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 | |
March 31, 2016 | December 31, 2015 | ||||||
As Restated (Note 2) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 38,985 | $ | 29,032 | |||
Restricted cash | 1,490 | 1,490 | |||||
Accounts receivable, net of allowance of $3,614 and $2,868, respectively | 283,256 | 363,581 | |||||
Inventory (Note 4) | 194,641 | 208,081 | |||||
Costs and estimated earnings in excess of billings on uncompleted contracts (Note 5) | 52,129 | 65,311 | |||||
Other current assets | 50,496 | 53,866 | |||||
Current assets associated with discontinued operations (Note 3) | 15,706 | 32,923 | |||||
Total current assets | 636,703 | 754,284 | |||||
Property, plant and equipment, net (Note 6) | 824,818 | 858,188 | |||||
Deferred income taxes (Note 12) | 96,076 | 86,110 | |||||
Intangible and other assets, net | 50,905 | 51,533 | |||||
Long-term assets associated with discontinued operations (Note 3) | — | 38,281 | |||||
Total assets | $ | 1,608,502 | $ | 1,788,396 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable, trade | $ | 86,761 | $ | 86,727 | |||
Accrued liabilities | 167,760 | 175,841 | |||||
Deferred revenue | 24,778 | 31,675 | |||||
Billings on uncompleted contracts in excess of costs and estimated earnings (Note 5) | 37,558 | 37,908 | |||||
Current liabilities associated with discontinued operations (Note 3) | 20,260 | 13,645 | |||||
Total current liabilities | 337,117 | 345,796 | |||||
Long-term debt (Note 8) | 431,222 | 525,593 | |||||
Deferred income taxes | 22,274 | 22,519 | |||||
Long-term deferred revenue | 76,024 | 59,769 | |||||
Other long-term liabilities | 22,078 | 22,708 | |||||
Long-term liabilities associated with discontinued operations (Note 3) | 6,617 | 6,075 | |||||
Total liabilities | 895,332 | 982,460 | |||||
Commitments and contingencies (Note 17) | |||||||
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; 35,625,158 and 35,153,358 shares issued, respectively | 356 | 352 | |||||
Additional paid-in capital | 805,043 | 805,755 | |||||
Accumulated deficit | (122,272 | ) | (29,315 | ) | |||
Treasury stock — 115,624 and 5,776 common shares, at cost, respectively | (1,468 | ) | (54 | ) | |||
Accumulated other comprehensive income | 31,511 | 29,198 | |||||
Total stockholders’ equity (Note 14) | 713,170 | 805,936 | |||||
Total liabilities and stockholders’ equity | $ | 1,608,502 | $ | 1,788,396 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
As Restated (Note 2) | |||||||
Revenues: | |||||||
Contract operations | $ | 104,759 | $ | 120,691 | |||
Aftermarket services | 30,241 | 36,244 | |||||
Product sales—third parties | 171,630 | 307,047 | |||||
Product sales—affiliates (Note 13) | — | 55,838 | |||||
306,630 | 519,820 | ||||||
Costs and expenses: | |||||||
Cost of sales (excluding depreciation and amortization expense): | |||||||
Contract operations | 38,498 | 44,339 | |||||
Aftermarket services | 22,300 | 25,157 | |||||
Product sales | 161,892 | 307,625 | |||||
Selling, general and administrative | 45,738 | 57,816 | |||||
Depreciation and amortization | 50,933 | 38,015 | |||||
Long-lived asset impairment (Note 10) | 651 | 4,579 | |||||
Restructuring and other charges (Note 11) | 12,567 | — | |||||
Interest expense | 8,463 | 507 | |||||
Equity in income of non-consolidated affiliates (Note 7) | (5,174 | ) | (5,006 | ) | |||
Other (income) expense, net | (4,417 | ) | 7,788 | ||||
331,451 | 480,820 | ||||||
Income (loss) before income taxes | (24,821 | ) | 39,000 | ||||
Provision for income taxes (Note 12) | 4,009 | 20,455 | |||||
Income (loss) from continuing operations | (28,830 | ) | 18,545 | ||||
Income (loss) from discontinued operations, net of tax (Note 3) | (64,127 | ) | 17,932 | ||||
Net income (loss) | $ | (92,957 | ) | $ | 36,477 | ||
Basic net income (loss) per common share (Note 16): | |||||||
Income (loss) from continuing operations per common share | $ | (0.84 | ) | $ | 0.53 | ||
Income (loss) from discontinued operations per common share | (1.86 | ) | 0.53 | ||||
Net income (loss) per common share | $ | (2.70 | ) | $ | 1.06 | ||
Diluted net income (loss) per common share (Note 16): | |||||||
Income (loss) from continuing operations per common share | $ | (0.84 | ) | $ | 0.53 | ||
Income (loss) from discontinued operations per common share | (1.86 | ) | 0.53 | ||||
Net income (loss) per common share | $ | (2.70 | ) | $ | 1.06 | ||
Weighted average common shares outstanding used in net income (loss) per common share (Note 16): | |||||||
Basic | 34,459 | 34,286 | |||||
Diluted | 34,459 | 34,286 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
As Restated (Note 2) | |||||||
Net income (loss) | $ | (92,957 | ) | $ | 36,477 | ||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustment | 2,313 | (7,745 | ) | ||||
Comprehensive income (loss) | $ | (90,644 | ) | $ | 28,732 |
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) | 36,477 | 36,477 | |||||||||||||||||||||||||
Net contributions from parent (As Restated) | 10,298 | 10,298 | |||||||||||||||||||||||||
Foreign currency translation adjustment (As Restated) | (7,745 | ) | (7,745 | ) | |||||||||||||||||||||||
Balance, March 31, 2015 (As Restated) | $ | — | $ | — | $ | — | $ | — | $ | 1,384,365 | $ | 19,000 | $ | 1,403,365 | |||||||||||||
Balance, January 1, 2016 (As Restated) | $ | 352 | $ | 805,755 | $ | (29,315 | ) | $ | (54 | ) | $ | — | $ | 29,198 | $ | 805,936 | |||||||||||
Net loss | (92,957 | ) | (92,957 | ) | |||||||||||||||||||||||
Options exercised | 694 | 694 | |||||||||||||||||||||||||
Foreign currency translation adjustment | 2,313 | 2,313 | |||||||||||||||||||||||||
Cash transfer to Archrock, Inc. (Note 17) | (5,153 | ) | (5,153 | ) | |||||||||||||||||||||||
Treasury stock purchased | (1,414 | ) | (1,414 | ) | |||||||||||||||||||||||
Stock-based compensation, net of forfeitures | 4 | 4,389 | 4,393 | ||||||||||||||||||||||||
Income tax benefit from stock-based compensation expenses | (642 | ) | (642 | ) | |||||||||||||||||||||||
Balance, March 31, 2016 | $ | 356 | $ | 805,043 | $ | (122,272 | ) | $ | (1,468 | ) | $ | — | $ | 31,511 | $ | 713,170 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
As Restated (Note 2) | |||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (92,957 | ) | $ | 36,477 | ||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||
Depreciation and amortization | 50,933 | 38,015 | |||||
Long-lived asset impairment | 651 | 4,579 | |||||
Amortization of deferred financing costs | 1,080 | — | |||||
(Income) loss from discontinued operations, net of tax | 64,127 | (17,932 | ) | ||||
Provision for doubtful accounts | 763 | 176 | |||||
Gain on sale of property, plant and equipment | (101 | ) | (125 | ) | |||
Equity in income of non-consolidated affiliates | (5,174 | ) | (5,006 | ) | |||
(Gain) loss on remeasurement of intercompany balances | (4,610 | ) | 7,508 | ||||
Stock-based compensation expense | 4,393 | 2,015 | |||||
Deferred income tax provision (benefit) | (8,927 | ) | 4,602 | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable and notes | 80,402 | 32,172 | |||||
Inventory | 13,789 | (26,397 | ) | ||||
Costs and estimated earnings versus billings on uncompleted contracts | 12,829 | 14,391 | |||||
Other current assets | 4,274 | (12,346 | ) | ||||
Accounts payable and other liabilities | (6,853 | ) | (47,295 | ) | |||
Deferred revenue | 6,190 | (3,571 | ) | ||||
Other | (103 | ) | (3,202 | ) | |||
Net cash provided by continuing operations | 120,706 | 24,061 | |||||
Net cash provided by discontinued operations | 2,187 | 271 | |||||
Net cash provided by operating activities | 122,893 | 24,332 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (14,451 | ) | (40,523 | ) | |||
Proceeds from sale of property, plant and equipment | 85 | 3,600 | |||||
Return of investments in non-consolidated affiliates | 5,174 | 5,006 | |||||
Net cash used in continuing operations | (9,192 | ) | (31,917 | ) | |||
Net cash provided by (used in) discontinued operations | (1,827 | ) | 16,504 | ||||
Net cash used in investing activities | (11,019 | ) | (15,413 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings of long-term debt | 157,500 | — | |||||
Repayments of long-term debt | (252,563 | ) | — | ||||
Cash transfer to Archrock, Inc. (Note 17) | (5,153 | ) | — | ||||
Net contributions from parent | — | 3,401 | |||||
Proceeds from stock options exercised | 694 | — | |||||
Purchase of treasury stock | (1,414 | ) | — | ||||
Net cash provided by (used in) financing activities | (100,936 | ) | 3,401 | ||||
Effect of exchange rate changes on cash and cash equivalents | (985 | ) | (231 | ) | |||
Net increase in cash and cash equivalents | 9,953 | 12,089 | |||||
Cash and cash equivalents at beginning of period | 29,032 | 39,361 | |||||
Cash and cash equivalents at end of period | $ | 38,985 | $ | 51,450 |
• | Our condensed consolidated statements of operations, comprehensive income (loss), cash flows and stockholders’ equity for the three months ended March 31, 2016 consist entirely of our consolidated results. Our condensed combined statements of operations, comprehensive income (loss), cash flows and stockholders’ equity for the three months ended March 31, 2015 consist entirely of the combined results of Archrock’s international services and product sales businesses. |
• | Our condensed consolidated balance sheets at March 31, 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 provides 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 March 31, 2015 | |||||||||||||||
As Previously Reported | Restatement Adjustments | Reclassification Adjustments (1) | As Restated and Reclassified | ||||||||||||
Revenues: | |||||||||||||||
Contract operations | $ | 120,691 | $ | — | $ | — | $ | 120,691 | |||||||
Aftermarket services | 36,244 | — | — | 36,244 | |||||||||||
Product sales—third parties | 319,274 | (6,932 | ) | (5,295 | ) | 307,047 | |||||||||
Product sales—affiliates | 55,838 | — | — | 55,838 | |||||||||||
532,047 | (6,932 | ) | (5,295 | ) | 519,820 | ||||||||||
Costs and expenses: | |||||||||||||||
Cost of sales (excluding depreciation and amortization expense): | |||||||||||||||
Contract operations | 44,339 | — | — | 44,339 | |||||||||||
Aftermarket services | 25,157 | — | — | 25,157 | |||||||||||
Product sales | 318,486 | (6,087 | ) | (4,774 | ) | 307,625 | |||||||||
Selling, general and administrative | 58,566 | — | (750 | ) | 57,816 | ||||||||||
Depreciation and amortization | 38,795 | 97 | (877 | ) | 38,015 | ||||||||||
Long-lived asset impairment | 4,579 | — | — | 4,579 | |||||||||||
Interest expense | 507 | — | — | 507 | |||||||||||
Equity in income of non-consolidated affiliates | (5,006 | ) | — | — | (5,006 | ) | |||||||||
Other (income) expense, net | 8,391 | (898 | ) | 295 | 7,788 | ||||||||||
493,814 | (6,888 | ) | (6,106 | ) | 480,820 | ||||||||||
Income before income taxes | 38,233 | (44 | ) | 811 | 39,000 | ||||||||||
Provision for income taxes | 19,384 | 1,071 | — | 20,455 | |||||||||||
Income from continuing operations | 18,849 | (1,115 | ) | 811 | 18,545 | ||||||||||
Income from discontinued operations, net of tax | 18,743 | — | (811 | ) | 17,932 | ||||||||||
Net income | $ | 37,592 | $ | (1,115 | ) | $ | — | $ | 36,477 | ||||||
Basic net income per common share: | |||||||||||||||
Income from continuing operations per common share | $ | 0.55 | $ | (0.04 | ) | $ | 0.02 | $ | 0.53 | ||||||
Income from discontinued operations per common share | 0.55 | — | (0.02 | ) | 0.53 | ||||||||||
Net income per common share | $ | 1.10 | $ | (0.04 | ) | $ | — | $ | 1.06 | ||||||
Diluted net income per common share: | |||||||||||||||
Income from continuing operations per common share | $ | 0.55 | $ | (0.04 | ) | $ | 0.02 | $ | 0.53 | ||||||
Income from discontinued operations per common share | 0.55 | — | (0.02 | ) | 0.53 | ||||||||||
Net income per common share | $ | 1.10 | $ | (0.04 | ) | $ | — | $ | 1.06 |
(1) | As discussed in Note 3, in the first quarter of 2016, we committed to a plan to exit our Belleli CPE business, which provides 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 March 31, 2015 | |||||||||||||||
As Previously Reported | Restatement Adjustments | Reclassification Adjustments | As Restated and Reclassified | ||||||||||||
Net income | $ | 37,592 | $ | (1,115 | ) | $ | — | $ | 36,477 | ||||||
Other comprehensive loss: | |||||||||||||||
Foreign currency translation adjustment | (10,362 | ) | 2,617 | — | (7,745 | ) | |||||||||
Comprehensive income | $ | 27,230 | $ | 1,502 | $ | — | $ | 28,732 |
Three Months Ended March 31, 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 | 37,592 | (1,115 | ) | — | 36,477 | ||||||||||
Net contributions from parent | 10,311 | (13 | ) | — | 10,298 | ||||||||||
Foreign currency translation adjustment | (10,362 | ) | 2,617 | — | (7,745 | ) | |||||||||
Balance, March 31, 2015 | $ | 1,489,363 | $ | (85,998 | ) | $ | — | $ | 1,403,365 |
Three Months Ended March 31, 2015 | |||||||||||||||
As Previously Reported | Restatement Adjustments | Reclassification Adjustments (1) | As Restated and Reclassified | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 37,592 | $ | (1,115 | ) | $ | — | $ | 36,477 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 38,795 | 97 | (877 | ) | 38,015 | ||||||||||
Long-lived asset impairment | 4,579 | — | — | 4,579 | |||||||||||
Income from discontinued operations, net of tax | (18,743 | ) | — | 811 | (17,932 | ) | |||||||||
Provision for doubtful accounts | 324 | — | (148 | ) | 176 | ||||||||||
Gain on sale of property, plant and equipment | (130 | ) | — | 5 | (125 | ) | |||||||||
Equity in income of non-consolidated affiliates | (5,006 | ) | — | — | (5,006 | ) | |||||||||
Loss on remeasurement of intercompany balances | 7,508 | — | — | 7,508 | |||||||||||
Stock-based compensation expense | 2,015 | — | — | 2,015 | |||||||||||
Deferred income tax provision | 3,532 | 1,070 | — | 4,602 | |||||||||||
Changes in assets and liabilities: | |||||||||||||||
Accounts receivable and notes | 28,369 | (5,213 | ) | 9,016 | 32,172 | ||||||||||
Inventory | (26,388 | ) | — | (9 | ) | (26,397 | ) | ||||||||
Costs and estimated earnings versus billings on uncompleted contracts | 12,304 | 12,145 | (10,058 | ) | 14,391 | ||||||||||
Other current assets | (15,883 | ) | (40 | ) | 3,577 | (12,346 | ) | ||||||||
Accounts payable and other liabilities | (40,480 | ) | (6,104 | ) | (711 | ) | (47,295 | ) | |||||||
Deferred revenue | (3,571 | ) | — | — | (3,571 | ) | |||||||||
Other | (2,738 | ) | (827 | ) | 363 | (3,202 | ) | ||||||||
Net cash provided by continuing operations | 22,079 | 13 | 1,969 | 24,061 | |||||||||||
Net cash provided by discontinued operations | 2,240 | — | (1,969 | ) | 271 | ||||||||||
Net cash provided by operating activities | 24,319 | 13 | — | 24,332 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (40,549 | ) | — | 26 | (40,523 | ) | |||||||||
Proceeds from sale of property, plant and equipment | 3,600 | — | — | 3,600 | |||||||||||
Return of investments in non-consolidated affiliates | 5,006 | — | — | 5,006 | |||||||||||
Net cash used in continuing operations | (31,943 | ) | — | 26 | (31,917 | ) | |||||||||
Net cash provided by discontinued operations | 16,530 | — | (26 | ) | 16,504 | ||||||||||
Net cash used in investing activities | (15,413 | ) | — | — | (15,413 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||
Net contributions from parent | 3,414 | (13 | ) | — | 3,401 | ||||||||||
