10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(MARK ONE)

☒      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2021

OR

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                   TO                  

Commission File No. 001-36875

EXTERRAN CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		47-3282259
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
11000 Equity Drive
Houston	Texas	77041
(Address of principal executive offices)		(Zip Code)

(281) 836-7000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Ticker symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	EXTN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of the common stock of the registrant outstanding as of April 27, 2021: 33,285,841 shares.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Loss	5
Condensed Consolidated Statements of Stockholders’ Equity	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	35
Item 4. Controls and Procedures	35
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	36
Item 1A. Risk Factors	36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3. Defaults Upon Senior Securities	36
Item 4. Mine Safety Disclosures	36
Item 5. Other Information	36
Item 6. Exhibits	37
SIGNATURES	38

2

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share amounts)

(unaudited)

	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	42,575	$	40,318
Restricted cash	4,078		3,410
Accounts receivable, net of allowance of $10,755 and $10,803, respectively	188,401		198,028
Inventory (Note 4)	107,533		109,837
Contract assets (Note 2)	32,301		32,642
Other current assets	21,907		19,810
Current assets associated with discontinued operations (Note 3)	25,955		25,325
Total current assets	422,750		429,370
Property, plant and equipment, net (Note 5)	695,164		733,222
Long-term contract assets (Note 2)	19,324		33,563
Operating lease right-of-use assets	24,180		25,428
Deferred income taxes	6,824		8,866
Intangible and other assets, net	77,157		71,436
Long-term assets associated with discontinued operations (Note 3)	1,608		1,606
Total assets	$	1,247,007	$	1,303,491
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, trade	$	52,288	$	60,078
Accrued liabilities	108,548		94,404
Contract liabilities (Note 2)	97,753		100,123
Current operating lease liabilities	6,228		6,340
Current liabilities associated with discontinued operations (Note 3)	7,016		13,707
Total current liabilities	271,833		274,652
Long-term debt (Note 6)	569,766		562,325
Deferred income taxes	1,073		1,014
Long-term contract liabilities (Note 2)	65,580		80,499
Long-term operating lease liabilities	28,826		29,868
Other long-term liabilities	44,162		57,159
Long-term liabilities associated with discontinued operations (Note 3)	1,062		2,142
Total liabilities	982,302		1,007,659
Commitments and contingencies (Note 13)
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; 38,017,445 and 37,804,206 shares issued, respectively	380		378
Additional paid-in capital	751,977		750,506
Accumulated deficit	(448,402)		(418,529)
Treasury stock — 4,730,795 and 4,665,560 common shares, at cost, respectively	(57,741)		(57,431)
Accumulated other comprehensive income	18,491		20,908
Total stockholders’ equity (Note 10)	264,705		295,832
Total liabilities and stockholders’ equity	$	1,247,007	$	1,303,491

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

	Three Months Ended March 31,
	2021		2020
Revenues (Note 2):
Contract operations	$	81,014	$	94,788
Aftermarket services	25,120		27,909
Product sales	30,030		38,097
	136,164		160,794
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):
Contract operations	23,344		31,460
Aftermarket services	20,012		21,181
Product sales	25,573		38,931
Selling, general and administrative	32,631		33,560
Depreciation and amortization	42,499		31,951
Restructuring and other charges (Note 8)	624		207
Interest expense	9,964		9,953
Other expense, net	3,061		294
	157,708		167,537
Loss before income taxes	(21,544)		(6,743)
Provision for income taxes (Note 9)	7,456		9,330
Loss from continuing operations	(29,000)		(16,073)
Loss from discontinued operations, net of tax (Note 3)	(873)		(2,231)
Net loss	$	(29,873)	$	(18,304)
Basic and diluted net loss per common share (Note 12):
Loss from continuing operations per common share	$	(0.88)	$	(0.49)
Loss from discontinued operations per common share	(0.03)		(0.07)
Net loss per common share	$	(0.91)	$	(0.56)
Weighted average common shares outstanding used in net loss per common share (Note 12):
Basic and diluted	32,950		32,653

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(unaudited)

	Three Months Ended March 31,
	2021		2020
Net loss	$	(29,873)	$	(18,304)
Other comprehensive loss:
Foreign currency translation adjustment	(2,417)		(11,056)
Comprehensive loss	$	(32,290)	$	(29,360)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(unaudited)

	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Treasury Stock		Accumulated Other Comprehensive Income		Total
Balance, January 1, 2020	$	375	$	747,622	$	(317,238)	$	(56,567)	$	35,346	$	409,538
Net loss					(18,304)						(18,304)
Foreign currency translation adjustment									(11,056)		(11,056)
Treasury stock purchased							(835)				(835)
Stock-based compensation, net of forfeitures	2		283								285
Balance, March 31, 2020	$	377	$	747,905	$	(335,542)	$	(57,402)	$	24,290	$	379,628
Balance, January 1, 2021	$	378	$	750,506	$	(418,529)	$	(57,431)	$	20,908	$	295,832
Net loss					(29,873)						(29,873)
Foreign currency translation adjustment									(2,417)		(2,417)
Treasury stock purchased							(310)				(310)
Stock-based compensation, net of forfeitures	2		1,471								1,473
Balance, March 31, 2021	$	380	$	751,977	$	(448,402)	$	(57,741)	$	18,491	$	264,705

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net loss	$	(29,873)	$	(18,304)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	42,499		31,951
Amortization of deferred financing costs	667		628
Loss from discontinued operations, net of tax	873		2,231
Provision for doubtful accounts	1		2,742
Gain on sale of property, plant and equipment	(193)		(161)
(Gain) loss on remeasurement of intercompany balances	1,511		(1,121)
Loss on foreign currency derivatives	926		—
Stock-based compensation expense	1,473		285
Deferred income tax expense	374		1,361
Changes in assets and liabilities:
Accounts receivable and notes	8,738		(44)
Inventory	2,017		(1,558)
Contract assets and contract liabilities, net	(11,382)		30,854
Other current assets	(2,283)		(163)
Accounts payable and other liabilities	(2,474)		(33,372)
Other	(413)		5,933
Net cash provided by continuing operations	12,461		21,262
Net cash used in discontinued operations	(9,276)		(12,990)
Net cash provided by operating activities	3,185		8,272
Cash flows from investing activities:
Capital expenditures	(7,199)		(16,807)
Proceeds from sale of property, plant and equipment	212		164
Net cash used in continuing operations	(6,987)		(16,643)
Net cash used in discontinued operations	—		(218)
Net cash used in investing activities	(6,987)		(16,861)
Cash flows from financing activities:
Proceeds from borrowings of debt	64,600		112,000
Repayments of debt	(57,400)		(100,613)
Purchases of treasury stock (Note 10)	(310)		(835)
Net cash provided by financing activities	6,890		10,552
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(163)		(513)
Net increase in cash, cash equivalents and restricted cash	2,925		1,450
Cash, cash equivalents and restricted cash at beginning of period	43,728		16,702
Cash, cash equivalents and restricted cash at end of period	$	46,653	$	18,152
Supplemental disclosure of non-cash transactions:
Accrued capital expenditures	$	3,453	$	6,959

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

EXTERRAN CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Description of Business and Basis of Presentation

Description of Business

Exterran Corporation (together with its subsidiaries, “Exterran Corporation,” the “Company,” “our,” “we” or “us”), a Delaware corporation formed in March 2015, is a global sustainable systems and process company offering solutions in the oil, gas, water and power markets. We are a leader in natural gas processing and treatment, produced water treatment and compression products, solutions and services, providing critical midstream infrastructure solutions to customers throughout the world. We provide our products, solutions, 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. Our manufacturing facilities are located in the United States of America (“U.S.”), Singapore and the United Arab Emirates. We operate in three primary business lines: contract operations, aftermarket services and product sales. In our contract operations business line, we provide processing, treating, compression and water treatment services through the operation of our natural gas and crude oil production and process equipment and natural gas compression equipment and water treatment equipment for our customers. In our aftermarket services business line, we sell parts and components and provide operations, maintenance, repair, overhaul, upgrade, startup and commissioning and reconfiguration services to customers who own their own oil and natural gas compression, production, processing, treating and related equipment. In our product sales business line, we design, engineer, manufacture, install and sell equipment used in the treating and processing of crude oil, natural gas, natural gas compression packages and water to our customers throughout the world and for use in our contract operations business line. We also offer our customers, on either a contract operations basis or a sale basis, the engineering, design, project management, procurement and construction services necessary to incorporate our products into production, processing and compression facilities, which we refer to as integrated projects.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Exterran Corporation included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“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 of a normal recurring nature that are necessary to fairly state our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2020. 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 consolidated 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.

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus (“COVID-19”) a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption across most industries. Efforts to mitigate the spread of COVID-19 have also resulted in decreased energy demand and additional weakness in energy pricing. To help control the spread of the virus and protect the health and safety of our employees and customers, we began temporarily closing our locations or modifying operating hours in our locations around the world. This was in response to governmental requirements including “stay-at-home” orders and similar mandates and in some of our locations, we voluntarily went beyond the requirements of local government authorities. The broader implications of COVID-19 on our long-term future results of operations and overall financial condition remains uncertain. Due to the rapid market deterioration during the three months ended March 31, 2020, we concluded that a trigger existed and that we should evaluate our long-term assets for impairment. Therefore, we updated our impairment analysis and concluded that no impairment existed during the three months ended March 31, 2020. No triggering events were identified subsequent to March 31, 2020.

8

Recent Accounting Pronouncements

We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be not applicable.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”): Simplifying the Accounting for Income Taxes. The update simplifies the accounting for income taxes and is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. On January 1, 2021, we adopted this update. The adoption of this update was immaterial to our financial statements.

In June 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04). Topic 848 is effective for fiscal years and interim periods beginning as of March 12, 2020 through December 31, 2022. This update provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. It is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The adoption of ASU 2020-04 did not have a material impact to our financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

There are no recently issued accounting pronouncements not yet adopted that we are aware of at this time that would have a material impact on the Company.

Note 2 - Revenue

Disaggregation of Revenue

The following tables present disaggregated revenue by products and services lines and by geographical regions for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
Revenue by Products and Services	2021		2020
Contract Operations Segment:
Contract operations services (1)	$	81,014	$	94,788
Aftermarket Services Segment:
Operation and maintenance services (1)	$	12,042	$	12,939
Part sales (2)	9,050		10,824
Other services (1)	4,028		4,146
Total aftermarket services	$	25,120	$	27,909
Product Sales Segment(3):
Compression equipment (1)	$	5,326	$	19,156
Processing and treating equipment (1)	21,559		11,809
Other product sales (1) (2)	3,145		7,132
Total product sales revenues	$	30,030	$	38,097
Total revenues	$	136,164	$	160,794

(1)Revenue recognized over time.

(2)Revenue recognized at a point in time.

(3)Compression equipment includes sales to customers outside of the U.S. The compression fabrication business for sales to U.S. customers that was previously included in our product sales segment is now included in discontinued operations.

9

	Three Months Ended March 31,
Revenue by Geographical Regions	2021		2020
North America	$	6,325	$	8,976
Latin America	60,618		76,797
Middle East and Africa	57,179		55,713
Asia Pacific	12,042		19,308
Total revenues	$	136,164	$	160,794

The North America region is primarily comprised of our operations in the U.S. The Latin America region is primarily comprised of our operations in Argentina, Bolivia, Brazil and Mexico. The Middle East and Africa region is primarily comprised of our operations in Bahrain, Iraq, Oman, Nigeria and the United Arab Emirates. The Asia Pacific region is primarily comprised of our operations in China, Indonesia, Singapore and Thailand.

The following table summarizes the expected timing of revenue recognition from unsatisfied performance obligations (commonly referred to as backlog) as of March 31, 2021 (in thousands):

	Contract Operations Segment		Product Sales Segment
Remainder of 2021	$	215,012	$	149,838
2022	213,560		205,167
2023	203,346		59,556
2024	186,322		13,000
2025	161,876		17,500
Thereafter	247,538		—
Total backlog	$	1,227,654	$	445,061

Certain of our aftermarket services contracts are subject to cancellation or modification at the election of the customer.

If the primary component of our contract operations contracts is the lease component, the contracts are accounted for as operating leases. For these contracts, revenues are recognized on a straight-line basis. As of March 31, 2021, the total value of our contracts operations backlog accounted for as operating leases was approximately $300.5 million, of which $33 million is expected to be recognized in the remainder of 2021, $43 million is expected to be recognized in 2022, $77 million is expected to be recognized in 2023, $65 million is expected to be recognized in 2024 and $47 million is expected to be recognized in 2025. Contract operations revenue recognized as operating leases for the three months ended March 31, 2021 was approximately $9 million. Our product sales backlog includes contracts where there is a significant financing component. As of March 31, 2021, we had approximately $43 million expected to be recognized in future periods as interest income within our product sales segment.

Contract Assets and Contract Liabilities

The following table provides information about accounts receivables, net, contract assets and contract liabilities from contracts with customers (in thousands):

	March 31, 2021		December 31, 2020
Accounts receivables, net	$	188,401	$	198,028
Contract assets and contract liabilities:
Current contract assets	32,301		32,642
Long-term contract assets	19,324		33,563
Current contract liabilities	97,753		100,123
Long-term contract liabilities	65,580		80,499

10

During the three months ended March 31, 2021, revenue recognized from contract operations services included $15.8 million of revenue deferred in previous periods. Revenue recognized during the three months ended March 31, 2021 from product sales performance obligations partially satisfied in previous periods was $27.8 million, of which $16.4 million was included in billings in excess of costs at the beginning of the period. The decrease in long-term contract assets during the three months ended March 31, 2021 was primarily due to the timing of milestones billings in the Middle East and Africa region. The decrease in current contract liabilities during the three months ended March 31, 2021 was primarily driven by the progression of product sales projects and the timing of milestones billings in the Middle East and Africa region. The decrease in long-term contract liabilities during the three months ended March 31, 2021 was primarily driven by the change in the remaining term of a contract operation services contract in the Latin America region.

Allowance for Doubtful Accounts

The Company estimates its reserves using information about past events, current conditions and risk characteristics of each customer, and reasonable and supportable forecasts relevant to assessing risk associated with the collectability of accounts receivables, contract assets and long-term note receivables. The Company’s customer base has generally similar collectability risk characteristics, although larger customers may have lower risk than smaller independent customers. The allowance for doubtful accounts as of March 31, 2021 and changes for the three months then ended are as follows (in thousands):

Balance at December 31, 2020	$	10,803
Write-offs during the period	(48)
Balance at March 31, 2021	$	10,755

Note 3 - Discontinued Operations

We have continued to work toward our strategy to be a company that leverages technology and operational excellence to provide complete systems and process solutions in energy and industrial applications. Over the past several years, we have made significant progress in this journey by taking actions to protect our core business, develop important organizational capabilities, commercialize new products, solutions, and services and implement new processes to position Exterran for success. We are focused on optimizing our portfolio of products and services to better serve our global customers while providing a more attractive investment option for our investors. As we continue on this path, we decided that our U.S. compression fabrication business was non-core to our strategy, and during the third quarter of 2020, we entered into an agreement to sell the assets used to operate the business which closed on November 2, 2020. We did not sell certain items in inventory, which we expect to liquidate over time. During the third quarter of 2020, this business met the held for sale criteria and is now reflected as discontinued operations in our financial statements for all periods presented. The U.S. compression fabrication business was previously included in our product sales segment and has been reclassified to discontinued operations in our financial statements for all periods presented. Compression revenue from sales to international customers continues to be included in our product sales segment.

In the first quarter of 2016, we began executing the exit of our Belleli EPC business that has historically been comprised of 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) by ceasing the bookings of new orders. As of the fourth quarter of 2017, we had substantially exited our Belleli EPC business and, in accordance with GAAP, it is reflected as discontinued operations in our financial statements for all periods presented. Although we have reached mechanical completion on all remaining Belleli EPC contracts, we are still subject to risks and uncertainties potentially resulting from warranty obligations, customer or supplier claims against us, settlement of claims against customers, completion of demobilization activities and litigation developments. The facility previously utilized to manufacture products for our Belleli EPC business has been repurposed to manufacture product sales equipment. As such, certain personnel, buildings, equipment and other assets that were previously related to our Belleli EPC business remain a part of our continuing operations. As a result, activities associated with our ongoing operations at our repurposed facility are included in continuing operations.

11

The following table summarizes the operating results of discontinued operations (in thousands):

	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
	Belleli EPC		US Compression		Total		Belleli EPC		US Compression		Total
Revenue	$	—	$	53	$	53	$	124	$	49,563	$	49,687
Cost of sales (excluding depreciation and amortization expense)	55		209		264		96		45,508		45,604
Selling, general and administrative	158		395		553		113		4,492		4,605
Depreciation and amortization	—		—		—		—		659		659
Restructuring and other charges	—		—		—		—		981		981
Other expense, net	34		—		34		44		—		44
Provision for income taxes	75		—		75		25		—		25
Loss from discontinued operations, net of tax	$	(322)	$	(551)	$	(873)	$	(154)	$	(2,077)	$	(2,231)

The following table summarizes the balance sheet data for discontinued operations (in thousands):

	March 31, 2021						December 31, 2020
	Belleli EPC		US Compression		Total		Belleli EPC		US Compression		Total
Accounts receivable	$	268	$	739	$	1,007	$	268	$	3,171	$	3,439
Inventory	—		24,584		24,584		—		21,107		21,107
Contract assets	—		176		176		—		458		458
Other current assets	188		—		188		213		108		321
Total current assets associated with discontinued operations	456		25,499		25,955		481		24,844		25,325
Intangible and other assets, net	1,608		—		1,608		1,606		—		1,606
Total assets associated with discontinued operations	$	2,064	$	25,499	$	27,563	$	2,087	$	24,844	$	26,931
Accounts payable	$	35	$	1,138	$	1,173	$	139	$	5,093	$	5,232
Accrued liabilities	2,944		2,411		5,355		2,939		5,037		7,976
Contract liabilities	199		289		488		197		302		499
Total current liabilities associated with discontinued operations	3,178		3,838		7,016		3,275		10,432		13,707
Other long-term liabilities	786		276		1,062		765		1,377		2,142
Total liabilities associated with discontinued operations	$	3,964	$	4,114	$	8,078	$	4,040	$	11,809	$	15,849

Note 4 - Inventory

Inventory consisted of the following amounts (in thousands):

	March 31, 2021		December 31, 2020
Parts and supplies	$	63,470	$	65,576
Work in progress	40,822		41,020
Finished goods	3,241		3,241
Inventory	$	107,533	$	109,837

12

Note 5 - Property, Plant and Equipment, Net

Property, plant and equipment, net, consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Compression equipment, processing facilities and other fleet assets(1)	$	1,555,823	$	1,562,528
Land and buildings	50,676		50,908
Transportation and shop equipment	53,768		54,763
Computer software	54,849		54,486
Other	40,729		40,305
	1,755,845		1,762,990
Accumulated depreciation	(1,060,681)		(1,029,768)
Property, plant and equipment, net	$	695,164	$	733,222

(1)In the first quarter of 2021, we evaluated the salvage values of our property, plant and equipment. As a result of this evaluation, we changed the salvage values for our compression equipment to a maximum salvage value of 5% from 15%. During the three months ended March 31, 2021, we recorded an increase to depreciation expense of approximately $0.9 million as a result of this change in salvage value.

Note 6 - Debt

Debt consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Revolving credit facility due October 2023	$	223,700	$	216,500
8.125% senior notes due May 2025	350,000		350,000
Unamortized deferred financing costs of 8.125% senior notes	(3,934)		(4,175)
Long-term debt	$	569,766	$	562,325

Revolving Credit Facility Due October 2023

We and our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”), are parties to an amended and restated credit agreement (the “Amended Credit Agreement”) consisting of a $650.0 million revolving credit facility expiring in October 2023.

As of March 31, 2021, we had $223.7 million in outstanding borrowings and $7.5 million in outstanding letters of credit under our revolving credit facility. At March 31, 2021, taking into account guarantees through letters of credit, we had undrawn capacity of $418.8 million under our revolving credit facility. Our Amended Credit Agreement limits our Total Debt to EBITDA ratio (as defined in the Amended Credit Agreement) on the last day of the fiscal quarter to no greater than 4.50 to 1.0. As a result of this limitation, $109.8 million of the $418.8 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of March 31, 2021.

8.125% Senior Notes Due May 2025

In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. issued $375.0 million aggregate principal amount of 8.125% senior unsecured notes due 2025 (the “2017 Notes”) which have $350.0 million outstanding as of March 31, 2021. We guarantee the 2017 Notes on a senior unsecured basis. We may redeem the 2017 Notes at any time in cash, in whole or part, at certain redemption prices, including the applicable make-whole premium plus accrued and unpaid interest, if any, to the date of redemption.

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The Amended Credit Agreement contains various covenants with which we, EESLP and our respective restricted subsidiaries must comply, including, but not limited to, limitations on the incurrence of indebtedness, investments, liens on assets, repurchasing equity, making distributions, transactions with affiliates, mergers, consolidations, dispositions of assets and other provisions customary in similar types of agreements. We are required to maintain, on a consolidated basis, a minimum interest coverage ratio (as defined in the Amended Credit Agreement) of 2.25 to 1.00; a maximum total leverage ratio (as defined in the Amended Credit Agreement) of 4.50 to 1.00; and a maximum senior secured leverage ratio (as defined in the Amended Credit Agreement) of 2.75 to 1.00. As of March 31, 2021, we maintained a 5.0 to 1.0 interest coverage ratio, a 3.8 to 1.0 total leverage ratio and a 1.5 to 1.0 senior secured leverage ratio. As of March 31, 2021, we were in compliance with all financial covenants under the Amended Credit Agreement.

Note 7 - 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 categories:

•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.

Recurring Fair Value Measurements

The following table presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, with pricing levels as of the date of valuation (in thousands):

	March 31, 2021						December 31, 2020
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
Foreign currency derivatives liabilities	$	—	$	—	$	—	$	—	$	—	$	(247)

We are exposed to market risks associated with changes in foreign currency exchange rates, including foreign currency exchange rate changes recorded on intercompany obligations. From time to time, we may enter into foreign currency hedges to manage existing exposures to foreign exchange risk related to assets and liabilities recorded on our balance sheets including intercompany activity. As of March 31, 2021, we were a party to forward currency exchange contracts to mitigate exposures to the Argentine Peso with a total notional value of $25.0 million. These contracts expire at varying dates through June 2021. We did not designate these forward currency exchange contracts as hedge transactions. Changes in fair value and gains and losses on settlement on these forward currency exchange contracts are recognized in other (income) expense, net, in our statements of operations. Our estimate of the fair value of foreign currency derivatives as of March 31, 2021 was determined using quoted forward exchange rates in active markets at March 31, 2021. Foreign currency derivative assets are included in other current assets in our balance sheets. During the three months ended March 31, 2021, we recognized a loss of $0.9 million on forward currency exchange contracts.

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Nonrecurring Fair Value Measurements

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2021 and 2020, with pricing levels as of the date of valuation (in thousands):

	Three months ended March 31, 2021						Three months ended March 31, 2020
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
Long-term note receivable (1)	$	—	$	—	$	11,767	$	—	$	—	$	15,039

(1)Our estimate of the fair value of a note receivable was discounted based on a settlement period of eight years and a discount rate of 12.5%. The undiscounted value of the note receivable, including interest, as of March 31, 2021 was $15.7 million.

Financial Instruments

Our financial instruments consist of cash, restricted cash, receivables, payables and debt. At March 31, 2021 and December 31, 2020, the estimated fair values of cash, restricted cash, receivables and payables approximated their carrying amounts as reflected in our balance sheets due to the short-term nature of these financial instruments.

The fair value of the 2017 Notes was estimated based on model derived calculations using market yields observed in active markets, which are Level 2 inputs. As of March 31, 2021 and December 31, 2020, the carrying amount of the 2017 Notes, excluding unamortized deferred financing costs, of $350.0 million was estimated to have a fair value of $324.0 million and $297.0 million, respectively. Due to the variable rate nature of our revolving credit facility, the carrying value as of March 31, 2021 and December 31, 2020 approximated the fair value as the rate was comparable to the then-current market rate at which debt with similar terms could have been obtained.

