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):
  
August 4, 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 August 4, 2015, Exterran Holdings, Inc. issued a press release announcing our financial results for the quarter ended June 30, 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 August 4, 2015, announcing Exterran Holdings, Inc.’s results of operations for the quarter ended June 30, 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.
         
  
        
August 4, 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 August 4, 2015, announcing Exterran Holdings, Inc.’s results of operations for the quarter ended June 30, 2015.


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Exihibit 99.1
 
Exterran Holdings Reports Second-Quarter 2015 Results

● EBITDA, as adjusted, of $162 million for the quarter, compared to $161 million for the second quarter 2014
● Net income from continuing operations attributable to Exterran common stockholders of $0.22 per diluted share, excluding items, for the quarter

HOUSTON, August 4, 2015 – Exterran Holdings, Inc. (NYSE: EXH) today reported EBITDA, as adjusted (as defined below), of $162.5 million for the second quarter 2015, compared to $182.0 million for the first quarter 2015 and $161.1 million for the second quarter 2014.

Revenue was $683.8 million for the second quarter 2015, compared to $729.1 million for the first quarter 2015 and $739.3 million for the second quarter 2014.

Fabrication backlog was $600.5 million at June 30, 2015, compared to $730.4 million at March 31, 2015 and $818.1 million at June 30, 2014. Fabrication bookings were $149.6 million for the second quarter 2015, compared to $96.4 million for the first quarter 2015 and $471.6 million for the second 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 August 17, 2015 to stockholders of record at the close of business on August 10, 2015.

“In the second quarter 2015, we achieved solid operating performance across our businesses. Due to their production-oriented focus, our contract operations and aftermarket services businesses in the United States and international markets demonstrated stability compared to businesses that are more closely tied to drilling and completion activity. In our fabrication business, revenues and gross margins held up well given industry conditions while bookings improved over first quarter levels,” said Brad Childers, Exterran Holdings’ President and Chief Executive Officer.

“We remain committed to enhancing shareholder value through the planned separation of our international services and global fabrication businesses and expect to complete this transaction as soon as we secure reasonable financing,” added Childers. “In the meantime, our financial position is solid and we have ample liquidity, including availability under our credit facilities of approximately $450 million at Exterran Holdings and approximately $360 million at Exterran Partners, at June 30, 2015.”
 
 
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 $5.1 million for the second quarter 2015, compared to $23.7 million for the first quarter 2015 and $23.0 million for the second quarter 2014. At June 30, 2015, Exterran was still due to receive $116 million of principal payments from the sales of these assets. In July 2015, Exterran received an installment payment of $18.9 million related to the sale of its Venezuelan wholly-owned assets. As a result, this income will be recognized in the third quarter 2015 when the proceeds were received.

Net income from continuing operations attributable to Exterran stockholders, excluding items, for the second quarter 2015 was $15.6 million, or $0.22 per diluted common share. In addition to excluding the benefit related to our nationalized Venezuelan assets discussed above, these amounts also exclude restructuring and other charges of $19.6 million, including costs associated with the planned spin-off, that primarily consisted of legal, consulting, audit and professional fees and non-cash write-down of inventory, and non-cash long-lived asset impairment charges of $15.4 million related to our contract operations businesses. Net income from continuing operations attributable to Exterran stockholders, excluding items, was $18.6 million, or $0.27 per diluted common share, for the first quarter 2015, and net loss from continuing operations attributable to Exterran stockholders, excluding items, was $4.7 million, or $0.07 per diluted common share, for the second quarter 2014.

Net loss attributable to Exterran stockholders was $1.4 million, or $0.02 per diluted common share, for the second quarter 2015. Net income attributable to Exterran stockholders was $32.1 million, or $0.46 per diluted common share, for the first quarter 2015, and $12.4 million, or $0.19 per diluted common share, for the second 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 $18.5 million for the second quarter 2015, compared to $15.6 million for the first quarter 2015 and $14.0 million for the second quarter 2014.

Conference Call Details
Exterran Holdings and Exterran Partners, L.P. will host a joint conference call on Tuesday, August 4, 2015, to discuss their second-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 40327110.

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 40327110#.

 
2
 

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 and other 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, the availability of financing to consummate the proposed transaction 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; availability under Exterran Holdings’ and Exterran Partners’ credit facilities; 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.

 
4
 

EXTERRAN HOLDINGS, INC.
  