Net cash provided by financing activities | 3,414 | (13 | ) | — | 3,401 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (231 | ) | — | — | (231 | ) | |||||||||
Net increase in cash and cash equivalents | 12,089 | — | — | 12,089 | |||||||||||
Cash and cash equivalents at beginning of period | 39,361 | — | — | 39,361 | |||||||||||
Cash and cash equivalents at end of period | $ | 51,450 | $ | — | $ | — | $ | 51,450 |
(1) | As discussed in Note 3, in the first quarter of 2016, we committed to a plan to exit our Belleli CPE business, which provides 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 March 31, 2016 | Three Months Ended March 31, 2015 | ||||||||||||||||||||||
Venezuela | Belleli CPE | Total | Venezuela | Belleli CPE | Total | ||||||||||||||||||
Revenue | $ | — | $ | 11,929 | $ | 11,929 | $ | — | $ | 5,295 | $ | 5,295 | |||||||||||
Cost of sales (excluding depreciation and amortization expense) | — | 11,674 | 11,674 | — | 4,774 | 4,774 | |||||||||||||||||
Selling, general and administrative | 38 | 1,893 | 1,931 | 84 | 750 | 834 | |||||||||||||||||
Depreciation and amortization | — | 861 | 861 | — | 877 | 877 | |||||||||||||||||
Long-lived asset impairment | — | 61,636 | 61,636 | — | — | — | |||||||||||||||||
Recovery attributable to expropriation | (6 | ) | — | (6 | ) | (16,506 | ) | — | (16,506 | ) | |||||||||||||
Interest expense | — | 8 | 8 | — | — | — | |||||||||||||||||
Other (income) expense, net | (268 | ) | 220 | (48 | ) | (2,321 | ) | (295 | ) | (2,616 | ) | ||||||||||||
Income (loss) from discontinued operations, net of tax | $ | 236 | $ | (64,363 | ) | $ | (64,127 | ) | $ | 18,743 | $ | (811 | ) | $ | 17,932 |
March 31, 2016 | December 31, 2015 | ||||||||||||||||||||||
Venezuela | Belleli CPE | Total | Venezuela | Belleli CPE | Total | ||||||||||||||||||
Cash | $ | 48 | $ | — | $ | 48 | $ | 177 | $ | — | $ | 177 | |||||||||||
Accounts receivable | — | 14,545 | 14,545 | — | 7,810 | 7,810 | |||||||||||||||||
Inventory | — | 436 | 436 | — | 431 | 431 | |||||||||||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | — | — | — | — | 17,666 | 17,666 | |||||||||||||||||
Other current assets | 1 | 676 | 677 | 14 | 6,825 | 6,839 | |||||||||||||||||
Total current assets associated with discontinued operations | 49 | 15,657 | 15,706 | 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 | $ | 49 | $ | 15,657 | $ | 15,706 | $ | 191 | $ | 71,013 | $ | 71,204 | |||||||||||
Accounts payable | $ | — | $ | 8,217 | $ | 8,217 | $ | — | $ | 7,839 | $ | 7,839 | |||||||||||
Accrued liabilities | 1,013 | 2,082 | 3,095 | 1,249 | 2,556 | 3,805 | |||||||||||||||||
Billings on uncompleted contracts in excess of costs and estimated earnings | — | 8,948 | 8,948 | — | 2,001 | 2,001 | |||||||||||||||||
Total current liabilities associated with discontinued operations | 1,013 | 19,247 | 20,260 | 1,249 | 12,396 | 13,645 | |||||||||||||||||
Other long-term liabilities | 9 | 6,608 | 6,617 | 158 | 5,917 | 6,075 | |||||||||||||||||
Total liabilities associated with discontinued operations | $ | 1,022 | $ | 25,855 | $ | 26,877 | $ | 1,407 | $ | 18,313 | $ | 19,720 |
March 31, 2016 | December 31, 2015 | ||||||
As Restated | |||||||
Parts and supplies | $ | 123,522 | $ | 133,558 | |||
Work in progress | 36,828 | 41,184 | |||||
Finished goods | 34,291 | 33,339 | |||||
Inventory | $ | 194,641 | $ | 208,081 |
March 31, 2016 | December 31, 2015 | ||||||
As Restated | |||||||
Costs incurred on uncompleted contracts | $ | 649,922 | $ | 664,229 | |||
Estimated earnings | 27,564 | 44,915 | |||||
677,486 | 709,144 | ||||||
Less — billings to date | (662,915 | ) | (681,741 | ) | |||
$ | 14,571 | $ | 27,403 |
March 31, 2016 | December 31, 2015 | ||||||
As Restated | |||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ | 52,129 | $ | 65,311 | |||
Billings on uncompleted contracts in excess of costs and estimated earnings | (37,558 | ) | (37,908 | ) | |||
$ | 14,571 | $ | 27,403 |
March 31, 2016 | December 31, 2015 | ||||||
As Restated | |||||||
Compression equipment, facilities and other fleet assets (1) | $ | 1,462,323 | $ | 1,527,328 | |||
Land and buildings | 114,003 | 117,247 | |||||
Transportation and shop equipment | 145,730 | 144,413 | |||||
Other | 102,679 | 99,035 | |||||
1,824,735 | 1,888,023 | ||||||
Accumulated depreciation (1) | (999,917 | ) | (1,029,835 | ) | |||
Property, plant and equipment, net | $ | 824,818 | $ | 858,188 |
(1) | During the three months ended March 31, 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. |
March 31, 2016 | December 31, 2015 | ||||||
Revolving credit facility due November 2020 | $ | 190,000 | $ | 285,000 | |||
Term loan facility due November 2017 | 245,000 | 245,000 | |||||
Other, interest at various rates, collateralized by equipment and other assets | 773 | 836 | |||||
Unamortized deferred financing costs | (4,551 | ) | (5,243 | ) | |||
Long-term debt | $ | 431,222 | $ | 525,593 |
• | 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. |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | ||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Impaired long-lived assets | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Impaired assets—Discontinued operations | — | — | 15,657 | — | — | — | |||||||||||||||||
Long-term receivable from the sale of our Canadian Operations | — | — | — | — | — | 5,100 |
Spin-off | Cost Reduction Plan | Total | |||||||||
Beginning balance at January 1, 2016 | $ | 1,083 | $ | 565 | $ | 1,648 | |||||
Additions for costs expensed | 1,602 | 10,965 | 12,567 | ||||||||
Less non-cash expense | (604 | ) | (437 | ) | (1,041 | ) | |||||
Reductions for payments | (879 | ) | (3,161 | ) | (4,040 | ) | |||||
Ending balance at March 31, 2016 | $ | 1,202 | $ | 7,932 | $ | 9,134 |
Three Months Ended March 31, 2016 | |||
Consulting fees | $ | 22 | |
Start-up of stand-alone functions | 277 | ||
Retention awards to certain employees | 1,325 | ||
Employee termination benefits | 10,721 | ||
Other | 222 | ||
Total restructuring and other charges | $ | 12,567 |
Three Months Ended March 31, 2015 | |||
As Restated | |||
Net contributions from parent per the statements of stockholders’ equity | $ | 10,298 | |
Stock-based compensation expenses prior to the Spin-off | (2,015 | ) | |
Stock-based compensation excess tax benefit prior to the Spin-off | 764 | ||
Net transfers of property, plant and equipment from parent prior to the Spin-off | (5,646 | ) | |
Net contributions from parent per statements of cash flows | $ | 3,401 |
Foreign Currency Translation Adjustment | |||
Accumulated other comprehensive income, January 1, 2015 (As Restated) | $ | 26,745 | |
Loss recognized in other comprehensive income (loss) (As Restated) | (7,745 | ) | |
Accumulated other comprehensive income, March 31, 2015 (As Restated) | $ | 19,000 | |
Accumulated other comprehensive income, January 1, 2016 | $ | 29,198 | |
Income recognized in other comprehensive income (loss) | 2,313 | ||
Accumulated other comprehensive income, March 31, 2016 | $ | 31,511 |
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 | (20 | ) | 36.86 | |||||||||
Options outstanding, March 31, 2016 | 358 | 18.46 | 2.5 | $ | 888 | |||||||
Options exercisable, March 31, 2016 | 346 | 17.97 | 2.4 | 888 |
Shares (in thousands) | Weighted Average Grant-Date Fair Value Per Share | |||||
Non-vested awards, January 1, 2016 | 1,004 | $ | 22.17 | |||
Granted | 763 | 15.46 | ||||
Vested | (397 | ) | 22.98 | |||
Cancelled | (29 | ) | 24.87 | |||
Non-vested awards, March 31, 2016 (1) | 1,341 | 18.05 |
(1) | Non-vested awards as of March 31, 2016 are comprised of 27,000 cash settled restricted stock units and cash settled performance units and 1,314,000 restricted shares, restricted stock units and performance units. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
As Restated | |||||||
Numerator for basic and diluted net income (loss) per common share: | |||||||
Income (loss) from continuing operations | $ | (28,830 | ) | $ | 18,545 | ||
Income (loss) from discontinued operations, net of tax | (64,127 | ) | 17,932 | ||||
Less: Net income attributable to participating securities | — | — | |||||
Net income (loss) — used in basic and diluted net income (loss) per common share | $ | (92,957 | ) | $ | 36,477 | ||
Weighted average common shares outstanding including participating securities | 35,404 | 34,286 | |||||
Less: Weighted average participating securities outstanding | (945 | ) | — | ||||
Weighted average common shares outstanding — used in basic net income (loss) per common share | 34,459 | 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 | 34,459 | 34,286 | |||||
Net income (loss) per common share: | |||||||
Basic | $ | (2.70 | ) | $ | 1.06 | ||
Diluted | $ | (2.70 | ) | $ | 1.06 |
* | Excluded from diluted net income (loss) per common share as their inclusion would have been anti-dilutive. |
Three Months Ended March 31, | |||||
2016 | 2015 | ||||
Net dilutive potential common shares issuable: | |||||
On exercise of options where exercise price is greater than average market value for the period | 243 | * | |||
On exercise of options and vesting of restricted stock units | 58 | * | |||
Net dilutive potential common shares issuable | 301 | — |
* | Not applicable for the period. |
Term | Maximum Potential Undiscounted Payments as of March 31, 2016 | ||||
Performance guarantees through letters of credit (1) | 2016 - 2021 | $ | 175,317 | ||
Standby letters of credit | 2016 - 2017 | 6,792 | |||
Commercial letters of credit | 2016 | 451 | |||
Bid bonds and performance bonds (1) | 2016 - 2023 | 81,298 | |||
Maximum potential undiscounted payments | $ | 263,858 |
(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 | Product Sales (1) | Reportable Segments Total (1)(2) | |||||||||||
March 31, 2016: | |||||||||||||||
Revenue | $ | 104,759 | $ | 30,241 | $ | 171,630 | $ | 306,630 | |||||||
Gross margin (3) | 66,261 | 7,941 | 9,738 | 83,940 | |||||||||||
March 31, 2015: | |||||||||||||||
Revenue | $ | 120,691 | $ | 36,244 | $ | 362,885 | $ | 519,820 | |||||||
Gross margin (3) | 76,352 | 11,087 | 55,260 | 142,699 |
(1) | Financial information for the product sales segment for the three months ended March 31, 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 March 31, | |||||||
2016 | 2015 | ||||||
As Restated | |||||||
Income (loss) before income taxes | $ | (24,821 | ) | $ | 39,000 | ||
Selling, general and administrative | 45,738 | 57,816 | |||||
Depreciation and amortization | 50,933 | 38,015 | |||||
Long-lived asset impairment | 651 | 4,579 | |||||
Restructuring and other charges | 12,567 | — | |||||
Interest expense | 8,463 | 507 | |||||
Equity in income of non-consolidated affiliates | (5,174 | ) | (5,006 | ) | |||
Other (income) expense, net | (4,417 | ) | 7,788 | ||||
Consolidated and combined gross margin | $ | 83,940 | $ | 142,699 |
• | 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. |
• | 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 product sales revenues and our ability to secure new 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 March 31, 2016 | |||||||||||||||||
Revenue | $ | 276,667 | $ | — | $ | 29,963 | $ | 306,630 | |||||||||
Cost of sales (excluding depreciation and amortization expense) | 191,103 | — | 31,587 | 222,690 | |||||||||||||
Depreciation and amortization | 48,407 | — | 2,526 | 50,933 | |||||||||||||
Loss from continuing operations | (22,051 | ) | — | (6,779 | ) | (28,830 | ) | ||||||||||
Income (loss) from discontinued operations, net of tax (1) | 236 | (64,363 | ) | — | (64,127 | ) | |||||||||||
Net loss | (21,815 | ) | (64,363 | ) | (6,779 | ) | (92,957 | ) | |||||||||
Product sales backlog (at period end) | 145,985 | — | (2) | 137,100 | 283,085 | ||||||||||||
Third party bookings | 20,234 | — | (2) | 4,639 | 24,873 | ||||||||||||
Three Months Ended March 31, 2015 (As Restated) | |||||||||||||||||
Revenue | $ | 487,394 | $ | — | $ | 32,426 | $ | 519,820 | |||||||||
Cost of sales (excluding depreciation and amortization expense) | 344,408 | — | 32,713 | 377,121 | |||||||||||||
Depreciation and amortization | 35,255 | — | 2,760 | 38,015 | |||||||||||||
Income (loss) from continuing operations | 24,144 | — | (5,599 | ) | 18,545 | ||||||||||||
Income (loss) from discontinued operations, net of tax (1) | 18,743 | (811 | ) | — | 17,932 | ||||||||||||
Net income (loss) | 42,887 | (811 | ) | (5,599 | ) | 36,477 | |||||||||||
Product sales backlog (at period end) | 553,971 | — | (2) | 158,850 | 712,821 | ||||||||||||
Third party bookings | 63,130 | — | (2) | 6,538 | 69,668 |
(1) | See Note 3 to the Financial Statements for further discussion regarding discontinued operations. |
(2) | As of March 31, 2016 and 2015 product sales backlog for Belleli CPE was $49.1 million and $47.0 million, respectively. During the three months ended March 31, 2016 and 2015 third party bookings for Belleli CPE were $2.9 million and $28.7 million, 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. |
• | Our condensed consolidated statements of operations, comprehensive income (loss), cash flows and stockholders’ equity for the three months ended March 31, 2016 consist entirely of our consolidated results. Our condensed combined statements of operations, comprehensive income (loss), cash flows and stockholders’ equity for the three months ended March 31, 2015 consist entirely of the combined results of Archrock’s international services and product sales businesses. |
• | Our condensed consolidated balance sheets at March 31, 2016 and December 31, 2015 consist entirely of our consolidated balances. |
Three Months Ended | ||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | ||||||
Total Available Horsepower (at period end) | 1,189 | 1,181 | 1,239 | |||||
Total Operating Horsepower (at period end) | 971 | 964 | 960 | |||||
Average Operating Horsepower | 964 | 964 | 971 | |||||
Horsepower Utilization (at period end) | 82 | % | 82 | % | 77 | % |
March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
As Restated | As Restated | ||||||||||
Product Sales Backlog (1): | |||||||||||
Compressor and Accessory Backlog | $ | 75,717 | $ | 141,059 | $ | 185,640 | |||||
Production and Processing Equipment Backlog | 204,337 | 281,338 | 440,591 | ||||||||
Installation Backlog | 3,031 | 7,445 | 86,590 | ||||||||
Total Product Sales Backlog | $ | 283,085 | $ | 429,842 | $ | 712,821 |
(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. |
Three Months Ended March 31, | Increase | |||||||||
2016 | 2015 | (Decrease) | ||||||||
Revenue | $ | 104,759 | $ | 120,691 | (13 | )% | ||||
Cost of sales (excluding depreciation and amortization expense) | 38,498 | 44,339 | (13 | )% | ||||||
Gross margin | $ | 66,261 | $ | 76,352 | (13 | )% | ||||
Gross margin percentage (1) | 63 | % | 63 | % | — | % |
Three Months Ended March 31, | Increase | |||||||||
2016 | 2015 | (Decrease) | ||||||||
Revenue | $ | 30,241 | $ | 36,244 | (17 | )% | ||||
Cost of sales (excluding depreciation and amortization expense) | 22,300 | 25,157 | (11 | )% | ||||||
Gross margin | $ | 7,941 | $ | 11,087 | (28 | )% | ||||
Gross margin percentage | 26 | % | 31 | % | (5 | )% |
Three Months Ended March 31, | Increase | |||||||||
2016 | 2015 | (Decrease) | ||||||||
As Restated | ||||||||||
Revenue | $ | 171,630 | $ | 362,885 | (53 | )% | ||||
Cost of sales (excluding depreciation and amortization expense) | 161,892 | 307,625 | (47 | )% | ||||||
Gross margin | $ | 9,738 | $ | 55,260 | (82 | )% | ||||
