UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
 
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
 
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
     
Date of Report (Date of Earliest Event Reported):
  
May 5, 2015
 
EXTERRAN HOLDINGS, INC.
__________________________________________
  
(Exact name of registrant as specified in its charter)
 
     
Delaware
001-33666
74-3204509
_____________________
(State or other jurisdiction
_____________
(Commission
______________
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)
  
    
16666 Northchase Drive,
    
Houston, Texas
  
77060
_________________________________
(Address of principal executive offices)
  
___________
(Zip Code)

     
Registrant’s telephone number, including area code:
  
(281) 836-7000
 
Not Applicable
______________________________________________
  
Former name or former address, if changed since last report
  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
  
[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 Item 2.02 Results of Operations and Financial Condition.
 
On May 5, 2015, Exterran Holdings, Inc. issued a press release announcing our financial results for the quarter ended March 31, 2015. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
 
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
 
 Item 9.01 Financial Statements and Exhibits.
  
(d) Exhibits.
 
99.1 Press release dated May 5, 2015, announcing Exterran Holdings, Inc.’s results of operations for the quarter ended March 31, 2015.
 

 
 
 

 
2
 

SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
         
   
EXTERRAN HOLDINGS, INC.
         
  
        
May 5, 2015
  
By:
  
/s/ JON C. BIRO
       
Jon C. Biro
       
Senior Vice President and Chief Financial Officer
         



 
 


 
3
 

Exhibit Index
 
     
Exhibit No.
  
Description
99.1
  
Press release dated May 5, 2015, announcing Exterran Holdings, Inc.’s results of operations for the quarter ended March 31, 2015.



4

 
 


Exhibit 99.1


 
Exterran Holdings Reports First-Quarter 2015 Results

● EBITDA, as adjusted, of $182 million for the quarter
● Net income from continuing operations attributable to Exterran common stockholders of $0.27 per diluted share, excluding items, for the quarter

HOUSTON, May 5, 2015 – Exterran Holdings, Inc. (NYSE: EXH) today reported EBITDA, as adjusted (as defined below), of $182.0 million for the first quarter 2015, compared to $182.3 million for the fourth quarter 2014 and $144.8 million for the first quarter 2014.

Revenue was $729.1 million for the first quarter 2015, compared to $793.6 million for the fourth quarter 2014 and $643.0 million for the first quarter 2014.

Fabrication backlog was $730.4 million at March 31, 2015, compared to $953.2 million at December 31, 2014 and $669.1 million at March 31, 2014. Fabrication bookings were $96.4 million for the first quarter 2015, compared to $474.9 million for the fourth quarter 2014 and $276.6 million for the first quarter 2014.

Exterran Holdings declared a dividend of $0.15 per share of common stock, a rate of $0.60 per share on an annualized basis, which will be paid on May 18, 2015 to stockholders of record at the close of business on May 11, 2015.

“In the first quarter 2015, we achieved solid operating performance across all our businesses. We benefitted from the relative stability and cost improvement activities in our production-related services businesses as well as solid execution of the significant backlog with which we entered the year in our fabrication business,” said Brad Childers, Exterran Holdings’ President and Chief Executive Officer. “As expected, fabrication bookings declined in this period of reduced capital spending and activity levels in the oil and gas industry. With this development in our fabrication business, we have taken steps to reduce our costs and are working aggressively to right size our businesses until this environment improves.”

“We continue to make progress toward the planned separation of our international services and global fabrication businesses into a new publicly traded company, and we now expect the transaction to close in the third quarter of this year. We expect this strategic transaction will create two strong businesses, the U.S. services business and the international services and global fabrication business, that will be better positioned to capture more profit and growth, as well as generate more value for our investors,” added Childers.
 
1
 

Net income (loss) from continuing operations attributable to Exterran stockholders, excluding items, for all periods excludes the benefit of proceeds from the two previously announced sales of Exterran Holdings’ previously-nationalized Venezuelan assets, the benefit of which was $23.7 million for the first quarter 2015, compared to $18.5 million for the fourth quarter 2014 and $22.7 million for the first quarter 2014. At March 31, 2015, Exterran was still due approximately $121 million of principal payments from the sales of these assets.