Note 8 - Restructuring and Other Charges

The energy industry’s focus on cash flow, capital discipline and improving returns has caused delays in the timing of new equipment orders. As a result, in the third quarter of 2019, we announced a cost reduction plan primarily focused on workforce reductions. We incurred restructuring and other charges associated with these activities of $0.6 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively. These charges are reflected as restructuring and other charges in our statements of operations and accrued liabilities on our balance sheets. The cost reduction plan is expected to be completed in the first half of 2021 and we expect to settle these charges within the next twelve months in cash. At this time, we cannot currently estimate the total restructuring costs that will be incurred as a result of this cost reduction plan.

The following table summarizes the changes to our accrued liability balance related to restructuring and other charges for the three months ended March 31, 2021 and 2020 (in thousands):

	Cost Reduction Plan
Beginning balance at January 1, 2020	$	2,281
Additions for costs expensed, net	207
Reductions for payments	(163)
Foreign exchange impact	(289)
Ending balance at March 31, 2020	$	2,036
Beginning balance at January 1, 2021	$	1,351
Additions for costs expensed, net	624
Reductions for payments	(588)
Foreign exchange impact	(94)
Ending balance at March 31, 2021	$	1,293

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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, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Employee termination benefits	$	624	$	—
Consulting fees	—		207
Total restructuring and other charges	$	624	$	207

The following table summarizes the components of charges included in restructuring and other charges incurred since the announcement of the cost reduction plan in the second quarter of 2019 (in thousands):

	Total
Employee termination benefits	$	6,867
Consulting fees	3,205
Total restructuring and other charges	$	10,072

Note 9 - Provision for Income Taxes

Our effective tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn, or losses we incur, in those jurisdictions. It is also affected by discrete items that may occur in any given year but are not consistent from year to year. Our effective tax rate is also affected by valuation allowances recorded against loss carryforwards in the U.S. and certain other jurisdictions, foreign withholding taxes and changes in foreign currency exchange rates.

The following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 21% and our effective tax rate of (34.6)% for the three months ended March 31, 2021: (i) a 6.7% positive impact resulting from unrecognized tax benefits under FASB’s Interpretation No. 48 of Financial Accounting Standard 109 (“FIN 48”), (ii) a (12.1)% negative impact resulting from foreign currency devaluations in Argentina, (iii) a (20.2)% negative impact resulting from foreign taxes in excess of the U.S. tax rate and other rate drivers, (iv) a (12.6)% negative impact resulting from deemed inclusions in the U.S. and (v) a (9.5)% negative impact resulting from an addition of valuation allowances against U.S. deferred tax assets.

Our effective tax rate increased for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 primarily due to a decrease in valuation allowances recorded in the U.S., an increase in foreign taxes in excess of the U.S. tax rate, an increase in deemed inclusions in the U.S., a decrease in the FIN 48 reserve and an increase in tax related to foreign exchange movement in Argentina.

Note 10 - Stockholders’ Equity

Share Repurchase Program

On February 20, 2019, our board of directors approved a share repurchase program under which the Company is authorized to purchase up to $100.0 million of its outstanding common stock through February 2022. The timing and method of any repurchases under the program will depend on a variety of factors, including prevailing market conditions among others. Purchases under the program may be suspended or discontinued at any time and we have no obligation to repurchase any amount of our common shares under the program. Shares of common stock acquired through the repurchase program are held in treasury at cost. During the three months ended March 31, 2021 and 2020, we did not repurchase any shares under this program. As of March 31, 2021, the remaining authorized repurchase amount under the share repurchase program was $57.7 million.

Additionally, treasury stock purchased during the three months ended March 31, 2021 and 2020 included shares withheld to satisfy employees’ tax withholding obligations in connection with vesting of restricted stock awards.

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Note 11 - Stock-Based Compensation

Stock Options

There were no stock options granted during the three months ended March 31, 2021 and 2020.

Restricted Stock, Restricted Stock Units and Performance Units

For grants of restricted stock, restricted stock units and performance units, we recognize compensation expense over the applicable vesting period equal to the fair value of our common stock at the grant date. Grants of restricted stock, restricted stock units and performance units generally vest over two or three years proportionately on each grant date anniversary.

The table below presents the changes in restricted stock, restricted stock units and performance units for our common stock during the three months ended March 31, 2021.

	Equity Awards			Liability Awards
	Shares (in thousands)	Weighted Average Grant-Date Fair  Value Per Share		Shares (in thousands)	Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards, January 1, 2021	320	$	16.02	1,198	$	9.35
Granted	199	4.84		1,418	4.84
Vested	(274)	13.38		(371)	14.02
Cancelled	(2)	18.65		—	—
Non-vested awards, March 31, 2021	243	9.81		2,245	5.73

As of March 31, 2021, we estimate $7.6 million of unrecognized compensation cost related to unvested restricted stock, restricted stock units and performance units issued to our employees to be recognized over the weighted-average vesting period of 1.8 years.

Note 12 - 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 unvested restricted stock and restricted stock units that have non-forfeitable 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.

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The following table presents a reconciliation of basic and diluted net loss per common share for the three months ended March 31, 2021 and 2020 (in thousands, except per share data):

	Three Months Ended March 31,
	2021		2020
Numerator for basic and diluted net loss per common share:
Loss from continuing operations	$	(29,000)	$	(16,073)
Loss from discontinued operations, net of tax	(873)		(2,231)
Less: Net income attributable to participating securities	—		—
Net loss — used in basic and diluted net loss per common share	$	(29,873)	$	(18,304)
Weighted average common shares outstanding including participating securities	33,229		33,163
Less: Weighted average participating securities outstanding	(279)		(510)
Weighted average common shares outstanding — used in basic net loss per common share	32,950		32,653
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 loss per common share	32,950		32,653
Net loss per common share:
Basic and diluted	$	(0.91)	$	(0.56)

*    Excluded from diluted net income (loss) per common share as their inclusion would have been anti-dilutive.

The following table shows the potential shares of common stock issuable for the three months ended March 31, 2021 and 2020 that were excluded from computing diluted net loss per common share as their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended March 31,
	2021	2020
Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value	—	57
Net dilutive potential common shares issuable	—	57

Note 13 - Commitments and Contingencies

Contingencies

We have agreements with financial institutions under which approximately $62.6 million of letters of credit or bank guarantees were outstanding as of March 31, 2021. These are put in place in certain situations to guarantee our performance obligations under contracts with counterparties.

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, 2021 and December 31, 2020, we had accrued $1.5 million and $3.5 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.

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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, commercial automobile liability and other coverage we believe is appropriate. 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.

Litigation and Claims

On December 19, 2020, we initiated arbitration in the International Court of Arbitration of the International Chamber of Commerce (“ICC”) against Iberoamericana de Hidrocarburos, S.A. De C.V. (“IHSA”) to collect approximately $38 million owed to us under three agreements, plus future lost profits, interest, attorneys’ fees, and other damages as allowed under the contracts and/or Mexican law. The three agreements relate to contract operation services provided to IHSA by Exterran. After we stopped providing services due to IHSA’s nonpayment, on December 29, 2020, IHSA filed a lawsuit in the 129th Judicial District Court of Harris County, Texas, for tortious interference with a contract and prospective business relationships, claiming damages for lost profits, lost production, loss of equipment, loss of business opportunity, damage to business reputation and attorneys’ fees. On March 2, 2021, after we moved IHSA’s lawsuit to the United States District Court for the Southern District of Texas, IHSA voluntarily dismissed the lawsuit. On April 27, 2021, IHSA answered Exterran’s request for arbitration before the ICC and included a counterclaim for approximately $27 million allegedly resulting from breach of contract, operational deficiencies, lost production, and lost profit. In addition, IHSA has orally threatened to draw certain bonds totaling approximately $12 million under one of the contracts for contract operation services. Based on currently available information we believe IHSA’s claims are without merit; however, IHSA’s claim are in the early stages and the results cannot be predicted with certainty.

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.

Note 14 - Reportable Segments

Our chief operating decision maker manages business operations, evaluates performance and allocates resources based upon the type of product or service provided. We have three reportable segments: contract operations, aftermarket services and product sales. In our contract operations segment, we provide processing, treating, compression and water treatment services through the operation of our natural gas and crude oil production and process equipment, natural gas compression equipment and water treatment equipment for our customers. In our aftermarket services segment, we sell parts and components and provide operations, maintenance, repair, overhaul, upgrade, startup and commissioning and reconfiguration services to customers who own their own oil and natural gas compression, production, processing, treating and related equipment. In our product sales segment, we design, engineer, manufacture, install and sell equipment used in the treating and processing of crude oil, natural gas and water as well natural gas compression packages to our customers throughout the world and for use in our contract operations business line.

We evaluate the performance of our segments based on adjusted gross margin for each segment. Revenue only includes sales to external customers. We do not include intersegment sales when we evaluate our segments’ performance.

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The following table presents revenue and other financial information by reportable segment for the three months ended March 31, 2021 and 2020 (in thousands):

Three months ended March 31,	Contract Operations		Aftermarket Services		Product Sales(2)		Reportable Segments Total
2021
Revenue	$	81,014	$	25,120	$	30,030	$	136,164
Adjusted gross margin(1)	57,670		5,108		4,457		67,235
2020
Revenue	$	94,788	$	27,909	$	38,097	$	160,794
Adjusted gross margin(1)	63,328		6,728		(834)		69,222

(1)    Adjusted gross margin is defined as revenue less cost of sales (excluding depreciation and amortization expense).

(2)    The U.S. compression fabrication business that was previously included in our product sales segment is now included in discontinued operations.

The following table reconciles total gross margin to total adjusted gross margin (in thousands):

	Three Months Ended
	March 31, 2021		March 31, 2020
Revenues	$	136,164	$	160,794
Cost of sales (excluding depreciation and amortization expenses)	68,929		91,572
Depreciation and amortization (1)	40,835		30,446
Total gross margin	26,400		38,776
Depreciation and amortization (1)	40,835		30,446
Total adjusted gross margin	$	67,235	$	69,222

(1)    Represents the portion only attributable to cost of sales.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes thereto included in the Condensed Consolidated Financial Statements in Part I, Item 1 (“Financial Statements”) of this report and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020.

Disclosure Regarding Forward-Looking Statements

This report contains “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this report are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, without limitation, statements regarding our business growth strategy and projected costs; future financial position; the sufficiency of available cash flows to fund continuing operations; the expected amount of our capital expenditures; anticipated cost savings, future revenue, adjusted gross margin and other financial or operational measures related to our business and our primary business segments; the future value of our equipment; and plans and objectives of our management for our future operations. You can identify many of these statements by looking for words such as “believe,” “expect,” “intend,” “project,” “anticipate,” “estimate,” “will continue” or similar words or the negative thereof.

Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this report. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, no assurance can be given that these expectations will prove to be correct. Known material factors that could cause our actual results to differ materially from the expectations reflected in these forward-looking statements include the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2020, and those set forth from time to time in our filings with the Securities and Exchange Commission (“SEC”), which are available through our website at www.exterran.com and through the SEC’s website at www.sec.gov, as well as the following risks and uncertainties:

•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 depress or reduce the demand or pricing for our natural gas compression and oil and natural gas production and processing equipment and services;

•reduced profit margins or the loss of market share resulting from competition or the introduction of competing technologies by other companies;

•economic or political conditions in the countries in which we do business, including civil developments such as uprisings, riots, terrorism, kidnappings, violence associated with drug cartels, legislative changes and the expropriation, confiscation or nationalization of property without fair compensation;

•risks associated with natural disasters, pandemics and other public health crisis and other catastrophic events outside our control, including the impact of, and the response to, the ongoing COVID-19 pandemic;

•changes in currency exchange rates, including the risk of currency devaluations by foreign governments, and restrictions on currency repatriation;

•risks associated with cyber-based attacks or network security breaches;

•changes in international trade relationships, including the imposition of trade restrictions or tariffs relating to any materials or products (such as aluminum and steel) used in the operation of our business;

•risks associated with our operations, such as equipment defects, equipment malfunctions and environmental discharges;

•the risk that counterparties will not perform their obligations under their contracts with us or other changes that could impact our ability to recover our fixed asset investment;

•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 our business and financial objectives, including:

•winning profitable new business;

•timely and cost-effective execution of projects;

•enhancing or maintaining our asset utilization, particularly with respect to our fleet of compressors and other assets;

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•integrating acquired businesses;

•generating sufficient cash to satisfy our operating needs, existing capital commitments and other contractual cash obligations, including our debt obligations; and

•accessing the financial markets at an acceptable cost;

•our ability to accurately estimate our costs and time required under our fixed price contracts;

•liability related to the use of our products, solutions and services;

•changes in governmental safety, health, environmental or other regulations, which could require us to make significant expenditures; and

•risks associated with our level of indebtedness and our ability to fund our business.

All forward-looking statements included in this report are based on information available to us on the date of this report. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this report.

General

Exterran Corporation (together with its subsidiaries, “Exterran Corporation,” the “Company,” “our,” “we” or “us”), a Delaware corporation formed in March 2015, is a global sustainable systems and process company offering solutions in the oil, gas, water and power markets. We are a leader in natural gas processing and treatment, produced water treatment and compression products, solutions and services, providing critical midstream infrastructure solutions to customers throughout the world. Our manufacturing facilities are located in the United States of America (“U.S.”), Singapore and the United Arab Emirates.

We provide our products, solutions 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. The nature and inherent interactions between and among our business lines provide us with opportunities to cross-sell and offer integrated product and service solutions to our customers.

In our contract operations business line, we provide processing, treating, compression and water treatment services through the operation of our natural gas and crude oil production and process equipment, natural gas compression equipment and water treatment equipment for our customers. In our aftermarket services business line, we sell parts and components and provide operations, maintenance, repair, overhaul, upgrade, startup and commissioning and reconfiguration services to customers who own their own oil and natural gas compression, production, processing, treating and related equipment. In our product sales business line, we design, engineer, manufacture, install and sell equipment used in the treating and processing of crude oil, natural gas and water as well as natural gas compression packages to our customers throughout the world and for use in our contract operations business line. We also offer our customers, on either a contract operations basis or a sale basis, the engineering, design, project management, procurement and construction services necessary to incorporate our products into production, processing and compression facilities, which we refer to as integrated projects.

We have continued to work toward our strategy to be a company that leverages our sustainable technology offering in treating natural gas and produced water to help our customers better utilize their natural resources while enhancing our operational excellence to provide complete systems and process solutions in energy and industrial applications. Over the past several years, we have made significant progress in this journey by taking actions to protect our core business, develop important organizational capabilities, commercialize new products, solutions and services and implement new processes to position Exterran for success. We have optimized our portfolio of products, solutions and services to better serve our global customers while providing a more attractive investment option for our investors. As we continue on this path, we decided that our U.S. compression fabrication business was non-core to our strategy, and during the third quarter of 2020, we entered into an agreement to sell the business which closed on November 2, 2020. We did not sell certain items in inventory, which we expect to liquidate over time. During the third quarter of 2020, this business met the held for sale criteria and is also now reflected as discontinued operations in our financial statements for all periods presented. The U.S. compression fabrication business was previously included in our product sales segment and had been reclassified to discontinued operations in our financial statements for all periods presented. Compression revenue from sales to international customers continues to be included in our product sales segment.

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Our chief operating decision maker manages business operations, evaluates performance and allocates resources based on the Company’s three primary business lines, which are also referred to as our segments. In order to more efficiently and effectively identify and serve our customer needs, we classify our worldwide operations into four geographic regions. The North America region is primarily comprised of our operations in the U.S. The Latin America region is primarily comprised of our operations in Argentina, Bolivia, Brazil and Mexico. The Middle East and Africa region is primarily comprised of our operations in Bahrain, Iraq, Oman, Nigeria and the United Arab Emirates. The Asia Pacific region is primarily comprised of our operations in China, Indonesia, Singapore and Thailand.

We refer to the condensed consolidated 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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Financial Results of Operations

Overview

Industry Conditions and Trends

Our business environment and corresponding operating results are affected by the level of energy industry spending for the exploration, development and production of oil and natural gas reserves along with spending within the midstream space. Spending by oil and natural gas exploration and production companies and midstream providers is dependent upon these companies’ forecasts regarding the expected future supply, demand and pricing of oil and natural gas products as well as their estimates of risk-adjusted costs to find, develop, produce, transport and treat these reserves. Although we believe our contract operations business is typically less impacted by short-term commodity prices than certain other energy products, solutions and service providers, changes in oil and natural gas exploration and production spending normally result in changes in demand for our products, solutions and services.

Beginning in 2019, there has been a shift in the industry that was exacerbated by the COVID-19 pandemic. The COVID-19 pandemic has created a demand shock to the system that further exacerbated the supply demand imbalance that was already taking place. In response, exploration and production producers and midstream providers have shifted their focus from growth to one emphasizing cash flow and returns. This has caused a significant reduction in their capital spending plans in order to drive incremental cash flow and has put constraints on the amount of new projects that customers sanction. We believe this is likely to continue to persist into 2021, particularly in the U.S. The timing of the rebalancing of supply and demand and improvement of pricing for crude oil and natural gas resulting in increased spending on new projects remains uncertain.

Our Performance Trends and Outlook

Our revenue, earnings and financial position are affected by, among other things, market conditions that impact demand and pricing for natural gas compression, oil and natural gas production and processing and produced water treatment solutions along with our customers’ decisions to use our products, solutions and services, use our competitors’ products and services or own and operate the equipment themselves.

Aggregate booking activity levels for our product sales segment in North America and international markets during the three months ended March 31, 2021 were $9.7 million, which represents a decrease of 98% compared to the three months ended March 31, 2020. The decrease in bookings was primarily driven by the impact of energy industry conditions and the COVID-19 pandemic. During the first quarter of 2020, we recorded a large processing plant booking in the Middle East. Fluctuations in the size and timing of customers’ requests for bid proposals and awards of new contracts tend to create variability in booking activity levels from period to period.

Historically, oil, natural gas and natural gas liquids prices and the level of drilling and exploration activity in North America have been volatile. The Henry Hub spot price for natural gas was $2.52 per MMBtu at March 31, 2021, which was 7% and 47% higher than the prices at December 31, 2020 and March 31, 2020, respectively, and the U.S. natural gas liquid composite price was $7.07 per MMBtu for the month of January 2021, which was 23% and 131% higher than the prices for the month of December 2020 and March 2020, respectively. In addition, the West Texas Intermediate crude oil spot price as of March 31, 2021 was 22% and 189% higher than the price at December 31, 2020 and at March 31, 2020, respectively. Volatility in demand for energy and in commodity prices as well as an industry trend towards disciplined capital spending and improving returns have caused timing uncertainties in demand for our products recently. These uncertainties have caused delays in the timing of new equipment orders and lower bookings in our product sales segment. Booking activity levels for our product sales segment in North America during the three months ended March 31, 2021 were $1.2 million, up from negative $0.3 million in three months ended March 31, 2020.

Longer-term fundamentals in our international markets partially depend on international oil and gas infrastructure projects, many of which are based on the longer-term plans of our customers that can be driven by their local market demand and local pricing for natural gas. As a result, we believe our international customers make decisions based more on longer-term fundamentals that may be less tied to near term commodity prices than our North American customers. We believe the demand for our products, solutions and services in international markets will continue, and we expect to have opportunities to grow our international businesses. Booking activity levels for our product sales segment in international markets during the three months ended March 31, 2021 were $8.5 million, down from $445.1 million in three months ended March 31, 2020.

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The timing of customer orders and change in activity levels by our customers is difficult to predict. As a result, our ability to project the anticipated activity level for our business, and particularly our product sales segment, is limited. Given the volatility of the global energy markets and industry capital spending levels, we plan to monitor and continue to control our expense levels as necessary to protect our profitability. Additionally, volatility in commodity prices could continue to delay investments by our customers in significant projects, which could result in a material adverse effect on our business, financial condition, results of operations and cash flows.

Our level of capital spending largely depends on the demand for our contract operations services and the equipment required to provide such services to our customers. Based on opportunities we anticipate in international markets, we expect to invest more capital in our contract operations business in 2021 than we did in 2020.

A decline in demand for oil and natural gas or prices for those commodities, or instability and rationalization of capital funding in the global energy markets could continue to cause a reduction in demand for our products and services. 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.

Impact of COVID-19 on our Business

In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption across most industries. Efforts to mitigate the spread of COVID-19 have also resulted in decreased energy demand and additional weakness in energy pricing.

The Company took proactive steps earlier in the first quarter of 2020 to enable and verify the ability to ensure the safety of our employees while still carrying on the majority of business functions. These steps included:

•Establishing a daily global operating process to identify, monitor and discuss impacts to our business whether originating from governmental actions or as a direct result of employee illness;

•Investing in additional IT capabilities to enable employees to work remotely;

•Closing operations where and until assessments were completed to ensure we could operate in a safe manner; and

•Reestablishing operations once safety mechanisms were in place. This included the acquisition of additional personal protective equipment and establishing screening and other workplace processes.

To date our actions in response to the pandemic and the primary impacts on our business are summarized below:

•As most of our operations are considered essential by local government authorities, our service operations that are provided under long-term contracts have to a large extent continued to operate under substantially normal conditions;

•We are following local governmental guidance for viral spread mitigation, including having many of our employees who would traditionally work in an office work from home;

•We have put in place additional health and safety measures to protect our employees, customers and other parties who are working at our operating sites;

•Although early in 2020 we recorded significant new product sales bookings, more recently we have seen a decrease in purchasing activity from our customers which we believe is due to both the work at home mitigation measures our customers are also taking and weakness in commodity prices, causing us to lower our expectations for additional new bookings in the near term;

•Given travel restrictions and other mitigation efforts, certain of our employees were not able to travel to work assignments, therefore although we have taken additional steps to be able to continue to provide services required by our customers, some services were delayed until mitigation measures were eased;

•As our operations have been impacted by lower product sale bookings in 2019 and 2020, we started cost reduction efforts even prior to the current pandemic and have continued our efforts to optimize our cost structure to align with the expected demand in our business including making work force reductions;

•We are continuing to have discussions with customers at their request to reduce their costs by collaborating with them on how we can manage costs and/or optimize the projects performance to potentially improve our and their results;

•We evaluated our accounts receivable and given the current energy environment and expected impact to the financials of our customers, we increased our reserve for uncollectible accounts by $4.8 million during the year ended December 31, 2020;

•Given COVID-19’s impact on demand for energy and decreased commodity prices which impact our customer’s capital spending, during the three months ended March 31, 2020, we tested our long-term assets for impairment and concluded that no impairment was indicated;

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•As many of our suppliers increased delivery times including as a result of disruptions, we are working with customers on revising expected due-dates for delivery, and have pushed out the timing of our recognition of revenue and adjusted gross margin on certain projects as a result of these and other delays caused by the pandemic; and

•We have participated in certain COVID-19 tax incentive programs in certain jurisdictions in which we operate. These primarily allowed a delay in filing and/or paying of taxes for short periods of time. In the U.S., we filed a request for refund and received a $4.9 million Alternative Minimum Tax refund in 2020, which was earlier than originally scheduled due to the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). We have not participated in any government sponsored loan programs under the CARES Act.

We are unable to predict the impact that COVID-19 will have on our long-term financial position and operating results due to numerous uncertainties. The long-term impact of the pandemic on our customers and the global economy will depend on various factors, including the scope, severity and duration of the pandemic. A prolonged economic downturn or recession resulting from the pandemic could adversely affect many of our customers which could, in turn, adversely impact our business, financial condition and results of operations. We will continue to assess the evolving impact of the COVID-19 pandemic and intend to make adjustments to its responses accordingly.

Operating Highlights

The following table summarizes our contract operations and product sales backlog (in thousands):

	March 31, 2021		December 31, 2020		March 31, 2020
Contract Operations Backlog:
Contract operations services	$	1,227,654	$	1,100,929	$	1,352,627
Product Sales Backlog:
Compression equipment(1)	$	12,562	$	10,218	$	72,637
Processing and treating equipment	403,718		425,292		465,535
Other product sales	28,781		29,835		40,066
Total product sales backlog	$	445,061	$	465,345	$	578,238

(1)Compression equipment includes sales to customers outside of the U.S. The compression fabrication business for sales to U.S. customers, that was previously included in our product sales segment, is now included in discontinued operations.

Summary of Results

As discussed in Note 3 to the Financial Statements, the results from continuing operations for all periods presented exclude the results of our Belleli EPC business and our U.S. compression fabrication business. Those results are reflected in discontinued operations for all periods presented.

Revenue. 

Revenue during the three months ended March 31, 2021 and 2020 was $136.2 million and $160.8 million, respectively. The decrease in revenue during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was due to decreases in revenue in all three of our segments. The decrease in our contract operations segment was primarily due to decreases in revenue in the Latin America region. The decrease in our product sales segment was primarily due to decreases in revenue in the Asia Pacific region and the decrease in aftermarket services revenue was primarily due to decreases in revenue in the Middle East and Africa region.