Gross margin percentage | 6 | % | 15 | % | (9 | )% |
Three Months Ended March 31, | Increase | |||||||||
2016 | 2015 | (Decrease) | ||||||||
As Restated | ||||||||||
Selling, general and administrative | $ | 45,738 | $ | 57,816 | (21 | )% | ||||
Depreciation and amortization | 50,933 | 38,015 | 34 | % | ||||||
Long-lived asset impairment | 651 | 4,579 | (86 | )% | ||||||
Restructuring and other charges | 12,567 | — | n/a | |||||||
Interest expense | 8,463 | 507 | 1,569 | % | ||||||
Equity in income of non-consolidated affiliates | (5,174 | ) | (5,006 | ) | 3 | % | ||||
Other (income) expense, net | (4,417 | ) | 7,788 | (157 | )% |
Three Months Ended March 31, | Increase | |||||||||
2016 | 2015 | (Decrease) | ||||||||
As Restated | ||||||||||
Provision for income taxes | $ | 4,009 | $ | 20,455 | (80 | )% | ||||
Effective tax rate | (16.2 | )% | 52.4 | % | (68.6 | )% |
Three Months Ended March 31, | Increase | |||||||||
2016 | 2015 | (Decrease) | ||||||||
Income (loss) from discontinued operations, net of tax | $ | (64,127 | ) | $ | 17,932 | (458 | )% |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
As Restated | |||||||
Net cash provided by (used in) continuing operations: | |||||||
Operating activities | $ | 120,706 | $ | 24,061 | |||
Investing activities | (9,192 | ) | (31,917 | ) | |||
Financing activities | (100,936 | ) | 3,401 | ||||
Effect of exchange rate changes on cash and cash equivalents | (985 | ) | (231 | ) | |||
Discontinued operations | 360 | 16,775 | |||||
Net change in cash and cash equivalents | $ | 9,953 | $ | 12,089 |
• | 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 March 31, | |||||||
2016 | 2015 | ||||||
As Restated | |||||||
Net income (loss) | $ | (92,957 | ) | $ | 36,477 | ||
(Income) loss from discontinued operations, net of tax | 64,127 | (17,932 | ) | ||||
Depreciation and amortization | 50,933 | 38,015 | |||||
Long-lived asset impairment | 651 | 4,579 | |||||
Restructuring and other charges | 12,567 | — | |||||
Proceeds from sale of joint venture assets | (5,174 | ) | (5,006 | ) | |||
Interest expense | 8,463 | 507 | |||||
(Gain) loss on currency exchange rate remeasurement of intercompany balances | (4,610 | ) | 7,508 | ||||
Provision for income taxes | 4,009 | 20,455 | |||||
EBITDA, as adjusted | $ | 38,009 | $ | 84,603 |
• | 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 | ||||||
January 1, 2016 - January 31, 2016 | 1,159 | $ | 16.05 | N/A | N/A | |||||
February 1, 2016 - February 29, 2016 | 2,095 | 13.64 | N/A | N/A | ||||||
March 1, 2016 - March 31, 2016 | 88,363 | 15.46 | N/A | N/A | ||||||
Total | 91,617 | $ | 15.43 | 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† | Exterran Corporation Amended and Restated Directors’ Stock and Deferral Plan, incorporated by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 | |
10.2† | Separation Letter between the Company and Daniel K. Schlanger, dated as of March 7, 2016, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 8, 2016 | |
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† | Exterran Corporation Amended and Restated Directors’ Stock and Deferral Plan, incorporated by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 | |
10.2† | Separation Letter between the Company and Daniel K. Schlanger, dated as of March 7, 2016, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 8, 2016 | |
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. |
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 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Dec. 28, 2016 |
|
Document and Entity Information | ||
Entity Registrant Name | Exterran Corporation | |
Entity Central Index Key | 0001635881 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 35,438,843 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 3,614 | $ 2,868 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 35,625,158 | 35,153,358 |
Treasury stock, common shares | 115,624 | 5,776 |
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (92,957) | $ 36,477 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | 2,313 | (7,745) |
Comprehensive income (loss) | $ (90,644) | $ 28,732 |
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Parent Equity |
Accumulated Other Comprehensive Income |
---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2014 | $ 1,364,335 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1,337,590 | $ 26,745 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 36,477 | 36,477 | |||||
Net contributions from parent (As Restated) | 10,298 | 10,298 | |||||
Foreign currency translation adjustment | (7,745) | (7,745) | |||||
Ending balance at Mar. 31, 2015 | 1,403,365 | 0 | 0 | 0 | 0 | 1,384,365 | 19,000 |
Beginning balance at Dec. 31, 2015 | 805,936 | 352 | 805,755 | (29,315) | (54) | 0 | 29,198 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (92,957) | (92,957) | |||||
Options exercised | 694 | 694 | |||||
Foreign currency translation adjustment | 2,313 | 2,313 | |||||
Cash transfer to Archrock, Inc. (Note 17) | (5,153) | (5,153) | |||||
Treasury stock purchased | (1,414) | (1,414) | |||||
Stock-based compensation, net of forfeitures | 4,393 | 4 | 4,389 | ||||
Income tax benefit from stock-based compensation expenses | (642) | (642) | |||||
Ending balance at Mar. 31, 2016 | $ 713,170 | $ 356 | $ 805,043 | $ (122,272) | $ (1,468) | $ 0 | $ 31,511 |
Description of Business, Spin-Off and Basis of Presentation |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||
Accounting Policies [Abstract] | |||||||||
Description of Business, Spin-Off and Basis of Presentation | 1. Description of Business, Spin-Off and Basis of Presentation Description of Business Exterran Corporation (together with its subsidiaries, “Exterran Corporation,” “our,” “we” or “us”), a Delaware corporation formed in March 2015, is a market leader in the provision of compression, production and processing products and services that support the production and transportation of oil and natural gas throughout the world. We provide these products and services to a global customer base consisting of companies engaged in all aspects of the oil and natural gas industry, including large integrated oil and natural gas companies, national oil and natural gas companies, independent oil and natural gas producers and oil and natural gas processors, gatherers and pipeline operators. We operate in three primary business lines: contract operations, aftermarket services and product sales. Spin-off On November 3, 2015, Archrock, Inc. (named Exterran Holdings, Inc. prior to November 3, 2015) (“Archrock”) completed the spin-off (the ‘‘Spin-off”) of its international contract operations, international aftermarket services (the international contract operations and international aftermarket services businesses combined are referred to as the ‘‘international services businesses’’ and include such activities conducted outside of the United States of America (‘‘U.S.’’)) and global fabrication businesses into an independent, publicly traded company named Exterran Corporation. We refer to the global fabrication business previously operated by Archrock as our product sales business. To effect the Spin-off, on November 3, 2015, Archrock distributed, on a pro rata basis, all of our shares of common stock to its stockholders of record as of October 27, 2015 (the “Record Date”). Archrock shareholders received one share of Exterran Corporation common stock for every two shares of Archrock common stock held at the close of business on the Record Date. Pursuant to the separation and distribution agreement with Archrock and certain of our and Archrock’s respective affiliates, on November 3, 2015, we transferred cash of $532.6 million to Archrock. On November 4, 2015, Exterran Corporation common stock began “regular-way” trading on the New York Stock Exchange under the stock symbol “EXTN.” Following the completion of the Spin-off, we and Archrock are independent, publicly traded companies with separate boards of directors and management. Basis of Presentation The accompanying unaudited condensed consolidated and combined financial statements of Exterran Corporation included herein have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished includes all adjustments, consisting only of normal recurring adjustments, that are necessary to present fairly our consolidated and combined financial position, results of operations and cash flows for the periods indicated. All financial information presented for periods after the Spin-off represents our consolidated results of operations, financial position and cash flows (referred to as the “condensed consolidated financial statements”) and all financial information for periods prior to the Spin-off represents our combined results of operations, financial position and cash flows (referred to as the “condensed combined financial statements”). Accordingly:
The condensed combined financial statements were derived from the accounting records of Archrock and reflect the combined historical results of operations, financial position and cash flows of Archrock’s international services and product sales businesses. The condensed combined financial statements were presented as if such businesses had been combined for periods prior to November 4, 2015. All intercompany transactions and accounts within these statements have been eliminated. Affiliate transactions between the international services and product sales businesses of Archrock and the other businesses of Archrock have been included in the condensed combined financial statements, with the exception of product sales within our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”). Prior to the closing of the Spin-off, EESLP also had a fleet of compression units used to provide compression services in the U.S. services business of Archrock. Revenue has not been recognized in the condensed combined statements of operations for the sale of compressor units by us that were used by EESLP to provide compression services to customers of the U.S. services business of Archrock. See Note 13 for further discussion on transactions with affiliates. The condensed combined statements of operations include expense allocations for certain functions historically performed by Archrock and not allocated to its operating segments, including allocations of expenses related to executive oversight, accounting, treasury, tax, legal, human resources, procurement and information technology. See Note 13 for further discussion regarding the allocation of corporate expenses. The accompanying unaudited condensed consolidated and combined financial statements should be read in conjunction with the consolidated and combined financial statements presented in Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2015 (the “2015 Form 10-K/A”). That report contains a comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. We refer to the condensed consolidated and combined financial statements collectively as “financial statements,” and individually as “balance sheets,” “statements of operations,” “statements of comprehensive income (loss),” “statements of stockholders’ equity” and “statements of cash flows” herein. Recent Accounting Developments In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance in determining revenue recognition as principal versus agent. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, which provides guidance in accounting for immaterial performance obligations and shipping and handling activities. In May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, which provides clarification on assessing the collectibility criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. The updates will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Early adoption is permitted for reporting periods beginning after December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach to adopt the updates. We are currently evaluating the potential impact of the updates on our financial statements. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which will require an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update will be effective on a prospective basis for interim and annual periods beginning after December 15, 2016, with early adoption permitted. We do not believe the adoption of this update will have a material impact on our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Accounting by lessors will remain largely unchanged. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). The update covers such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. This update will be effective for reporting periods beginning after December 15, 2016, including interim periods within the reporting period. Early adoption is permitted. We are currently evaluating the potential impact of the update on our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Early adoption is permitted. We are currently evaluating the potential impact of the update on our financial statements. |
Restatement of Previously Reported Consolidated and Combined Financial Statements |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restatement of Previously Reported Consolidated and Combined Financial Statements | 2. Restatement of Previously Reported Consolidated and Combined Financial Statements Subsequent to the filing of our Annual Report on Form 10-K for the year ended December 31, 2015, originally filed with the SEC on February 26, 2016, our senior management identified errors relating to the application of percentage-of-completion accounting principles to certain business lines of our subsidiary, Belleli Energy S.r.l. (subsequently renamed Exterran Italy S.r.l.). Such business lines comprise engineering, procurement and construction for the manufacture of tanks for tank farms and the manufacture of evaporators and brine heaters for desalination plants in the Middle East (referred to as “Belleli EPC” or the “Belleli EPC business” herein). Belleli Energy S.r.l. is headquartered in Mantova, Italy, and its operations are based in Dubai, United Arab Emirates. Management promptly reported the matter to the Audit Committee of the Company’s Board of Directors, which immediately retained counsel, who in turn retained a forensic accounting firm, to initiate an internal investigation. As a result of the internal investigation, management identified inaccuracies related to Belleli EPC projects within our product sales segment in estimating the total costs required to complete projects impacting the years ended December 31, 2015, 2014, 2013, 2012 and 2011 (including the unaudited quarterly periods within 2015 and 2014). The application of percentage-of-completion accounting principles on Belleli EPC projects is estimated using the cost to total cost basis, which requires an estimate of total costs (labor and materials) required to complete each project. The cost-to-complete estimates for Belleli EPC projects were incorrectly estimated and at times manipulated by or at the direction of certain former members of Belleli EPC local senior management, resulting in a misstatement of product sales revenue. The inaccurate cost-to-complete estimates for some Belleli EPC projects also resulted in the need to establish and/or increase contract loss provisions for certain projects, and as a result, product sales cost of sales was misstated. Additionally, penalties for liquidated damages on certain projects were