Exterran Holdings Reports Fourth-Quarter and Full-Year 2012 Results

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Exterran Holdings Reports Fourth-Quarter and Full-Year 2012 Results

  • Reported net income from continuing operations attributable to Exterran stockholders of $0.09 per diluted share, excluding charges, in the quarter
  • Achieved EBITDA, as adjusted, of $140.8 million in the quarter, up 20 percent over year-ago levels
  • Reduced consolidated debt levels by $140.7 million in the quarter
  • Grew operating horsepower in both North America and International contract operations businesses

HOUSTON--(BUSINESS WIRE)-- Exterran Holdings, Inc. (NYS: EXH) today reported EBITDA, as adjusted (as defined below), of $140.8 million for the fourth quarter 2012, compared to $126.4 million for the third quarter 2012 and $117.5 million for the fourth quarter 2011.

Revenue was $838.9 million for the fourth quarter 2012, compared to $718.7 million for the third quarter 2012 and $689.1 million for the fourth quarter 2011.


Fabrication backlog was $1,065.7 million at December 31, 2012, compared to $1,239.5 million at September 30, 2012 and $735.3 million at December 31, 2011.

EBITDA, as adjusted, was $464.8 million for 2012, compared to $395.4 million for 2011. Revenue was $2,803.6 million for 2012, compared to $2,629.9 million for 2011.

"During 2012, we made significant progress in the implementation of performance improvement initiatives, as each of our four operating segments achieved increased revenues and gross margin percentage over prior-year levels. In addition, we grew operating horsepower in both of our North America and International contract operations businesses," said Brad Childers, Exterran Holdings' President and Chief Executive Officer. "In the fourth quarter, we achieved the highest quarterly level of EBITDA, as adjusted, in over three years and achieved our second consecutive quarter of positive earnings from continuing operations excluding charges."

"One of our key goals entering 2012 was to reduce debt and covenant leverage. For the year, consolidated debt declined by $208 million and Exterran Holdings' total leverage ratio, which is total debt to adjusted EBITDA as defined in our credit agreement, decreased to 2.4x at December 31, 2012 from 3.0x at September 30, 2012 and 4.3x at December 31, 2011," said Bill Austin, Exterran Holdings' Executive Vice President and Chief Financial Officer.

"I believe we are on track to make further progress in improving the company's performance in 2013, though similar to last year, first quarter revenues are expected to decline somewhat from fourth quarter levels," added Childers.

Net income from continuing operations attributable to Exterran stockholders for the fourth quarter 2012 was $6.0 million, or $0.09 per diluted share, excluding pretax charges totaling $48.4 million, comprised primarily of non-cash long-lived asset impairment charges of $47.6 million related to our contract water treatment business. Net income from continuing operations attributable to Exterran stockholders, excluding charges, for the third quarter 2012 was $1.4 million, or $0.02 per diluted share, and net loss from continuing operations attributable to Exterran stockholders, excluding charges, for the fourth quarter 2011 was $9.8 million, or $0.16 per diluted share. Net income from continuing operations attributable to Exterran stockholders, excluding pretax charges, also excludes the benefit of the two previously announced sales of Exterran Holdings' Venezuelan assets.

Net loss attributable to Exterran stockholders for the fourth quarter 2012 was $5.7 million, or $0.09 per diluted share, compared to net income attributable to Exterran stockholders for the third quarter 2012 of $113.4 million, or $1.74 per diluted share, and a net loss attributable to Exterran stockholders for the fourth quarter 2011 of $66.6 million, or $1.06 per diluted share.

Net loss from continuing operations attributable to Exterran stockholders for 2012 was $50.7 million, or $0.80 per diluted share, excluding pretax charges totaling $190.1 million, comprised primarily of non-cash long-lived asset impairment charges of $183.4 million related primarily to our U.S. fleet and contract water treatment business, and the benefit of the sale of our Venezuelan assets. Net loss from continuing operations attributable to Exterran stockholders, excluding charges, for 2011 was $89.9 million, or $1.44 per diluted share.

Net loss attributable to Exterran stockholders for 2012 was $39.5 million, or $0.62 per diluted share, compared to a net loss attributable to Exterran stockholders for 2011 of $340.6 million, or $5.44 per diluted share.

The cash distribution received by Exterran Holdings based upon its limited partner and general partner interests in Exterran Partners was $8.1 million for the fourth quarter 2012, compared to $7.9 million for the third quarter 2012 and $7.4 million for the fourth quarter 2011.