Net loss.  

We generated a net loss of $29.9 million and $18.3 million during the three months ended March 31, 2021 and 2020, respectively. The increase in net loss during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily due to an increase in depreciation and amortization expense and decreases in adjusted gross margin for our contract operations and aftermarket services segments, partially offset by an increase in adjusted gross margin for our product sales segment and decreases in income taxes and in loss from discontinued operations, net of tax. Net loss during the three months ended March 31, 2021 included loss from discontinued operations, net of tax, of $0.9 million and net loss during the three months ended March 31, 2020 included loss from discontinued operations, net of tax, of $2.2 million due to our U.S. compression fabrication business activity.

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EBITDA, as adjusted. 

Our EBITDA, as adjusted, was $33.1 million and $34.2 million during the three months ended March 31, 2021 and 2020, respectively. EBITDA, as adjusted, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 decreased primarily due to decreases in adjusted gross margin for our contract operations and aftermarket services segments, partially offset by an increase in adjusted gross margin in our product sales segment and a decrease in selling, general and administrative (“SG&A”) expense.

EBITDA, as adjusted, is a non-GAAP financial measure. For a reconciliation of EBITDA, as adjusted, to net loss, its most directly comparable financial measure calculated and presented in accordance with GAAP, please read “— Non-GAAP Financial Measures” included elsewhere in this Quarterly Report.

The Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

Contract Operations

(dollars in thousands)

	Three Months Ended March 31,
	2021			2020			Change			% Change
Revenue	$	81,014		$	94,788		$	(13,774)		(15)	%
Cost of sales (excluding depreciation and amortization expense)	23,344			31,460			(8,116)			(26)	%
Adjusted gross margin	$	57,670		$	63,328		$	(5,658)		(9)	%
Adjusted gross margin percentage (1)	71		%	67		%	4		%	6	%

___________________

(1)Defined as adjusted gross margin divided by revenue.

The decrease in revenue during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily due to decreases of approximately $10.6 million in contract stops, $1.4 million impact of foreign currency exchange rates in Brazil, $2.5 million impact of devaluation on the Argentine Peso during the current year period and $10.0 million from the sale of equipment pursuant to a purchase option exercised by a customer during the prior year period. These revenue decreases were partially offset by an increase of $4.2 million due to the start-up of a project that was not operating in the prior year period, and an increase of $7.9 million primarily driven by an increase of deferred revenue recognized resulting from a change in the remaining term of a contract in the third quarter of 2020. Adjusted gross margin decreased during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 due to the revenue decreases explained above. The change in the remaining term of the contract resulted in additional costs during the three months ended March 31, 2021 in the form of depreciation expense, which is excluded from adjusted gross margin. Adjusted gross margin percentage during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 increased primarily due to reduced operating expenses relative to the prior year and the increase in deferred revenue recognized resulting from changes in the remaining term of a contract.

Aftermarket Services

(dollars in thousands)

	Three Months Ended March 31,
	2021			2020			Change			% Change
Revenue	$	25,120		$	27,909		$	(2,789)		(10)	%
Cost of sales (excluding depreciation and amortization expense)	20,012			21,181			(1,169)			(6)	%
Adjusted gross margin	$	5,108		$	6,728		$	(1,620)		(24)	%
Adjusted gross margin percentage	20		%	24		%	(4)		%	(17)	%

The decrease in revenue during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily due to a decrease in part sales and operation and maintenance services. The decrease in operation and maintenance services was primarily due to a contract that ended in the current year period. Adjusted gross margin and adjusted gross margin percentage during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 decreased primarily due to the revenue decreases explained above.

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Product Sales

(dollars in thousands)

	Three Months Ended March 31,
	2021			2020			Change			% Change
Revenue	$	30,030		$	38,097		$	(8,067)		(21)	%
Cost of sales (excluding depreciation and amortization expense)	25,573			38,931			(13,358)			(34)	%
Adjusted gross margin	$	4,457		$	(834)		$	5,291		(634)	%
Adjusted gross margin percentage	15		%	(2)		%	17		%	(850)	%

The decrease in revenue during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily due to decreases of $13.9 million and $3.4 million in compression revenue and water solutions revenue, partially offset by an increase of $9.8 million in processing and treating equipment revenue. Adjusted gross margin increased during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 due to higher expenses on a specific project in the prior year period. Adjusted gross margin percentage increased during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 due to the higher expenses discussed above during the prior year period and a shift in product mix during the current year period.

Costs and Expenses

(dollars in thousands)

	Three Months Ended March 31,
	2021		2020		Change		% Change
Selling, general and administrative	$	32,631	$	33,560	$	(929)	(3)	%
Depreciation and amortization	42,499		31,951		10,548		33	%
Restructuring and other charges	624		207		417		201	%
Interest expense	9,964		9,953		11		—	%
Other expense, net	3,061		294		2,767		941	%

Selling, general and administrative

SG&A expense decreased during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 primarily due to a decrease in allowance for doubtful accounts recorded during the prior year period primarily due to the expected impact of COVID-19 on our customers, partially offset by increases in legal and network related expenses in the current year period. SG&A expense as a percentage of revenue was 24% and 21% during the three months ended March 31, 2021 and 2020, respectively.

Depreciation and amortization

Depreciation and amortization expense during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 increased primarily due to approximately $7.7 million of additional depreciation expense recognized in the current year period on a contract operations project due to changes in the remaining terms of a contract and approximately $2.9 million in depreciation for equipment on a contract operations project that was not operating in the prior year period. Additionally, in the first quarter of 2021, we evaluated the salvage values of our property, plant and equipment. As a result of this evaluation, we changed the salvage values for our compression equipment to a maximum salvage value of 5% from 15%. During the three months ended March 31, 2021, we recorded an increase to depreciation expense of approximately $0.9 million as a result of this change in salvage value. The estimated increase in depreciation expense during 2021 will be approximately $8 million.

Restructuring and other charges

The energy industry’s focus on capital discipline and improving returns has caused delays in the timing of new equipment orders. As a result, in the third quarter of 2019, we announced a cost reduction plan primarily focused on workforce reductions. We incurred restructuring and other charges associated with these activities of $0.6 million and $0.2 million during the three months ended March 31, 2021 and 2020, respectively.

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Other expense, net

The change in other expense, net, was primarily due to foreign currency losses of $5.1 million during the three months ended March 31, 2021 compared to foreign currency losses of $1.4 million during the three months ended March 31, 2020. The increase in losses was primarily due to the impact of devaluation on the Argentine Peso during the current year period. Foreign currency losses included translation losses of $1.5 million and translation gains of $1.1 million during the three months ended March 31, 2021 and 2020, respectively, related to the currency remeasurement of our foreign subsidiaries’ non-functional currency denominated intercompany obligations. During the three months ended March 31, 2021, we recognized losses on foreign currency exchange contracts of $0.9 million. The change in other expense, net, also included an increase of $2.0 million in interest income in the current year period.

Income Taxes

(dollars in thousands)

	Three Months Ended March 31,
	2021			2020			Change			% Change
Provision for income taxes	$	7,456		$	9,330		$	(1,874)		(20)	%
Effective tax rate	(34.6)		%	(138.4)		%	103.8		%	(75)	%

Our effective tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn, or losses we incur, in those jurisdictions. It is also affected by discrete items that may occur in any given year but are not consistent from year to year. Our effective tax rate is also affected by valuation allowances recorded against loss carryforwards in the U.S. and certain other jurisdictions, foreign withholding taxes and changes in foreign currency exchange rates.

The following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 21% and our effective tax rate of (34.6)% for the three months ended March 31, 2021: (i) a 6.7% positive impact resulting from unrecognized tax benefits under FASB’s Interpretation No. 48 of Financial Accounting Standard 109, (ii) a (12.1)% negative impact resulting from foreign currency devaluations in Argentina, (iii) a (20.2)% negative impact resulting from foreign taxes in excess of the U.S. tax rate and other rate drivers, (iv) a (12.6)% negative impact resulting from deemed inclusions in the U.S. and (v) a (9.5)% negative impact resulting from an addition of valuation allowances against U.S. deferred tax assets.

Discontinued Operations

(dollars in thousands)

	Three Months Ended March 31,
	2021		2020		Change		% Change
Loss from discontinued operations, net of tax	$	(873)	$	(2,231)	$	1,358	(61)	%

Loss from discontinued operations, net of tax, includes our Belleli EPC business and our U.S. compression fabrication business.

Loss from discontinued operations, net of tax, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 decreased due to a $1.5 million decrease in loss from U.S. compression. The decrease in loss in U.S. compression business was primarily driven by the decrease in activity for the business. For further details on our discontinued operations, see Note 3 to the Financial Statements.

Liquidity and Capital Resources

Our unrestricted cash balance was $42.6 million at March 31, 2021 compared to $40.3 million at December 31, 2020. Working capital decreased to $150.9 million at March 31, 2021 from $154.7 million at December 31, 2020. The decrease in working capital was primarily due to an increase in accrued liabilities and decreases in accounts receivables and inventory, partially offset by decreases in accounts payable, contract liabilities and discontinued operations. The increase in accrued liabilities was due to interest accrued for the 8.125% senior unsecured notes due 2025 (the “2017 Notes”). The decrease in accounts receivables was due to payments from customers. The decrease in inventory was primarily driven by the progression of product sales activity. The decrease in accounts payable was largely caused by the timing of purchases and payments to suppliers during the current year period. The decrease in contract liabilities was primarily driven by the progression of product sales projects and the timing of milestones billings in the Middle East and Africa region. The decrease in current liabilities associated with discontinued operations was driven by the decrease in activities in our U.S. compression fabrication business.

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Our cash flows from operating, investing and financing activities, as reflected in the statements of cash flows, are summarized in the following table (in thousands):

	Three Months Ended March 31,
	2021		2020
Net cash provided by (used in) continuing operations:
Operating activities	$	12,461	$	21,262
Investing activities	(6,987)		(16,643)
Financing activities	6,890		10,552
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(163)		(513)
Discontinued operations	(9,276)		(13,208)
Net change in cash, cash equivalents and restricted cash	$	2,925	$	1,450

Operating Activities.  The decrease in net cash provided by operating activities during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily attributable to decreases in adjusted gross margin for our contract operations and aftermarket services segment and decreases in working capital, partially offset by improved adjusted gross margin for our product sales segment. Working capital changes during the three months ended March 31, 2021 included a decrease of $8.7 million in accounts receivable and notes, a decrease of $2.0 million in inventory and an increase of $11.4 million in contract assets and contract liabilities, net. Working capital changes during the three months ended March 31, 2020 included a decrease of $30.9 million in contract assets and contract liabilities, net, an increase of $1.6 million in inventory and a decrease of $33.4 million in accounts payable and accrued liabilities.

Investing Activities.  The decrease in net cash used in investing activities during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily attributable to a $9.6 million decrease in capital expenditures. The decrease in capital expenditures was primarily driven by the timing of awards and growth capital expenditures for new contract operations projects.

Financing Activities.  The decrease in net cash provided by financing activities during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily attributable to a decrease in net borrowings of $4.2 million on our long-term debt.

Discontinued Operations.  The decrease in net cash used in discontinued operations during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily attributable to working capital changes related to our U.S. compression fabrication business.

Capital Requirements.  Our contract operations business is capital intensive, requiring significant investment to maintain and upgrade existing operations. Our capital spending is primarily dependent on the demand for our contract operations services and the availability of the type of equipment required for us to render those contract operations services to our customers. Our capital requirements have consisted primarily of, and we anticipate will continue to consist of, the following:

•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.

The majority of our growth capital expenditures are related to installation costs on contract operations services projects and acquisition costs of new compressor units and processing and treating equipment that we add to our contract operations fleet. In addition, growth capital expenditures can include the upgrading of major components on an existing compressor unit where the current configuration of the compressor unit is no longer in demand and the compressor unit is not likely to return to an operating status without the capital expenditures. These latter expenditures substantially modify the operating parameters of the compressor unit such that it can be used in applications for which it previously was not suited. Maintenance capital expenditures are related to major overhauls of significant components of a compressor unit, such as the engine, compressor and cooler, that return the components to a “like new” condition, but do not modify the applications for which the compressor unit was designed.

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We generally invest funds necessary to manufacture contract operations fleet additions when our idle equipment cannot be reconfigured to economically fulfill a project’s requirements and the new equipment expenditure is expected to generate economic returns over its expected useful life that exceeds our targeted return on capital. We currently plan to spend approximately $80 million to $90 million in capital expenditures during 2021, including (1) approximately $60 million to $70 million on contract operations growth capital expenditures based on contracts currently in our backlog and (2) approximately $20 million on equipment maintenance capital related to our contract operations business and other capital expenditures.

Historically, we have financed capital expenditures with a combination of net cash provided by operating and financing activities. Our ability to access the capital markets may be restricted at the time when we would like, or need, to do so, which could have an adverse impact on the cost and access to capital and our ability to maintain our operations and to grow. For example, COVID-19 disrupted the broader financial markets and the capital markets for energy service related companies continue to be impacted. If any of our lenders become unable to perform their obligations under the Amended Credit Agreement, our borrowing capacity under our revolving credit facility could be reduced. Inability to borrow additional amounts under our revolving credit facility could limit our ability to fund our future growth and operations. Based on current market conditions, we expect that net cash provided by operating activities and borrowings under our revolving credit facility will be sufficient to finance our operating expenditures, capital expenditures and other contractual cash obligations, including our debt obligations. However, if net cash provided by operating activities and borrowings under our revolving credit facility are not sufficient, we may seek additional debt or equity financing.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and financial markets and created significant volatility and disruption across most industries. Efforts to mitigate the spread of COVID-19 have also resulted in decreased energy demand and additional weakness in energy pricing. The broader implications of COVID-19 on our customers and our long-term future results of operations and overall financial condition remains uncertain.

Long-Term Debt. We and our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”), are parties to an amended and restated credit agreement (the “Amended Credit Agreement”) consisting of a $650.0 million revolving credit facility expiring in October 2023.

During the three months ended March 31, 2021 and 2020, the average daily borrowings of long-term debt were $578.1 million and $488.1 million, respectively. The weighted average annual interest rate on outstanding borrowings under our revolving credit facility at March 31, 2021 and 2020 was 3.2% and 3.0%, respectively. LIBOR and certain other “benchmarks” have been subject of national, international and other regulatory guidance and proposals for reform. In particular, on July 27, 2017, the United Kingdom’s Financial Conduct Authority (the “FCA”), which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. On March 5, 2021, the FCA announced that USD LIBOR will no longer be published after June 30, 2023. It is unclear whether, at that time, LIBOR will cease to exist or if new methods of calculating LIBOR will be established. Central banks and regulators in a number of major jurisdictions (for example, U.S., United Kingdom, European Union, Switzerland, and Japan) have convened working groups to find and implement the transition to suitable replacement benchmarks. The Alternative Reference Rates Committee, a steering committee consisting of large U.S. financial institutions convened by the U.S. Federal Reserve Board and the Federal Reserve Bank of New York, has recommended replacing LIBOR with the Secured Overnight Financing Rate (“SOFR”), an index supported by short-term Treasury repurchase agreements. We are continuing to evaluate and monitor financial and non-financial impacts and risks that may result when LIBOR rates are no longer published.

As of March 31, 2021, we had $7.5 million in outstanding letters of credit under our revolving credit facility, and taking into account guarantees through outstanding letters of credit, we had undrawn capacity of $418.8 million under our revolving credit facility. Our Amended Credit Agreement limits our Total Debt to EBITDA ratio (as defined in the Amended Credit Agreement) on the last day of the fiscal quarter to no greater than 4.50 to 1.0. As a result of this limitation, $109.8 million of the $418.8 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of March 31, 2021.

The Amended Credit Agreement contains various covenants with which we, EESLP and our respective restricted subsidiaries must comply, including, but not limited to, limitations on the incurrence of indebtedness, investments, liens on assets, repurchasing equity, making distributions, transactions with affiliates, mergers, consolidations, dispositions of assets and other provisions customary in similar types of agreements. We are required to maintain, on a consolidated basis, a minimum interest coverage ratio (as defined in the Amended Credit Agreement) of 2.25 to 1.00; a maximum total leverage ratio (as defined in the Amended Credit Agreement) of 4.50 to 1.00; and a maximum senior secured leverage ratio (as defined in the Amended Credit Agreement) of 2.75 to 1.00. As of March 31, 2021, we maintained a 5.0 to 1.0 interest coverage ratio, a 3.8 to 1.0 total leverage ratio and a 1.5 to 1.0 senior secured leverage ratio. As of March 31, 2021, we were in compliance with all financial covenants under the Amended Credit Agreement.

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In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. issued the 2017 Notes, which consisted of $375.0 million aggregate principal amount of the senior unsecured notes which have $350.0 million outstanding as of March 31, 2021. We guarantee the 2017 Notes on a senior unsecured basis. We may redeem the 2017 Notes at any time in cash, in whole or part, at certain redemption prices, including the applicable make-whole premium plus accrued and unpaid interest, if any, to the date of redemption.

We may from time to time seek to retire, extend or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such extensions, repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Unrestricted Cash. Of our $42.6 million unrestricted cash balance at March 31, 2021, $42.3 million was held by our non-U.S. subsidiaries. In the event of a distribution of earnings to the U.S. in the form of dividends, we may be subject to foreign withholding taxes. We do not believe that the cash held by our non-U.S. subsidiaries has an adverse impact on our liquidity because we expect that the cash we generate in the U.S., the available borrowing capacity under our revolving credit facility and the repayment of intercompany liabilities from our non-U.S. subsidiaries will be sufficient to fund the cash needs of our U.S. operations for the foreseeable future.

Share Repurchase Program. On February 20, 2019, our board of directors approved a share repurchase program under which the Company is authorized to purchase up to $100.0 million of its outstanding common stock through February 2022. The timing and method of any repurchases under the program will depend on a variety of factors, including prevailing market conditions among others. Purchases under the program may be suspended or discontinued at any time and we have no obligation to repurchase any amount of our common shares under the program. Shares of common stock acquired through the repurchase program are held in treasury at cost. During the three months ended March 31, 2021 and 2020, we did not repurchase any shares under this program. As of March 31, 2021, the remaining authorized repurchase amount under the share repurchase program was $57.7 million.

Dividends.  We do not currently anticipate paying cash dividends on our common stock. We currently intend to retain our future earnings to support the growth and development of our business. The declaration of any future cash dividends and, if declared, the amount of any such dividends, will be subject to our financial condition, earnings, capital requirements, financial covenants, applicable law and other factors our board of directors deems relevant.

Supplemental Guarantor Financial Information

In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. (together, the “Issuers”) issued the 2017 Notes, which consisted of $375.0 million aggregate principal amount senior unsecured notes which have $350.0 million outstanding as of March 31, 2021. The 2017 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by Exterran Corporation (“Parent”). The 2017 Notes and Parent’s guarantee are:

•Senior unsecured obligations of each of the Issuers and the Parent, as applicable;

•Equal in right of payment with all of the existing and future senior unsecured indebtedness and senior unsecured guarantees of each of the Issuers and the Parent, as applicable;

•Senior in right of payment to all subordinated indebtedness and subordinated guarantees of each of the Issuers and the Parent, as applicable;

•Effectively junior in right of payment to all existing and future secured indebtedness and secured guarantees of each of the Issuers and the Parent, as applicable, to the extent of the value of the assets securing such indebtedness or guarantees; and

•Structurally junior in right of payment to all existing and future indebtedness, guarantees and other liabilities (including trade payables) and any preferred equity of each of the Parent’s subsidiaries (other than the Issuers) that are not guarantors of the 2017 Notes.

Parent’s guarantee will be automatically and unconditionally released and discharged upon (i) the merger of the Parent into the Issuers, (ii) a legal defeasance, covenant defeasance or satisfaction and discharge of the indenture governing the 2017 Notes or (iii) the liquidation or dissolution of the Parent, provided in each case no default or event of default has occurred and is continuing under the indenture governing the 2017 Notes.

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Federal bankruptcy and state fraudulent transfer laws permit a court to void all or a portion of the obligations of the Parent pursuant to its guarantee, or to subordinate the Parent’s obligations under its guarantee to claims of the Parent’s other creditors, reducing or eliminating the ability to recover under the guarantee. Although laws differ among jurisdictions, in general, under applicable fraudulent transfer or conveyance laws, the guarantee could be voided as a fraudulent transfer or conveyance if (i) the guarantee was incurred with the intent of hindering, delaying or defrauding creditors or (ii) the Parent received less than reasonably equivalent value or fair consideration in return for incurring the guarantee and either (x) the Parent was insolvent or rendered insolvent by reason of the incurrence of the guarantee or subsequently became insolvent for other reasons, (y) the incurrence of the guarantee left the Parent with an unreasonably small amount of capital to carry on the business, or (z) the Parent intended to, or believed that it would, incur debts beyond its ability to pay such debts as they mature. A court would likely find that Parent did not receive reasonably equivalent value or fair consideration for its guarantee if it determined that the Parent did not substantially benefit directly or indirectly from the issuance of the 2017 Notes. If a court were to void a guarantee, noteholders would no longer have a claim against the Parent. In addition, the court might direct noteholders to repay any amounts that you already received from the Parent. Parent’s guarantee contains a provision intended to limit the Parent’s liability under the guarantee to the maximum amount that the Parent could incur without causing the incurrence of obligations under its guarantee to be deemed a fraudulent transfer. This provision may not be effective to protect the guarantee from being voided under fraudulent transfer law.

All consolidated subsidiaries of Exterran other than the Issuers are collectively referred to as the “Non-Guarantor Subsidiaries.” The 2017 Notes are structurally subordinated to any indebtedness and other liabilities (including trade payables) of any of the Non-Guarantor Subsidiaries. The Non-Guarantor Subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the 2017 Notes, or to make any funds available therefor, whether by dividends, loans, distributions or other payments. Holders of the 2017 Notes will have no claim as a creditor against any Non-Guarantor Subsidiaries. In the event of bankruptcy, liquidation or reorganization of any of the Non-Guarantor Subsidiaries, such subsidiaries will pay current outstanding obligations to the holders of their debt and their trade creditors before they will be able to distribute any of their assets to the Parent or the Issuers. As a result, in the context of a bankruptcy, liquidation or reorganization, holders of the 2017 Notes would likely receive less, ratably, than holders of indebtedness and other liabilities (including trade payables of such entities).

The Parent and EESLP are also parties to our credit agreement, which covenants with which the Parent, EESLP and our respective restricted subsidiaries must comply, including, but not limited to, limitations on the incurrence of indebtedness, investments, liens on assets, repurchasing equity, making distributions, transactions with affiliates, mergers, consolidations, dispositions of assets and other provisions customary in similar types of agreements. These covenants may impact the ability of the Parent and EESLP to repay the 2017 Notes or amounts owing under Parent’s guarantee.

Summarized Financial Information (in thousands)

As a result of the Parent’s guarantee, we are presenting the following summarized financial information for the Issuers’ and Parent (collectively referred to as the “Obligated Group”) pursuant to Rule 13-01 of Regulation S-X, Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. For purposes of the following summarized financial information, transactions between the Parent and the Issuers, presented on a combined basis, have been eliminated and information for the Non-Guarantor Subsidiaries have been excluded. Amounts due from or due to the Non-Guarantor Subsidiaries and other related parties, as applicable, have been separately presented within the summarized financial information.

	Three Months Ended March 31, 2021
Summarized Statement of Operations:
Revenues(1)	$	18,738
Cost of sales(1)	10,564
Loss from continuing operations	(54,345)
Net loss	(54,896)

(1)Includes revenue and cost of sales for intercompany sales from the Obligated Group the Non-Guarantor Subsidiaries during the three months ended March 31, 2021.