Net income from continuing operations attributable to Exterran stockholders, excluding items, for the first quarter 2015 was $18.6 million, or $0.27 per diluted common share. In addition to excluding the benefit related to our nationalized Venezuelan assets discussed above, these amounts also exclude non-cash long-lived asset impairment charges of $12.7 million primarily related to our contract operations businesses and restructuring charges of $4.8 million related to costs associated with the planned spin-off that primarily consisted of legal, consulting, audit and professional fees. Net income from continuing operations attributable to Exterran stockholders, excluding items, for the first quarter 2015 included charges of $7.5 million for currency losses related to the functional currency remeasurement of our foreign subsidiaries’ U.S. dollar denominated intercompany obligations. Net income from continuing operations attributable to Exterran stockholders, excluding items, was $21.4 million, or $0.31 per diluted common share, for the fourth quarter 2014, and $13.9 million, or $0.20 per diluted common share, for the first quarter 2014.

Net income attributable to Exterran stockholders was $32.1 million, or $0.46 per diluted common share, for the first quarter 2015, compared to $19.1 million, or $0.27 per diluted common share, for the fourth quarter 2014, and $32.6 million, or $0.47 per diluted common share, for the first quarter 2014.

The cash distribution to be received by Exterran Holdings based upon its limited partner and general partner interests in Exterran Partners, L.P. is $15.6 million for the first quarter 2015, compared to $15.2 million for the fourth quarter 2014 and $13.7 million for the first quarter 2014.

Conference Call Details
Exterran Holdings and Exterran Partners, L.P. will host a joint conference call on Tuesday, May 5, 2015, to discuss their first-quarter 2015 financial results. The call will begin at 11:00 a.m. Eastern Time.

To listen to the call via a live webcast, please visit Exterran’s website at www.exterran.com. The call will also be available by dialing 800-446-2782 in the United States and Canada, or +1-847-413-3235 for international calls. Please call approximately 15 minutes prior to the scheduled start time and reference Exterran conference call number 39431196.
 
2
 

A replay of the conference call will be available on Exterran’s website for approximately seven days. Also, a replay may be accessed by dialing 888-843-7419 in the United States and Canada, or +1-630-652-3042 for international calls. The access code is 39431196#.

*****
EBITDA, as adjusted, a non-GAAP measure, is defined as net income (loss) excluding income (loss) from discontinued operations (net of tax), cumulative effect of accounting changes (net of tax), income taxes, interest expense (including debt extinguishment costs and gain or loss on termination of interest rate swaps), depreciation and amortization expense, impairment charges, restructuring charges, non-cash gains or losses from foreign currency exchange rate changes recorded on intercompany obligations, expensed acquisition costs and other items. EBITDA, as adjusted, excludes the benefit of the two previously announced sales of Exterran Holdings’ Venezuelan assets.

Gross Margin, a non-GAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization expense). Gross margin percentage is defined as gross margin divided by revenue.

About Exterran Holdings
Exterran Holdings, Inc. is a global market leader in full service natural gas compression and a premier provider of operations, maintenance, service and equipment for oil and gas production, processing and transportation applications. Exterran Holdings serves customers across the energy spectrum—from producers to transporters to processors to storage owners.  Headquartered in Houston, Texas, Exterran has approximately 10,000 employees and operates in approximately 30 countries. Exterran Holdings owns an equity interest, including all of the general partner interest, in Exterran Partners, L.P. (NASDAQ: EXLP), a master limited partnership, the leading provider of natural gas contract compression services to customers throughout the United States. For more information, visit www.exterran.com.