Conference Call Details

Exterran Holdings and Exterran Partners, L.P. will host a joint conference call on Tuesday, Feb. 26, 2013, to discuss their fourth-quarter 2012 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 34069963.

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 34069963#.

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, merger and integration expenses, restructuring charges, non-cash gains or losses from foreign currency exchange rate changes recorded on intercompany obligations and other charges. 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. (NAS: EXLP) , the leading provider of natural gas contract operations 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' expectations regarding future economic and market conditions; Exterran Holdings' financial and operational outlook and ability to fulfill that outlook; statements relating to the remaining expected proceeds from the Venezuelan asset sales; and demand for Exterran Holdings' products and services and growth opportunities for those products and services.

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; 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, 2011, and those set forth from time to time in Exterran Holdings' filings with the Securities and Exchange Commission, which are currently available at www.exterran.com. Except as required by law, Exterran Holdings expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

 
EXTERRAN HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
     
 
Three Months EndedYears Ended
December 31,September 30,December 31,December 31,December 31,
20122012201120122011
Revenue:
North America contract operations$154,683$151,532$146,863$605,367$588,034
International contract operations127,911110,632114,675463,957445,059
Aftermarket services98,46095,854116,494385,861371,327
Fabrication 457,868  360,686  311,031  1,348,417  1,225,459 
 838,922  718,704  689,063  2,803,602  2,629,879 
 
Costs and Expenses:
Cost of sales (excluding depreciation and amortization expense):
North America contract operations69,36875,21774,977289,244303,050
International contract operations47,36746,26045,446184,608184,405
Aftermarket services78,53875,79393,649303,590311,760
Fabrication404,223310,754290,3351,191,9371,102,237
Selling, general and administrative101,85085,53683,648376,359352,780
Depreciation and amortization91,57985,24889,599350,847356,972
Long-lived asset impairment47,5763,2042,182183,4456,068
Restructuring charges8081,5158,6536,63611,594
Goodwill impairment--665-196,807
Interest expense27,69431,72339,045134,376149,473
Equity in (income) loss of non-consolidated affiliates(4,623)(4,793)209(51,483)471
Other (income) expense, net (777) (1,450) (15,435) 430  (5,620)
 863,603  709,007  712,973  2,969,989  2,969,997 
 
Income (loss) before income taxes(24,681)9,697(23,910)(166,387)(340,118)
Provision for (benefit from) income taxes (27,797) 1,267  39,615  (62,375) (10,605)
Income (loss) from continuing operations3,1168,430(63,525)(104,012)(329,513)
Income (loss) from discontinued operations, net of tax (20) 110,916  (858) 66,843  (10,105)
Net income (loss)3,096119,346(64,383)(37,169)(339,618)
Less: net income attributable to the noncontrolling interest (8,835) (5,980) (2,195) (2,317) (990)
Net income (loss) attributable to Exterran stockholders$(5,739)$113,366 $(66,578)$(39,486)$(340,608)
 
Basic income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders$(0.09)$0.04$(1.05)$(1.68)$(5.28)
Income (loss) from discontinued operations attributable to Exterran stockholders (0.00) 1.71  (0.01) 1.06  (0.16)
Net income (loss) attributable to Exterran stockholders$(0.09)$1.75 $(1.06)$(0.62)$(5.44)
Diluted income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders$(0.09)$0.04$(1.05)$(1.68)$(5.28)
Income (loss) from discontinued operations attributable to Exterran stockholders (0.00) 1.70  (0.01) 1.06  (0.16)
Net income (loss) attributable to Exterran stockholders$(0.09)$1.74 $(1.06)$(0.62)$(5.44)
Weighted average common and equivalent shares outstanding:
Basic 63,658  64,847  62,821  63,436  62,624 
Diluted 63,658  65,094  62,821  63,436  62,624 
 
Income (loss) attributable to Exterran stockholders:
Income (loss) from continuing operations$(5,719)$2,450$(65,720)$(106,329)$(330,503)
Income (loss) from discontinued operations, net of tax (20) 110,916  (858) 66,843  (10,105)
Net income (loss) attributable to Exterran stockholders$(5,739)$113,366 $(66,578)$(39,486)$(340,608)
 
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EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except percentages)
     
 
Three Months EndedYears Ended
December 31,September 30,December 31,December 31,December 31,
20122012201120122011
Revenues:
North America contract operations$154,683$151,532$