not correctly estimated. Furthermore, other errors within product sales cost of sales on Belleli EPC projects were identified, primarily relating to vendor claims, customer warranties and costs being charged to incorrect projects. As a result of the errors and conduct identified, our product sales revenue and cost of sales were overstated by $6.9 million and $6.1 million, respectively, during the three months ended March 31, 2015. These errors and inaccuracies also resulted in the misstatement of accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, billings on uncompleted contracts in excess of costs and estimated earnings, accrued liabilities and related income tax effects for each of the periods impacted. We separately identified prior period errors related to the miscalculation and recovery of non-income-based tax receivables owed to us from the Brazilian government as of December 31, 2011. As a result of these errors and since relevant prior periods were being restated, we recorded adjustments to decrease intangible and other assets, net, beginning parent equity and other income by approximately $26.1 million, $17.5 million and $10.7 million, respectively, as of and for the year ended December 31, 2011 and increase other comprehensive income by approximately $2.1 million as of December 31, 2011. These errors also resulted in the misstatement of intangible and other assets, net, other (income) expense, net, and accumulated other comprehensive income in periods subsequent to December 31, 2011. Along with restating our financial statements to correct the errors discussed above, we recorded adjustments for certain immaterial accounting errors as of December 31, 2015 and for the three months ended March 31, 2015. We delayed the filing of this Quarterly Report on Form 10-Q pending the completion of the internal investigation, including the completion of the restatement. As a result of that investigation, the historical financial statements included in this Form 10-Q have been restated to reflect the adjustments described above. The restatement has been set forth below for the periods presented and in its entirety in the 2015 Form 10-K/A which the Company has filed with the SEC concurrently with this Form 10-Q. Contemporaneously with filing the Form 8-K on April 26, 2016, we self-reported the errors and possible irregularities at Belleli EPC to the SEC. Since then, we have been cooperating with the SEC in its investigation of this matter, including responding to a subpoena for documents related to the restatement and compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”), which are also being provided to the Department of Justice at its request. The FCPA related requests in the SEC subpoena pertain to our policies and procedures, information about our third-party sales agents, and documents related to historical internal investigations completed prior to November 2015. The tables below summarize the effects of the restatement on our (i) balance sheet at December 31, 2015, (ii) statement of operations for the three months ended March 31, 2015, (iii) statement of comprehensive income for the three months ended March 31, 2015, (iv) statement of stockholders’ equity for the three months ended March 31, 2015 and (v) statement of cash flows for the three months ended March 31, 2015. The effects of the restatement on our balance sheet as of December 31, 2015 are set forth in the following table (in thousands):
The effects of the restatement on our statement of operations for the three months ended March 31, 2015 are set forth in the following table (in thousands, except per share data):
The effects of the restatement on our statement of comprehensive income for the three months ended March 31, 2015 are set forth in the following table (in thousands):
The effects of the restatement on our statement of stockholders’ equity for the three months ended March 31, 2015 are set forth in the following table (in thousands):
The effects of the restatement on our statement of cash flows for the three months ended March 31, 2015 are set forth in the following table (in thousands):
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | 3. Discontinued Operations In August 2012, our Venezuelan subsidiary sold its previously nationalized assets to PDVSA Gas, S.A. (“PDVSA Gas”) for a purchase price of approximately $441.7 million. We received an installment payment, including an annual charge, totaling $18.7 million during the three months ended March 31, 2015. The remaining principal amount due to us of approximately $66 million as of March 31, 2016, is payable in quarterly cash installments through the third quarter of 2016. We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize payments received in the future as income from discontinued operations in the periods such payments are received. The proceeds from the sale of the assets are not subject to Venezuelan national taxes due to an exemption allowed under the Venezuelan Reserve Law applicable to expropriation settlements. In addition, and in connection with the sale, we and the Venezuelan government agreed to waive rights to assert certain claims against each other. In connection with the sale of these assets, we have agreed to suspend the arbitration proceeding previously filed by our Spanish subsidiary against Venezuela pending payment in full by PDVSA Gas of the purchase price for these nationalized assets. In accordance with the separation and distribution agreement, a subsidiary of Archrock has the right to receive payments from EESLP based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our previously nationalized assets promptly after such amounts are collected by our subsidiaries. See Note 17 for further discussion related to our contingent liability to Archrock. In the first quarter of 2016, we committed to a plan to exit our Belleli CPE and Belleli EPC businesses (collectively, “Belleli businesses”) to focus on our core oil and gas businesses. Belleli CPE provides engineering, procurement and manufacturing services related to the manufacture of critical process equipment for refinery and petrochemical facilities. Belleli EPC provides engineering, procurement and construction for the manufacture of tanks for tank farms and the manufacture of evaporators and brine heaters for desalination plants. Belleli CPE met the held for sale criteria and is reflected as discontinued operations in our financial statements for all periods presented. As discussed in Note 19, we completed the sale of our Belleli CPE business in August 2016. Belleli CPE was previously included in our product sales segment. In conjunction with the planned disposition of Belleli CPE, we recorded impairments of long-lived assets, costs and estimated earnings in excess of billings on uncompleted contracts and other current assets, that totaled $61.6 million during the three months ended March 31, 2016. The impairment charges are reflected in income (loss) from discontinued operations, net of tax. In accordance with GAAP, Belleli EPC will not be reflected as discontinued operations until the substantial cessation of the remaining non-oil and gas business. During the first quarter of 2016, we ceased the booking of new orders for our Belleli EPC business. Belleli EPC is included in our product sales segment. Our plan to exit our Belleli EPC business resulted in a reduction in the remaining useful lives of the assets that are currently used in the Belleli EPC business and a long-lived asset impairment charge of $0.7 million impacting results from continuing operations during the three months ended March 31, 2016. The following table summarizes the operating results of discontinued operations (in thousands):
The following table summarizes the balance sheet data for discontinued operations (in thousands):
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Inventory |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | 4. Inventory Inventory consisted of the following amounts (in thousands):
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Product Sales Contracts |
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Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Sales Contracts | 5. Product Sales Contracts Costs, estimated earnings and billings on uncompleted contracts that are recognized using the percentage-of-completion method consisted of the following (in thousands):
Costs, estimated earnings and billings on uncompleted contracts are presented in the accompanying financial statements as follows (in thousands):
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Property, Plant and Equipment, net |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, net | 6. Property, Plant and Equipment, net Property, plant and equipment, net, consisted of the following (in thousands):
___________________
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Investments in Non-Consolidated Affiliates |
3 Months Ended |
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Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Non-Consolidated Affiliates | 7. Investments in Non-Consolidated Affiliates Investments in affiliates that are not controlled by us where we have the ability to exercise significant influence over the operations are accounted for using the equity method. We own a 30.0% interest in WilPro Energy Services (PIGAP II) Limited and 33.3% interest in WilPro Energy Services (El Furrial) Limited, which are joint ventures that provided natural gas compression and injection services in Venezuela. In May 2009, Petroleos de Venezuela S.A. (“PDVSA”) assumed control over the assets of our Venezuelan joint ventures and transitioned the operations, including the hiring of their employees, to PDVSA. In March 2011, our Venezuelan joint ventures, together with the Netherlands’ parent company of our joint venture partners, filed a request for the institution of an arbitration proceeding against Venezuela with the International Centre for Settlement of Investment Disputes related to the seized assets and investments. In March 2012, our Venezuelan joint ventures sold their assets to PDVSA Gas. We received an installment payment, including an annual charge, of $5.2 million and $5.0 million during the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, the remaining principal amount due to us was approximately $9 million. We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize payments received in the future as equity in income of non-consolidated affiliates in our statements of operations in the periods such payments are received. In connection with the sale of our Venezuelan joint ventures’ assets, the joint ventures and our joint venture partners have agreed to suspend their previously filed arbitration proceeding against Venezuela pending payment in full by PDVSA Gas of the purchase price for the assets. In accordance with the separation and distribution agreement, a subsidiary of Archrock has the right to receive payments from EESLP based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our joint ventures’ previously nationalized assets promptly after such amounts are collected by our subsidiaries. Pursuant to the separation and distribution agreement, we transferred cash of $5.2 million to Archrock during the three months ended March 31, 2016. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. See Note 17 for further discussion related to our contingent liability to Archrock. |
Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | 8. Long-Term Debt Long-term debt consisted of the following (in thousands):
Revolving Credit Facility and Term Loan On July 10, 2015, we and our wholly owned subsidiary, EESLP, entered into a $750.0 million credit agreement (the “Credit Agreement”) with Wells Fargo, as the administrative agent, and various financial institutions as lenders. On October 5, 2015, the parties amended and restated the Credit Agreement to provide for a $925.0 million credit facility, consisting of a $680.0 million revolving credit facility and a $245.0 million term loan facility (collectively, the “Credit Facility”). Availability under the Credit Facility was subject to the satisfaction of certain conditions precedent, including the consummation of the Spin-off on or before January 4, 2016 (the date on which those conditions were satisfied, November 3, 2015, is referred to as the “Initial Availability Date”). In accordance with the Credit Agreement, we are required to repay borrowings outstanding under the term loan facility on each anniversary of the Initial Availability Date in an amount equal to the lesser of (i) $12.3 million and (ii) the outstanding principal balance of the term loan facility. The principal amount of $12.3 million due in November 2016 under the term loan facility is classified as long-term in our balance sheet at March 31, 2016 because we have the intent and ability to refinance the current principal amount due with borrowings under our existing revolving credit facility. As of March 31, 2016, we had $190.0 million in outstanding borrowings and $80.2 million in outstanding letters of credit under our revolving credit facility. At March 31, 2016, taking into account guarantees through letters of credit, we had undrawn capacity of $409.8 million under our revolving credit facility. Our Credit Agreement limits our Total Debt (as defined in the Credit Agreement) to EBITDA ratio (as defined in the Credit Agreement) to not greater than 3.75 to 1.0 (which will increase to 4.50 to 1.0 following the completion of a qualified capital raise). As a result of this limitation, $337.9 million of the $409.8 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of March 31, 2016. In connection with the restatement, we entered into amendments to our Credit Agreement subsequent to March 31, 2016 which are discussed in more detail in Note 19. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | 9. Fair Value Measurements The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories:
The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2016 and 2015, with pricing levels as of the date of valuation (in thousands):
Our estimate of the fair value of the impaired assets of Belleli CPE, which are classified as discontinued operations, during the three months ended March 31, 2016 was based on our expected proceeds from the sale of Belleli CPE, net of selling costs. Our estimate of the impaired long-lived assets’ fair value for the three months ended March 31, 2015 was primarily based on the estimated component value of the equipment on each compressor unit that we plan to use. In April 2015, we accepted an offer to early settle the outstanding note receivable due to us relating to the previous sale of our Canadian contract operations and aftermarket services businesses (“Canadian Operations”) for $5.1 million. Financial Instruments Our financial instruments consist of cash, restricted cash, receivables, payables and debt. At March 31, 2016 and December 31, 2015, the estimated fair values of these financial instruments approximated their carrying amounts as reflected in our balance sheets. Due to the variable rate nature of our long-term debt, the carrying values approximate their fair values as the rates on our long-term debt are comparable to current market rates at which debt with similar terms could be obtained. |