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	March 31, 2021		December 31, 2020
Summarized Balance Sheet:
ASSETS
Intercompany receivables due from non-guarantors	$	208,860	$	206,267
Total current assets	336,210		334,675
Total long-term assets	208,938		230,334
LIABILITIES AND STOCKHOLDERS’ EQUITY
Intercompany payables due to non-guarantors	$	363,053	$	362,221
Total current liabilities	434,240		439,707
Long-term liabilities	614,990		613,994

Non-GAAP Financial Measures

We define EBITDA, as adjusted, as net income (loss) excluding income (loss) from discontinued operations (net of tax), cumulative effect of accounting changes (net of tax), income taxes, interest expense (including debt extinguishment costs), depreciation and amortization expense, impairment charges, restructuring and other charges, non-cash gains or losses from foreign currency exchange rate changes recorded on intercompany obligations, expensed acquisition costs and other items. We believe EBITDA, as adjusted, is an important measure of operating performance because it allows management, investors and others to evaluate and compare our core operating results from period to period by removing the impact of our capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), our subsidiaries’ capital structure (non-cash gains or losses from foreign currency exchange rate changes on intercompany obligations), tax consequences, impairment charges, restructuring and other charges, expensed acquisition costs and other items. Management uses EBITDA, as adjusted, as a supplemental measure to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, the compensation committee has used EBITDA, as adjusted, in evaluating the performance of the Company and management and in evaluating certain components of executive compensation, including performance-based annual incentive programs. Our EBITDA, as adjusted, may not be comparable to a similarly titled measure of another company because other entities may not calculate EBITDA in the same manner.

EBITDA, as adjusted, is not a measure of financial performance under GAAP, and should not be considered in isolation or as an alternative to net income (loss), cash flows from operating activities or any other measure determined in accordance with GAAP. Items excluded from EBITDA, as adjusted, are significant and necessary components to the operation of our business, and, therefore, EBITDA, as adjusted, should only be used as a supplemental measure of our operating performance.

The following table reconciles our net loss to EBITDA, as adjusted (in thousands):

	Three Months Ended March 31,
	2021		2020
Net loss	$	(29,873)	$	(18,304)
Loss from discontinued operations, net of tax	873		2,231
Depreciation and amortization	42,499		31,951
Restructuring and other charges	624		207
Interest expense	9,964		9,953
(Gain) loss on currency exchange rate remeasurement of intercompany balances	1,511		(1,121)
Provision for income taxes	7,456		9,330
EBITDA, as adjusted	$	33,054	$	34,247

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks associated with changes in foreign currency exchange rates due to our significant international operations. While the majority of our revenue contracts are denominated in, or indexed to, the U.S. dollar, certain contracts or portions of certain contracts, most notably within our contract operations segment, are exposed to foreign currency fluctuations. Approximately 75% of revenues in our contract operations segment are denominated in the U.S. dollar. The currencies for which we have our largest exchange rate exposures are related to changes in the Argentine Peso and the Brazilian Real. During the three months ended March 31, 2021, the Argentine Peso depreciated by approximately 8% and the Brazilian Real depreciated by approximately 10%. The impact of foreign currency risk on income for these contracts is generally mitigated by matching costs with revenues in the same currency.

Additionally, the net assets and liabilities of these operations are exposed to changes in foreign currency exchange rates. These operations may also have net assets and liabilities not denominated in their functional currency, which exposes us to changes in foreign currency exchange rates that impact income. We recorded foreign currency losses of $5.1 million and $1.4 million in our statements of operations during the three months ended March 31, 2021 and 2020, respectively. Our foreign currency losses are primarily due to exchange rate fluctuations related to monetary asset balances denominated in currencies other than the functional currency, including foreign currency exchange rate changes recorded on intercompany obligations. Foreign currency losses included translation losses of $1.5 million and translation gains of $1.1 million during the three months ended March 31, 2021 and 2020, respectively, related to the functional currency remeasurement of our foreign subsidiaries’ non-functional currency denominated intercompany obligations. During the three months ended March 31, 2021, we entered into forward currency exchange contracts to mitigate exposures in U.S. dollars related to the Argentine Peso. As a result of entering into these contracts, we recognized losses of $0.9 million during the three months ended March 31, 2021. Changes in exchange rates may create gains or losses in future periods to the extent we maintain net assets and liabilities not denominated in the functional currency.

Item 4.  Controls and Procedures

This Item 4 includes information concerning the controls and controls evaluation referred to in the certifications of our Chief Executive Officer and Chief Financial Officer required by Rule 13a-14 of the Exchange Act included in this Quarterly Report as Exhibits 31.1 and 31.2.

Management’s Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosures.

In connection with the preparation of this Quarterly Report on Form 10-Q, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2021. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed in reports that we file or submit under the Exchange Act is accumulated and communicated to management, and made known to our principal executive officer and principle financial officer, on a timely basis to ensure that it is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

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.

For further details on the current legal proceedings, see Note 13 to the Financial Statements.

Item 1A.  Risk Factors

There have been no material changes or updates to our risk factors that were previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

(a)  Not applicable.

(b)  Not applicable.

(c)  The following table summarizes our repurchases of equity securities during the three months ended March 31, 2021:

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 (2)	Approximate Dollar Value of Shares yet to be Purchased Under the Publicly Announced Plans or Programs (2)
January 1, 2021 - January 31, 2021	2,808	$	4.42	—	$	57,726,011
February 1, 2021 - February 29, 2021	—	—		—	57,726,011
March 1, 2021 - March 31, 2021	61,618	4.84		—	57,726,011
Total	64,426	$	4.82	—	$	57,726,011

____________________

(1)     Total number of shares repurchased includes 64,426 shares withheld to satisfy employees’ tax withholding obligations in connection with vesting of restricted stock awards during the period.

(2)     On February 20, 2019, our board of directors approved a share repurchase program, under which the Company is authorized to purchase up to $100.0 million of its outstanding common stock through February 2022. The timing and method of any repurchases under the program will depend on a variety of factors, including prevailing market conditions among others. Purchases under the program may be suspended or discontinued at any time, and we have no obligation to repurchase any amount of our common shares under the program. Shares of common stock acquired through the repurchase program are held in treasury at cost.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

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Item 6.  Exhibits

Exhibit No.	Description
10.1†*	Form of Award Notice and Agreement for Performance Cash-Settled Units pursuant to the 2020 Omnibus Incentive Plan
10.2†*	Form of Award Notice and Agreement for Time-Vested Cash-Settled Restricted Stock pursuant to the 2020 Omnibus Incentive Plan
10.3†*	Form of Award Notice and Agreement for Common Stock Award for Non-Employee Directors pursuant to the 2020 Omnibus Incentive Plan
22.1*	List of Guarantor Subsidiaries, incorporated by reference to Exhibit 22.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020
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.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 1010).

________________________________

†	Management contract or compensation plan or arrangement.
*	Filed herewith.
**	Furnished, not filed.

37

SIGNATURES

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

	Exterran Corporation
Date: May 4, 2021	By:	/s/ DAVID A. BARTA
		David A. Barta
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

38

EX-10.1

Exhibit 10.1

EXTERRAN CORPORATION

AWARD NOTICE AND AGREEMENT
2021 PERFORMANCE CASH-SETTLED UNITS

Exterran Corporation (the “Company”), on behalf of your employer, a wholly-owned subsidiary of the Company, has granted to you a Performance Award (your “Award”) under the Exterran Corporation 2020 Omnibus Incentive Plan (as it may be amended from time to time, the “Plan”), subject to the terms and conditions set forth in this Award Notice (this “Award Notice”) and the Plan. All capitalized terms not explicitly defined in this Award Notice but defined in the Plan shall have the respective meanings ascribed to them in the Plan.

The material terms of your Award are as follows:

1.Award. You (EMPLOYEE NAME) have been granted a number of performance units (the “Performance Units”), the payout of which is based on the attainment of certain performance measures as described herein. The Award is granted at Target; however, the actual number of Performance Units that become earned and payable hereunder may be greater or less than your Target Award. “Target Award” means the number of Performance Units that would be earned by you if the Performance Measures (as specified on Exhibit A) are met at the applicable target level at the end of the Performance Period.

2.Grant Date. The Grant Date of this Award is March 4, 2021.

3.Vesting. Subject to and in accordance with Sections 4, 5 and 6 below, your Award will become payable at 0% to 200% of the Performance Units based on achievement by the Company of the applicable pre-determined Performance Measures over the applicable performance period (the “Performance Period”). The Performance Units subject to this Award will vest on the second anniversary of the Grant Date (“Vest Date”); however, except as set forth in Sections 4 and 5 below, you must remain in continuous service as an Employee of the Company or an Affiliate at all times from the Grant Date up to and including the applicable Vest Date for the Award to vest.

Exhibit A hereto provides (a) the Performance Period for your Award, (b) an explanation of the Performance Measures and (c) the percentage of the Award that you may earn, if any, based on the achievement of the Performance Measures.

4.Termination of Service.

(a)    Subject to Sections 4(b) and 4(c) below, if your status as an Employee of the Company or an Affiliate terminates for any reason, the unvested portion of your Award will be automatically cancelled and forfeited on the date of such termination unless the Committee directs otherwise.

(b)    If your status as an Employee of the Company or an Affiliate terminates as a result of your death or Disability, your Target Award will immediately vest in full, and all restrictions applicable to your Award will cease as of that date. Any such date on which such accelerated vesting occurs pursuant to this Section 4(b) is referred to in this Award Notice as an “Accelerated Vest Date”. Not later than the sixtieth (60th) day following the Accelerated Vest Date, you will receive a lump sum cash payment equal to your Target Award multiplied by the Fair Market Value of a share of Common Stock on the Accelerated Vest Date, less applicable taxes and withholdings. Employees outside of the U.S. may be paid directly by their employer in the applicable local currency converted using an exchange rate at the time of payment, as solely determined by the Committee.

(c)    In the event your status as an Employee of the Company or an Affiliate is terminated and the Committee desires in its discretion to accelerate vesting of your Award, you agree that, in consideration

1

Exterran Corporation 2021 Performance Cash Settled Award

of the Committee’s agreement to vest your Award, if requested, you will execute an additional agreement containing additional obligations owed by you to the Company or an Affiliate.

5.Corporate Change. Notwithstanding anything to the contrary in this Award Notice, this section will govern the vesting of your Award on and after the date a Corporate Change is consummated. With respect to employees outside of the U.S., payments pursuant to this section may be paid directly by their employer in the applicable local currency converted using an exchange rate at the time of payment, as solely determined by the Committee.

(a)If, in connection with a Corporate Change, the Company’s successor replaces your existing Award (a “Replaced Award”) with a Replacement Award, and your employment is thereafter terminated by the Company or an Affiliate (or successor) without Cause within 18 months following the Corporate Change, then the unvested portion of your Replacement Award, if any, as of the date of your termination of employment will become 100% vested and free of all restrictions, with payment made not later than the sixtieth (60th) day following your termination of employment; provided that if the level of performance achieved by the Company with respect to the Performance Measures in Section 6 below has not been determined, then such Performance Measures shall be deemed satisfied as if target performance was achieved. In general, a Replacement Award means a substitute award that, compared to the award being replaced, is of the same type of award, has at least an equal intrinsic value, has vesting that continues on the same terms, and has other terms and conditions are not less favorable to the holder of the Award.

(b)If, in connection with a Corporate Change, the Company’s successor does not provide a Replacement Award to replace your existing Award, then the unvested portion of your Award, if any, will immediately become 100% vested and free of all restrictions, with payment made not later than the sixtieth (60th) day following the Corporate Change; provided that if the level of performance achieved by the Company with respect to the Performance Measures in Section 6 below has not been determined, then such Performance Measures shall be deemed satisfied as if target performance was achieved.

(c)An Award shall qualify as a Replacement Award if: (i) it is of the same type as the Replaced Award (or, it is of a different type as the Replaced Award, provided that the Committee, as constituted immediately prior to the Corporate Change, finds such type acceptable); (ii) it has an intrinsic value at least equal to the value of the Replaced Award; (iii) it relates to publicly traded equity securities of the Company or its successor in the Corporate Change or another entity that is affiliated with the Company or its successor following the Corporate Change; (iv) its terms and conditions comply with Section 6(a); (v) vesting conditions continue on the same terms as set forth in the Replaced Award; and (vi) its other terms and conditions are not less favorable to the holder of the Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Corporate Change). Without limiting the generality of the foregoing, a Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 6(c) are satisfied shall be made by the Committee, as constituted immediately before the Corporate Change, in its sole discretion.

6.Determination of Earned Units, Settlement and Payment. As soon as administratively practicable following the conclusion of the Performance Period, the Committee shall certify in writing the level of performance achieved by the Company with respect to the Performance Measures (the “Achievement Percentage”). The actual number of Performance Units earned under your individual Award (the “Earned Units”) shall be determined by the Committee (or any officer of the Company to whom authority to determine such adjustment is delegated by the Committee) and based on the Company’s Achievement Percentage and your Target Award. Not later than the sixtieth (60th) day following the applicable Vest Date of such Earned Units, you will receive a lump sum cash payment equal to the number of the vested Earned Units multiplied by the Fair Market Value of a share of Common Stock on the Vest Date, less applicable taxes and withholding. Employees outside of the U.S. may be paid directly by their employer in the applicable local currency converted using an exchange rate at the time of payment, as solely determined by the Committee.

2

Exterran Corporation 2021 Performance Cash Settled Award

Except as provided below, this Award is intended to be exempt under Section 409A of the Code (“Section 409A”) under the short-term deferral exclusion and will be interpreted and operated consistent with such intent. If, for any reason, the Company determines that this Award is subject to Section 409A, the Company shall have the right in its sole discretion (without any obligation to do so or to indemnify you or any other person for failure to do so) to adopt such amendments to the Plan or this Award Notice, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Company determines are necessary or appropriate to provide for either the Performance Units to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

7.No Stockholder Rights. The Performance Units represent an unfunded, unsecured and contingent right to receive payment. You have no rights as a stockholder with respect to any Performance Units.

8.Non-Transferability.You cannot sell, transfer, pledge, exchange, hypothecate or otherwise dispose of your Award except as otherwise set forth in Paragraph XV(i) of the Plan.

9.No Right to Continued Service. Nothing in this Award Notice guarantees your continued status as an Employee or other service provider of the Company or any of its Affiliates or interferes in any way with the right of the Company or an Affiliate to terminate your status as an Employee or other service provider at any time.

10.Data Privacy. You consent to the collection, use, processing and transfer of your personal data as described in this paragraph. You understand that the Company and/or its Affiliates hold certain personal information about you (including your name, address and telephone number, date of birth, social security number, social insurance number, etc.) for the purpose of administering the Plan (“Data”). You also understand that the Company and/or its Affiliates will transfer this Data amongst themselves as necessary for the purpose of implementing, administering and managing your participation in the Plan, and that the Company and/or its Affiliates may also transfer this Data to any third parties assisting the Company in the implementation, administration and management of the Plan. You authorize them to receive, possess, use, retain and transfer the Data, in electronic or other form, for these purposes. You also understand that you may, at any time, review the Data, require any necessary changes to the Data or withdraw your consent in writing by contacting the Company. You further understand that withdrawing your consent may affect your ability to participate in the Plan.

11.Withholding. Your Award is subject to applicable income and/or social insurance tax withholding obligations (including, without limitation, any locally applicable taxes, and the Company and its Affiliates may, in their sole discretion, withhold a sufficient amount from the amount that is otherwise payable to you pursuant to your Award to satisfy any such withholding obligations. The ultimate liability for tax-related items due to your receipt of this Award is yours and may exceed the amount actually withheld by the Company (or any of its Affiliates, including, without limitation, your employer). If necessary, the Company reserves the right to withhold from your regular earnings an amount sufficient to meet the withholding obligations. The Company makes no representations regarding the treatment of tax items relating to this Award and is under no obligation to structure the terms of any award to reduce your liability for tax-related items or to achieve a particular tax result. If you become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, the Company and/or its Affiliates, , may be required to withhold or account for tax-related items in more than one jurisdiction, and you may have tax liability in more than one jurisdiction. You authorize the Company and/or your employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all tax-related items by withholding from your Award, wages or other cash compensation paid to Employee by the Company and/or your employer or any other of the Affiliates.

12.Plan Governs. This Award Notice is subject to the terms of the Plan, a copy of which is available at no charge through your stock account or which will be provided to you upon request. All the

3

Exterran Corporation 2021 Performance Cash Settled Award

terms and conditions of the Plan, as it may be amended from time to time, and any rules, guidelines and procedures that may from time to time be established pursuant to the Plan, are hereby incorporated into this Award Notice including, but not limited to, Paragraphs XV(l) (“Section 409A of the Code”) and XV(j) (“Clawback”) thereof. In the event of a discrepancy between this Award Notice and the Plan, the Plan shall govern.

13.Adjustment. This Award shall be subject to adjustment as provided in Paragraph XIII of the Plan.

14.Modifications. The Company may, without your consent, make any change to this Award Notice that is not materially adverse to your rights under this Award Notice or the Plan.

15.Non-Solicitation/Non-Competition/Confidentiality/Non-Disparagement Agreement. The greatest assets of the Company and its Affiliates (“Exterran” in this Section 15) are its employees, directors, customers, and confidential information. In recognition of the increased risk of unfairly losing any of these assets, Exterran has adopted this Non-Solicitation/Non-Competition/Confidentiality/Non-Disparagement Agreement as set forth in this Section 15, the terms of which you accept and agree to by accepting the Award.

i.In order to assist you with your employment-related duties, Exterran has provided and shall continue to provide you with access to confidential and proprietary operational information and other confidential information which is either information not known by actual or potential competitors and third parties or is proprietary information of Exterran (“Confidential Information”). Such Confidential Information shall include, without limitation, information regarding Exterran’s customers and suppliers, employees, business operations, product lines, services, pricing and pricing formulae, machines and inventions, research, knowhow, manufacturing and fabrication techniques, engineering and product design specifications, financial information, business plans and strategies, information derived from reports and computer systems, work in progress, marketing and sales programs and strategies, cost data, methods of doing business, ideas, materials or information prepared or performed for, by or on behalf of Exterran. You agree, during your service as an Employeeand at all times thereafter, not to use, divulge, or furnish or to make accessible to any third party, company, or other entity or individual, without Exterran’s written consent, any Confidential Information of Exterran, except as required by your job-related duties to Exterran.

ii.You agree that whenever your service as an Employeeof Exterran ends for any reason, (i) you shall return to Exterran all documents containing or referring to Exterran’s Confidential Information as may be in your possession and/or control, with no request being required; and (ii) you shall return all Exterran computers, mobile computing devices, handheld devices, phones and similar equipment, hardware and software, and all Exterran property, files, records, documents, drawings, specifications, lists, equipment and other similar items relating to Exterran’s business coming into your possession and/or control during your employment, with no request being required. You further agree that if company property is in electronic form on a personal computer or device, you will delete all such information from the devices, unless you have reason to believe that you have the sole copy of such information, in which event you will promptly notify the Company so that appropriate action can be taken to transfer such information to the Company.

iii.In connection with your acceptance of the Award under the Plan, and in exchange for the consideration provided hereunder, and in consideration of Exterran disclosing and providing access to Confidential Information, you agree that you will not, during your service as an Employee or other service provider of Exterran, and for one year thereafter, directly or indirectly, for any reason, for your own account or on behalf of or

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Exterran Corporation 2021 Performance Cash Settled Award

together with any other person, entity or organization (i) call on or otherwise solicit, cause, encourage or induce any natural person who is employed by Exterran in any capacity for employment by another company (including, for this purpose, contracting with any person who was an independent contractor (excluding consultant) of Exterran on the date of your employment or during the six (6)-month period preceding the termination of your employment), or (ii) solicit any established customer of Exterran or other service provider of Exterran or interfere with the relationship of Exterran with its established customers or other service providers without, in any of those cases, the prior written consent of Exterran.

iv.In connection with your acceptance of the Award under the Plan, and in exchange for the consideration provided hereunder, and in consideration of Exterran disclosing and providing access to Confidential Information, you agree that you will not, during your service as an Employee or other service provider of Exterran, and for one year thereafter, accept employment or engage in any business activity (whether as a principal, partner, joint venturer, agent, employee, salesperson, consultant, independent contractor, director, or officer) with a “Competitor” (as defined below) of Exterran where such employment or activity would involve your (i) providing, selling or attempting to sell, or assisting in the sale or attempted sale of, any services or products competitive with or similar to those services or products with which you had any involvement, and/or regarding which you had access to any information, during your service as an Employee or other service provider of Exterran (including any products or services being researched or developed by Exterran during your service as an Employee or other service provider of Exterran), or (ii) providing or performing services that are similar to any services that you provided to or performed for Exterran during your service as an Employee or other service provider of Exterran.

For purposes of this Section 15(d), a “Competitor” is any business or entity that, at any time during the one-year period following your separation from employment, provides or seeks to provide, any products or services similar or related to any products sold or any services provided by Exterran. “Competitor” includes, without limitation, any company or business relating to the provision of oil, water and natural gas processing and treatment in the oil and gas industry, including compression, water and power products and services, and midstream infrastructure contract operations and product sales and the supply of aftermarket parts and services globally.

The restrictions set forth in this Section 15(d) will be limited to the geographic areas (i)  where you performed services for Exterran, (ii) where you solicited or served the customers or clients of Exterran, or (iii) otherwise impacted or influenced by your provision of services to Exterran. Notwithstanding the foregoing, you may invest in securities of any entity, solely for investment purposes and without participating in the business thereof, if (A) such securities are traded on any national securities exchange or the National Association of Securities Dealers Automatic Quotation System or equivalent non-U.S. securities exchange, (B) you are not a controlling person of, or a member of a group which controls, such entity, and (C) you do not, directly or indirectly, own three percent (3%) or more of any class of securities of such entity.

v.Subject to Section 16 below, you agree that you will not, directly or indirectly, make any public or private statements (whether orally, in writing, via electronic transmission or otherwise) that disparage, denigrate or malign Exterran or any of its affiliates; any of the businesses, activities, operations, affairs, reputations or prospects of any of the foregoing; or any of the respective officers, employees, directors, managers, partners, agents, members or shareholders of any of the foregoing.

vi.You agree that (i) the terms of this Section 15 are reasonable and constitute an otherwise enforceable agreement to which the terms and provisions of this Section 15 are ancillary or a part of; (ii) the consideration provided by Exterran under this Section 15

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Exterran Corporation 2021 Performance Cash Settled Award

is not illusory; (iii) the restrictions of this Section 15 are necessary and reasonable for the protection of the legitimate business interests and goodwill of Exterran; and (iv) the consideration given by Exterran under this Section 15, including without limitation, the provision by Exterran of Confidential Information to you, gives rise to Exterran’s interests in the covenants set forth in this Section 15.

vii.You and Exterran agree that it was both parties’ intention to enter into a valid and enforceable agreement. You agree that if any covenant contained in this Section 15 is found by a court of competent jurisdiction to contain limitations as to time, geographic area, or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interests of Exterran, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time, geographic area, and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of Exterran.

viii.In the event that Exterran determines that you have breached or attempted or threatened to breach any term of this Section 15, in addition to any other remedies at law or in equity Exterran may have available to it, it is agreed that Exterran shall be entitled, upon application to any court of proper jurisdiction, to a temporary restraining order or preliminary injunction (without necessity of (i) proving irreparable harm, (ii) establishing that monetary damages are inadequate, or (iii) posting any bond with respect thereto) against you prohibiting such breach or attempted or threatened breach by proving only the existence of such breach or attempted or threatened breach. You agree that the period during which the covenants contained in this Section 15 are in effect shall be computed by excluding from such computation any time during which you are in violation of any provision of this Section 15.

ix.You hereby acknowledge that the Award being granted to you under the Plan is an extraordinary item of compensation and is not part of, nor in lieu of, your ordinary wages for services you may render to Exterran.

x.You understand that your obligations under this Section 15 are independent of and do not affect the enforceability of any other restrictive covenants by which you have agreed to be bound in any other agreement with Exterran.

xi.Notwithstanding any other provision of this Award, the provisions of this Section 15 shall be governed, construed and enforced in accordance with the laws of the State of Texas, without giving effect to the conflict of law principles thereof. Any action or proceeding seeking to enforce any provision of this Section 15 shall be brought only in the courts of the State of Texas or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of Texas, and the parties consent to the jurisdiction of such courts in any such action or proceeding and waive any objection to venue laid therein.

16.    Protected Rights. Notwithstanding any other provision of this Award Notice, nothing contained in this Award Notice limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or from providing truthful testimony in response to a lawfully issued subpoena or court order. You understand that this Award Notice does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Exterran.

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Exterran Corporation 2021 Performance Cash Settled Award

17.    Defend Trade Secrets Act.You are hereby notified that under the Defend Trade Secrets Act: (1) no person will be held criminally or civilly liable under federal or state trade secret law for disclosure of a trade secret (as defined in the Economic Espionage Act) that is: (A) made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and (2) a person who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the person and use the trade secret information in the court proceeding, if the person files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

18.    Additional Information. If you require additional information concerning your Award, contact compensation@exterran.com, or log into your account online at www.NetBenefits.com.