Forward-Looking Statements
All statements in this release (and oral statements made regarding the subjects of this release) other than historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside Exterran Holdings’ control, which could cause actual results to differ materially from such statements. Forward-looking information includes, but is not limited to: Exterran Holdings’ financial and operational strategies and ability to successfully effect those strategies; Exterran Holdings’ plan to conduct a separation of certain of its businesses, the possibility that the proposed transaction will be consummated, the timing of its consummation and the expected benefits from the proposed transaction; Exterran Holdings’ expectations regarding future economic and market conditions; Exterran Holdings’ financial and operational outlook and ability to fulfill that outlook; demand for Exterran Holdings’ products and services and growth opportunities for those products and services; and statements regarding amounts due from the sales of Exterran Holdings’ nationalized Venezuelan assets.
 
3
 

While Exterran Holdings believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: local, regional, national and international economic conditions and the impact they may have on Exterran Holdings and its customers; changes in tax laws that impact master limited partnerships; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for oil or natural gas or a sustained decrease in the price of oil or natural gas; delays, costs and difficulties that could impact the completion and expected results of the proposed separation transaction; Exterran Holdings’ ability to timely and cost-effectively execute larger projects; changes in political or economic conditions in key operating markets, including international markets; any non-performance by third parties of their contractual obligations; changes in safety, health, environmental and other regulations; and the performance of Exterran Partners.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Exterran Holdings’ Annual Report on Form 10-K for the year ended December 31, 2014, and those set forth from time to time in Exterran Holdings’ filings with the Securities and Exchange Commission, which are available at www.exterran.com.  Except as required by law, Exterran Holdings expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

SOURCE
Exterran Holdings, Inc.
 
 
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EXTERRAN HOLDINGS, INC.
  
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  
(In thousands, except per share amounts)
  
                   
                   
      Three Months Ended  
   
March 31,
    
December 31,
    
March 31,
  
   
2015
    
2014
    
2014
  
Revenues:
                  
North America contract operations
   $ 202,261     $ 199,640     $ 156,523  
International contract operations
     120,691       124,066       111,040  
Aftermarket services
     86,856       108,362       88,048  
Fabrication
     319,274       361,560       287,397  
      729,082       793,628       643,008  
                         
Costs and Expenses:
                        
Cost of sales (excluding depreciation and amortization expense):
                  
     North America contract operations
     82,679       85,094       71,081  
     International contract operations
     44,339       49,891       41,032  
     Aftermarket services
     65,934       85,804       67,821  
     Fabrication
     267,118       297,490       229,588  
Selling, general and administrative
     86,686       94,658       92,578  
Depreciation and amortization
     95,808       90,337       85,522  
Long-lived asset impairment
     12,732       20,640       3,807  
Restructuring charges
     4,790       2,159       4,822  
Interest expense
     27,298       27,411       28,308  
Equity in income of non-consolidated affiliates
     (5,006 )     -       (4,693 )
Other (income) expense, net
     7,841       3,189       (2,434 )
      690,219       756,673       617,432  
                         
Income before income taxes
     38,863       36,955       25,576  
Provision for income taxes
     16,491       27,163       9,409  
Income from continuing operations
     22,372       9,792       16,167  
Income from discontinued operations, net of tax
     18,713       18,175       18,727  
Net income
     41,085       27,967       34,894  
Less: net income attributable to the noncontrolling interest
     (8,943 )     (8,824 )     (2,298 )
Net income attributable to Exterran stockholders
   $ 32,142     $ 19,143     $ 32,596  
                         
Basic income per common share(1):
                        
Income from continuing operations attributable to Exterran common stockholders
   $ 0.19     $ 0.01     $ 0.21  
Income from discontinued operations attributable to Exterran common stockholders
     0.27       0.27       0.28  
     Net income attributable to Exterran common stockholders
   $ 0.46     $ 0.28     $ 0.49  
Diluted income per common share(1):
                        
Income from continuing operations attributable to Exterran common stockholders
   $ 0.19     $ 0.01     $ 0.20  
Income from discontinued operations attributable to Exterran common stockholders
     0.27       0.26       0.27  
     Net income attributable to Exterran common stockholders
   $ 0.46     $ 0.27     $ 0.47  
                         
Weighted average common shares outstanding used in computing income per common share:
  
Basic
     68,252       67,366       65,390  
Diluted
     68,534       68,422       67,792  
                         
Dividends declared and paid per common share
   $ 0.15     $ 0.15     $ 0.15  
                         
(1) Basic and diluted net income attributable to Exterran common stockholders per common share was computed using the two-class method to determine the net income per share for each class of common stock and participating security (restricted stock and certain of our stock settled restricted stock units) according to dividends declared and participation rights in undistributed earnings. Accordingly, we have excluded net income attributable to participating securities from our calculation of basic and diluted net income attributable to Exterran common stockholders per common share.
  