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  
(In thousands, except per share amounts)
  
                   
                   
    Three Months Ended  
   
June 30,
    
March 31,
    
June 30,
  
   
2015
    
2015
    
2014
  
Revenues:
                  
North America contract operations
   $ 198,259     $ 202,261     $ 181,940  
International contract operations
     115,250       120,691       134,392  
Aftermarket services
     90,834       86,856       100,359  
Fabrication
     279,489       319,274       322,579  
      683,832       729,082       739,270  
                         
Costs and Expenses:
                        
Cost of sales (excluding depreciation and amortization expense):
                  
     North America contract operations
     81,221       82,679       77,514  
     International contract operations
     44,745       44,339       46,502  
     Aftermarket services
     70,171       65,934       79,297  
     Fabrication
     240,854       267,118       279,983  
Selling, general and administrative
     83,874       86,686       95,712  
Depreciation and amortization
     94,325       95,808       111,956  
Long-lived asset impairment
     15,420       12,732       9,847  
Restructuring and other charges
     19,604       4,790       353  
Interest expense
     28,398       27,298       32,722  
Equity in income of non-consolidated affiliates
     (5,062 )     (5,006 )     (4,909 )
Other (income) expense, net
     1,005       7,841       (3,671 )
      674,555       690,219       725,306  
                         
Income before income taxes
     9,277       38,863       13,964  
Provision for income taxes
     1,742       16,491       10,870  
Income from continuing operations
     7,535       22,372       3,094  
Income from discontinued operations, net of tax
     254       18,713       17,769  
Net income
     7,789       41,085       20,863  
Less: Net income attributable to the noncontrolling interest
     (9,178 )     (8,943 )     (8,486 )
Net income (loss) attributable to Exterran stockholders
   $ (1,389 )   $ 32,142     $ 12,377  
                         
Basic income (loss) per common share(1):
                        
Income (loss) from continuing operations attributable to Exterran common stockholders
   $ (0.03 )   $ 0.19     $ (0.08 )
Income from discontinued operations attributable to Exterran common stockholders
     0.01       0.27       0.27  
     Net income (loss) attributable to Exterran common stockholders
   $ (0.02 )   $ 0.46     $ 0.19  
Diluted income (loss) per common share(1):
                        
Income (loss) from continuing operations attributable to Exterran common stockholders
   $ (0.03 )   $ 0.19     $ (0.08 )
Income from discontinued operations attributable to Exterran common stockholders
     0.01       0.27       0.27  
     Net income (loss) attributable to Exterran common stockholders
   $ (0.02 )   $ 0.46     $ 0.19  
                         
Weighted average common shares outstanding used in computing income (loss) per common share:
  
Basic
     68,514       68,252       65,890  
Diluted
     68,514       68,534       65,890  
                         
Dividends declared and paid per common share
   $ 0.15     $ 0.15     $ 0.15  
                         
(1) Basic and diluted net income (loss) attributable to Exterran common stockholders per common share was computed using the two-class method to determine the net income (loss) 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 (loss) attributable to Exterran common stockholders per common share.
 
  

 
5
 
EXTERRAN HOLDINGS, INC.
  
UNAUDITED SUPPLEMENTAL INFORMATION
  
(In thousands, except percentages)
  
                   
                   
    Three Months Ended  
   
June 30,
    
March 31,
    
June 30,
  
   
2015
    
2015
    
2014
  
Revenues:
                  
North America contract operations
   $ 198,259     $ 202,261     $ 181,940  
International contract operations
     115,250       120,691       134,392  
Aftermarket services
     90,834       86,856       100,359  
Fabrication
     279,489       319,274       322,579  
    Total
   $ 683,832     $ 729,082     $ 739,270  
                         
Gross Margin (1):
                        
North America contract operations
   $ 117,038     $ 119,582     $ 104,426  
International contract operations
     70,505       76,352       87,890  
Aftermarket services
     20,663       20,922       21,062  
Fabrication
     38,635       52,156       42,596  
    Total
   $ 246,841     $ 269,012     $ 255,974  
                         
Selling, General and Administrative
   $ 83,874     $ 86,686     $ 95,712  
    % of revenue
     12 %     12 %     13 %
                         
EBITDA, as Adjusted (1)
   $ 162,453     $ 181,993     $ 161,132  
    % of revenue
     24 %     25 %     22 %
                         
Capital expenditures
   $ 114,397     $ 139,783     $ 138,996  
Less: Proceeds from sale of PP&E
     (10,438 )     (8,910 )     (2,536 )
Net Capital expenditures
   $ 103,959     $ 130,873     $ 136,460  
                         
Gross Margin Percentage:
                        
North America contract operations
     59 %     59 %     57 %
International contract operations
     61 %     63 %     65 %
Aftermarket services
     23 %     24 %     21 %
Fabrication
     14 %     16 %     13 %
   Total
     36 %     37 %     35 %
                         
