|
$
|
92,961
|
|
Investing activities
|
(36,302
|
)
|
|
(96,314
|
)
|
||
Financing activities
|
(205,879
|
)
|
|
(41,309
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(2,268
|
)
|
|
(976
|
)
|
||
Discontinued operations
|
34,450
|
|
|
38,223
|
|
||
Net change in cash and cash equivalents
|
$
|
3,021
|
|
|
$
|
(7,415
|
)
|
•
|
growth capital expenditures, which are made to expand or to replace partially or fully depreciated assets or to expand the operating capacity or revenue generating capabilities of existing or new assets, whether through construction, acquisition or modification; and
|
•
|
maintenance capital expenditures, which are made to maintain the existing operating capacity of our assets and related cash flows further extending the useful lives of the assets.
|
•
|
provides that LIBOR loans will bear interest at LIBOR plus
2.75%
and base rate loans will bear interest at the Base Rate plus
1.75%
until February 28, 2017 (or, if earlier, the date we deliver replacement financial information for our 2015 audited financial statements, together with a replacement compliance certificate);
|
•
|
adds a condition precedent to the borrowing of loans that, after giving effect to the application of the proceeds of each borrowing, our consolidated cash balance (as defined in the Amended Credit Agreement) will not exceed
$30,000,000
plus certain other amounts; and
|
•
|
amends the definition of EBITDA to allow adjustments for certain Restructuring Costs and Restatement Costs (in each case as defined in the Amended Credit Agreement) to the extent such costs were incurred during the years ending December 31, 2016 and 2017.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
As Restated
|
|
|
|
As Restated
|
||||||||
Net income (loss)
|
$
|
(12,660
|
)
|
|
$
|
8,677
|
|
|
$
|
(201,163
|
)
|
|
$
|
30,731
|
|
(Income) loss from discontinued operations, net of tax
|
(19,652
|
)
|
|
(18,275
|
)
|
|
33,439
|
|
|
(36,414
|
)
|
||||
Depreciation and amortization
|
28,183
|
|
|
36,083
|
|
|
106,533
|
|
|
110,151
|
|
||||
Long-lived asset impairment
|
5,358
|
|
|
3,775
|
|
|
6,009
|
|
|
14,264
|
|
||||
Restatement charges
|
12,298
|
|
|
—
|
|
|
20,149
|
|
|
—
|
|
||||
Restructuring and other charges
|
2,239
|
|
|
7,150
|
|
|
25,442
|
|
|
17,697
|
|
||||
Investment in non-consolidated affiliates impairment
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||
Proceeds from sale of joint venture assets
|
—
|
|
|
(5,117
|
)
|
|
(10,403
|
)
|
|
(15,185
|
)
|
||||
Interest expense
|
8,254
|
|
|
581
|
|
|
25,596
|
|
|
1,407
|
|
||||
(Gain) loss on currency exchange rate remeasurement of intercompany balances
|
(2,335
|
)
|
|
27,551
|
|
|
(9,335
|
)
|
|
35,550
|
|
||||
Provision for (benefit from) income taxes
|
16,343
|
|
|
(4,137
|
)
|
|
120,687
|
|
|
24,555
|
|
||||
EBITDA, as adjusted
|
$
|
38,028
|
|
|
$
|
56,321
|
|
|
$
|
116,954
|
|
|
$
|
182,789
|
|
•
|
There was not adequate integration, emphasis of local senior management accountability and management oversight of accounting and financial reporting activities in implementing and maintaining certain accounting practices at Belleli EPC to conform to the Company’s policies and GAAP.
|
•
|
The Company did not modify its controls and testing procedures to sufficiently address its assessment of risks related to Belleli EPC that could significantly impact internal control over financial reporting by modifying its approach to how those risks should be addressed.
|
•
|
The Company did not implement and maintain the same accounting controls at Belleli EPC, including information and communication controls, as those maintained in the Company’s other operating locations, resulting in internal controls that were not adequate to prevent or detect instances of intentional override of controls, intentional misconduct, or manipulation of cost-to-complete estimates by, or at the direction of, certain former members of Belleli EPC local senior management.
|
•
|
The Company did not maintain a sufficient complement of personnel with appropriate levels of accounting knowledge, experience and training commensurate with the nature and complexity of Belleli EPC’s business.
|
•
|
Corporate monitoring controls over certain foreign operations were not adequate to detect inappropriate accounting practices and were not designed to operate at a sufficient level of precision to detect material misstatements.