19.    No Employment Relationship. As set forth in the introductory paragraph, this grant is on behalf of your employer, a subsidiary of the Company, and is a potential direct payment from and grant by such employing entity. Notwithstanding anything to the contrary in this Award Notice, nothing in this Award Notice shall be deemed to create an employment relationship between you and the Company. This Award Notice is not an employment agreement and does not in any way create any obligation on the part of the Company to employ you.

20.    Clawback. The Award shall be subject to the provisions of any clawback or recoupment policy adopted by the Company’s Board of Directors from time to time, including without limitation the Incentive-Based Compensation Recoupment Policy adopted by the Company’s Board of Directors to be effective on January 1, 2019.

21.    Amendment. Nothing in this Award Notice shall amend any provision of any Severance Benefit Agreement or Change of Control Agreement of any executive, including any provision relating to forfeiture or cancellation of an unvested Award in accordance with Section 4 herein.

22.    Acceptance. If you agree with the terms and conditions of this Award, please indicate your acceptance online at www.NetBenefits.com. Please note that if you reject the Award or do not accept the Award within 30 days of the Grant Date, the Award will be forfeited.

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Exterran Corporation 2021 Performance Cash Settled Award

EXTERRAN CORPORATION AWARD NOTICE

2021 PERFORMANCE CASH SETTLED UNITS

EXHIBIT A

PERFORMANCE MEASURES

Target Number of Units: (INSERT TARGET NUMBER OF UNITS)

Performance Period: The two-year period commencing on January 1, 2021, and ending on December 31, 2022

Performance will be based on the following Performance Measures:

ROA Backlog (50%)

Returns on assets (“ROA”) measure is defined as: Gross margin backlog divided by PPE (Property Plant and Equipment) plus Inventory, as determined by the Human Capital & Compensation Committee (the “Committee”), taking into consideration certain unusual or non-recurring items

EBITDA Percentage Rate (25%)

This measure is defined as EBITDA, as adjusted, divided by Total Revenue, as determined by the Committee.

Relative Total Shareholder Return (TSR) (25%)

This measure is defined as follows, as determined by the Committee:

Twenty trading day average of dividend adjusted closing stock prices ending December 31, 2022, minus twenty trading day average of dividend adjusted closing stock prices ending December 31, 2020

divided by

Twenty trading day average of dividend adjusted closing stock prices ending December 31, 2020

The Company results are ranked against companies in the Company’s Performance Peer Group (as set forth in the Company’s proxy).

For all Performance Measures, straight line interpolation will be used for performance achieved between Threshold and Target and between Target and Maximum performance levels. No amount shall be paid if the performance Achievement Percentage is determined to be less than the Threshold level.

    A-1

EX-10.2

Exhibit 10.2

EXTERRAN CORPORATION

AWARD NOTICE AND AGREEMENT
2021 TIME-VESTED CASH-SETTLED RESTRICTED STOCK UNITS

Exterran Corporation (the “Company”), on behalf of your employer, a wholly-owned subsidiary of the Company, has granted to you restricted stock units under the Exterran Corporation 2020 Omnibus Incentive Plan (as it may be amended from time to time, the “Plan”), subject to the terms and conditions set forth in this Award Notice and Agreement (the “Award Notice”) and the Plan. Each restricted stock unit shall be issued in tandem with a corresponding Dividend Equivalent, which shall entitle you to payments in accordance with Section 2 below. All capitalized terms not explicitly defined in this Award Notice but defined in the Plan shall have the respective meanings ascribed to them in the Plan.

The material terms of your Award are as follows:

1.Award. You (INSERT EMPLOYEE NAME)have been granted (INSERT # UNITS) restricted stock units (the “Award” or “RSUs”), each with a tandem grant of a Dividend Equivalent, subject to the terms and conditions set forth in this Award and the Plan.

2.Dividend Equivalents. Each RSU granted hereunder is hereby granted in tandem with a corresponding Dividend Equivalent, which Dividend Equivalent shall remain outstanding from the Grant Date until the earlier of the payment or forfeiture of the RSU to which it corresponds (the “Dividend Equivalent Period”). Each Dividend Equivalent shall entitle you to receive payments, subject to and in accordance with this Award Notice, in an amount equal to each dividend (including any extraordinary or other non-recurring dividend), in each case, that (a) is made by the Company in respect of the share of Common Stock underlying the RSU to which such Dividend Equivalent relates, and (b) has an applicable Dividend Date (as defined below) occurring during the Dividend Equivalent Period. Such amounts (if any) shall be payable as and when vested RSUs underlying such Dividend Equivalent are paid. Notwithstanding the foregoing, upon the payment or forfeiture of a RSU, the Dividend Equivalent granted in tandem with such paid or forfeited RSU and the Dividend Equivalent Period shall terminate with respect to such RSU. For the avoidance of doubt, a Dividend Equivalent will only entitle you to payments relating to dividends with an applicable Dividend Date occurring between the Grant Date and the date on which you receive payment in respect of the RSU to which it corresponds in accordance with Section 7 below (or, if earlier, the date on which you forfeit the RSU to which it corresponds). The Dividend Equivalents and any amounts that may become distributable in respect thereof shall be treated separately from the RSUs and the rights arising in connection therewith for purposes of Section 409A of the Code (including for purposes of the designation of the time and form of payments required by Section 409A of the Code). For purposes of this Award Notice, “Dividend Date” shall mean, with respect to any dividend made in respect of the Common Stock of the Company, the date preceding the ex-dividend date applicable to such dividend.

3.Grant Date. The Grant Date of this Award is March 4, 2021.

4.Vesting. Your Award will vest on a pro rata basis over a three-year restriction period, with a third of your Award vesting on the first, second and third anniversary of the Grant Date (each such date, a “Vest Date”); however, except as set forth in Sections 5 and 6 below, you must remain in continuous service as an Employee ofthe Company or one of its Affiliates at all times from the Grant Date up to and including the applicable Vest Date for the applicable portion of the Award to vest.

5.Termination of Service.

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Exterran Corporation 2021 Time-Vested Cash-Settled Restricted Stock Units Award

(a)    Subject to Sections 5(b) and 5(c) below, if your status as an Employee of the Company or an Affiliate terminates for any reason, the unvested portion of your Award and the Dividend Equivalents corresponding with such unvested portion of your Award will be automatically cancelled and forfeited on the date of such termination unless the Committee directs otherwise.

(b)    If your status as an Employee of the Company or an Affiliate terminates as a result of your death or Disability, the unvested portion of your Award will immediately vest in full and all restrictions applicable to your Award will cease as of that date. Any such date on which such accelerated vesting occurs pursuant to this Section 5(b) is referred to in this Award Notice as an “Accelerated Vest Date”.

(c)In the event your status as an Employee is terminated and the Committee desires in its discretion to accelerate vesting of your Award, you agree that, in consideration of the Committees’ agreement to vest your Award, if requested, you will execute an additional agreement containing additional obligations owed by you to the Company or an Affiliate.

6.Corporate Change. Notwithstanding anything to the contrary in this Award Notice, this section will govern the vesting of your Award on and after the date a Corporate Change is consummated.

(a) If, in connection with a Corporate Change, the Company’s successor replaces your existing Award (the “Replaced Award”), with a Replacement Award, and your employment is thereafter terminated by the Company or an Affiliate (or successor) without Cause within 18 months following the Corporate Change, then the unvested portion of your Replacement Award, if any, as of the date of your termination of employment will become 100% vested and free of all restrictions, with payment made not later than the sixtieth (60th) day following your termination of employment.

(b) If, in connection with a Corporate Change, the Company’s successor does not provide a Replacement Award to replace your existing Award, then the unvested portion of your Award, if any, will immediately become 100% vested and free of all restrictions, with payment made not later than the sixtieth (60th) day following the Corporate Change.

(c) An Award shall qualify as a Replacement Award if: (i) it is of the same type as the Replaced Award (or, it is of a different type as the Replaced Award, provided that the Committee, as constituted immediately prior to the Corporate Change, finds such type acceptable); (ii) it has an intrinsic value at least equal to the value of the Replaced Award; (iii) it relates to publicly traded equity securities of the Company or its successor in the Corporate Change or another entity that is affiliated with the Company or its successor following the Corporate Change; (iv) its terms and conditions comply with Section 6(a); (v) vesting conditions continue on the same terms as set forth in the Replaced Award; and (vi) its other terms and conditions are not less favorable to the holder of the Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Corporate Change). Without limiting the generality of the foregoing, a Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section 6(c) are satisfied shall be made by the Committee, as constituted immediately before the Corporate Change, in its sole discretion.

7.Payment. As soon as administratively practicable after your RSUs vest, but in no event later than the sixtieth (60th) day following the applicable Vest Date (or Accelerated Vest Date, if applicable), you will receive a lump sum cash payment in respect of each vested RSU equal to the Fair Market Value of a share of Common Stock on the applicable Vest Date or Accelerated Vest Date of such vested RSU, less applicable taxes and withholdings. Employees outside of the U.S. may be paid directly by their employer in the applicable local currency converted using an exchange rate at the time of payment, as solely determined by the Committee.

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Exterran Corporation 2021 Time-Vested Cash-Settled Restricted Stock Units Award

This Award and the Dividend Equivalents are intended to be exempt under Section 409A of the Code (“Section 409A”) under the short-term deferral exclusion and will be interpreted and operated consistent with such intent. If, for any reason, the Company determines that this Award and/or the Dividend Equivalents are subject to Section 409A, the Company shall have the right in its sole discretion (without any obligation to do so or to indemnify you or any other person for failure to do so) to adopt such amendments to the Plan or this Award Notice, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Company determines are necessary or appropriate to provide for either the RSUs and/or the Dividend Equivalents to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.

8.No Stockholder Rights. You will not have the right to vote the shares of Common Stock underlying your RSUs at any time, or, except as otherwise provided herein with respect to the payment of Dividend Equivalents with respect to the shares of Common Stock underlying your RSUs, dividends, to enjoy any other stockholder rights.

9.Non–Transferability. You cannot sell, transfer, pledge, exchange, hypothecate or otherwise dispose of your RSUs or your Dividend Equivalents except as otherwise set forth in Paragraph XV(i) of the Plan.

10.No Right to Continued Service. Nothing in this Award Notice guarantees your continued service as an Employee or other service provider of the Company or any of its Affiliates or interferes in any way with the right of the Company or its Affiliates to terminate your status as an Employee or other service provider at any time.

11.Data Privacy. You consent to the collection, use, processing and transfer of your personal data as described in this paragraph. You understand that the Company and/or its Affiliates hold certain personal information about you (including your name, address and telephone number, date of birth, social security number, social insurance number, etc.) for the purpose of administering the Plan (“Data”). You also understand that the Company and/or its Affiliates will transfer this Data amongst themselves as necessary for the purpose of implementing, administering and managing your participation in the Plan, and that the Company and/or its Affiliates may also transfer this Data to any third parties assisting the Company in the implementation, administration and management of the Plan. You authorize them to receive, possess, use, retain and transfer the Data, in electronic or other form, for these purposes. You also understand that you may, at any time, review the Data, require any necessary changes to the Data or withdraw your consent in writing by contacting the Company. You further understand that withdrawing your consent may affect your ability to participate in the Plan.

12.Withholding. Your Award is subject to applicable income and/or social insurance tax withholding obligations (including, without limitation, any locally applicable taxes, and the Company and its Affiliates may, in their sole discretion, withhold a sufficient amount from the amount that is otherwise payable to you pursuant to your Award to satisfy any such withholding obligations. The ultimate liability for tax-related items due to your receipt of this Award is yours and may exceed the amount actually withheld by the Company (or any of its Affiliates, including, without limitation, your employer). If necessary, the Company reserves the right to withhold from your regular earnings an amount sufficient to meet the withholding obligations. The Company makes no representations regarding the treatment of tax items relating to this Award and is under no obligation to structure the terms of any award to reduce your liability for tax-related items or to achieve a particular tax result. If you become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, the Company and/or its Affiliates may be required to withhold or account for tax-related items in more than one jurisdiction, and you may have tax liability in more than one jurisdiction. You authorize the Company and/or your employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all tax-related items by withholding from your Award, wages or other cash compensation paid to Employee by the Company and/or your employer or any other of the Affiliates.

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Exterran Corporation 2021 Time-Vested Cash-Settled Restricted Stock Units Award

13.Plan Governs. This Award Notice is subject to the terms of the Plan, a copy of which is available at no charge through your stock account or which will be provided to you upon request as indicated in Section 19. All the terms and conditions of the Plan, as it may be amended from time to time, and any rules, guidelines and procedures which may from time to time be established pursuant to the Plan, are hereby incorporated into this Award Notice, including, but not limited to, Paragraphs XV(l) (“Section 409A of the Code”) and XV(j) (“Clawback”) thereof. In the event of a discrepancy between this Award Notice and the Plan, the Plan shall govern.

14.Adjustment. This Award and the Dividend Equivalents shall be subject to adjustment as provided in Paragraph XIII of the Plan.

15.Modifications. The Company may, without your consent, make any change to this Award Notice that is not materially adverse to your rights under this Award Notice or the Plan.

16.Non-Solicitation/Non-Competition/Confidentiality/Non-Disparagement Agreement. The greatest assets of the Company and its affiliates (“Exterran” in this Section 16) are its employees, directors, customers, and confidential information. In recognition of the increased risk of unfairly losing any of these assets, Exterran has adopted this Non-Solicitation/Non-Competition/Confidentiality/Non-Disparagement Agreement as set forth in this Section 16, the terms of which you accept and agree to by accepting the Award.

i.In order to assist you with your employment-related duties, Exterran has provided and shall continue to provide you with access to confidential and proprietary operational information and other confidential information which is either information not known by actual or potential competitors and third parties or is proprietary information of Exterran (“Confidential Information”). Such Confidential Information shall include, without limitation, information regarding Exterran’s customers and suppliers, employees, business operations, product lines, services, pricing and pricing formulae, machines and inventions, research, knowhow, manufacturing and fabrication techniques, engineering and product design specifications, financial information, business plans and strategies, information derived from reports and computer systems, work in progress, marketing and sales programs and strategies, cost data, methods of doing business, ideas, materials or information prepared or performed for, by or on behalf of Exterran. You agree, during your service as an Employee and at all times thereafter, not to use, divulge, or furnish or to make accessible to any third party, company, or other entity or individual, without Exterran’s written consent, any Confidential Information of Exterran, except as required by your job-related duties to Exterran.

ii.You agree that whenever your status as an Employee of Exterran ends for any reason, (i) you shall return to Exterran all documents containing or referring to Exterran’s Confidential Information as may be in your possession and/or control, with no request being required; and (ii) you shall return all Exterran computers, mobile computing devices, handheld devices, phones and similar equipment, hardware and software, and all Exterran property, files, records, documents, drawings, specifications, lists, equipment and other similar items relating to Exterran’s business coming into your possession and/or control during your employment, with no request being required.You further agree that if company property is in electronic form on a personal computer or device, you will delete all such information from the devices, unless you have reason to believe that you have the sole copy of such information, in which event you will promptly notify the Company so that appropriate action can be taken to transfer such information to the Company.

iii.In connection with your acceptance of the Award under the Plan, and in exchange for the consideration provided hereunder, and in consideration of Exterran disclosing and providing access to Confidential Information, you agree that you will not, during your service

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Exterran Corporation 2021 Time-Vested Cash-Settled Restricted Stock Units Award

as an Employee or other service provider of Exterran, and for one year thereafter, directly or indirectly, for any reason, for your own account or on behalf of or together with any other person, entity or organization (i) call on or otherwise solicit, cause, encourage or induce any natural person who is employed by Exterran in any capacity for employment by another company (including, for this purpose, contracting with any person who was an independent contractor (excluding consultant) of Exterran on the date of your employment or during the six (6)-month period preceding the termination of your employment), or (ii) solicit any established customer of Exterran or other service provider of Exterran or interfere with the relationship of Exterran with its established customers or other service providers without, in any of those cases, the prior written consent of Exterran.

iv.In connection with your acceptance of the Award under the Plan, and in exchange for the consideration provided hereunder, and in consideration of Exterran disclosing and providing access to Confidential Information, you agree that you will not, during your service as an Employee or other service provider of Exterran, and for one year thereafter, accept employment or engage in any business activity (whether as a principal, partner, joint venturer, agent, employee, salesperson, consultant, independent contractor, director, or officer) with a “Competitor” (as defined below) of Exterran where such employment or activity would involve your (i) providing, selling or attempting to sell, or assisting in the sale or attempted sale of, any services or products competitive with or similar to those services or products with which you had any involvement, and/or regarding which you had access to any information, during your service as an employee or other service provider of Exterran (including any products or services being researched or developed by Exterran during your service as an employee or other service provider of Exterran), or (ii) providing or performing services that are similar to any services that you provided to or performed for Exterran during your service as an employee or other service provider of Exterran.

For purposes of this Section 16(d), a “Competitor” is any business or entity that, at any time during the one-year period following your separation from employment, provides or seeks to provide, any products or services similar or related to any products sold or any services provided by Exterran. “Competitor” includes, without limitation, any company or business relating to the provision of oil, water and natural gas processing and treatment in the oil and gas industry, including compression, water and power products and services, and midstream infrastructure contract operations and product sales and the supply of aftermarket parts and services globally.

The restrictions set forth in this Section 16(d) will be limited to the geographic areas (i) where you performed services for Exterran, (ii) where you solicited or served the customers or clients of Exterran, or (iii) otherwise impacted or influenced by your provision of services to Exterran. Notwithstanding the foregoing, you may invest in securities of any entity, solely for investment purposes and without participating in the business thereof, if (A) such securities are traded on any national securities exchange or the National Association of Securities Dealers Automatic Quotation System or equivalent non-U.S. securities exchange, (B) you are not a controlling person of, or a member of a group which controls, such entity and (C) you do not, directly or indirectly, own three percent (3%) or more of any class of securities of such entity.

v.Subject to Section 17 below, you agree that you will not, directly or indirectly, make any public or private statements (whether orally, in writing, via electronic transmission or otherwise) that disparage, denigrate or malign Exterran or any of its affiliates; any of the businesses, activities, operations, affairs, reputations or prospects of any of the foregoing; or any of the respective officers, employees, directors, managers, partners, agents, members or shareholders of any of the foregoing.

vi.You agree that (i) the terms of this Section 16 are reasonable and constitute an otherwise enforceable agreement to which the terms and provisions of this Section 16 are

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Exterran Corporation 2021 Time-Vested Cash-Settled Restricted Stock Units Award

ancillary or a part of; (ii) the consideration provided by Exterran under this Section 16 is not illusory; (iii) the restrictions of this Section 16 are necessary and reasonable for the protection of the legitimate business interests and goodwill of Exterran; and (iv) the consideration given by Exterran under this Section 16, including without limitation, the provision by Exterran of Confidential Information to you, gives rise to Exterran’s interests in the covenants set forth in this Section 16.

vii.You and Exterran agree that it was both parties’ intention to enter into a valid and enforceable agreement. You agree that if any covenant contained in this Section 16 is found by a court of competent jurisdiction to contain limitations as to time, geographic area, or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interests of Exterran, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time, geographic area, and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of Exterran.

viii.In the event that Exterran determines that you have breached or attempted or threatened to breach any term of this Section 16, in addition to any other remedies at law or in equity Exterran may have available to it, it is agreed that Exterran shall be entitled, upon application to any court of proper jurisdiction, to a temporary restraining order or preliminary injunction (without necessity of (i) proving irreparable harm, (ii) establishing that monetary damages are inadequate, or (iii) posting any bond with respect thereto) against you prohibiting such breach or attempted or threatened breach by proving only the existence of such breach or attempted or threatened breach. You agree that the period during which the covenants contained in this Section 16 are in effect shall be computed by excluding from such computation any time during which you are in violation of any provision of this Section 16.

ix.You hereby acknowledge that the Award being granted to you under the Plan is an extraordinary item of compensation and is not part of, nor in lieu of, your ordinary wages for services you may render to Exterran.

x.You understand that your obligations under this Section 16 are independent of and do not affect the enforceability of any other restrictive covenants by which you have agreed to be bound in any other agreement with Exterran.

xi.Notwithstanding any other provision of this Award, the provisions of this Section 16 shall be governed, construed and enforced in accordance with the laws of the State of Texas, without giving effect to the conflict of law principles thereof. Any action or proceeding seeking to enforce any provision of this Section 16 shall be brought only in the courts of the State of Texas or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of Texas, and the parties consent to the jurisdiction of such courts in any such action or proceeding and waive any objection to venue laid therein.

17.Protected Rights. Notwithstanding any other provision of this Award Notice, nothing contained in this Award Notice limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or from providing truthful testimony in response to a lawfully issued subpoena or court order. You understand that this Award Notice does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Exterran.

6

Exterran Corporation 2021 Time-Vested Cash-Settled Restricted Stock Units Award

18.Defend Trade Secrets Act.You are hereby notified that under the Defend Trade Secrets Act: (1) no person will be held criminally or civilly liable under federal or state trade secret law for disclosure of a trade secret (as defined in the Economic Espionage Act) that is: (A) made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and (2) a person who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the person and use the trade secret information in the court proceeding, if the person files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

19.Additional Information. If you require additional information concerning your Award, contact compensation@exterran.com, or log into your account online at www.NetBenefits.com.

20.No Employment Relationship. As set forth in the introductory paragraph, this grant is on behalf of your employer, a subsidiary of the Company, and is a potential direct payment from and grant by such employing entity. Notwithstanding anything to the contrary in this Award Notice, nothing in this Award Notice shall be deemed to create an employment relationship between you and the Company. This Award Notice is not an employment agreement and does not in any way create any obligation on the part of the Company to employ you.

21.Clawback. The Award shall be subject to the provisions of any clawback or recoupment policy adopted by the Company’s Board of Directors from time to time, including without limitation the Incentive-Based Compensation Recoupment Policy adopted by the Company’s Board of Directors effective on January 1, 2019.

22.Amendment. Nothing in this Award Notice shall amend any provision of any Severance Benefit Agreement or Change of Control Agreement of any executive, including any provision relating to forfeiture or cancellation of an unvested Award in accordance with Section 5 herein.

23. Acceptance. If you agree with the terms and conditions of this Award, please indicate your acceptance online at www.NetBenefits.com. Please note that if you reject the Award or do not accept the Award within 30 days of the Grant Date, the Award will be forfeited.

7

Exterran Corporation 2021 Time-Vested Cash-Settled Restricted Stock Units Award

EX-10.3

Exhibit 10.3

EXTERRAN CORPORATION

AWARD NOTICE AND AGREEMENT

2021 COMMON STOCK AWARD FOR NON-EMPLOYEE DIRECTORS

Exterran Corporation (the “Company”) has granted to you an Other Stock-Based Award consisting of shares of Common Stock under the Exterran Corporation 2020 Omnibus Incentive Plan (as it may be amended from time to time, the “Plan”), subject to the terms and conditions set forth in this Award Notice (the “Award Notice”) and the Plan. Unless otherwise defined herein, capitalized terms used in this Award Notice shall have the respective meanings ascribed to them in the Plan.

The material terms of your Award are as follows:

1.Award. You have been granted shares of the Company’s Common Stock (the “Award” or “Stock") subject to these terms and conditions.

2.Grant Date. The Grant Date of this Award is March 4, 2021.

3.Stockholder Rights. The Company will register the Stock in your name. You will have the right to vote your Stock and receive dividends, if any.

4.No Right to Continued Service. Nothing contained in this Award Notice shall confer upon you any right to continued service (as a member of the Board or otherwise), or limit in any way the right of the Board to terminate or modify the terms of your service at any time.

5.Data Privacy. You consent to the collection, use, processing and transfer of your personal data as described in this paragraph. You understand that the Company and/or its Affiliates hold certain personal information about you (including your name, address and telephone number, date of birth, social security number, social insurance number, etc.) for the purpose of administering the Plan (“Data”). You also understand that the Company and/or its Affiliates will transfer this Data amongst themselves as necessary for the purpose of implementing, administering and managing your participation in the Plan, and that the Company and/or its Affiliates may also transfer this Data to any third parties assisting the Company in the implementation, administration and management of the Plan. You authorize them to receive, possess, use, retain and transfer the Data, in electronic or other form, for these purposes. You also understand that you may, at any time, review the Data, require any necessary changes to the Data or withdraw your consent in writing by contacting the Company. You further understand that withdrawing your consent may affect your ability to participate in the Plan.