 
5
 

EXTERRAN HOLDINGS, INC.
  
UNAUDITED SUPPLEMENTAL INFORMATION
  
(In thousands, except percentages)
  
                   
                   
      Three Months Ended  
   
March 31,
    
December 31,
    
March 31,
  
   
2015
    
2014
    
2014
  
Revenues:
                  
North America contract operations
   $ 202,261     $ 199,640     $ 156,523  
International contract operations
     120,691       124,066       111,040  
Aftermarket services
     86,856       108,362       88,048  
Fabrication
     319,274       361,560       287,397  
    Total
   $ 729,082     $ 793,628     $ 643,008  
                         
Gross Margin (1):
                        
North America contract operations
   $ 119,582     $ 114,546     $ 85,442  
International contract operations
     76,352       74,175       70,008  
Aftermarket services
     20,922       22,558       20,227  
Fabrication
     52,156       64,070       57,809  
    Total
   $ 269,012     $ 275,349     $ 233,486  
                         
Selling, General and Administrative
   $ 86,686     $ 94,658     $ 92,578  
    % of revenue
     12 %     12 %     14 %
                         
EBITDA, as Adjusted (1)
   $ 181,993     $ 182,254     $ 144,805  
    % of revenue
     25 %     23 %     23 %
                         
Capital expenditures
   $ 139,783     $ 155,956     $ 99,214  
Less: Proceeds from sale of PP&E
     (8,910 )     (4,637 )     (10,863 )
Net Capital expenditures
   $ 130,873     $ 151,319     $ 88,351  
                         
Gross Margin Percentage:
                        
North America contract operations
     59 %     57 %     55 %
International contract operations
     63 %     60 %     63 %
Aftermarket services
     24 %     21 %     23 %
Fabrication
     16 %     18 %     20 %
   Total
     37 %     35 %     36 %
                         
Total Available Horsepower (at period end):
                        
North America contract operations
     4,246       4,209       3,476  
International contract operations
     1,239       1,236       1,254  
    Total
     5,485       5,445       4,730  
                         
Total Operating Horsepower (at period end):
                        
North America contract operations
     3,689       3,700       2,901  
International contract operations
     960       976       984  
    Total
     4,649       4,676       3,885  
                         
Average Operating Horsepower:
                        
North America contract operations
     3,695       3,638       2,894  
International contract operations
     971       975       982  
    Total
     4,666       4,613       3,876  
                         
Horsepower Utilization (at period end):
                        
North America contract operations
     87 %     88 %     83 %
International contract operations
     77 %     79 %     78 %
    Total
     85 %     86 %     82 %
                         
   
March 31,
    
December 31,
    
March 31,
  
Fabrication Backlog:
    2015      2014      2014  
Compression & accessory
   $ 185,640     $ 270,297     $ 176,708  
Production & processing equipment
     458,143       561,153       433,842  
Installation
     86,590       121,751       58,513  
   Total
   $ 730,373     $ 953,201     $ 669,063  
                         
Balance Sheet:
                        
Debt - Parent level
   $ 704,994     $ 726,607     $ 783,828  
Debt - Exterran Partners, L.P.
     1,342,581       1,300,295       801,595  
  Total consolidated debt
   $ 2,047,575     $ 2,026,902     $ 1,585,423  
Exterran stockholders' equity
   $ 1,809,730     $ 1,797,260     $ 1,702,787  
                         
(1) Management believes EBITDA, as adjusted, and gross margin provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone.  Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, management uses EBITDA, as adjusted, as a valuation measure.
  

 
6
 

EXTERRAN HOLDINGS, INC.
  