|
•
|
Controls over the determination of estimated cost-to-complete, including the assessment of contingencies and impact of project uncertainties; and
|
•
|
Controls to address the accuracy and completeness of information used to estimate revenue and related costs in the application of percentage-of-completion accounting principles.
|
•
|
Restructured the Company’s Executive Leadership Team (ELT), including designating responsibility of overseeing Belleli EPC projects to an ELT member who then reports directly to the Exterran Corporation principal executive officer;
|
•
|
Appointed experienced professionals to key finance and operational leadership positions within Belleli EPC, including the hiring of a new Finance Manager and assigning a Managing Director to lead the operations organization;
|
•
|
Integrated oversight of Belleli EPC operating, finance and manufacturing personnel by certain members of the Exterran Corporation ELT and the Exterran Corporation chief financial officer’s leadership team, including implementing regular meetings, to ensure sufficient oversight of project performance;
|
•
|
Established a direct functional reporting structure between Belleli EPC and Exterran Corporation with more clearly defined responsibilities;
|
•
|
Provided enhanced training on our policies and ethical requirements in English, and in Italian where necessary, including the emphasis of our hotline, the importance of reporting unethical actions and the Company’s zero tolerance for retaliation of any kind;
|
•
|
Engaged a third-party consultant to accelerate redesigning the Belleli EPC project and contract management processes and controls; and
|
•
|
Enhanced the accuracy and visibility of Belleli EPC financial results by improving the integrity of the monthly data interface.
|
•
|
Instituting enhanced review of estimated costs at completion as part of the quarterly close process;
|
•
|
Reviewing and redesigning internal controls, including spreadsheet controls, to ensure that the control objectives mitigate the identified risks;
|
•
|
Assessing and redesigning, as necessary, systems and related processes at Belleli EPC to ensure information technology oversight matches the operations of the business;
|
•
|
Integrating accounting, manufacturing and operations functions and revising organizational structures to enhance accurate reporting and ensure appropriate review and accountability;
|
•
|
Assessing current staffing levels and competencies to ensure the optimal complement of personnel with appropriate backgrounds and skill sets;
|
•
|
Enhancing our Sarbanes-Oxley (SOX) compliance procedures, including designing controls to respond to our risk assessment processes, implementing walkthroughs and performing risk responsive testing on our internal controls; and
|
•
|
Implementing a corporate review of non-income-based tax receivables globally.
|
Period
|
Total Number of
Shares Repurchased
(1)
|
|
Average
Price Paid
Per Unit
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
Maximum Number of Shares
yet to be Purchased Under the
Publicly Announced Plans or
Programs
|
|||
July 1, 2016 - July 31, 2016
|
233
|
|
|
$
|
12.72
|
|
|
N/A
|
|
N/A
|
August 1, 2016 - August 31, 2016
|
209
|
|
|
12.83
|
|
|
N/A
|
|
N/A
|
|
September 1, 2016 - September 30, 2016
|
775
|
|
|
14.88
|
|
|
N/A
|
|
N/A
|
|
Total
|
1,217
|
|
|
$
|
14.11
|
|
|
N/A
|
|
N/A
|
(1)
|
Represents shares withheld to satisfy employees’ tax withholding obligations in connection with vesting of restricted stock awards during the period.
|
Exhibit No.
|
|
Description
|
2.1
|
|
Separation and Distribution Agreement, dated as of November 3, 2015, by and among Exterran Holdings, Inc., Exterran General Holdings LLC, Exterran Energy Solutions, L.P., Exterran Corporation, AROC Corp., EESLP LP LLC, AROC Services GP LLC, AROC Services LP LLC and Archrock Services, L.P., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
|
2.2
|
|
First Amendment to Separation and Distribution Agreement, dated as of December 15, 2015, by and among Archrock, Inc., Exterran General Holdings LLC, Exterran Energy Solutions, L.P., Exterran Corporation, AROC Corp., EESLP LP LLC, AROC Services GP LLC, AROC Services LP LLC and Archrock Services, L.P., incorporated by reference to Exhibit 2.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Exterran Corporation, incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
|
3.2
|
|
Amended and Restated Bylaws of Exterran Corporation, incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
|
10.1
|
|
Third Amendment, Consent and Waiver, dated August 24, 2016, to Amended and Restated Credit Agreement by and among Exterran Energy Solutions, L.P., Exterran Corporation, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 29, 2016
|
10.2
|
|
Fourth Amendment, Consent and Waiver, dated November 22, 2016, to Amended and Restated Credit Agreement by and among Exterran Energy Solutions, L.P., Exterran Corporation, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 22, 2016
|
10.3†*
|
|
First Amendment, Exterran Corporation Deferred Compensation Plan
|
10.4†*
|
|
2016 Form of Severance Benefit Agreement
|
10.5†*
|
|
2016 Form of Change of Control Agreement
|
31.1*
|
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2*
|
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1**
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2**
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.1*
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T
|
†
|
|
Management contract or compensatory plan or arrangement.
