Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Exterran Corporation | |
Entity Central Index Key | 1,635,881 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 35,788,190 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 71,202 | $ 35,678 |
Restricted cash | 546 | 671 |
Accounts receivable, net of allowance of $6,020 and $5,383, respectively | 265,315 | 230,607 |
Inventory (Note 3) | 138,751 | 157,516 |
Costs and estimated earnings in excess of billings on uncompleted contracts (Note 4) | 40,696 | 31,956 |
Other current assets | 42,111 | 55,516 |
Current assets associated with discontinued operations (Note 2) | 4 | 14 |
Total current assets | 558,625 | 511,958 |
Property, plant and equipment, net (Note 5) | 812,797 | 797,809 |
Deferred income taxes | 9,042 | 6,015 |
Intangible and other assets, net | 76,906 | 58,996 |
Total assets | 1,457,370 | 1,374,778 |
Current liabilities: | ||
Accounts payable, trade | 126,052 | 95,959 |
Accrued liabilities | 143,146 | 162,792 |
Deferred revenue | 36,797 | 32,154 |
Billings on uncompleted contracts in excess of costs and estimated earnings (Note 4) | 96,789 | 42,116 |
Current liabilities associated with discontinued operations (Note 2) | 63 | 1,113 |
Total current liabilities | 402,847 | 334,134 |
Long-term debt (Note 7) | 367,896 | 348,970 |
Deferred income taxes | 13,649 | 11,700 |
Long-term deferred revenue | 100,043 | 98,964 |
Other long-term liabilities | 24,352 | 24,237 |
Long-term liabilities associated with discontinued operations (Note 2) | 0 | 2 |
Total liabilities | 908,787 | 818,007 |
Commitments and contingencies (Note 16) | ||
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; 36,190,463 and 35,641,113 shares issued, respectively | 362 | 356 |
Additional paid-in capital | 736,065 | 768,304 |
Accumulated deficit | (230,172) | (257,252) |
Treasury stock — 406,332 and 202,430 common shares, at cost, respectively | (5,464) | (2,145) |
Accumulated other comprehensive income | 47,792 | 47,508 |
Total stockholders’ equity (Note 13) | 548,583 | 556,771 |
Total liabilities and stockholders’ equity | $ 1,457,370 | $ 1,374,778 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 6,020 | $ 5,383 |
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 | 36,190,463 | 35,641,113 |
Treasury stock, common shares | 406,332 | 202,430 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Revenues | $ 327,095 | $ 229,158 | $ 938,380 | $ 797,935 |
Cost of sales (excluding depreciation and amortization expense): | ||||
Selling, general and administrative | 44,197 | 37,864 | 135,678 | 124,250 |
Depreciation and amortization | 28,314 | 28,183 | 83,641 | 106,533 |
Long-lived asset impairment (Note 9) | 0 | 5,358 | 0 | 6,009 |
Restatement related charges (Note 10) | 1,997 | 12,298 | 3,011 | 20,149 |
Restructuring and other charges (Note 11) | 417 | 2,239 | 2,595 | 25,442 |
Interest expense | 7,860 | 8,254 | 27,329 | 25,596 |
Equity in income of non-consolidated affiliates (Note 6) | 0 | 0 | 0 | (10,403) |
Other (income) expense, net | (2,496) | (3,349) | (1,128) | (13,160) |
Total costs and expenses | 316,567 | 245,127 | 910,408 | 844,972 |
Income (loss) before income taxes | 10,528 | (15,969) | 27,972 | (47,037) |
Provision for income taxes (Note 12) | 7,146 | 16,343 | 20,331 | 120,687 |
Income (loss) from continuing operations | 3,382 | (32,312) | 7,641 | (167,724) |
Income (loss) from discontinued operations, net of tax (Note 2) | (29) | 19,652 | 19,577 | (33,439) |
Net income (loss) | $ 3,353 | $ (12,660) | $ 27,218 | $ (201,163) |
Basic net income (loss) per common share (Note 15): | ||||
Income (loss) from continuing operations per common share (in dollars per share) | $ 0.09 | $ (0.93) | $ 0.22 | $ (4.85) |
Income (loss) from discontinued operations per common share (in dollars per share) | 0 | 0.56 | 0.54 | (0.97) |
Net income (loss) per common share (in dollars per share) | 0.09 | (0.37) | 0.76 | (5.82) |
Diluted net income (loss) per common share (Note 15): | ||||
Income (loss) from continuing operations per common share (in dollars per share) | 0.09 | (0.93) | 0.21 | (4.85) |
Income (loss) from discontinued operations per common share (in dollars per share) | 0 | 0.56 | 0.54 | (0.97) |
Net income (loss) per common share (in dollars per share) | $ 0.09 | $ (0.37) | $ 0.75 | $ (5.82) |
Weighted average common shares outstanding used in net income (loss) per common share (Note 15): | ||||
Basic (in shares) | 35,046 | 34,632 | 34,937 | 34,550 |
Diluted (in shares) | 35,120 | 34,632 | 35,019 | 34,550 |
Contract operations | ||||
Revenues: | ||||
Revenues | $ 92,561 | $ 99,143 | $ 279,947 | $ 298,591 |
Cost of sales (excluding depreciation and amortization expense): | ||||
Costs of sales (excluding depreciation and amortization expense) | 33,640 | 36,056 | 99,129 | 110,955 |
Long-lived asset impairment (Note 9) | 5,400 | 5,400 | ||
Aftermarket services | ||||
Revenues: | ||||
Revenues | 29,799 | 26,590 | 76,567 | 91,499 |
Cost of sales (excluding depreciation and amortization expense): | ||||
Costs of sales (excluding depreciation and amortization expense) | 21,903 | 19,046 | 55,793 | 65,483 |
Oil and gas product sales | ||||
Revenues: | ||||
Revenues | 192,119 | 73,685 | 521,091 | 314,684 |
Cost of sales (excluding depreciation and amortization expense): | ||||