UNAUDITED SUPPLEMENTAL INFORMATION
  
(In thousands, except per share amounts)
  
                   
      Three Months Ended  
   
March 31,
    
December 31,
    
March 31,
  
   
2015
    
2014
    
2014
  
                   
Reconciliation of GAAP to Non-GAAP Financial Information:
                  
                   
Net income
   $ 41,085     $ 27,967     $ 34,894  
Income from discontinued operations, net of tax
     (18,713 )     (18,175 )     (18,727 )
Income from continuing operations
     22,372       9,792       16,167  
Depreciation and amortization
     95,808       90,337       85,522  
Long-lived asset impairment
     12,732       20,640       3,807  
Restructuring charges
     4,790       2,159       4,822  
Investment in non-consolidated affiliates impairment
     -       -       197  
Proceeds from sale of joint venture assets
     (5,006 )     -       (4,890 )
Interest expense
     27,298       27,411       28,308  
(Gain) loss on currency exchange rate remeasurement of intercompany balances
     7,508       3,730       (81 )
Loss on sale of businesses
     -       961       -  
Expensed acquisition costs
     -       61       1,544  
Provision for income taxes
     16,491       27,163       9,409  
EBITDA, as adjusted (1)
     181,993       182,254       144,805  
Selling, general and administrative
     86,686       94,658       92,578  
Equity in income of non-consolidated affiliates
     (5,006 )     -       (4,693 )
Investment in non-consolidated affiliates impairment
     -       -       (197 )
Proceeds from sale of joint venture assets
     5,006       -       4,890  
Gain (loss) on currency exchange rate remeasurement of intercompany balances
     (7,508 )     (3,730 )     81  
Loss on sale of businesses
     -       (961 )     -  
Expensed acquisition costs
     -       (61 )     (1,544 )
Other (income) expense, net
     7,841       3,189       (2,434 )
Gross Margin (1)
   $ 269,012     $ 275,349     $ 233,486  
                         
                         
Net Income attributable to Exterran stockholders
   $ 32,142     $ 19,143     $ 32,596  
Income from discontinued operations
     (18,713 )     (18,175 )     (18,727 )
Foreign tax credit valuation allowance
     -       7,224       -  
Items, after-tax:
                        
Long-lived asset impairment (including the impact on noncontrolling interest)
     7,146       11,094       1,472  
Restructuring charges (including the impact on noncontrolling interest)
     3,017       1,360       2,897  
Investment in non-consolidated affiliates impairment
     -       -       197  
Proceeds from sale of joint venture assets
     (5,006 )     -       (4,890 )
Loss on sale of businesses
     -       718       -  
Expensed acquisition costs (including the impact on noncontrolling interest)
     -       14       398  
Net income from continuing operations attributable to Exterran stockholders, excluding items
   $ 18,586     $ 21,378     $ 13,943  
                         
Diluted income from continuing operations attributable to Exterran common stockholders
   $ 0.19     $ 0.01     $ 0.20  
Adjustment for items, after-tax, per common share (2)
     0.08       0.30       -  
Diluted net income from continuing operations attributable to Exterran common stockholders per common
        share, excluding items (1)(2)
   $ 0.27     $ 0.31     $ 0.20  
                         
(1) Management believes EBITDA, as adjusted, diluted net income from continuing operations attributable to Exterran common stockholders per common share, excluding items, and gross margin provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone.  Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, management uses EBITDA, as adjusted, as a valuation measure.
 
  
(2) Diluted net income from continuing operations attributable to Exterran common stockholders per common share, excluding items, was computed using the two-class method to determine the net income per share for each class of common stock and participating security (restricted stock and certain of our stock settled restricted stock units) according to dividends declared and participation rights in undistributed earnings. Accordingly, we have excluded net income from continuing operations attributable to participating securities, excluding items, of $0.2 million, $0.4 million and $0.2 million for the three months ended March 31, 2015, December 31, 2014 and March 31, 2014, respectively, from our calculation of diluted net income from continuing operations attributable to Exterran common stockholders per common share, excluding items.
 
  
 
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