Long-Lived Asset Impairment |
3 Months Ended |
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Mar. 31, 2016 | |
Asset Impairment Charges [Abstract] | |
Long-Lived Asset Impairment | 10. Long-Lived Asset Impairment We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressor units from our active fleet, indicate that the carrying amount of an asset may not be recoverable. As discussed in Note 3, in the first quarter of 2016, we committed to a plan to exit our Belleli EPC business to focus on our core oil and gas businesses. Because we ceased the booking of new orders for the manufacture of tanks for tank farms and the manufacture of evaporators and brine heaters for desalination plants, customer relationship intangible assets related to our Belleli EPC business were assessed to have no future benefit to us. As a result, we recorded a long-lived asset impairment charge of $0.7 million during the three months ended March 31, 2016. In addition, the property, plant and equipment of our Belleli EPC business was reviewed for recoverability. As a result, the remaining useful lives of Belleli EPC non-oil and gas property, plant and equipment were reduced to reflect their estimated date of the cessation. We regularly review the future deployment of our idle compression assets used in our contract operations segment for units that are not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. During the three months ended March 31, 2015, we determined that six idle compressor units totaling approximately 7,000 horsepower would be retired from the active fleet. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded a $3.2 million asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit was estimated based on the estimated component value of the equipment on each compressor unit that we plan to use. During the first quarter of 2015, we evaluated a long-term note receivable from the purchaser of our Canadian Operations for impairment. This review was triggered by an offer from the purchaser of our Canadian Operations to prepay the note receivable at a discount to its then current book value. The fair value of the note receivable as of March 31, 2015 was based on the amount offered by the purchaser of our Canadian Operations to prepay the note receivable. The difference between the book value of the note receivable at March 31, 2015 and its fair value resulted in the recording of an impairment of long-lived assets of $1.4 million. In April 2015, we accepted the offer to early settle this note receivable. |
Restructuring and Other Charges |
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Restructuring and Other Charges | 11. Restructuring and Other Charges During the three months ended March 31, 2016, we incurred $1.6 million of costs associated with the Spin-off related to retention awards to certain employees of $1.3 million and the start-up of certain stand-alone functions. Retention awards are being amortized over the required service period of each applicable employee. The charges incurred in conjunction with the Spin-off are included in restructuring and other charges in our statements of operations. We currently estimate that we will incur additional one-time expenditures of approximately $2.6 million related to retention awards to certain employees in the form of cash and stock-based compensation through November 2017. As a result of unfavorable market conditions in North America, combined with the impact of lower international activity due to customer budget cuts driven by lower oil prices, in the second quarter of 2015, we announced a cost reduction plan primarily focused on workforce reductions and the reorganization of certain facilities. During the three months ended March 31, 2016, we incurred $11.0 million of restructuring and other charges as a result of this plan for employee termination benefits and related consulting fees. Costs incurred for employee termination benefits during the three months ended March 31, 2016 were $10.7 million, of which $8.1 million related to our product sales business. These charges are reflected as restructuring and other charges in our statements of operations. We currently estimate that we will incur additional charges with respect to this cost reduction plan of approximately $11.0 million. We expect the majority of the estimated additional charges will result in cash expenditures. Accrued liabilities related to the cost reduction plan are based on estimates that may vary significantly from actual costs depending, in part, upon factors that may be beyond our control. We will continue to review the status of our restructuring obligations on a quarterly basis and, if appropriate, record changes to these obligations in current operations based on management’s most current estimates. The following table summarizes the changes to our accrued liability balance related to restructuring and other charges for the three months ended March 31, 2016 (in thousands):
The following table summarizes the components of charges included in restructuring and other charges in our statements of operations for the three months ended March 31, 2016 (in thousands):
Additionally, in the first quarter of 2016, we committed to a plan to exit our Belleli EPC business to focus on our core oil and gas businesses. Our plan to exit our Belleli EPC business resulted in a reduction in the remaining useful lives of the assets that are currently used in the Belleli EPC business and a long-lived asset impairment charge of $0.7 million impacting results from continuing operations during the three months ended March 31, 2016. See Note 10 for further discussion relating to this impairment charge and Note 3 for further discussion related to our plan to exit our Belleli businesses. |
Deferred Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Deferred Income Taxes As of December 31, 2015, we had approximately $152.0 million of U.S. deferred tax assets. These deferred tax assets primarily related to U.S. federal net operating loss carryforwards of $65.9 million that can be used to offset future U.S. federal taxable income, and carryforwards for foreign tax credits of $72.0 million, research and development credits of $31.3 million and alternative minimum tax credits of $5.1 million that can reduce our U.S. federal income taxes payable in future periods. Most of these carryforwards will expire if they are not used within certain periods. At this time, we consider it more-likely-than-not that we will have sufficient taxable income of the appropriate character in the future that will allow us to realize these U.S. deferred tax assets, other than in cases where valuation allowances were previously recorded. As of December 31, 2015, approximately $49.7 million of valuation allowances were recorded against our U.S. deferred tax assets. Management assesses all available positive and negative evidence to estimate our ability to generate sufficient future taxable income of the appropriate character, and in the appropriate taxing jurisdictions, to permit use of our existing deferred tax assets. A significant piece of objective negative evidence is a cumulative loss incurred over a three-year period in a taxing jurisdiction. Prevailing accounting practice is that such objective evidence would limit the ability to consider other subjective evidence, such as our projections for future growth. If we were to incur a three-year cumulative loss in the U.S. at some point during 2016, additional valuation allowances of approximately $65 million could be required against our U.S. deferred tax assets that existed at December 31, 2015, which would materially increase our income tax expense in the period the valuation allowances are recognized. |
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Related Party Transactions | 13. Related Party Transactions Spin Agreements In connection with the completion of the Spin-off, on November 3, 2015, we entered into several agreements with Archrock and certain subsidiaries of Archrock and, with respect to certain agreements, a subsidiary of Archrock Partners (named Exterran Partners, L.P. prior to November 3, 2015) (“Archrock Partners”), that govern the Spin-off and the relationship among the parties following the Spin-off, including the following agreements (collectively, the “Spin Agreements”): separation and distribution agreement, tax matters agreement, employee matters agreement, transition services agreement, supply agreement, storage agreements and services agreements. Pursuant to the transition services agreement, we recorded selling, general and administrative expense of $0.3 million and other income of $0.7 million during the three months ended March 31, 2016. Transactions with Affiliates All intercompany transactions and accounts within these financial statements have been eliminated. All affiliate transactions occurring prior to the Spin-off between the international services and product sales businesses of Archrock and the other businesses of Archrock have been included in these financial statements. Prior to the Spin-off sales of newly-manufactured compression equipment from the product sales business of EESLP to Archrock Partners were used in the U.S. services business of Archrock and were made pursuant to an omnibus agreement between the parties and other affiliates of both entities. Through November 3, 2015, per the omnibus agreement, revenue was determined by the cost to manufacture such equipment plus a fixed margin. During the three months ended March 31, 2015, we recorded product sales revenue from affiliates of $55.8 million and cost of sales of $51.3 million from the sale of newly-manufactured compression equipment to Archrock Partners. Subsequent to November 3, 2015, sales to Archrock Partners are considered sales to third parties. Prior to the closing of the Spin-off, EESLP also had a fleet of compression units used to provide compression services in the U.S. services business of Archrock. Revenue prior to the Spin-off was not recognized in our statements of operations for the sale of compressor units by us that were used by EESLP to provide compression services to customers of the U.S. services business of Archrock. The costs of these units were treated as a reduction of parent equity in the balance sheets and a distribution to parent in the statements of cash flows and totaled $16.5 million during the three months ended March 31, 2015. Subsequent to November 3, 2015, sales to Archrock are considered sales to third parties. Allocation of Expenses For the periods prior to the Spin-off, the statements of operations also includes expense allocations for certain functions performed by Archrock which have not been historically allocated to its operating segments, including allocations of expenses related to executive oversight, accounting, treasury, tax, legal, human resources, procurement and information technology. Included in our selling, general and administrative expense during the three months ended March 31, 2015 were $14.9 million of allocated corporate expenses incurred by Archrock prior to the Spin-off. These costs were allocated to us systematically based on specific department function and revenue. Management believes the assumptions underlying the financial statements, including the assumptions regarding allocating expenses from Archrock, are reasonable. Nevertheless, the financial statements may not be representative of the actual expenses that would have been incurred had we been a stand-alone public company during the periods presented and, consequently, may not reflect our combined results of operations, financial position and cash flows had we been a stand-alone public company during the periods presented. Actual costs that would have been incurred if we had been a stand-alone public company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. Cash Management Prior to the closing of the Spin-off, EESLP provided centralized treasury functions for Archrock’s U.S. operations, whereby EESLP regularly transferred cash both to and from U.S. subsidiaries of Archrock, as necessary. In conjunction therewith, the intercompany transactions between our U.S. subsidiaries and the other U.S. subsidiaries of Archrock were considered to be effectively settled in cash in these financial statements for the periods prior to the Spin-off. Intercompany receivables/payables from/to related parties arising from transactions with affiliates and expenses allocated from Archrock described above were included in net contributions from parent in the financial statements. Net Contributions from Parent Parent equity, which included retained earnings prior to the Spin-off, represents Archrock’s interest in our recorded net assets. Prior to the Spin-off, all transactions between us and Archrock were presented in the accompanying statements of stockholders’ equity as net contributions from parent. A reconciliation of net contributions from parent in the statements of stockholders’ equity to the corresponding amount presented in the statements of cash flows for the three months ended March 31, 2015 as follows (in thousands):
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Stockholders' Equity | 14. Stockholders’ Equity Comprehensive Income (Loss) Components of comprehensive income (loss) are net income (loss) and all changes in stockholders’ equity during a period except those resulting from transactions with owners. Our accumulated other comprehensive income consists of foreign currency translation adjustments. The following table presents the changes in accumulated other comprehensive income, net of tax, during the three months ended March 31, 2015 and 2016 (in thousands):
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Stock-Based Compensation |
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Stock-Based Compensation | 15. Stock-Based Compensation 2015 Stock Incentive Plan On October 30, 2015, our compensation committee and board of directors each approved the Exterran Corporation 2015 Stock Incentive Plan (the “2015 Plan”) to provide for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, other stock-based awards and dividend equivalents rights to employees, directors and consultants of Exterran Corporation. The 2015 Plan became effective on November 1, 2015. The 2015 Plan will also govern awards granted under the Archrock, Inc. 2013 Stock Incentive Plan and the Archrock, Inc. 2007 Amended and Restated Stock Incentive Plan which were adjusted into awards denominated in our common stock in accordance with the terms of the employee matters agreement and/or actions taken by our board of directors or the Archrock board of directors. Stock-based compensation expense prior to the Spin-off only related to employees directly involved in our operations, and therefore, excluded stock-based compensation expense related to Archrock employees that supported both the international services and product sales businesses and the other businesses of Archrock that it retained after the Spin-off. Stock-based compensation expense subsequent to the Spin-off relates to employees, directors and consultants of Exterran Corporation, and such awards may consist of awards for either our common stock or Archrock’s common stock. Stock Options Stock options are granted at fair market value at the grant date, are exercisable according to the vesting schedule established and generally expire no later than ten years after the grant date. Stock options generally vest one-third per year on each of the first three anniversaries of the grant date. The table below presents the changes in stock option awards for our common stock during the three months ended March 31, 2016. Options outstanding relate to employees, directors and consultants of us and Archrock.