|
*
|
|
Filed herewith.
|
**
|
|
Furnished, not filed.
|
|
|
Exterran Corporation
|
|
|
|
|
|
Date: January 4, 2017
|
|
By:
|
/s/ DAVID A. BARTA
|
|
|
|
David A. Barta
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Exhibit No.
|
|
Description
|
2.1
|
|
Separation and Distribution Agreement, dated as of November 3, 2015, by and among Exterran Holdings, Inc., Exterran General Holdings LLC, Exterran Energy Solutions, L.P., Exterran Corporation, AROC Corp., EESLP LP LLC, AROC Services GP LLC, AROC Services LP LLC and Archrock Services, L.P., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
|
2.2
|
|
First Amendment to Separation and Distribution Agreement, dated as of December 15, 2015, by and among Archrock, Inc., Exterran General Holdings LLC, Exterran Energy Solutions, L.P., Exterran Corporation, AROC Corp., EESLP LP LLC, AROC Services GP LLC, AROC Services LP LLC and Archrock Services, L.P., incorporated by reference to Exhibit 2.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Exterran Corporation, incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
|
3.2
|
|
Amended and Restated Bylaws of Exterran Corporation, incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
|
10.1
|
|
Third Amendment, Consent and Waiver, dated August 24, 2016, to Amended and Restated Credit Agreement by and among Exterran Energy Solutions, L.P., Exterran Corporation, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 29, 2016
|
10.2
|
|
Fourth Amendment, Consent and Waiver, dated November 22, 2016, to Amended and Restated Credit Agreement by and among Exterran Energy Solutions, L.P., Exterran Corporation, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 22, 2016
|
10.3†*
|
|
First Amendment, Exterran Corporation Deferred Compensation Plan
|
10.4†*
|
|
2016 Form of Severance Benefit Agreement
|
10.5†*
|
|
2016 Form of Change of Control Agreement
|
31.1*
|
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2*
|
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1**
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2**
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.1*
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T
|
†
|
|
Management contract or compensatory plan or arrangement.
|
*
|
|
Filed herewith.
|
**
|
|
Furnished, not filed.
|
|
Exterran Energy Solutions, L.P.
|
||
|
|
|
|
|
/s/ Christine M. Michel
|
|
|
|
By:
|
Christine M. Michel
|
|
|
Its:
|
Senior Vice President Global Human Resources and Communications
|
|
(i)
|
the commission by the Executive of an act of fraud, embezzlement or willful breach of a fiduciary duty to the Company or an affiliate (including the unauthorized disclosure of confidential or proprietary material information of the Company or an affiliate);
|
(ii)
|
a conviction of the Executive for (or a plea of
nolo contendere
to) a felony or a crime involving fraud, dishonesty or moral turpitude;
|
(iii)
|
willful failure of the Executive to follow the written directions the Board of Directors of the Company (the “
Board
”);
|
(iv)
|
willful failure of the Executive to render services to the Company or an affiliate in accordance with the Executive’s employment arrangement, which failure amounts to a material neglect of the Executive’s duties to the Company or an affiliate; or
|
(v)
|
the Executive’s use of alcohol or illicit drugs in the workplace or otherwise in a manner that has or may reasonably be expected to have a detrimental effect on the Executive’s performance, the Executive’s duties to the Company, or the reputation of the Company or any affiliate thereof.
|
(i)
|
a material diminution in the Executive’s duties or responsibilities;
|
(iii)
|
a material reduction in the Executive’s then current annual target bonus as a percentage of base salary;
|
(iv)
|
a material reduction in the Executive’s employee benefits (without regard to bonus compensation, if any) if such reduction results in the Executive receiving benefits which are, in the aggregate, materially less than the benefits received by other comparable executives of the Company generally; or
|
(v)
|
willful failure by the Company to pay any compensation to the Executive when due;
|
|
EXTERRAN CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
EXECUTIVE
|
|
|
|
|
|
|
|
|
|
AGREED TO AND ACCEPTED
this
|
|
|
|
|
|
_____ day of _______________, 20___
|
|
|
|
|
|
|
|
|
|
|
|
|
EXTERRAN CORPORATION
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
EXECUTIVE
|
|
1.
|
401(k) Plan.