6.Withholding. To the extent required by law, the Company and its Affiliates will withhold a sufficient number of shares of Common Stock that are otherwise issuable to you pursuant to your Award to satisfy any required tax withholding obligations.

7.Plan Governs. Your Award and this Award Notice are subject to the terms of the Plan, a copy of which is available at no charge through your stock account or which will be provided to you upon request. All the terms and conditions of the Plan, as it may be amended from time to time, and any rules, guidelines and procedures which may from time to time be established pursuant to the Plan, are hereby incorporated into this Award Notice. In the event of a discrepancy between this Award Notice and the Plan, the Plan shall govern.

8.Adjustment. This Award shall be subject to adjustment as provided in Paragraph XIII of the Plan.

9.Modifications. The Company may, without your consent, make any change to this Award Notice that is not materially adverse to your rights under this Award Notice.

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Exterran Corporation 2021 Common Stock Award For Non-Employee Directors

10.Non-Solicitation/Confidentiality/Non-Disparagement Agreement. The greatest assets of the Company and its affiliates (“Exterran” in this Section 10) are its employees, directors, customers, and confidential information. In recognition of the increased risk of unfairly losing any of these assets, Exterran has adopted this Non-Solicitation/Confidentiality/Non-Disparagement Agreement as set forth in this Section 10, the terms of which you acknowledge and agree to in exchange for the consideration provided by this Award and access to the Company’s confidential information.

a.In order to assist you with your duties as a member of the Board of Directors (“Director”), Exterran has provided and shall continue to provide you with access to confidential and proprietary operational information and other confidential information which is either information not known by actual or potential competitors and third parties or is proprietary information of Exterran (“Confidential Information”). Such Confidential Information shall include, without limitation, information regarding Exterran’s customers and suppliers, employees, business operations, product lines, services, pricing and pricing formulae, machines and inventions, research, knowhow, manufacturing and fabrication techniques, engineering and product design specifications, financial information, business plans and strategies, information derived from reports and computer systems, work in progress, marketing and sales programs and strategies, cost data, methods of doing business, ideas, materials or information prepared or performed for, by or on behalf of Exterran. You agree, during your service to Exterran and at all times thereafter, not to use, divulge, or furnish or to make accessible to any third party, company, or other entity or individual, without Exterran’s written consent, any Confidential Information of Exterran, except as required by your duties and responsibilities as a Director.

b.You agree that whenever your status as a Director ends, (i) you shall return to Exterran all documents containing or referring to Exterran’s Confidential Information as may be in your possession and/or control, with no request being required; and (ii) you shall return all Exterran computers, mobile computing devices, handheld devices, phones and similar equipment, hardware and software, and all Exterran property, files, records, documents, drawings, specifications, lists, equipment and other similar items relating to Exterran’s business coming into your possession and/or control during your service as a Director or otherwise, with no request being required. You further agree that if company property is in electronic form on a personal computer or device, you will delete all such information from the devices, unless you have reason to believe that you have the sole copy of such information, in which event you will promptly notify the Company so that appropriate action can be taken to transfer such information to the Company.

c.You agree that you will not, during your service to Exterran, and for one year thereafter, directly or indirectly, for any reason, for your own account or on behalf of or together with any other person, entity or organization (i) call on or otherwise solicit, cause, encourage or induce any natural person who is employed by Exterran in any capacity for employment by another company (including, for this purpose, contracting with any person who was an independent contractor (excluding consultant) of Exterran on the date of your employment or during the six (6)-month period preceding the termination of your employment), or (ii) solicit any established customer of Exterran or other service provider of Exterran or interfere with the relationship of Exterran with its established customers or other service providers without, in any of those prior cases, the prior written consent of Exterran.

d.You agree that (i) the terms of this Section 10 are reasonable and constitute an otherwise enforceable agreement to which the terms and provisions of this Section 10 are ancillary or a part of; (ii) the consideration provided by Exterran under this Section 10 is not illusory; (iii) the restrictions of this Section 10 are necessary and reasonable for the protection of the legitimate business interests and goodwill of Exterran; and (iv) the Award and other consideration given by Exterran under this Section 10, including without limitation, the provision by Exterran of Confidential Information to you, gives rise to Exterran’s interests in the covenants set forth in this Section 10.

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Exterran Corporation 2021 Common Stock Award For Non-Employee Directors

e.Subject to Section 11 below, you agree that you will not, directly or indirectly, make any public or private statements (whether orally, in writing, via electronic transmission or otherwise) that disparage, denigrate or malign Exterran or any of its affiliates; any of the businesses, activities, operations, affairs, reputations or prospects of any of the foregoing; or any of the respective officers, employees, directors, managers, partners, agents, members or shareholders of any of the foregoing.

f.You and Exterran agree that it was both parties’ intention that the terms of this Section 10 are binding and enforceable. You agree that if any covenant contained in this Section 10 is found by a court of competent jurisdiction to contain limitations as to time, geographic area, or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interests of Exterran, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time, geographic area, and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of Exterran.

g.In the event that Exterran determines that you have breached or attempted or threatened to breach any term of this Section 10, in addition to any other remedies at law or in equity Exterran may have available to it, it is agreed that Exterran shall be entitled, upon application to any court of proper jurisdiction, to a temporary restraining order or preliminary injunction (without necessity of (i) proving irreparable harm, (ii) establishing that monetary damages are inadequate, or (iii) posting any bond with respect thereto) against you prohibiting such breach or attempted or threatened breach by proving only the existence of such breach or attempted or threatened breach. You agree that the period during which the covenants contained in this Section 10 are in effect shall be computed by excluding from such computation any time during which you are in violation of any provision of this Section 10.

h.You understand that the obligations in this Section 10 are independent of and do not affect the enforceability of any other restrictive covenants by which you have agreed to be bound in any other agreement with Exterran.

i.Notwithstanding any other provision of this Award, the provisions of this Section 10 shall be governed, construed and enforced in accordance with the laws of the State of Texas, without giving effect to the conflict of law principles thereof. Any action or proceeding seeking to enforce any provision of this Section 10 shall be brought only in the courts of the State of Texas or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of Texas, and the parties consent to the jurisdiction of such courts in any such action or proceeding and waive any objection to venue laid therein.

11.     Protected Rights. Notwithstanding any other provision of this Award Notice, nothing contained in this Award Notice limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or from providing truthful testimony in response to a lawfully issued subpoena or court order. You understand that this Award Notice does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Exterran.

12.    Defend Trade Secrets Act. You are hereby notified that under the Defend Trade Secrets Act: (1) no person will be held criminally or civilly liable under federal or state trade secret law for disclosure of a trade secret (as defined in the Economic Espionage Act) that is: (A) made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not

3

Exterran Corporation 2021 Common Stock Award For Non-Employee Directors

made public; and (2) a person who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the person and use the trade secret information in the court proceeding, if the person files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

13.    Additional Information.If you require additional information concerning your Award, contact compensation@exterran.com, or log into your account online at www.NetBenefits.com.

14.     Clawback. The Award shall be subject to the provisions of any clawback or recoupment policy adopted by the Company’s Board of Directors from time to time, including without limitation the Incentive-Based Compensation Recoupment Policy adopted by the Company’s Board of Directors effective on January 1, 2019.

15.Acceptance. If you agree with the terms and conditions of this Award, please indicate your acceptance by electronic, or wet, signature below.

You/Member of Board of Directors of Exterran Corporation

By:______________________

Name: [Insert Name]

Date:____________________

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Exterran Corporation 2021 Common Stock Award For Non-Employee Directors

EX-31.1

Exhibit 31.1

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Andrew J. Way, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Exterran Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2021

By:	/s/ ANDREW J. WAY
	Name:	Andrew J. Way
	Title:	Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David A. Barta, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Exterran Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2021

By:	/s/ DAVID A. BARTA
	Name:	David A. Barta
	Title:	Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of CEO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Exterran Corporation (the “Company”) for the quarter ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Andrew J. Way, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ANDREW J. WAY
Name:	Andrew J. Way
Title:	President and Chief Executive Officer
Date: May 4, 2021

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Exterran Corporation (the “Company”) for the quarter ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), David A. Barta, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ DAVID A. BARTA
Name:	David A. Barta
Title:	Senior Vice President and Chief Financial Officer
Date: May 4, 2021

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2021	Apr. 27, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-36875
Entity Registrant Name	EXTERRAN CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-3282259
Entity Address, Address Line One	11000 Equity Drive
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77041
City Area Code	281
Local Phone Number	836-7000
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	EXTN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		33,285,841
Entity Central Index Key	0001635881
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 42,575	$ 40,318
Restricted cash	4,078	3,410
Accounts receivable, net of allowance of $10,755 and $10,803, respectively	188,401	198,028
Inventory (Note 4)	107,533	109,837
Contract assets (Note 2)	32,301	32,642
Other current assets	21,907	19,810
Current assets associated with discontinued operations (Note 3)	25,955	25,325
Total current assets	422,750	429,370
Property, plant and equipment, net (Note 5)	695,164	733,222
Long-term contract assets (Note 2)	19,324	33,563
Operating lease right-of-use assets	24,180	25,428
Deferred income taxes	6,824	8,866
Intangible and other assets, net	77,157	71,436
Long-term assets associated with discontinued operations (Note 3)	1,608	1,606
Total assets	1,247,007	1,303,491
Current liabilities:
Accounts payable, trade	52,288	60,078
Accrued liabilities	108,548	94,404
Contract liabilities (Note 2)	97,753	100,123
Current operating lease liabilities	6,228	6,340
Current liabilities associated with discontinued operations (Note 3)	7,016	13,707
Total current liabilities	271,833	274,652
Long-term debt (Note 6)	569,766	562,325
Deferred income taxes	1,073	1,014
Long-term contract liabilities (Note 2)	65,580	80,499
Long-term operating lease liabilities	28,826	29,868
Other long-term liabilities	44,162	57,159
Long-term liabilities associated with discontinued operations (Note 3)	1,062	2,142
Total liabilities	982,302	1,007,659
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 50,000,000 shares authorized; zero issued	0	0
Common stock, $0.01 par value per share; 250,000,000 shares authorized; 38,017,445 and 37,804,206 shares issued, respectively	380	378
Additional paid-in capital	751,977	750,506
Accumulated deficit	(448,402)	(418,529)
Treasury stock — 4,730,795 and 4,665,560 common shares, at cost, respectively	(57,741)	(57,431)
Accumulated other comprehensive income	18,491	20,908
Total stockholders' equity	264,705	295,832
Total liabilities and stockholders’ equity	$ 1,247,007	$ 1,303,491

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Accounts receivable, allowance (US dollars)	$ 10,755	$ 10,803
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	38,017,445	37,804,206
Treasury stock, common shares	4,730,795	4,665,560

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues (Note 2):
Revenues (Note 2):	$ 136,164	$ 160,794
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):	68,929	91,572
Selling, general and administrative	32,631	33,560
Depreciation and amortization	42,499	31,951
Restructuring and other charges (Note 8)	624	207
Interest expense	9,964	9,953
Other expense, net	3,061	294
Costs and expenses:	157,708	167,537
Loss before income taxes	(21,544)	(6,743)
Provision for income taxes (Note 9)	7,456	9,330
Loss from continuing operations	(29,000)	(16,073)
Loss from discontinued operations, net of tax (Note 3)	(873)	(2,231)
Net loss	$ (29,873)	$ (18,304)
Basic and diluted net loss per common share (Note 12):
Loss from continuing operations per common share (in dollars per share)	$ (0.88)	$ (0.49)
Income (loss) from discontinued operations per common share (in dollars per share)	(0.03)	(0.07)
Net loss per common share (in dollars per share)	$ (0.91)	$ (0.56)
Weighted average common shares outstanding used in net loss per common share (Note 12):
Basic and diluted (in shares)	32,950	32,653
Contract operations
Revenues (Note 2):
Revenues (Note 2):	$ 81,014	$ 94,788
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):	23,344	31,460
Aftermarket services
Revenues (Note 2):
Revenues (Note 2):	25,120	27,909
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):	20,012	21,181
Product sales
Revenues (Note 2):
Revenues (Note 2):	30,030	38,097
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):	$ 25,573	$ 38,931

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Net loss	$ (29,873)	$ (18,304)
Other comprehensive loss:
Foreign currency translation adjustment	(2,417)	(11,056)
Comprehensive loss	$ (32,290)	$ (29,360)

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock	Accumulated Other Comprehensive Income
Beginning balance at Dec. 31, 2019	$ 409,538	$ 375	$ 747,622	$ (317,238)	$ (56,567)	$ 35,346
Increase (Decrease) in Stockholders' Equity
Net loss	(18,304)			(18,304)
Foreign currency translation adjustment	(11,056)					(11,056)
Treasury stock purchased	(835)				(835)
Stock-based compensation, net of forfeitures	285	2	283
Ending balance at Mar. 31, 2020	379,628	377	747,905	(335,542)	(57,402)	24,290
Beginning balance at Dec. 31, 2020	295,832	378	750,506	(418,529)	(57,431)	20,908
Increase (Decrease) in Stockholders' Equity
Net loss	(29,873)			(29,873)
Foreign currency translation adjustment	(2,417)					(2,417)
Treasury stock purchased	(310)				(310)
Stock-based compensation, net of forfeitures	1,473	2	1,471
Ending balance at Mar. 31, 2021	$ 264,705	$ 380	$ 751,977	$ (448,402)	$ (57,741)	$ 18,491

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net loss	$ (29,873)	$ (18,304)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	42,499	31,951
Amortization of deferred financing costs	667	628
Loss from discontinued operations, net of tax	873	2,231
Provision for doubtful accounts	1	2,742
Gain on sale of property, plant and equipment	(193)	(161)
(Gain) loss on remeasurement of intercompany balances	1,511	(1,121)
Loss on foreign currency derivatives	926	0
Stock-based compensation expense	1,473	285
Deferred income tax expense	374	1,361
Changes in assets and liabilities:
Accounts receivable and notes	8,738	(44)
Inventory	2,017	(1,558)
Contract assets and contract liabilities, net	(11,382)	30,854
Other current assets	(2,283)	(163)
Accounts payable and other liabilities	(2,474)	(33,372)
Other	(413)	5,933
Net cash provided by continuing operations	12,461	21,262
Net cash used in discontinued operations	(9,276)	(12,990)
Net cash provided by operating activities	3,185	8,272
Cash flows from investing activities:
Capital expenditures	(7,199)	(16,807)
Proceeds from sale of property, plant and equipment	212	164
Net cash used in continuing operations	(6,987)	(16,643)
Net cash used in discontinued operations	0	(218)
Net cash used in investing activities	(6,987)	(16,861)
Cash flows from financing activities:
Proceeds from borrowings of debt	64,600	112,000
Repayments of debt	(57,400)	(100,613)
Purchases of treasury stock (Note 10)	(310)	(835)
Net cash provided by financing activities	6,890	10,552
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(163)	(513)
Net increase in cash, cash equivalents and restricted cash	2,925	1,450
Cash, cash equivalents and restricted cash at beginning of period	43,728	16,702
Cash, cash equivalents and restricted cash at end of period	46,653	18,152
Supplemental disclosure of non-cash transactions:
Accrued capital expenditures	$ 3,453	$ 6,959

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Description of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

Note 1 - Description of Business and Basis of Presentation

Description of Business

Exterran Corporation (together with its subsidiaries, “Exterran Corporation,” the “Company,” “our,” “we” or “us”), a Delaware corporation formed in March 2015, is a global sustainable systems and process company offering solutions in the oil, gas, water and power markets. We are a leader in natural gas processing and treatment, produced water treatment and compression products, solutions and services, providing critical midstream infrastructure solutions to customers throughout the world. We provide our products, solutions, 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. Our manufacturing facilities are located in the United States of America (“U.S.”), Singapore and the United Arab Emirates. We operate in three primary business lines: contract operations, aftermarket services and product sales. In our contract operations business line, we provide processing, treating, compression and water treatment services through the operation of our natural gas and crude oil production and process equipment and natural gas compression equipment and water treatment equipment for our customers. In our aftermarket services business line, we sell parts and components and provide operations, maintenance, repair, overhaul, upgrade, startup and commissioning and reconfiguration services to customers who own their own oil and natural gas compression, production, processing, treating and related equipment. In our product sales business line, we design, engineer, manufacture, install and sell equipment used in the treating and processing of crude oil, natural gas, natural gas compression packages and water to our customers throughout the world and for use in our contract operations business line. We also offer our customers, on either a contract operations basis or a sale basis, the engineering, design, project management, procurement and construction services necessary to incorporate our products into production, processing and compression facilities, which we refer to as integrated projects.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Exterran Corporation included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“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 of a normal recurring nature that are necessary to fairly state our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2020. 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 consolidated 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.

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus (“COVID-19”) a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption across most industries. Efforts to mitigate the spread of COVID-19 have also resulted in decreased energy demand and additional weakness in energy pricing. To help control the spread of the virus and protect the health and safety of our employees and customers, we began temporarily closing our locations or modifying operating hours in our locations around the world. This was in response to governmental requirements including “stay-at-home” orders and similar mandates and in some of our locations, we voluntarily went beyond the requirements of local government authorities. The broader implications of COVID-19 on our long-term future results of operations and overall financial condition remains uncertain. Due to the rapid market deterioration during the three months ended March 31, 2020, we concluded that a trigger existed and that we should evaluate our long-term assets for impairment. Therefore, we updated our impairment analysis and concluded that no impairment existed during the three months ended March 31, 2020. No triggering events were identified subsequent to March 31, 2020.

Recent Accounting Pronouncements

We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be not applicable.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”): Simplifying the Accounting for Income Taxes. The update simplifies the accounting for income taxes and is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. On January 1, 2021, we adopted this update. The adoption of this update was immaterial to our financial statements.

In June 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04). Topic 848 is effective for fiscal years and interim periods beginning as of March 12, 2020 through December 31, 2022. This update provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. It is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The adoption of ASU 2020-04 did not have a material impact to our financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

There are no recently issued accounting pronouncements not yet adopted that we are aware of at this time that would have a material impact on the Company.

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Revenue

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue

Note 2 - Revenue

Disaggregation of Revenue

The following tables present disaggregated revenue by products and services lines and by geographical regions for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
Revenue by Products and Services	2021		2020
Contract Operations Segment:
Contract operations services (1)	$	81,014	$	94,788
Aftermarket Services Segment:
Operation and maintenance services (1)	$	12,042	$	12,939
Part sales (2)	9,050		10,824
Other services (1)	4,028		4,146
Total aftermarket services	$	25,120	$	27,909
Product Sales Segment(3):
Compression equipment (1)	$	5,326	$	19,156
Processing and treating equipment (1)	21,559		11,809
Other product sales (1) (2)	3,145		7,132
Total product sales revenues	$	30,030	$	38,097
Total revenues	$	136,164	$	160,794

(1)Revenue recognized over time.

(2)Revenue recognized at a point in time.

(3)Compression equipment includes sales to customers outside of the U.S. The compression fabrication business for sales to U.S. customers that was previously included in our product sales segment is now included in discontinued operations.

	Three Months Ended March 31,
Revenue by Geographical Regions	2021		2020
North America	$	6,325	$	8,976
Latin America	60,618		76,797
Middle East and Africa	57,179		55,713
Asia Pacific	12,042		19,308
Total revenues	$	136,164	$	160,794

The North America region is primarily comprised of our operations in the U.S. The Latin America region is primarily comprised of our operations in Argentina, Bolivia, Brazil and Mexico. The Middle East and Africa region is primarily comprised of our operations in Bahrain, Iraq, Oman, Nigeria and the United Arab Emirates. The Asia Pacific region is primarily comprised of our operations in China, Indonesia, Singapore and Thailand.

The following table summarizes the expected timing of revenue recognition from unsatisfied performance obligations (commonly referred to as backlog) as of March 31, 2021 (in thousands):

	Contract Operations Segment		Product Sales Segment
Remainder of 2021	$	215,012	$	149,838
2022	213,560		205,167
2023	203,346		59,556
2024	186,322		13,000
2025	161,876		17,500
Thereafter	247,538		—
Total backlog	$	1,227,654	$	445,061

Certain of our aftermarket services contracts are subject to cancellation or modification at the election of the customer.

If the primary component of our contract operations contracts is the lease component, the contracts are accounted for as operating leases. For these contracts, revenues are recognized on a straight-line basis. As of March 31, 2021, the total value of our contracts operations backlog accounted for as operating leases was approximately $300.5 million, of which $33 million is expected to be recognized in the remainder of 2021, $43 million is expected to be recognized in 2022, $77 million is expected to be recognized in 2023, $65 million is expected to be recognized in 2024 and $47 million is expected to be recognized in 2025. Contract operations revenue recognized as operating leases for the three months ended March 31, 2021 was approximately $9 million. Our product sales backlog includes contracts where there is a significant financing component. As of March 31, 2021, we had approximately $43 million expected to be recognized in future periods as interest income within our product sales segment.

Contract Assets and Contract Liabilities

The following table provides information about accounts receivables, net, contract assets and contract liabilities from contracts with customers (in thousands):

	March 31, 2021		December 31, 2020
Accounts receivables, net	$	188,401	$	198,028
Contract assets and contract liabilities:
Current contract assets	32,301		32,642
Long-term contract assets	19,324		33,563
Current contract liabilities	97,753		100,123
Long-term contract liabilities	65,580		80,499

During the three months ended March 31, 2021, revenue recognized from contract operations services included $15.8 million of revenue deferred in previous periods. Revenue recognized during the three months ended March 31, 2021 from product sales performance obligations partially satisfied in previous periods was $27.8 million, of which $16.4 million was included in billings in excess of costs at the beginning of the period. The decrease in long-term contract assets during the three months ended March 31, 2021 was primarily due to the timing of milestones billings in the Middle East and Africa region. The decrease in current contract liabilities during the three months ended March 31, 2021 was primarily driven by the progression of product sales projects and the timing of milestones billings in the Middle East and Africa region. The decrease in long-term contract liabilities during the three months ended March 31, 2021 was primarily driven by the change in the remaining term of a contract operation services contract in the Latin America region.

Allowance for Doubtful Accounts

The Company estimates its reserves using information about past events, current conditions and risk characteristics of each customer, and reasonable and supportable forecasts relevant to assessing risk associated with the collectability of accounts receivables, contract assets and long-term note receivables. The Company’s customer base has generally similar collectability risk characteristics, although larger customers may have lower risk than smaller independent customers. The allowance for doubtful accounts as of March 31, 2021 and changes for the three months then ended are as follows (in thousands):

Balance at December 31, 2020	$	10,803
Write-offs during the period	(48)
Balance at March 31, 2021	$	10,755

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Discontinued Operations

3 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3 - Discontinued Operations

We have continued to work toward our strategy to be a company that leverages technology and operational excellence to provide complete systems and process solutions in energy and industrial applications. Over the past several years, we have made significant progress in this journey by taking actions to protect our core business, develop important organizational capabilities, commercialize new products, solutions, and services and implement new processes to position Exterran for success. We are focused on optimizing our portfolio of products and services to better serve our global customers while providing a more attractive investment option for our investors. As we continue on this path, we decided that our U.S. compression fabrication business was non-core to our strategy, and during the third quarter of 2020, we entered into an agreement to sell the assets used to operate the business which closed on November 2, 2020. We did not sell certain items in inventory, which we expect to liquidate over time. During the third quarter of 2020, this business met the held for sale criteria and is now reflected as discontinued operations in our financial statements for all periods presented. The U.S. compression fabrication business was previously included in our product sales segment and has been reclassified to discontinued operations in our financial statements for all periods presented. Compression revenue from sales to international customers continues to be included in our product sales segment.

In the first quarter of 2016, we began executing the exit of our Belleli EPC business that has historically been comprised of 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) by ceasing the bookings of new orders. As of the fourth quarter of 2017, we had substantially exited our Belleli EPC business and, in accordance with GAAP, it is reflected as discontinued operations in our financial statements for all periods presented. Although we have reached mechanical completion on all remaining Belleli EPC contracts, we are still subject to risks and uncertainties potentially resulting from warranty obligations, customer or supplier claims against us, settlement of claims against customers, completion of demobilization activities and litigation developments. The facility previously utilized to manufacture products for our Belleli EPC business has been repurposed to manufacture product sales equipment. As such, certain personnel, buildings, equipment and other assets that were previously related to our Belleli EPC business remain a part of our continuing operations. As a result, activities associated with our ongoing operations at our repurposed facility are included in continuing operations.