Intrinsic value is the difference between the market value of our common stock and the exercise price of each stock option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their exercise price. The total intrinsic value of stock options exercised to purchase our common stock during the three months ended March 31, 2016 was $0.1 million. As of March 31, 2016, we expect to recognize less than $0.1 million of additional compensation cost related to unvested stock options issued to our employees, directors and consultants, related to options to purchase either our common stock or Archrock’s common stock. Restricted Stock, Restricted Stock Units, Performance Units, Cash Settled Restricted Stock Units and Cash Settled Performance Units For grants of restricted stock, restricted stock units and performance units, we recognize compensation expense over the vesting period equal to the fair value of our common stock at the grant date. We remeasure the fair value of cash settled restricted stock units and cash settled performance units and record a cumulative adjustment of the expense previously recognized. Our obligation related to the cash settled restricted stock units and cash settled performance units is reflected as a liability in our balance sheets. Grants of restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units generally vest one-third per year on each of the first three anniversaries of the grant date. The table below presents the changes in restricted stock, restricted stock unit, performance unit, cash settled restricted stock unit and cash settled performance unit for our common stock during the three months ended March 31, 2016. Non-vested awards relate to employees, directors and consultants of us and Archrock. Awards granted subsequent to November 3, 2015 only relate to our employees, directors and consultants.
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As of March 31, 2016, we expect $23.5 million of unrecognized compensation cost related to unvested restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units issued to our employees, in the form of either our common stock or Archrock’s common stock, to be recognized over the weighted-average vesting period of 2.3 years. |
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Net Income (Loss) Per Common Share | 16. Net Income (Loss) Per Common Share Basic net income (loss) per common share is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share is determined by dividing net income (loss) after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include our unvested restricted stock and certain stock settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss from continuing operations, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses. Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options to purchase common stock and non-participating restricted stock units, unless their effect would be anti-dilutive. To effect the Spin-off, on November 3, 2015, Archrock distributed 34,286,267 shares of our common stock to its stockholders. For the periods prior to November 3, 2015, the average number of common shares outstanding used to calculate basic and diluted net income per common share was based on the shares of our common stock that were distributed on November 3, 2015. The same number of shares was used to calculate basic and diluted net income per common share for these periods since we had no equity awards outstanding prior to November 3, 2015 and we were a wholly owned subsidiary of Archrock prior to the Spin-off date. The following table presents a reconciliation of basic and diluted net income (loss) per common share for the three months ended March 31, 2016 and 2015 (in thousands, except per share data):
The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income (loss) per common share as their inclusion would have been anti-dilutive (in thousands):
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Commitments and Contingencies | 17. Commitments and Contingencies Guarantees We have issued the following guarantees that are not recorded on our accompanying balance sheet (dollars in thousands):
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Contingencies See Note 3 and Note 7 for a discussion of our gain contingencies related to assets that were expropriated in Venezuela. Pursuant to the separation and distribution agreement, EESLP contributed to a subsidiary of Archrock the right to receive payments based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our and our joint ventures’ previously nationalized assets promptly after such amounts are collected by our subsidiaries until Archrock’s subsidiary has received an aggregate amount of such payments up to the lesser of (i) $125.8 million, plus the aggregate amount of all reimbursable expenses incurred by Archrock and its subsidiaries in connection with recovering any PDVSA Gas default installment payments following the completion of the Spin-off or (ii) $150.0 million. Our balance sheets do not reflect this contingent liability to Archrock or the amount payable to us by PDVSA Gas as a receivable. Pursuant to the separation and distribution agreement, we transferred cash of $5.2 million to Archrock during the three months ended March 31, 2016. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. As of March 31, 2016, the remaining principal amount due to us from PDVSA Gas in respect of the sale of our and our joint ventures’ previously nationalized assets was approximately $75 million. In subsequent periods, the recognition of a liability, if applicable, resulting from this contingency to Archrock is expected to impact equity, and as such, is not expected to have an impact on our statements of operations. Pursuant to the separation and distribution agreement, EESLP (in the case of debt offerings) or Exterran Corporation (in the case of equity issuances) will use its commercially reasonable efforts to complete one or more unsecured debt offerings or equity issuances resulting in aggregate gross cash proceeds of at least $250.0 million on the terms described in the Credit Agreement (such transaction, a “qualified capital raise”) on or before the maturity date of our $245.0 million term loan facility. In connection with the Spin-off, EESLP contributed to a subsidiary of Archrock the right to receive, promptly following the occurrence of a qualified capital raise, a $25.0 million cash payment. Our balance sheets do not reflect this contingent liability to Archrock. In subsequent periods, the recognition of a liability, if applicable, resulting from this contingency to Archrock is expected to impact equity, and as such, is not expected to have an impact on our statements of operations. In addition to U.S. federal, state and local and foreign income taxes, we are subject to a number of taxes that are not income-based. As many of these taxes are subject to audit by the taxing authorities, it is possible that an audit could result in additional taxes due. We accrue for such additional taxes when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the liability. As of March 31, 2016 and December 31, 2015, we had accrued $2.5 million and $3.1 million, respectively, for the outcomes of non-income-based tax audits. We do not expect that the ultimate resolutions of these audits will result in a material variance from the amounts accrued. We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim. We do not have any unasserted claims from non-income based tax audits that we have determined are probable of assertion. We also believe the likelihood is remote that the impact of potential unasserted claims from non-income-based tax audits could be material to our financial position, but it is possible that the resolution of future audits could be material to our results of operations or cash flows for the period in which the resolution occurs. Our business can be hazardous, involving unforeseen circumstances such as uncontrollable flows of natural gas or well fluids and fires or explosions. As is customary in our industry, we review our safety equipment and procedures and carry insurance against some, but not all, risks of our business. Our insurance coverage includes property damage, general liability and commercial automobile liability and other coverage we believe is appropriate. In addition, we have a minimal amount of insurance on our offshore assets. We believe that our insurance coverage is customary for the industry and adequate for our business; however, losses and liabilities not covered by insurance would increase our costs. Additionally, we are substantially self-insured for workers’ compensation and employee group health claims in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to the deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. Contracts Containing Liquidated Damages Provisions Some of our product sales contracts have schedule dates and performance obligations that if not met could subject us to penalties for liquidated damages. These generally relate to specified activities that must be completed by a set contractual date or by achievement of a specified level of output or throughput. Each contract defines the conditions under which a customer may make a claim for liquidated damages. However, in some instances, liquidated damages are not asserted by the customer, but the potential to do so is used in negotiating or settling claims and closing out the contract. As of March 31, 2016, estimated penalties for liquidated damages of $20.9 million have been recorded in our financial statements, based on our actual or projected failure to meet certain specified contractual milestone dates. We believe that we will be successful in obtaining schedule extensions or other customer-agreed changes that should resolve the potential for additional liquidated damages. Accordingly, we believe that no amounts for these potential liquidated damages in excess of the amounts currently reflected in our financial statements are probable of being incurred by us. However, we may not achieve relief on some or all of the issues involved and, as a result, could be subject to higher liquidated damages amounts. Additionally, we have asserted claims, or intend to assert claims, against certain customers that, if settled, could result in a release of such claims in exchange for release of certain liquidated damages currently recorded in our financial statements. We recognize claims for recovery of incurred cost when it is probable that the claim will result in additional contract revenue and when the amount of the claim can be reliably estimated. These requirements are satisfied when the contract or other evidence provides a legal basis for the claim, additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in our performance, claim-related costs are identifiable and considered reasonable in view of the work performed, evidence supporting the claim is objective and verifiable and collection is probable. These assessments require judgments concerning matters such as litigation developments and outcomes, the anticipated outcome of negotiations, the number of future claims and the cost of both pending and future claims. Litigation and Claims In the ordinary course of business, we are involved in various pending or threatened legal actions. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from any of these actions will not have a material adverse effect on our financial position, results of operations or cash flows. However, because of the inherent uncertainty of litigation and arbitration proceedings, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our financial position, results of operations or cash flows. Contemporaneously with filing the Form 8-K on April 26, 2016, we self-reported the errors and possible irregularities at Belleli EPC to the SEC. Since then, we have been cooperating with the SEC in its investigation of this matter, including responding to a subpoena for documents related to the restatement and compliance with the FCPA, which are also being provided to the Department of Justice at its request. The FCPA related requests in the SEC subpoena pertain to our policies and procedures, information about our third-party sales agents, and documents related to historical internal investigations completed prior to November 2015. Indemnifications In conjunction with, and effective as of the completion of, the Spin-off, we entered into the separation and distribution agreement with Archrock, which governs, among other things, the treatment between Archrock and us of aspects relating to indemnification, insurance, confidentiality and cooperation. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Archrock’s business with Archrock. Pursuant to the agreement, we and Archrock will generally release the other party from all claims arising prior to the Spin-off that relate to the other party’s business. Additionally, in conjunction with, and effective as of the completion of, the Spin-off, we entered into the tax matters agreement with Archrock. Under the tax matters agreement and subject to certain exceptions, we are generally liable for, and indemnify Archrock against, taxes attributable to our business, and Archrock is generally liable for, and indemnify us against, all taxes attributable to its business. We are generally liable for, and indemnify Archrock against, 50% of certain taxes that are not clearly attributable to our business or Archrock’s business. |
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Reportable Segments | 18. Reportable Segments We manage our business segments primarily based upon the type of product or service provided. We have three reportable segments: contract operations, aftermarket services and product sales. The contract operations segment primarily provides natural gas compression services, production and processing equipment services and maintenance services to meet specific customer requirements on assets owned by us. The aftermarket services segment provides a full range of services to support the surface production, compression and processing needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets. The product sales segment provides design, engineering, manufacturing, installation and sale of natural gas compression units and accessories and equipment used in the production, treating and processing of crude oil and natural gas. We evaluate the performance of our segments based on gross margin for each segment. Revenue includes sales to external customers and affiliates. We do not include intersegment sales when we evaluate our segments’ performance. The following table presents revenues and other financial information by reportable segment during the three months ended March 31, 2016 and 2015 (in thousands):