Total Available Horsepower (at period end):
                        
North America contract operations
     4,246       4,246       3,976  
International contract operations
     1,216       1,239       1,248  
    Total
     5,462       5,485       5,224  
                         
Total Operating Horsepower (at period end):
                        
North America contract operations
     3,618       3,689       3,422  
International contract operations
     938       960       959  
    Total
     4,556       4,649       4,381  
                         
Average Operating Horsepower:
                        
North America contract operations
     3,652       3,695       3,340  
International contract operations
     948       971       968  
    Total
     4,600       4,666       4,308  
                         
Horsepower Utilization (at period end):
                        
North America contract operations
     85 %     87 %     86 %
International contract operations
     77 %     77 %     77 %
    Total
     83 %     85 %     84 %
                         
   
June 30,
    
March 31,
    
June 30,
  
Fabrication Backlog:
    2015      2015      2014  
Compression & accessory
   $ 150,981     $ 185,640     $ 192,692  
Production & processing equipment
     389,037       458,143       532,117  
Installation
     60,479       86,590       93,305  
   Total
   $ 600,497     $ 730,373     $ 818,114  
                         
Balance Sheet:
                        
Debt - Parent level
   $ 707,391     $ 704,994     $ 810,832  
Debt - Exterran Partners, L.P.
     1,382,371       1,342,581       1,041,736  
  Total consolidated debt
   $ 2,089,762     $ 2,047,575     $ 1,852,568  
Exterran stockholders' equity
   $ 1,826,533     $ 1,809,730     $ 1,770,231  
                         
(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  
   
June 30,
    
March 31,
    
June 30,
  
   
2015
    
2015
    
2014
  
                   
Reconciliation of GAAP to Non-GAAP Financial Information:
                  
                   
Net income
   $ 7,789     $ 41,085     $ 20,863  
Income from discontinued operations, net of tax
     (254 )     (18,713 )     (17,769 )
Income from continuing operations
     7,535       22,372       3,094  
Depreciation and amortization
     94,325       95,808       111,956  
Long-lived asset impairment
     15,420       12,732       9,847  
Restructuring and other charges
     19,604       4,790       353  
Proceeds from sale of joint venture assets
     (5,062 )     (5,006 )     (4,909 )
Interest expense
     28,398       27,298       32,722  
(Gain) loss on currency exchange rate remeasurement of intercompany balances
     491       7,508       (2,801 )
Provision for income taxes
     1,742       16,491       10,870  
EBITDA, as adjusted (1)
     162,453       181,993       161,132  
Selling, general and administrative
     83,874       86,686       95,712  
Equity in income of non-consolidated affiliates
     (5,062 )     (5,006 )     (4,909 )
Proceeds from sale of joint venture assets
     5,062       5,006       4,909  
Gain (loss) on currency exchange rate remeasurement of intercompany balances
     (491 )     (7,508 )     2,801  
Other (income) expense, net
     1,005       7,841       (3,671 )
Gross Margin (1)
   $ 246,841     $ 269,012     $ 255,974  
                         
                         
Net Income (loss) attributable to Exterran stockholders
   $ (1,389 )   $ 32,142     $ 12,377  
Income from discontinued operations
     (254 )     (18,713 )     (17,769 )
Items, after-tax:
                        
Long-lived asset impairment (including the impact on noncontrolling interest)
     9,025       7,146       5,409  
Restructuring and other charges (including the impact on noncontrolling interest)
     13,278       3,017       143  
Proceeds from sale of joint venture assets
     (5,062 )     (5,006 )     (4,909 )
Net income (loss) from continuing operations attributable to Exterran stockholders, excluding items
   $ 15,598     $ 18,586     $ (4,749 )
                         
Diluted income (loss) from continuing operations attributable to Exterran common stockholders
   $ (0.03 )   $ 0.19     $ (0.08 )
Adjustment for items, after-tax, per common share (2)
     0.25       0.08       0.01  
Diluted net income (loss) from continuing operations attributable to Exterran common stockholders per common share,
    excluding items (1)(2)
   $ 0.22     $ 0.27     $ (0.07 )
                         
(1) Management believes EBITDA, as adjusted, diluted net income (loss) 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 (loss) 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 (loss) 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 $0.4 million, $0.2 million and $0.1 million for the three months ended June 30, 2015, March 31, 2015 and June 30, 2014, respectively, from our calculation of diluted net income (loss) from continuing operations attributable to Exterran common stockholders per common share, excluding items.
 
  
 
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