“
401(k) Plan
” shall mean any Code Section 401(a) qualified plan that includes a cash or deferral arrangement under Code Section 401(k) maintained by the Company or an affiliate thereof.
|
2.
|
Base Salary.
“
Base Salary
” shall mean Executive’s annual rate of base salary (without regard to bonus compensation) as in effect immediately prior to the Change of Control or, if later, the Date of Termination.
|
3.
|
Board
. “
Board
” shall mean the Board of Directors of the Company.
|
4.
|
Cause.
“
Cause
” shall mean a termination of Executive’s employment due to (a) the commission by Executive of an act of fraud, embezzlement or willful breach of a fiduciary duty to the Company or an affiliate (including the unauthorized disclosure of confidential or proprietary material information of the Company or an affiliate), (b) a conviction of Executive of (or a plea of
nolo contendere
to) a felony or a crime involving fraud, dishonesty or moral turpitude, (c) willful failure of Executive to follow the written directions of the Board; (d) the willful failure of Executive to render services to the Company or an affiliate in accordance with Executive’s employment arrangement, which failure amounts to a material neglect of Executive’s duties to the Company or an affiliate; or (e) Executive’s use of alcohol or illicit drugs in the workplace or otherwise in a manner that has or may reasonably be expected to have a detrimental effect on Executive’s performance, Executive’s duties to the Company, or the reputation of the Company or any affiliate thereof.
|
5.
|
Change of Control.
A “
Change of Control
” of the Company shall mean:
|
(a)
|
The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of either (A) the then outstanding shares of common stock of the Company (the “
Outstanding Company Common Stock
”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “
Outstanding Company Voting Securities
”);
provided, however
, that for purposes of this subsection (a), any acquisition by any Person pursuant to a transaction which complies with clause (A) of subsection (c) of this definition shall not constitute a Change of Control; or
|
(b)
|
Individuals who, as of the date hereof, constitute the Board (the “
Incumbent Board
”) cease for any reason to constitute at least a majority of the Board;
provided, however
, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered for purposes of this definition as though such individual was a member of the Incumbent Board, but excluding, for these purposes, any such individual whose
|
(c)
|
The consummation of a reorganization, merger or consolidation involving the Company or any of its subsidiaries, or the sale, lease or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole (other than to an entity wholly owned, directly or indirectly, by the Company) (each, a “
Corporate Transaction
”), in each case, unless, following such Corporate Transaction, (A) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the Resulting Corporation in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, and (B) at least a majority of the members of the board of directors of the Resulting Corporation were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Corporate Transaction. The term “
Resulting Corporation
” means (1) the Company or its successor, or (2) if as a result of a Corporate Transaction the Company or its successor becomes a subsidiary of another entity, then such entity or the parent of such entity, as applicable, or (3) in the event of a Corporate Transaction involving the sale, lease or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, then the transferee of such assets or the parent of such transferee, as applicable, in such Corporate Transaction.
|
6.
|
Code
. “
Code
” shall mean the Internal Revenue Code of 1986, as amended.
|
7.
|
Confidential Information
. “
Confidential Information
” shall mean any and all information, data and knowledge which is part of the Property or that has been created, discovered, developed or otherwise become known to the Company or any of its affiliates or ventures or in which property rights have been assigned or otherwise conveyed to the
|
8.
|
Date of Termination.
“
Date of Termination
” shall mean (a) if Executive terminates Executive’s employment for Good Reason, that date on which Executive’s employment is deemed terminated as provided in the definition of Good Reason, (b) with respect to a termination of employment prior to a Change of Control that is deemed to be during the Protected Period, the date of such termination, or (c) if Executive’s employment is terminated for any other reason on or after a Change of Control, the date of such termination, provided, in the case of each of clauses (a), (b) and (c) above, that such termination is also a “separation from service” within the meaning of Section 409A.
|
9.
|
Disability.
A “
Disability
” shall mean Executive becoming entitled to long-term disability benefits under the Company’s long-term disability plan.
|
10.
|
Exchange Act
. “
Exchange Act
” shall mean the Securities Exchange Act of 1934, as amended.
|
11.
|
Good Reason.