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Consolidated and combined gross margin is included as a supplemental disclosure because it is a primary measure used by our management to evaluate the results of revenue and cost of sales (excluding depreciation and amortization expense), which are key components of our operations. As an indicator of our operating performance, consolidated and combined gross margin should not be considered an alternative to, or more meaningful than, income (loss) before income taxes as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner. The following table reconciles income (loss) before income taxes to total gross margin (in thousands):
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Subsequent Events |
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Mar. 31, 2016 | |||||||||||||
Subsequent Events [Abstract] | |||||||||||||
Subsequent Events | 19. Subsequent Events As a result of the events described in Note 2 related to Belleli EPC (including, without limitation, the need to restate previously issued financial statements), on April 22, 2016, June 17, 2016, August 24, 2016 and November 22, 2016, we and our wholly owned subsidiary, EESLP, entered into amendments to the Credit Agreement (as amended, the “Amended Credit Agreement”) with Wells Fargo, as the administrative agent, and various financial institutions as lenders. Under the Amended Credit Agreement, the lenders waived, among other things, (1) any potential event of default arising under the Credit Agreement as a result of the potential inaccuracy of certain representations and warranties regarding our prior period financial information and previously delivered compliance certificate for the 2015 fiscal year and (2) any requirement that EESLP or we make any representations and warranties as to our prior period financial statements and other prior period financial information. The Amended Credit Agreement extended the deadline to no later than February 28, 2017 by which we are required to deliver to the lenders our quarterly reports for the fiscal quarters ended March 31, 2016, June 30, 2016 and September 30, 2016 and the related compliance certificates demonstrating compliance with the financial covenants set forth in the Credit Agreement. The Amended Credit Agreement also, among other things:
Contemporaneously with filing the Form 8-K on April 26, 2016, we self-reported the errors and possible irregularities at Belleli EPC to the SEC. Since then, we have been cooperating with the SEC in its investigation of this matter, including responding to a subpoena for documents related to the restatement and compliance with the FCPA, which are also being provided to the Department of Justice at its request. The FCPA related requests in the SEC subpoena pertain to our policies and procedures, information about our third-party sales agents, and documents related to historical internal investigations completed prior to November 2015. In June 2016, we received additional installment payments, including an annual charge, from PDVSA Gas relating to the 2012 sale of our and our joint ventures’ previously nationalized assets of $19.3 million and $5.2 million, respectively. In July 2016, we received an additional installment payment, including an annual charge, from PDVSA Gas relating to the 2012 sale of our previously nationalized assets of $19.5 million. As we have not recognized amounts payable to us by PDVSA Gas relating to the 2012 sale of our and our joint ventures’ previously nationalized assets as a receivable but rather as income in the periods such payments are received, the installment payments received in June 2016 and July 2016 relating to our and our joint ventures’ previously nationalized assets will be recognized as income from discontinued operations and equity in income of non-consolidated affiliates, respectively, in the second and third quarter of 2016. Pursuant to the separation and distribution agreement, a notional amount corresponding to the cash we received from the PDVSA Gas installment payments were transferred to Archrock in June 2016 and July 2016. The transfer of cash will be recognized as a reduction to stockholders’ equity in the second and third quarter of 2016. As discussed in Note 12, management assesses all available positive and negative evidence to estimate our ability to generate sufficient future taxable income of the appropriate character, and in the appropriate taxing jurisdictions, to permit use of our existing deferred tax assets. Based on available information in the second quarter of 2016, we expect to incur a three-year cumulative loss in the U.S. by the end of 2016. Due to this significant negative evidence of cumulative losses, which outweighed the positive evidence of firm sales backlog and projected further taxable income, in the second quarter of 2016 we are no longer able to support that it is more-likely-than-not that we will have sufficient taxable income of the appropriate character in the future that will allow us to realize our U.S. deferred tax assets. As a result, during the second quarter of 2016, we recorded valuation allowances against our U.S. deferred tax assets that existed at December 31, 2015 of $65 million. In August 2016, we completed the sale of our Belleli CPE business to Tosto S.r.l. for cash proceeds of approximately $5.5 million. Our Belleli CPE business is reflected as discontinued operations in our financial statements. |
Description of Business, Spin-Off and Basis of Presentation (Policies) |
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Mar. 31, 2016 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated and combined financial statements of Exterran Corporation included herein have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished includes all adjustments, consisting only of normal recurring adjustments, that are necessary to present fairly our consolidated and combined financial position, results of operations and cash flows for the periods indicated. All financial information presented for periods after the Spin-off represents our consolidated results of operations, financial position and cash flows (referred to as the “condensed consolidated financial statements”) and all financial information for periods prior to the Spin-off represents our combined results of operations, financial position and cash flows (referred to as the “condensed combined financial statements”). Accordingly:
The condensed combined financial statements were derived from the accounting records of Archrock and reflect the combined historical results of operations, financial position and cash flows of Archrock’s international services and product sales businesses. The condensed combined financial statements were presented as if such businesses had been combined for periods prior to November 4, 2015. All intercompany transactions and accounts within these statements have been eliminated. Affiliate transactions between the international services and product sales businesses of Archrock and the other businesses of Archrock have been included in the condensed combined financial statements, with the exception of product sales within our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”). Prior to the closing of the Spin-off, EESLP also had a fleet of compression units used to provide compression services in the U.S. services business of Archrock. Revenue has not been recognized in the condensed combined statements of operations for the sale of compressor units by us that were used by EESLP to provide compression services to customers of the U.S. services business of Archrock. See Note 13 for further discussion on transactions with affiliates. The condensed combined statements of operations include expense allocations for certain functions historically performed by Archrock and not allocated to its operating segments, including allocations of expenses related to executive oversight, accounting, treasury, tax, legal, human resources, procurement and information technology. See Note 13 for further discussion regarding the allocation of corporate expenses. The accompanying unaudited condensed consolidated and combined financial statements should be read in conjunction with the consolidated and combined financial statements presented in Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2015 (the “2015 Form 10-K/A”). That report contains a comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. We refer to the condensed consolidated and combined financial statements collectively as “financial statements,” and individually as “balance sheets,” “statements of operations,” “statements of comprehensive income (loss),” “statements of stockholders’ equity” and “statements of cash flows” herein. |
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Recent Accounting Developments | Recent Accounting Developments In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance in determining revenue recognition as principal versus agent. In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, which provides guidance in accounting for immaterial performance obligations and shipping and handling activities. In May 2016, the FASB issued ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, which provides clarification on assessing the collectibility criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. The updates will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Early adoption is permitted for reporting periods beginning after December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach to adopt the updates. We are currently evaluating the potential impact of the updates on our financial statements. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which will require an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update will be effective on a prospective basis for interim and annual periods beginning after December 15, 2016, with early adoption permitted. We do not believe the adoption of this update will have a material impact on our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Accounting by lessors will remain largely unchanged. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). The update covers such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. This update will be effective for reporting periods beginning after December 15, 2016, including interim periods within the reporting period. Early adoption is permitted. We are currently evaluating the potential impact of the update on our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Early adoption is permitted. We are currently evaluating the potential impact of the update on our financial statements. |
Restatement of Previously Reported Consolidated and Combined Financial Statements (Tables) |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effects of Restatement on Balance Sheet, Statement of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity, and Statements of Cash Flows | The effects of the restatement on our balance sheet as of December 31, 2015 are set forth in the following table (in thousands):
The effects of the restatement on our statement of operations for the three months ended March 31, 2015 are set forth in the following table (in thousands, except per share data):
The effects of the restatement on our statement of comprehensive income for the three months ended March 31, 2015 are set forth in the following table (in thousands):
The effects of the restatement on our statement of stockholders’ equity for the three months ended March 31, 2015 are set forth in the following table (in thousands):
The effects of the restatement on our statement of cash flows for the three months ended March 31, 2015 are set forth in the following table (in thousands):
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Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Operating Results and Balance Sheet Data for Discontinued Operations | The following table summarizes the operating results of discontinued operations (in thousands):
The following table summarizes the balance sheet data for discontinued operations (in thousands):
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Inventory (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory consisted of the following amounts (in thousands):
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Product Sales Contracts (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs, Estimated Earnings and Billings on Uncompleted Contracts | Costs, estimated earnings and billings on uncompleted contracts that are recognized using the percentage-of-completion method consisted of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs, Estimated Earnings and Billings on Uncompleted Contracts as Presented in the Financial Statements | Costs, estimated earnings and billings on uncompleted contracts are presented in the accompanying financial statements as follows (in thousands):
|
Property, Plant and Equipment, net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment, net | Property, plant and equipment, net, consisted of the following (in thousands):
___________________
|
Long-Term Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt consisted of the following (in thousands):
|
Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on Nonrecurring Basis | The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2016 and 2015, with pricing levels as of the date of valuation (in thousands):
|
Restructuring and Other Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes to Accrued Liability Balance Related to Restructuring and Other Charges | The following table summarizes the changes to our accrued liability balance related to restructuring and other charges for the three months ended March 31, 2016 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Charges Included in Restructuring and Other Charges | The following table summarizes the components of charges included in restructuring and other charges in our statements of operations for the three months ended March 31, 2016 (in thousands):
|
Related Party Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||
Reconciliation of Net Contributions from Parent | A reconciliation of net contributions from parent in the statements of stockholders’ equity to the corresponding amount presented in the statements of cash flows for the three months ended March 31, 2015 as follows (in thousands):
|
Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income, Net of Tax | The following table presents the changes in accumulated other comprehensive income, net of tax, during the three months ended March 31, 2015 and 2016 (in thousands):
|
Stock-Based Compensation (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | The table below presents the changes in stock option awards for our common stock during the three months ended March 31, 2016. Options outstanding relate to employees, directors and consultants of us and Archrock.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock, Restricted Stock Unit, Performance Unit, Cash Settled Restricted Stock Unit and Cash Settled Performance Unit | The table below presents the changes in restricted stock, restricted stock unit, performance unit, cash settled restricted stock unit and cash settled performance unit for our common stock during the three months ended March 31, 2016. Non-vested awards relate to employees, directors and consultants of us and Archrock. Awards granted subsequent to November 3, 2015 only relate to our employees, directors and consultants.