The following table summarizes the operating results of discontinued operations (in thousands):

	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
	Belleli EPC		US Compression		Total		Belleli EPC		US Compression		Total
Revenue	$	—	$	53	$	53	$	124	$	49,563	$	49,687
Cost of sales (excluding depreciation and amortization expense)	55		209		264		96		45,508		45,604
Selling, general and administrative	158		395		553		113		4,492		4,605
Depreciation and amortization	—		—		—		—		659		659
Restructuring and other charges	—		—		—		—		981		981
Other expense, net	34		—		34		44		—		44
Provision for income taxes	75		—		75		25		—		25
Loss from discontinued operations, net of tax	$	(322)	$	(551)	$	(873)	$	(154)	$	(2,077)	$	(2,231)

The following table summarizes the balance sheet data for discontinued operations (in thousands):

	March 31, 2021						December 31, 2020
	Belleli EPC		US Compression		Total		Belleli EPC		US Compression		Total
Accounts receivable	$	268	$	739	$	1,007	$	268	$	3,171	$	3,439
Inventory	—		24,584		24,584		—		21,107		21,107
Contract assets	—		176		176		—		458		458
Other current assets	188		—		188		213		108		321
Total current assets associated with discontinued operations	456		25,499		25,955		481		24,844		25,325
Intangible and other assets, net	1,608		—		1,608		1,606		—		1,606
Total assets associated with discontinued operations	$	2,064	$	25,499	$	27,563	$	2,087	$	24,844	$	26,931
Accounts payable	$	35	$	1,138	$	1,173	$	139	$	5,093	$	5,232
Accrued liabilities	2,944		2,411		5,355		2,939		5,037		7,976
Contract liabilities	199		289		488		197		302		499
Total current liabilities associated with discontinued operations	3,178		3,838		7,016		3,275		10,432		13,707
Other long-term liabilities	786		276		1,062		765		1,377		2,142
Total liabilities associated with discontinued operations	$	3,964	$	4,114	$	8,078	$	4,040	$	11,809	$	15,849

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Inventory

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Inventory

Note 4 - Inventory

Inventory consisted of the following amounts (in thousands):

	March 31, 2021		December 31, 2020
Parts and supplies	$	63,470	$	65,576
Work in progress	40,822		41,020
Finished goods	3,241		3,241
Inventory	$	107,533	$	109,837

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Property, Plant and Equipment, Net

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, Net

Note 5 - Property, Plant and Equipment, Net

Property, plant and equipment, net, consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Compression equipment, processing facilities and other fleet assets(1)	$	1,555,823	$	1,562,528
Land and buildings	50,676		50,908
Transportation and shop equipment	53,768		54,763
Computer software	54,849		54,486
Other	40,729		40,305
	1,755,845		1,762,990
Accumulated depreciation	(1,060,681)		(1,029,768)
Property, plant and equipment, net	$	695,164	$	733,222

(1)In the first quarter of 2021, we evaluated the salvage values of our property, plant and equipment. As a result of this evaluation, we changed the salvage values for our compression equipment to a maximum salvage value of 5% from 15%. During the three months ended March 31, 2021, we recorded an increase to depreciation expense of approximately $0.9 million as a result of this change in salvage value.

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Debt

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Debt

Note 6 - Debt

Debt consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Revolving credit facility due October 2023	$	223,700	$	216,500
8.125% senior notes due May 2025	350,000		350,000
Unamortized deferred financing costs of 8.125% senior notes	(3,934)		(4,175)
Long-term debt	$	569,766	$	562,325

Revolving Credit Facility Due October 2023

We and our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”), are parties to an amended and restated credit agreement (the “Amended Credit Agreement”) consisting of a $650.0 million revolving credit facility expiring in October 2023.

As of March 31, 2021, we had $223.7 million in outstanding borrowings and $7.5 million in outstanding letters of credit under our revolving credit facility. At March 31, 2021, taking into account guarantees through letters of credit, we had undrawn capacity of $418.8 million under our revolving credit facility. Our Amended Credit Agreement limits our Total Debt to EBITDA ratio (as defined in the Amended Credit Agreement) on the last day of the fiscal quarter to no greater than 4.50 to 1.0. As a result of this limitation, $109.8 million of the $418.8 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of March 31, 2021.

8.125% Senior Notes Due May 2025

In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. issued $375.0 million aggregate principal amount of 8.125% senior unsecured notes due 2025 (the “2017 Notes”) which have $350.0 million outstanding as of March 31, 2021. We guarantee the 2017 Notes on a senior unsecured basis. We may redeem the 2017 Notes at any time in cash, in whole or part, at certain redemption prices, including the applicable make-whole premium plus accrued and unpaid interest, if any, to the date of redemption.

The Amended Credit Agreement contains various covenants with which we, EESLP and our respective restricted subsidiaries must comply, including, but not limited to, limitations on the incurrence of indebtedness, investments, liens on assets, repurchasing equity, making distributions, transactions with affiliates, mergers, consolidations, dispositions of assets and other provisions customary in similar types of agreements. We are required to maintain, on a consolidated basis, a minimum interest coverage ratio (as defined in the Amended Credit Agreement) of 2.25 to 1.00; a maximum total leverage ratio (as defined in the Amended Credit Agreement) of 4.50 to 1.00; and a maximum senior secured leverage ratio (as defined in the Amended Credit Agreement) of 2.75 to 1.00. As of March 31, 2021, we maintained a 5.0 to 1.0 interest coverage ratio, a 3.8 to 1.0 total leverage ratio and a 1.5 to 1.0 senior secured leverage ratio. As of March 31, 2021, we were in compliance with all financial covenants under the Amended Credit Agreement.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 7 - 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 categories:

•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.

Recurring Fair Value Measurements

The following table presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, with pricing levels as of the date of valuation (in thousands):

	March 31, 2021						December 31, 2020
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
Foreign currency derivatives liabilities	$	—	$	—	$	—	$	—	$	—	$	(247)

We are exposed to market risks associated with changes in foreign currency exchange rates, including foreign currency exchange rate changes recorded on intercompany obligations. From time to time, we may enter into foreign currency hedges to manage existing exposures to foreign exchange risk related to assets and liabilities recorded on our balance sheets including intercompany activity. As of March 31, 2021, we were a party to forward currency exchange contracts to mitigate exposures to the Argentine Peso with a total notional value of $25.0 million. These contracts expire at varying dates through June 2021. We did not designate these forward currency exchange contracts as hedge transactions. Changes in fair value and gains and losses on settlement on these forward currency exchange contracts are recognized in other (income) expense, net, in our statements of operations. Our estimate of the fair value of foreign currency derivatives as of March 31, 2021 was determined using quoted forward exchange rates in active markets at March 31, 2021. Foreign currency derivative assets are included in other current assets in our balance sheets. During the three months ended March 31, 2021, we recognized a loss of $0.9 million on forward currency exchange contracts.

Nonrecurring Fair Value Measurements

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2021 and 2020, with pricing levels as of the date of valuation (in thousands):

	Three months ended March 31, 2021						Three months ended March 31, 2020
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
Long-term note receivable (1)	$	—	$	—	$	11,767	$	—	$	—	$	15,039

(1)Our estimate of the fair value of a note receivable was discounted based on a settlement period of eight years and a discount rate of 12.5%. The undiscounted value of the note receivable, including interest, as of March 31, 2021 was $15.7 million.

Financial Instruments

Our financial instruments consist of cash, restricted cash, receivables, payables and debt. At March 31, 2021 and December 31, 2020, the estimated fair values of cash, restricted cash, receivables and payables approximated their carrying amounts as reflected in our balance sheets due to the short-term nature of these financial instruments.

The fair value of the 2017 Notes was estimated based on model derived calculations using market yields observed in active markets, which are Level 2 inputs. As of March 31, 2021 and December 31, 2020, the carrying amount of the 2017 Notes, excluding unamortized deferred financing costs, of $350.0 million was estimated to have a fair value of $324.0 million and $297.0 million, respectively. Due to the variable rate nature of our revolving credit facility, the carrying value as of March 31, 2021 and December 31, 2020 approximated the fair value as the rate was comparable to the then-current market rate at which debt with similar terms could have been obtained.

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Restructuring and Other Charges

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Other Charges

Note 8 - Restructuring and Other Charges

The energy industry’s focus on cash flow, capital discipline and improving returns has caused delays in the timing of new equipment orders. As a result, in the third quarter of 2019, we announced a cost reduction plan primarily focused on workforce reductions. We incurred restructuring and other charges associated with these activities of $0.6 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively. These charges are reflected as restructuring and other charges in our statements of operations and accrued liabilities on our balance sheets. The cost reduction plan is expected to be completed in the first half of 2021 and we expect to settle these charges within the next twelve months in cash. At this time, we cannot currently estimate the total restructuring costs that will be incurred as a result of this cost reduction plan.

The following table summarizes the changes to our accrued liability balance related to restructuring and other charges for the three months ended March 31, 2021 and 2020 (in thousands):

	Cost Reduction Plan
Beginning balance at January 1, 2020	$	2,281
Additions for costs expensed, net	207
Reductions for payments	(163)
Foreign exchange impact	(289)
Ending balance at March 31, 2020	$	2,036
Beginning balance at January 1, 2021	$	1,351
Additions for costs expensed, net	624
Reductions for payments	(588)
Foreign exchange impact	(94)
Ending balance at March 31, 2021	$	1,293

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, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Employee termination benefits	$	624	$	—
Consulting fees	—		207
Total restructuring and other charges	$	624	$	207

The following table summarizes the components of charges included in restructuring and other charges incurred since the announcement of the cost reduction plan in the second quarter of 2019 (in thousands):

	Total
Employee termination benefits	$	6,867
Consulting fees	3,205
Total restructuring and other charges	$	10,072

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Provision for Income Taxes

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Provision for Income Taxes

Note 9 - Provision for Income Taxes

Our effective tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn, or losses we incur, in those jurisdictions. It is also affected by discrete items that may occur in any given year but are not consistent from year to year. Our effective tax rate is also affected by valuation allowances recorded against loss carryforwards in the U.S. and certain other jurisdictions, foreign withholding taxes and changes in foreign currency exchange rates.

The following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 21% and our effective tax rate of (34.6)% for the three months ended March 31, 2021: (i) a 6.7% positive impact resulting from unrecognized tax benefits under FASB’s Interpretation No. 48 of Financial Accounting Standard 109 (“FIN 48”), (ii) a (12.1)% negative impact resulting from foreign currency devaluations in Argentina, (iii) a (20.2)% negative impact resulting from foreign taxes in excess of the U.S. tax rate and other rate drivers, (iv) a (12.6)% negative impact resulting from deemed inclusions in the U.S. and (v) a (9.5)% negative impact resulting from an addition of valuation allowances against U.S. deferred tax assets.

Our effective tax rate increased for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 primarily due to a decrease in valuation allowances recorded in the U.S., an increase in foreign taxes in excess of the U.S. tax rate, an increase in deemed inclusions in the U.S., a decrease in the FIN 48 reserve and an increase in tax related to foreign exchange movement in Argentina.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Stockholders' Equity

Note 10 - Stockholders’ Equity

Share Repurchase Program

On February 20, 2019, our board of directors approved a share repurchase program under which the Company is authorized to purchase up to $100.0 million of its outstanding common stock through February 2022. The timing and method of any repurchases under the program will depend on a variety of factors, including prevailing market conditions among others. Purchases under the program may be suspended or discontinued at any time and we have no obligation to repurchase any amount of our common shares under the program. Shares of common stock acquired through the repurchase program are held in treasury at cost. During the three months ended March 31, 2021 and 2020, we did not repurchase any shares under this program. As of March 31, 2021, the remaining authorized repurchase amount under the share repurchase program was $57.7 million.

Additionally, treasury stock purchased during the three months ended March 31, 2021 and 2020 included shares withheld to satisfy employees’ tax withholding obligations in connection with vesting of restricted stock awards.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Note 11 - Stock-Based Compensation

Stock Options

There were no stock options granted during the three months ended March 31, 2021 and 2020.

Restricted Stock, Restricted Stock Units and Performance Units

For grants of restricted stock, restricted stock units and performance units, we recognize compensation expense over the applicable vesting period equal to the fair value of our common stock at the grant date. Grants of restricted stock, restricted stock units and performance units generally vest over two or three years proportionately on each grant date anniversary.

The table below presents the changes in restricted stock, restricted stock units and performance units for our common stock during the three months ended March 31, 2021.

	Equity Awards			Liability Awards
	Shares (in thousands)	Weighted Average Grant-Date Fair  Value Per Share		Shares (in thousands)	Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards, January 1, 2021	320	$	16.02	1,198	$	9.35
Granted	199	4.84		1,418	4.84
Vested	(274)	13.38		(371)	14.02
Cancelled	(2)	18.65		—	—
Non-vested awards, March 31, 2021	243	9.81		2,245	5.73

As of March 31, 2021, we estimate $7.6 million of unrecognized compensation cost related to unvested restricted stock, restricted stock units and performance units issued to our employees to be recognized over the weighted-average vesting period of 1.8 years.

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Net Income (Loss) Per Common Share

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Net Income (Loss) Per Common Share

Note 12 - 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 unvested restricted stock and restricted stock units that have non-forfeitable 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.

The following table presents a reconciliation of basic and diluted net loss per common share for the three months ended March 31, 2021 and 2020 (in thousands, except per share data):

	Three Months Ended March 31,
	2021		2020
Numerator for basic and diluted net loss per common share:
Loss from continuing operations	$	(29,000)	$	(16,073)
Loss from discontinued operations, net of tax	(873)		(2,231)
Less: Net income attributable to participating securities	—		—
Net loss — used in basic and diluted net loss per common share	$	(29,873)	$	(18,304)
Weighted average common shares outstanding including participating securities	33,229		33,163
Less: Weighted average participating securities outstanding	(279)		(510)
Weighted average common shares outstanding — used in basic net loss per common share	32,950		32,653
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 loss per common share	32,950		32,653
Net loss per common share:
Basic and diluted	$	(0.91)	$	(0.56)

*    Excluded from diluted net income (loss) per common share as their inclusion would have been anti-dilutive.

The following table shows the potential shares of common stock issuable for the three months ended March 31, 2021 and 2020 that were excluded from computing diluted net loss per common share as their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended March 31,
	2021	2020
Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value	—	57
Net dilutive potential common shares issuable	—	57

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 13 - Commitments and Contingencies

Contingencies

We have agreements with financial institutions under which approximately $62.6 million of letters of credit or bank guarantees were outstanding as of March 31, 2021. These are put in place in certain situations to guarantee our performance obligations under contracts with counterparties.

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, 2021 and December 31, 2020, we had accrued $1.5 million and $3.5 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, commercial automobile liability and other coverage we believe is appropriate. 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.

Litigation and Claims

On December 19, 2020, we initiated arbitration in the International Court of Arbitration of the International Chamber of Commerce (“ICC”) against Iberoamericana de Hidrocarburos, S.A. De C.V. (“IHSA”) to collect approximately $38 million owed to us under three agreements, plus future lost profits, interest, attorneys’ fees, and other damages as allowed under the contracts and/or Mexican law. The three agreements relate to contract operation services provided to IHSA by Exterran. After we stopped providing services due to IHSA’s nonpayment, on December 29, 2020, IHSA filed a lawsuit in the 129th Judicial District Court of Harris County, Texas, for tortious interference with a contract and prospective business relationships, claiming damages for lost profits, lost production, loss of equipment, loss of business opportunity, damage to business reputation and attorneys’ fees. On March 2, 2021, after we moved IHSA’s lawsuit to the United States District Court for the Southern District of Texas, IHSA voluntarily dismissed the lawsuit. On April 27, 2021, IHSA answered Exterran’s request for arbitration before the ICC and included a counterclaim for approximately $27 million allegedly resulting from breach of contract, operational deficiencies, lost production, and lost profit. In addition, IHSA has orally threatened to draw certain bonds totaling approximately $12 million under one of the contracts for contract operation services. Based on currently available information we believe IHSA’s claims are without merit; however, IHSA’s claim are in the early stages and the results cannot be predicted with certainty.

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.

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Reportable Segments

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Reportable Segments

Note 14 - Reportable Segments

Our chief operating decision maker manages business operations, evaluates performance and allocates resources based upon the type of product or service provided. We have three reportable segments: contract operations, aftermarket services and product sales. In our contract operations segment, we provide processing, treating, compression and water treatment services through the operation of our natural gas and crude oil production and process equipment, natural gas compression equipment and water treatment equipment for our customers. In our aftermarket services segment, we sell parts and components and provide operations, maintenance, repair, overhaul, upgrade, startup and commissioning and reconfiguration services to customers who own their own oil and natural gas compression, production, processing, treating and related equipment. In our product sales segment, we design, engineer, manufacture, install and sell equipment used in the treating and processing of crude oil, natural gas and water as well natural gas compression packages to our customers throughout the world and for use in our contract operations business line.

We evaluate the performance of our segments based on adjusted gross margin for each segment. Revenue only includes sales to external customers. We do not include intersegment sales when we evaluate our segments’ performance.

The following table presents revenue and other financial information by reportable segment for the three months ended March 31, 2021 and 2020 (in thousands):

Three months ended March 31,	Contract Operations		Aftermarket Services		Product Sales(2)		Reportable Segments Total
2021
Revenue	$	81,014	$	25,120	$	30,030	$	136,164
Adjusted gross margin(1)	57,670		5,108		4,457		67,235
2020
Revenue	$	94,788	$	27,909	$	38,097	$	160,794
Adjusted gross margin(1)	63,328		6,728		(834)		69,222

(1)    Adjusted gross margin is defined as revenue less cost of sales (excluding depreciation and amortization expense).

(2)    The U.S. compression fabrication business that was previously included in our product sales segment is now included in discontinued operations.

The following table reconciles total gross margin to total adjusted gross margin (in thousands):

	Three Months Ended
	March 31, 2021		March 31, 2020
Revenues	$	136,164	$	160,794
Cost of sales (excluding depreciation and amortization expenses)	68,929		91,572
Depreciation and amortization (1)	40,835		30,446
Total gross margin	26,400		38,776
Depreciation and amortization (1)	40,835		30,446
Total adjusted gross margin	$	67,235	$	69,222

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Description of Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Exterran Corporation included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“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 of a normal recurring nature that are necessary to fairly state our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2020. 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 consolidated 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.

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus (“COVID-19”) a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption across most industries. Efforts to mitigate the spread of COVID-19 have also resulted in decreased energy demand and additional weakness in energy pricing. To help control the spread of the virus and protect the health and safety of our employees and customers, we began temporarily closing our locations or modifying operating hours in our locations around the world. This was in response to governmental requirements including “stay-at-home” orders and similar mandates and in some of our locations, we voluntarily went beyond the requirements of local government authorities. The broader implications of COVID-19 on our long-term future results of operations and overall financial condition remains uncertain. Due to the rapid market deterioration during the three months ended March 31, 2020, we concluded that a trigger existed and that we should evaluate our long-term assets for impairment. Therefore, we updated our impairment analysis and concluded that no impairment existed during the three months ended March 31, 2020. No triggering events were identified subsequent to March 31, 2020.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be not applicable.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”): Simplifying the Accounting for Income Taxes. The update simplifies the accounting for income taxes and is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. On January 1, 2021, we adopted this update. The adoption of this update was immaterial to our financial statements.

In June 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04). Topic 848 is effective for fiscal years and interim periods beginning as of March 12, 2020 through December 31, 2022. This update provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. It is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The adoption of ASU 2020-04 did not have a material impact to our financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

There are no recently issued accounting pronouncements not yet adopted that we are aware of at this time that would have a material impact on the Company.

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Revenue (Tables)

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables present disaggregated revenue by products and services lines and by geographical regions for the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
Revenue by Products and Services	2021		2020
Contract Operations Segment:
Contract operations services (1)	$	81,014	$	94,788
Aftermarket Services Segment:
Operation and maintenance services (1)	$	12,042	$	12,939
Part sales (2)	9,050		10,824
Other services (1)	4,028		4,146
Total aftermarket services	$	25,120	$	27,909
Product Sales Segment(3):
Compression equipment (1)	$	5,326	$	19,156
Processing and treating equipment (1)	21,559		11,809
Other product sales (1) (2)	3,145		7,132
Total product sales revenues	$	30,030	$	38,097
Total revenues	$	136,164	$	160,794

(1)Revenue recognized over time.

(2)Revenue recognized at a point in time.

(3)Compression equipment includes sales to customers outside of the U.S. The compression fabrication business for sales to U.S. customers that was previously included in our product sales segment is now included in discontinued operations.

	Three Months Ended March 31,
Revenue by Geographical Regions	2021		2020
North America	$	6,325	$	8,976
Latin America	60,618		76,797
Middle East and Africa	57,179		55,713
Asia Pacific	12,042		19,308
Total revenues	$	136,164	$	160,794

Schedule of Expected Timing of Revenue Recognition from Unsatisfied Performance Obligation

The following table summarizes the expected timing of revenue recognition from unsatisfied performance obligations (commonly referred to as backlog) as of March 31, 2021 (in thousands):

	Contract Operations Segment		Product Sales Segment
Remainder of 2021	$	215,012	$	149,838
2022	213,560		205,167
2023	203,346		59,556
2024	186,322		13,000
2025	161,876		17,500
Thereafter	247,538		—
Total backlog	$	1,227,654	$	445,061

Contract with Customer, Asset and Liability

The following table provides information about accounts receivables, net, contract assets and contract liabilities from contracts with customers (in thousands):

	March 31, 2021		December 31, 2020
Accounts receivables, net	$	188,401	$	198,028
Contract assets and contract liabilities:
Current contract assets	32,301		32,642
Long-term contract assets	19,324		33,563
Current contract liabilities	97,753		100,123
Long-term contract liabilities	65,580		80,499

Allowance for Doubtful Accounts

The allowance for doubtful accounts as of March 31, 2021 and changes for the three months then ended are as follows (in thousands):

Balance at December 31, 2020	$	10,803
Write-offs during the period	(48)
Balance at March 31, 2021	$	10,755

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Summary of Operating Results and Balance Sheet Data for Discontinued Operations and Disposals

The following table summarizes the operating results of discontinued operations (in thousands):

	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
	Belleli EPC		US Compression		Total		Belleli EPC		US Compression		Total
Revenue	$	—	$	53	$	53	$	124	$	49,563	$	49,687
Cost of sales (excluding depreciation and amortization expense)	55		209		264		96		45,508		45,604
Selling, general and administrative	158		395		553		113		4,492		4,605
Depreciation and amortization	—		—		—		—		659		659
Restructuring and other charges	—		—		—		—		981		981
Other expense, net	34		—		34		44		—		44
Provision for income taxes	75		—		75		25		—		25
Loss from discontinued operations, net of tax	$	(322)	$	(551)	$	(873)	$	(154)	$	(2,077)	$	(2,231)

The following table summarizes the balance sheet data for discontinued operations (in thousands):

	March 31, 2021						December 31, 2020
	Belleli EPC		US Compression		Total		Belleli EPC		US Compression		Total
Accounts receivable	$	268	$	739	$	1,007	$	268	$	3,171	$	3,439
Inventory	—		24,584		24,584		—		21,107		21,107
Contract assets	—		176		176		—		458		458
Other current assets	188		—		188		213		108		321
Total current assets associated with discontinued operations	456		25,499		25,955		481		24,844		25,325
Intangible and other assets, net	1,608		—		1,608		1,606		—		1,606
Total assets associated with discontinued operations	$	2,064	$	25,499	$	27,563	$	2,087	$	24,844	$	26,931
Accounts payable	$	35	$	1,138	$	1,173	$	139	$	5,093	$	5,232
Accrued liabilities	2,944		2,411		5,355		2,939		5,037		7,976
Contract liabilities	199		289		488		197		302		499
Total current liabilities associated with discontinued operations	3,178		3,838		7,016		3,275		10,432		13,707
Other long-term liabilities	786		276		1,062		765		1,377		2,142
Total liabilities associated with discontinued operations	$	3,964	$	4,114	$	8,078	$	4,040	$	11,809	$	15,849

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Inventory (Tables)

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following amounts (in thousands):

	March 31, 2021		December 31, 2020
Parts and supplies	$	63,470	$	65,576
Work in progress	40,822		41,020
Finished goods	3,241		3,241
Inventory	$	107,533	$	109,837

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Property, Plant and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment, Net

Property, plant and equipment, net, consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Compression equipment, processing facilities and other fleet assets(1)	$	1,555,823	$	1,562,528
Land and buildings	50,676		50,908
Transportation and shop equipment	53,768		54,763
Computer software	54,849		54,486
Other	40,729		40,305
	1,755,845		1,762,990
Accumulated depreciation	(1,060,681)		(1,029,768)
Property, plant and equipment, net	$	695,164	$	733,222

(1)In the first quarter of 2021, we evaluated the salvage values of our property, plant and equipment. As a result of this evaluation, we changed the salvage values for our compression equipment to a maximum salvage value of 5% from 15%. During the three months ended March 31, 2021, we recorded an increase to depreciation expense of approximately $0.9 million as a result of this change in salvage value.