“
Good Reason
” shall mean the occurrence of any of the following without Executive’s express written consent:
|
(a)
|
a material diminution in Executive’s duties or responsibilities;
|
(b)
|
a material reduction in Executive’s Base Salary;
|
(c)
|
a material reduction in Executive’s annual Target Short-Term Incentive as a percentage of Base Salary as in effect immediately prior to the Change of Control;
|
(d)
|
a material reduction in Executive’s employee benefits (without regard to bonus compensation, if any) if such reduction results in Executive receiving benefits which are, in the aggregate, materially less than the benefits received by other comparable employees of the Company generally; or
|
(e)
|
the willful failure by the Company to pay any compensation to Executive when due.
|
12.
|
IRS.
“
IRS
” shall mean the Internal Revenue Service.
|
13.
|
Notice of Termination.
“
Notice of Termination
” shall mean a written notice that sets forth in reasonable detail the facts and circumstances for termination of Executive’s employment.
|
14.
|
Person
. “
Person
” shall mean any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
|
15.
|
Property
. “
Property
” shall mean all records, files, memoranda, reports, keys, codes, computer hardware and software, documents, videotapes, written presentations, brochures, drawings, notes, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, drawings, architectural renditions and all other writings or materials of any type and other property of any kind or description (whether in electronic or other form) prepared, used or possessed by Executive during Executive’s employment by the Company (and any duplicates of any such property) together with any and all information, ideas, concepts, discoveries, and inventions and the like conceived, made, developed or acquired at any time by Executive individually or with others during Executive’s employment which relate to the Company’s business, products or services.
|
16.
|
Protected Period.
The “
Protected Period
” shall mean the period of time beginning with the Change of Control and ending on the eighteen (18)-month anniversary of such Change of Control or Executive’s death, if earlier;
provided, however
, (a) if Executive’s employment with the Company is terminated during the Term and within six (6) months prior to the date on which a Change of Control occurs (e.g., not during the Protected Period), and (b) it is reasonably demonstrated by Executive that such termination was at the request of a third party who has taken steps reasonably calculated to effect the Change of Control, or otherwise arose in connection with or anticipation of the Change of Control, then, for purposes of this Agreement, the Change of Control shall be deemed to have occurred on the date immediately prior to the date of Executive’s termination (except as otherwise expressly set forth herein) and Executive shall be deemed terminated by the Company during the Protected Period other than for Cause.
|
17.
|
Qualifying Termination of Employment.
A “
Qualifying Termination of Employment
” shall mean a termination of Executive’s employment during the Protected Period either (a) by the Company other than for Cause or (b) by Executive for Good Reason. A termination of employment due to Executive’s death or Disability during the Protected Period shall not constitute a Qualifying Termination of Employment.
|
18.
|
Restricted Area.
“
Restricted Area
” shall mean any state in the United States, or any country in which the Company or its subsidiaries engage in any Restricted Business at any time during the term of Executive’s employment with the Company.
|
19.
|
Restricted Business.
“
Restricted Business
” shall mean any business in which the Company or its subsidiaries may be engaged as of Executive’s Date of Termination. To the extent that any entity is primarily engaged in a business other than a Restricted Business, the term
|
20.
|
Short-Term Incentive
. “
Short-Term Incentive
” shall mean, with respect to any fiscal year of the Company, the specific short-term annual incentive award (if any) approved for Executive by the Board or a designated committee of the Board with respect to such year.
|
21.
|
Target Short-Term Incentive.
“
Target Short-Term Incentive
” shall mean the target annual short-term incentive opportunity for Executive expressed as a percentage of salary, as set forth in connection with the annual management incentive plan covering such Executive.
|
22.
|
Termination Year.
“
Termination Year
” shall mean the calendar year during which Executive’s Date of Termination occurs.
|
AGREED TO AND ACCEPTED
this
|
|
|
|
|
|
_____ day of _______________, 20___
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ ANDREW J. WAY
|
|
|
|
Name:
|
Andrew J. Way
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
By:
|
/s/ DAVID A. BARTA
|
|
|
|
Name:
|
David A. Barta
|
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
/s/ ANDREW J. WAY
|
|
|
Name:
|
Andrew J. Way
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
Date: January 4, 2017
|
|
/s/ DAVID A. BARTA
|
|
|
Name:
|
David A. Barta
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
Date: January 4, 2017
|
|