________________________________
|
Net Income (Loss) Per Common Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Basic and Diluted Net Income (Loss) Per Common Share | The following table presents a reconciliation of basic and diluted net income (loss) per common share for the three months ended March 31, 2016 and 2015 (in thousands, except per share data):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Shares Excluded from Computation of Net Income Per Common Share | The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income (loss) per common share as their inclusion would have been anti-dilutive (in thousands):
|
Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Guarantees | We have issued the following guarantees that are not recorded on our accompanying balance sheet (dollars in thousands):
________________________________
|
Reportable Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Other Financial Information By Reportable Segment | The following table presents revenues and other financial information by reportable segment during the three months ended March 31, 2016 and 2015 (in thousands):
________________________________
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Net Income (Loss) to Gross Margin | The following table reconciles income (loss) before income taxes to total gross margin (in thousands):
|
Description of Business, Spin-Off and Basis of Presentation - Narrative (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Nov. 03, 2015
USD ($)
|
Mar. 31, 2016
USD ($)
business_line
|
Mar. 31, 2015
USD ($)
|
|
Accounting Policies [Abstract] | |||
Number of business lines | business_line | 3 | ||
Related Party Transaction [Line Items] | |||
Cash transfer to Archrock, Inc. at Spin-off | $ 5,153 | $ 0 | |
Archrock | |||
Related Party Transaction [Line Items] | |||
Cash transfer to Archrock, Inc. at Spin-off | $ 532,600 | ||
Exterran Corporation | |||
Related Party Transaction [Line Items] | |||
Common stock, distribution basis for issued shares | 0.5 |
Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Composition of Inventory net of reserves | ||
Parts and supplies | $ 123,522 | $ 133,558 |
Work in progress | 36,828 | 41,184 |
Finished goods | 34,291 | 33,339 |
Inventory | $ 194,641 | $ 208,081 |
Product Sales Contracts - Uncompleted Contracts, Percentage-of-Completion (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Contractors [Abstract] | ||
Costs incurred on uncompleted contracts | $ 649,922 | $ 664,229 |
Estimated earnings | 27,564 | 44,915 |
Costs incurred and estimated earnings before billings on uncompleted contracts | 677,486 | 709,144 |
Less — billings to date | (662,915) | (681,741) |
Total costs incurred and estimated earnings less billings | $ 14,571 | $ 27,403 |
Product Sales Contracts - Uncompleted Contracts, as Presented in the Financial Statements (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Contractors [Abstract] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 52,129 | $ 65,311 |
Billings on uncompleted contracts in excess of costs and estimated earnings | (37,558) | (37,908) |
Total costs incurred and estimated earnings less billings | $ 14,571 | $ 27,403 |
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 1,824,735 | $ 1,888,023 |
Accumulated depreciation (1) | (999,917) | (1,029,835) |
Property, plant and equipment, net | 824,818 | 858,188 |
Compression equipment, facilities and other fleet assets (1) | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 1,462,323 | 1,527,328 |
Write-off of fully depreciated capitalized installation costs | 81,900 | |
Land and buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 114,003 | 117,247 |
Transportation and shop equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 145,730 | 144,413 |
Other | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 102,679 | $ 99,035 |
Investments in Non-Consolidated Affiliates (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Investments in non-consolidated affiliates | ||
Installment payments, including annual charges, received from the sale of the joint venture | $ 5,200 | $ 5,000 |
Remaining principal amount due from sale of joint venture | 9,000 | |
Cash transfer to related party | $ 5,153 | $ 0 |
PIGAP II | ||
Investments in non-consolidated affiliates | ||
Ownership interest (as a percent) | 30.00% | |
El Furrial | ||
Investments in non-consolidated affiliates | ||
Ownership interest (as a percent) | 33.30% |
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt | $ 431,222 | $ 525,593 |
Unamortized deferred financing costs | (4,551) | (5,243) |
Other, interest at various rates, collateralized by equipment and other assets | ||
Debt Instrument [Line Items] | ||
Long-term debt | 773 | 836 |
Revolving credit facility due November 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 190,000 | 285,000 |
Term loan facility due November 2017 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 245,000 | $ 245,000 |
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - Nonrecurring basis - USD ($) $ in Thousands |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
(Level 1) | ||
Fair value measurement of assets and liabilities | ||
Impaired long-lived assets | $ 0 | $ 0 |
Impaired assets—Discontinued operations | 0 | 0 |
Long-term receivable from the sale of our Canadian Operations | 0 | 0 |
(Level 2) | ||
Fair value measurement of assets and liabilities | ||
Impaired long-lived assets | 0 | 0 |
Impaired assets—Discontinued operations | 0 | 0 |
Long-term receivable from the sale of our Canadian Operations | 0 | 0 |
(Level 3) | ||
Fair value measurement of assets and liabilities | ||
Impaired long-lived assets | 0 | 0 |
Impaired assets—Discontinued operations | 15,657 | 0 |
Long-term receivable from the sale of our Canadian Operations | $ 0 | $ 5,100 |
Fair Value Measurements - Narrative (Details) $ in Millions |
1 Months Ended |
---|---|
Apr. 30, 2015
USD ($)
| |
Canadian Operations | |
Fair Value Measurements | |
Proceeds received from settlement of note receivable | $ 5.1 |
Long-Lived Asset Impairment (Details) hp in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
compressor_unit
hp
|
|
Idle compressor units | ||
Long-Lived Asset Impairment | ||
Number of long-lived assets that the entity determined to retire and either sell or re-utilize key components | compressor_unit | 6 | |
Horsepower retired from the contract operations business (in horsepower) | hp | 7 | |
Long-lived asset impairment | $ 3.2 | |
Long-term receivable from the sale of Canadian Operations | ||
Long-Lived Asset Impairment | ||
Long-lived asset impairment | $ 1.4 | |
Continuing Operations | Belleli, EPC business | Discontinued Operations, Held-for-sale | ||
Long-Lived Asset Impairment | ||
Impairment of assets to be disposed of | $ 0.7 |
Restructuring and Other Charges - Rollforward of Accrued Liability Balance Related to Restructuring (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Restructuring Charges Accrual | ||
Beginning balance | $ 1,648 | |
Additions for costs expensed | 12,567 | $ 0 |
Less non-cash expense | (1,041) | |
Reductions for payments | (4,040) | |
Ending balance | 9,134 | |
Spin-off | ||
Restructuring Charges Accrual | ||
Beginning balance | 1,083 | |
Additions for costs expensed | 1,602 | |
Less non-cash expense | (604) | |
Reductions for payments | (879) | |
Ending balance | 1,202 | |
Cost Reduction Plan | ||
Restructuring Charges Accrual | ||
Beginning balance | 565 | |
Additions for costs expensed | 10,965 | |
Less non-cash expense | (437) | |
Reductions for payments | (3,161) | |
Ending balance | $ 7,932 |
Restructuring and Other Charges - Components of Charges Included in Restructuring Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Components of charges included in restructuring charges | ||
Restructuring and other charges | $ 12,567 | $ 0 |
Consulting fees | ||
Components of charges included in restructuring charges | ||
Restructuring and other charges | 22 | |
Start-up of stand-alone functions | ||
Components of charges included in restructuring charges | ||
Restructuring and other charges | 277 | |
Retention awards to certain employees | ||
Components of charges included in restructuring charges | ||
Restructuring and other charges | 1,325 | |
Employee termination benefits | ||
Components of charges included in restructuring charges | ||
Restructuring and other charges | 10,721 | |
Other | ||
Components of charges included in restructuring charges | ||
Restructuring and other charges | $ 222 |
Deferred Income Taxes (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets | $ 152.0 | |
Net operating losses | 65.9 | |
Carryforwards of foreign tax credits | 72.0 | |
Carryforwards of research and development credits | 31.3 | |
Carryforwards of alternative minimum tax credits | 5.1 | |
Valuation allowance recorded against DTA | $ 49.7 | |
Scenario, Forecast | Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance recorded against DTA | $ 65.0 |
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Archrock and Archrock Partners | Transition services | ||
Related Party Transaction [Line Items] | ||
Selling, general and administrative expenses from related party | $ 0.3 | |
Other income from related party | $ 0.7 | |
Archrock | ||
Related Party Transaction [Line Items] | ||
Selling, general and administrative expenses from related party | $ 14.9 | |
Archrock | Sale of compressor units | ||
Related Party Transaction [Line Items] | ||
Related party transaction, amounts of transaction | 16.5 | |
Archrock Partners | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | 55.8 | |
Related parties amount in cost of sales | $ 51.3 |
Related Party Transactions - Net Contributions from Parent (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2015
USD ($)
| |
Related Party Transactions [Abstract] | |
Net contributions from parent per the statements of stockholders’ equity | $ 10,298 |
Stock-based compensation expenses prior to the Spin-off | (2,015) |
Stock-based compensation excess tax benefit prior to the Spin-off | 764 |
Net transfers of property, plant and equipment from parent prior to the Spin-off | (5,646) |
Net contributions from parent per statements of cash flows | $ 3,401 |
Stockholders' Equity - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 805,936 | $ 1,364,335 |
Ending balance | 713,170 | 1,403,365 |
Foreign Currency Translation Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 29,198 | 26,745 |
Income (loss) recognized in other comprehensive income (loss) | 2,313 | (7,745) |
Ending balance | $ 31,511 | $ 19,000 |
Net Income (Loss) Per Common Share - Narrative (Details) |
Nov. 03, 2015
shares
|
---|---|
Earnings Per Share [Abstract] | |
Common stock distributed by Archrock to its stockholders (in shares) | 34,286,267 |
Net Income (Loss) Per Common Share - Anti-Dilutive Shares (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net dilutive potential common shares issuable | 301 | 0 |
On exercise of options where exercise price is greater than average market value for the period | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net dilutive potential common shares issuable | 243 | |
On exercise of options and vesting of restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net dilutive potential common shares issuable | 58 |
Commitments and Contingencies - Guarantees Not Recorded on Balance Sheet (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Schedule Of Guarantees | |
Maximum potential undiscounted payments | $ 263,858 |
Performance guarantees through letters of credit | |
Schedule Of Guarantees | |
Term | 2016 - 2021 |
Maximum potential undiscounted payments | $ 175,317 |
Standby letters of credit | |
Schedule Of Guarantees | |
Term | 2016 - 2017 |
Maximum potential undiscounted payments | $ 6,792 |
Commercial letters of credit | |
Schedule Of Guarantees | |
Term | 2016 |
Maximum potential undiscounted payments | $ 451 |
Bid bonds and performance bonds | |
Schedule Of Guarantees | |
Term | 2016 - 2023 |
Maximum potential undiscounted payments | $ 81,298 |
Reportable Segments - Revenue and Other Financial Information by Reportable Segment (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
segment
|
Mar. 31, 2015
USD ($)
|
|
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 3 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 306,630 | $ 519,820 |
Consolidated and combined gross margin | 83,940 | 142,699 |
Contract Operations | ||
Segment Reporting Information [Line Items] | ||
Revenue | 104,759 | 120,691 |
Consolidated and combined gross margin | 66,261 | 76,352 |
Aftermarket Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 30,241 | 36,244 |
Consolidated and combined gross margin | 7,941 | 11,087 |
Product sales | ||
Segment Reporting Information [Line Items] | ||
Revenue | 171,630 | 362,885 |
Consolidated and combined gross margin | $ 9,738 | $ 55,260 |
Reportable Segments - Reconciliation of Net Income (Loss) to Gross Margin (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Segment Reporting [Abstract] | ||
Income (loss) before income taxes | $ (24,821) | $ 39,000 |
Selling, general and administrative | 45,738 | 57,816 |
Depreciation and amortization | 50,933 | 38,015 |
Long-lived asset impairment | 651 | 4,579 |
Restructuring and other charges | 12,567 | 0 |
Interest expense | 8,463 | 507 |
Equity in income of non-consolidated affiliates | (5,174) | (5,006) |
Other (income) expense, net | (4,417) | 7,788 |
Consolidated and combined gross margin | $ 83,940 | $ 142,699 |
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