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Debt (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Debt

Debt consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Revolving credit facility due October 2023	$	223,700	$	216,500
8.125% senior notes due May 2025	350,000		350,000
Unamortized deferred financing costs of 8.125% senior notes	(3,934)		(4,175)
Long-term debt	$	569,766	$	562,325

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, with pricing levels as of the date of valuation (in thousands):

	March 31, 2021						December 31, 2020
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
Foreign currency derivatives liabilities	$	—	$	—	$	—	$	—	$	—	$	(247)

Schedule 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, 2021 and 2020, with pricing levels as of the date of valuation (in thousands):

	Three months ended March 31, 2021						Three months ended March 31, 2020
	(Level 1)		(Level 2)		(Level 3)		(Level 1)		(Level 2)		(Level 3)
Long-term note receivable (1)	$	—	$	—	$	11,767	$	—	$	—	$	15,039

(1)Our estimate of the fair value of a note receivable was discounted based on a settlement period of eight years and a discount rate of 12.5%. The undiscounted value of the note receivable, including interest, as of March 31, 2021 was $15.7 million.

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Restructuring and Other Charges (Tables)

3 Months Ended

Mar. 31, 2021

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, 2021 and 2020 (in thousands):

	Cost Reduction Plan
Beginning balance at January 1, 2020	$	2,281
Additions for costs expensed, net	207
Reductions for payments	(163)
Foreign exchange impact	(289)
Ending balance at March 31, 2020	$	2,036
Beginning balance at January 1, 2021	$	1,351
Additions for costs expensed, net	624
Reductions for payments	(588)
Foreign exchange impact	(94)
Ending balance at March 31, 2021	$	1,293

Summary of the 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, 2021 and 2020 (in thousands):

	Three Months Ended March 31,
	2021		2020
Employee termination benefits	$	624	$	—
Consulting fees	—		207
Total restructuring and other charges	$	624	$	207

The following table summarizes the components of charges included in restructuring and other charges incurred since the announcement of the cost reduction plan in the second quarter of 2019 (in thousands):

	Total
Employee termination benefits	$	6,867
Consulting fees	3,205
Total restructuring and other charges	$	10,072

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Changes in Restricted Stock, Restricted Stock Units, and Performance Units

The table below presents the changes in restricted stock, restricted stock units and performance units for our common stock during the three months ended March 31, 2021.

	Equity Awards			Liability Awards
	Shares (in thousands)	Weighted Average Grant-Date Fair  Value Per Share		Shares (in thousands)	Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards, January 1, 2021	320	$	16.02	1,198	$	9.35
Granted	199	4.84		1,418	4.84
Vested	(274)	13.38		(371)	14.02
Cancelled	(2)	18.65		—	—
Non-vested awards, March 31, 2021	243	9.81		2,245	5.73

Schedule of Changes in Restricted Stock, Restricted Stock Units, and Performance Units

The table below presents the changes in restricted stock, restricted stock units and performance units for our common stock during the three months ended March 31, 2021.

	Equity Awards			Liability Awards
	Shares (in thousands)	Weighted Average Grant-Date Fair  Value Per Share		Shares (in thousands)	Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards, January 1, 2021	320	$	16.02	1,198	$	9.35
Granted	199	4.84		1,418	4.84
Vested	(274)	13.38		(371)	14.02
Cancelled	(2)	18.65		—	—
Non-vested awards, March 31, 2021	243	9.81		2,245	5.73

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Net Income (Loss) Per Common Share (Tables)

3 Months Ended

Mar. 31, 2021

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 loss per common share for the three months ended March 31, 2021 and 2020 (in thousands, except per share data):

	Three Months Ended March 31,
	2021		2020
Numerator for basic and diluted net loss per common share:
Loss from continuing operations	$	(29,000)	$	(16,073)
Loss from discontinued operations, net of tax	(873)		(2,231)
Less: Net income attributable to participating securities	—		—
Net loss — used in basic and diluted net loss per common share	$	(29,873)	$	(18,304)
Weighted average common shares outstanding including participating securities	33,229		33,163
Less: Weighted average participating securities outstanding	(279)		(510)
Weighted average common shares outstanding — used in basic net loss per common share	32,950		32,653
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 loss per common share	32,950		32,653
Net loss per common share:
Basic and diluted	$	(0.91)	$	(0.56)

*    Excluded from diluted net income (loss) per common share as their inclusion would have been anti-dilutive.

Schedule of Antidilutive Shares Excluded from Computation of Net Income Per Common Share

The following table shows the potential shares of common stock issuable for the three months ended March 31, 2021 and 2020 that were excluded from computing diluted net loss per common share as their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended March 31,
	2021	2020
Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value	—	57
Net dilutive potential common shares issuable	—	57

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Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Schedule of Revenues and Other Financial Information

The following table presents revenue and other financial information by reportable segment for the three months ended March 31, 2021 and 2020 (in thousands):

Three months ended March 31,	Contract Operations		Aftermarket Services		Product Sales(2)		Reportable Segments Total
2021
Revenue	$	81,014	$	25,120	$	30,030	$	136,164
Adjusted gross margin(1)	57,670		5,108		4,457		67,235
2020
Revenue	$	94,788	$	27,909	$	38,097	$	160,794
Adjusted gross margin(1)	63,328		6,728		(834)		69,222

(1)    Adjusted gross margin is defined as revenue less cost of sales (excluding depreciation and amortization expense).

(2)    The U.S. compression fabrication business that was previously included in our product sales segment is now included in discontinued operations.

Reconciliation of Total Gross Margin to Total Adjusted Gross Margin

The following table reconciles total gross margin to total adjusted gross margin (in thousands):

	Three Months Ended
	March 31, 2021		March 31, 2020
Revenues	$	136,164	$	160,794
Cost of sales (excluding depreciation and amortization expenses)	68,929		91,572
Depreciation and amortization (1)	40,835		30,446
Total gross margin	26,400		38,776
Depreciation and amortization (1)	40,835		30,446
Total adjusted gross margin	$	67,235	$	69,222

(1)    Represents the portion only attributable to cost of sales.

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Description of Business and Basis of Presentation - Narrative (Details)	3 Months Ended
	Mar. 31, 2021 business_line
Accounting Policies [Abstract]
Number of business lines	3

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Revenue - Disaggregation by Products and Services (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 136,164	$ 160,794
Contract operations
Disaggregation of Revenue [Line Items]
Revenue	81,014	94,788
Contract operations | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	81,014	94,788
Aftermarket services
Disaggregation of Revenue [Line Items]
Revenue	25,120	27,909
Aftermarket services | Operation and maintenance services | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	12,042	12,939
Aftermarket services | Part sales | Revenue recognized at a point in time
Disaggregation of Revenue [Line Items]
Revenue	9,050	10,824
Aftermarket services | Other services | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	4,028	4,146
Product sales
Disaggregation of Revenue [Line Items]
Revenue	30,030	38,097
Product sales | Compression equipment | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	5,326	19,156
Product sales | Processing and treating equipment | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	21,559	11,809
Product sales | Other product sales | Transferred over time and transferred at point in time
Disaggregation of Revenue [Line Items]
Revenue	$ 3,145	$ 7,132

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Revenue - Disaggregation by Geographical Regions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 136,164	$ 160,794
North America
Disaggregation of Revenue [Line Items]
Revenue	6,325	8,976
Latin America
Disaggregation of Revenue [Line Items]
Revenue	60,618	76,797
Middle East and Africa
Disaggregation of Revenue [Line Items]
Revenue	57,179	55,713
Asia Pacific
Disaggregation of Revenue [Line Items]
Revenue	$ 12,042	$ 19,308

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Revenue - Performance Obligations (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Contract operations
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 1,227,654
Contract operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 215,012
Expected timing of satisfaction, period	9 months
Contract operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 213,560
Expected timing of satisfaction, period	1 year
Contract operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 203,346
Expected timing of satisfaction, period	1 year
Contract operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 186,322
Expected timing of satisfaction, period	1 year
Contract operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 161,876
Expected timing of satisfaction, period	1 year
Contract operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 247,538
Expected timing of satisfaction, period
Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 445,061
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 149,838
Expected timing of satisfaction, period	9 months
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 205,167
Expected timing of satisfaction, period	1 year
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 59,556
Expected timing of satisfaction, period	1 year
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 13,000
Expected timing of satisfaction, period	1 year
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 17,500
Expected timing of satisfaction, period	1 year
Product sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 0
Expected timing of satisfaction, period

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Revenue - Expected Timing of Revenue Recognition (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Operating lease income	$ 9,000
Revenue recognized from contract operations services including revenue deferred in previous periods	15,800
Operating lease contracts
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	300,500
Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	445,061
Performance obligation satisfied in previous periods	27,800
Performance obligation satisfied in previous periods, included in billings in excess of costs	16,400
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Operating lease contracts
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 33,000
Expected timing of satisfaction, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 149,838
Expected timing of satisfaction, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Operating lease contracts
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 43,000
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 205,167
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Operating lease contracts
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 77,000
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 59,556
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Operating lease contracts
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 65,000
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 13,000
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Operating lease contracts
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 47,000
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 17,500
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 0
Expected timing of satisfaction, period
Financing | Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Expected timing of revenue recognition from unsatisfied performance obligations	$ 43,000

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Revenue - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Accounts receivables, net	$ 188,401	$ 198,028
Contract assets and contract liabilities:
Current contract assets	32,301	32,642
Long-term contract assets	19,324	33,563
Current contract liabilities	97,753	100,123
Long-term contract liabilities	$ 65,580	$ 80,499

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Revenue - Allowance for Doubtful Accounts (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 10,803
Write-offs during the period	(48)
Ending balance	$ 10,755

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Discontinued Operations - Summary of Operating Results (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of tax	$ (873)	$ (2,231)
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	53	49,687
Cost of sales (excluding depreciation and amortization expense)	264	45,604
Selling, general and administrative	553	4,605
Depreciation and amortization	0	659
Restructuring and other charges	0	981
Other expense, net	34	44
Provision for income taxes	75	25
Loss from discontinued operations, net of tax	(873)	(2,231)
Belleli EPC | Exit of Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	0	124
Cost of sales (excluding depreciation and amortization expense)	55	96
Selling, general and administrative	158	113
Depreciation and amortization	0	0
Restructuring and other charges	0	0
Other expense, net	34	44
Provision for income taxes	75	25
Loss from discontinued operations, net of tax	(322)	(154)
US Compression | Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	53	49,563
Cost of sales (excluding depreciation and amortization expense)	209	45,508
Selling, general and administrative	395	4,492
Depreciation and amortization	0	659
Restructuring and other charges	0	981
Other expense, net	0	0
Provision for income taxes	0	0
Loss from discontinued operations, net of tax	$ (551)	$ (2,077)

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Discontinued Operations - Summary of Balance Sheet Data (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract assets	$ 32,301	$ 32,642
Total current assets associated with discontinued operations	25,955	25,325
Total current liabilities associated with discontinued operations	7,016	13,707
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Accounts receivable	1,007	3,439
Inventory	24,584	21,107
Contract assets	176	458
Other current assets	188	321
Total current assets associated with discontinued operations	25,955	25,325
Intangible and other assets, net	1,608	1,606
Total assets associated with discontinued operations	27,563	26,931
Accounts payable	1,173	5,232
Accrued liabilities	5,355	7,976
Contract liabilities	488	499
Total current liabilities associated with discontinued operations	7,016	13,707
Other long-term liabilities	1,062	2,142
Total liabilities associated with discontinued operations	8,078	15,849
Belleli EPC | Exit of Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Accounts receivable	268	268
Inventory	0	0
Contract assets	0	0
Other current assets	188	213
Total current assets associated with discontinued operations	456	481
Intangible and other assets, net	1,608	1,606
Total assets associated with discontinued operations	2,064	2,087
Accounts payable	35	139
Accrued liabilities	2,944	2,939
Contract liabilities	199	197
Total current liabilities associated with discontinued operations	3,178	3,275
Other long-term liabilities	786	765
Total liabilities associated with discontinued operations	3,964	4,040
US Compression | Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Accounts receivable	739	3,171
Inventory	24,584	21,107
Contract assets	176	458
Other current assets	0	108
Total current assets associated with discontinued operations	25,499	24,844
Intangible and other assets, net	0	0
Total assets associated with discontinued operations	25,499	24,844
Accounts payable	1,138	5,093
Accrued liabilities	2,411	5,037
Contract liabilities	289	302
Total current liabilities associated with discontinued operations	3,838	10,432
Other long-term liabilities	276	1,377
Total liabilities associated with discontinued operations	$ 4,114	$ 11,809

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Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Composition of Inventory net of reserves
Parts and supplies	$ 63,470	$ 65,576
Work in progress	40,822	41,020
Finished goods	3,241	3,241
Inventory	$ 107,533	$ 109,837

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Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment
Property, plant and equipment, gross	$ 1,755,845	$ 1,762,990
Accumulated depreciation	(1,060,681)	(1,029,768)
Property, plant and equipment, net	695,164	733,222
Compression equipment, processing facilities and other fleet assets
Property, Plant and Equipment
Property, plant and equipment, gross	$ 1,555,823	$ 1,562,528
Compression equipment, processing facilities and other fleet assets | Salvage Value
Property, Plant and Equipment
Salvage value (in percent)	5.00%	15.00%
Depreciation expense	$ 900
Land and buildings
Property, Plant and Equipment
Property, plant and equipment, gross	50,676	$ 50,908
Transportation and shop equipment
Property, Plant and Equipment
Property, plant and equipment, gross	53,768	54,763
Computer software
Property, Plant and Equipment
Property, plant and equipment, gross	54,849	54,486
Other
Property, Plant and Equipment
Property, plant and equipment, gross	$ 40,729	$ 40,305

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Long-term debt	$ 569,766	$ 562,325
8.125% senior notes due May 2025 | Senior Notes
Debt Instrument [Line Items]
Long-term Debt	350,000	350,000
Unamortized deferred financing costs of 8.125% senior notes	$ (3,934)	(4,175)
Stated interest rate	8.125%
Revolving credit facility due October 2023
Debt Instrument [Line Items]
Long-term Debt	$ 223,700	$ 216,500

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Debt - Revolving Credit Facility (Narrative) (Details)	Mar. 31, 2021 USD ($)
Debt Instrument [Line Items]
Outstanding letters of credit	$ 62,600,000
Revolving credit facility | Amended Credit Agreement
Debt Instrument [Line Items]
Borrowing capacity under restated credit agreement	650,000,000.0
Revolving credit facility | Credit Agreement
Debt Instrument [Line Items]
Outstanding borrowings	223,700,000
Outstanding letters of credit	7,500,000
Undrawn capacity under revolving credit facility	$ 418,800,000
Total debt to EBITDA ratio	4.50
Undrawn capacity available	$ 109,800,000

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Debt - 8.125% Senior Notes Due May 2025 (Narrative) (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020	Apr. 30, 2017
Debt Instrument [Line Items]
Interest coverage ratio	5.0
Total leverage ratio	3.8
Senior secured leverage ratio	1.5
Revolving credit facility due October 2023
Debt Instrument [Line Items]
Long-term Debt	$ 223,700,000	$ 216,500,000
Amended Credit Agreement
Debt Instrument [Line Items]
Maximum interest coverage ratio	2.25
Maximum total leverage ratio	4.50
Maximum senior secured leverage ratio	2.75
Subsidiaries | Exterran Corporation | EESLP And EES Finance Corp.
Debt Instrument [Line Items]
Ownership percentage by parent			100.00%
8.125% senior notes due May 2025 | Senior unsecured notes
Debt Instrument [Line Items]
Stated interest rate	8.125%
Long-term Debt	$ 350,000,000	$ 350,000,000
8.125% senior notes due May 2025 | Subsidiaries | Senior unsecured notes | EESLP And EES Finance Corp.
Debt Instrument [Line Items]
Stated interest rate			8.125%
Aggregate principal amount of senior unsecured notes			$ 375,000,000.0

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Fair Value Measurements - Recurring Measurements (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
(Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivatives liabilities	$ 0	$ 0
(Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivatives liabilities	0	0
(Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivatives liabilities	$ 0	$ (247)

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Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Forward Currency Exchange | Designated as Hedging Instrument
Summary of assets and liabilities measured at fair value
Notional amount	$ 25.0
Foreign Exchange Contract
Summary of assets and liabilities measured at fair value
Loss recognized on forward currency exchange contracts	0.9
Senior Notes | 8.125% senior notes due May 2025 | Reported Value Measurement
Summary of assets and liabilities measured at fair value
Fair value of notes	350.0	$ 350.0
Senior Notes | 8.125% senior notes due May 2025 | Estimate of Fair Value Measurement
Summary of assets and liabilities measured at fair value
Fair value of notes	$ 324.0	$ 297.0

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Fair Value Measurements - Nonrecurring Measurements (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)
Summary of assets and liabilities measured at fair value on nonrecurring basis
Undiscounted value of note receivable Including Interest	$ 15,700
Nonrecurring | Maturiy
Summary of assets and liabilities measured at fair value on nonrecurring basis
Settlement period	8 years
Nonrecurring | Discount rate
Summary of assets and liabilities measured at fair value on nonrecurring basis
Discount rate	0.125
Nonrecurring | (Level 1)
Summary of assets and liabilities measured at fair value on nonrecurring basis
Long-term note receivable	$ 0	$ 0
Nonrecurring | (Level 2)
Summary of assets and liabilities measured at fair value on nonrecurring basis
Long-term note receivable	0	0
Nonrecurring | (Level 3)
Summary of assets and liabilities measured at fair value on nonrecurring basis
Long-term note receivable	$ 11,767	$ 15,039

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Restructuring and Other Charges - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 624	$ 207
Cost Reduction Plan
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 600	$ 200

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Restructuring and Other Charges - Summary of Charges to Accrued Liability Balance (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Restructuring Reserve [Roll Forward]
Restructuring and other charges	$ 624	$ 207
Restructuring and other charges incurred to date	10,072
Employee termination benefits
Restructuring Reserve [Roll Forward]
Restructuring and other charges	624	0
Restructuring and other charges incurred to date	6,867
Consulting fees
Restructuring Reserve [Roll Forward]
Restructuring and other charges	0	207
Restructuring and other charges incurred to date	3,205
Cost Reduction Plan
Restructuring Reserve [Roll Forward]
Beginning balance	1,351	2,281
Additions for costs expensed, net	624	207
Reductions for payments	(588)	(163)
Foreign exchange impact	(94)	(289)
Ending balance	1,293	2,036
Restructuring and other charges	$ 600	$ 200

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Provision for Income Taxes (Details)	3 Months Ended
	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Federal income tax rate	21.00%
Effective tax rate	(34.60%)
Unrecognized tax benefits due to FIN 48	6.70%
Foreign currency devaluation	(12.10%)
Foreign withholding tax rate differential	(20.20%)
Deemed inclusion in the US	(12.60%)
Deferred tax assets valuation	(9.50%)

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Stockholders' Equity (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Feb. 20, 2019
Equity [Abstract]
Share repurchase program, authorized purchase amount			$ 100,000,000.0
Shares repurchased (in shares)	0	0
Remaining authorized share repurchase amount	$ 57,700,000

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Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted (in shares)	0	0
Restricted stock, restricted stock units and performance units for common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated unrecognized compensation cost	$ 7.6
Weighted-average vesting period	1 year 9 months 18 days
Minimum | Restricted stock, restricted stock units and performance units for common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	2 years
Maximum | Restricted stock, restricted stock units and performance units for common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years

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Stock-Based Compensation - Schedule of Restricted Stock, Restricted Stock Units and Performance Units for Common Stock (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Equity Awards
Shares
Non-vested awards at the beginning of the period | shares	320
Granted | shares	199
Vested | shares	(274)
Cancelled | shares	(2)
Non-vested awards at the end of the period | shares	243
Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards at the beginning of the period (in dollars per share) | $ / shares	$ 16.02
Granted (in dollars per share) | $ / shares	4.84
Vested (in dollars per share) | $ / shares	13.38
Cancelled (in dollars per share) | $ / shares	18.65
Non-vested awards at the end of the period (in dollars per share) | $ / shares	$ 9.81
Liability Awards
Shares
Non-vested awards at the beginning of the period | shares	1,198
Granted | shares	1,418
Vested | shares	(371)
Cancelled | shares	0
Non-vested awards at the end of the period | shares	2,245
Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards at the beginning of the period (in dollars per share) | $ / shares	$ 9.35
Granted (in dollars per share) | $ / shares	4.84
Vested (in dollars per share) | $ / shares	14.02
Cancelled (in dollars per share) | $ / shares	0
Non-vested awards at the end of the period (in dollars per share) | $ / shares	$ 5.73

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Net Income (Loss) Per Common Share - Reconciliation of Basic and Diluted Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Numerator for basic and diluted net loss per common share:
Loss from continuing operations	$ (29,000)	$ (16,073)
Loss from discontinued operations, net of tax	(873)	(2,231)
Less: Net income attributable to participating securities	0	0
Net loss — used in basic and diluted net loss per common share	$ (29,873)	$ (18,304)
Weighted average common shares outstanding including participating securities
Weighted average common shares outstanding including participating securities (in shares)	33,229	33,163
Less: Weighted average participating securities outstanding (in shares)	(279)	(510)
Weighted average common shares outstanding — used in basic net loss per common share (in shares)	32,950	32,653
Net dilutive potential common shares issuable:
Weighted average common shares outstanding — used in diluted net loss per common share (in shares)	32,950	32,653
Net loss per common share:
Basic and diluted (in dollars per share)	$ (0.91)	$ (0.56)

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Net Income (Loss) Per Common Share - Schedule of Antidilutive Shares (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net dilutive potential common shares issuable (in shares)	0	57
On exercise of options where exercise price is greater than average market value
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net dilutive potential common shares issuable (in shares)	0	57

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Commitments and Contingencies - Contingencies (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Outstanding letters of credit	$ 62.6
Amount accrued for the outcomes of non-income-based tax audits	$ 1.5	$ 3.5

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Commitments and Contingencies - Litigation (Details) - USD ($) $ in Millions	Dec. 19, 2020	Apr. 27, 2021
Loss Contingencies [Line Items]
Amount of Legal Claim	$ 38
Pending litigation | Subsequent Event
Loss Contingencies [Line Items]
Estimate of possible loss		$ 27
Threatened litigation | Subsequent Event
Loss Contingencies [Line Items]
Estimate of possible loss		$ 12

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Reportable Segments - Narrative (Details)	3 Months Ended
	Mar. 31, 2021 segment
Segment Reporting [Abstract]
Number of reportable segments	3

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Reportable Segments - Schedule of Revenues and Other Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Revenue	$ 136,164	$ 160,794
Total adjusted gross margin	67,235	69,222
Operating Segments
Segment Reporting Information [Line Items]
Revenue	136,164	160,794
Total adjusted gross margin	67,235	69,222
Contract operations
Segment Reporting Information [Line Items]
Revenue	81,014	94,788
Contract operations | Operating Segments
Segment Reporting Information [Line Items]
Revenue	81,014	94,788
Total adjusted gross margin	57,670	63,328
Aftermarket Services
Segment Reporting Information [Line Items]
Revenue	25,120	27,909
Aftermarket Services | Operating Segments
Segment Reporting Information [Line Items]
Revenue	25,120	27,909
Total adjusted gross margin	5,108	6,728
Product sales
Segment Reporting Information [Line Items]
Revenue	30,030	38,097
Product sales | Operating Segments
Segment Reporting Information [Line Items]
Revenue	30,030	38,097
Total adjusted gross margin	$ 4,457	$ (834)

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Reportable Segments - Reconciliation of Total Gross Margin to Total Adjusted Gross Margin (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting [Abstract]
Revenue	$ 136,164	$ 160,794
Cost of sales (excluding depreciation and amortization expense):	68,929	91,572
Depreciation and amortization	40,835	30,446
Total gross margin	26,400	38,776
Total adjusted gross margin	$ 67,235	$ 69,222