Costs of sales (excluding depreciation and amortization expense) | 171,619 | 70,074 | 469,181 | 290,165 |
Belleli EPC product sales | ||||
Revenues: | ||||
Revenues | 12,616 | 29,740 | 60,775 | 93,161 |
Cost of sales (excluding depreciation and amortization expense): | ||||
Costs of sales (excluding depreciation and amortization expense) | $ 9,116 | $ 29,104 | $ 35,179 | $ 93,953 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 3,353 | $ (12,660) | $ 27,218 | $ (201,163) |
Other comprehensive income: | ||||
Foreign currency translation adjustment | 1,310 | 16,412 | 284 | 20,611 |
Comprehensive income (loss) | $ 4,663 | $ 3,752 | $ 27,502 | $ (180,552) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Income |
Beginning balance at Dec. 31, 2015 | $ 805,936 | $ 352 | $ 805,755 | $ (29,315) | $ (54) | $ 29,198 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income | (201,163) | (201,163) | ||||
Options exercised | 694 | 694 | ||||
Foreign currency translation adjustment | 20,611 | 20,611 | ||||
Cash transfer to Archrock, Inc. (Notes 7 and 16) | (49,176) | (49,176) | ||||
Treasury stock purchased | (1,444) | (1,444) | ||||
Stock-based compensation, net of forfeitures | 10,161 | 4 | 10,157 | |||
Income tax benefit from stock-based compensation expenses | (27) | (27) | ||||
Ending balance at Sep. 30, 2016 | 585,592 | 356 | 767,403 | (230,478) | (1,498) | 49,809 |
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative-effect adjustment from adoption of ASU 2016-09 | 0 | 138 | (138) | |||
Beginning balance at Dec. 31, 2016 | 556,771 | 356 | 768,304 | (257,252) | (2,145) | 47,508 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income | 27,218 | 27,218 | ||||
Options exercised | 684 | 1 | 683 | |||
Foreign currency translation adjustment | 284 | 284 | ||||
Cash transfer to Archrock, Inc. (Notes 7 and 16) | (44,720) | (44,720) | ||||
Treasury stock purchased | (3,319) | (3,319) | ||||
Stock-based compensation, net of forfeitures | 11,665 | 5 | 11,660 | |||
Ending balance at Sep. 30, 2017 | $ 548,583 | $ 362 | $ 736,065 | $ (230,172) | $ (5,464) | $ 47,792 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 27,218 | $ (201,163) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 83,641 | 106,533 |
Long-lived asset impairment (Note 9) | 0 | 6,009 |
Amortization of deferred financing costs | 4,044 | 3,453 |
(Income) loss from discontinued operations, net of tax | (19,577) | 33,439 |
Provision for doubtful accounts | 1,383 | 2,101 |
Gain on sale of property, plant and equipment | (1,956) | (2,354) |
Equity in income of non-consolidated affiliates | 0 | (10,403) |
Gain on remeasurement of intercompany balances | (2,473) | (9,922) |
Loss on foreign currency derivatives | 0 | 587 |
Loss on sale of business | 111 | 0 |
Stock-based compensation expense | 11,665 | 10,161 |
Deferred income tax provision (benefit) | (2,006) | 73,108 |
Changes in assets and liabilities: | ||
Accounts receivable and notes | (37,709) | 127,751 |
Inventory | 9,817 | 44,861 |
Costs and estimated earnings versus billings on uncompleted contracts | 45,943 | 16,578 |
Other current assets | (1,494) | 6,470 |
Accounts payable and other liabilities | 5,010 | (25,733) |
Deferred revenue | 2,931 | 25,083 |
Other | (9,257) | 6,477 |
Net cash provided by continuing operations | 117,291 | 213,036 |
Net cash provided by (used in) discontinued operations | 2,006 | (2,284) |
Net cash provided by operating activities | 119,297 | 210,752 |
Cash flows from investing activities: | ||
Capital expenditures | (79,122) | (47,689) |
Proceeds from sale of property, plant and equipment | 7,309 | 972 |
Proceeds from sale of business | 894 | 0 |
Return of investments in non-consolidated affiliates | 0 | 10,403 |
Settlement of foreign currency derivatives | 0 | (396) |
Decrease in restricted cash | 125 | 408 |
Net cash used in continuing operations | (70,794) | (36,302) |
Net cash provided by discontinued operations | 18,600 | 36,734 |
Net cash provided by (used in) investing activities | (52,194) | 432 |
Cash flows from financing activities: | ||
Proceeds from borrowings of long-term debt | 488,000 | 353,758 |
Repayments of long-term debt | (463,940) | (508,948) |
Cash transfer to Archrock, Inc. (Note 7 and 16) | (44,720) | (49,176) |
Payments for debt issuance costs | (7,911) | (779) |
Proceeds from stock options exercised | 684 | 694 |
Purchases of treasury stock | (3,319) | (1,444) |
Net cash used in financing activities | (31,206) | (205,895) |
Effect of exchange rate changes on cash and cash equivalents | (373) | (2,268) |
Net increase in cash and cash equivalents | 35,524 | 3,021 |
Cash and cash equivalents at beginning of period | 35,678 | 29,032 |
Cash and cash equivalents at end of period | $ 71,202 | $ 32,053 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
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,” “our,” “we” or “us”), a Delaware corporation formed in March 2015, is a global market leader in natural gas processing and treating, compression and production products and services, providing critical midstream infrastructure solutions to customers throughout the world. Outside the United States of America (“U.S.”), we are a leading provider of full-service natural gas contract compression and water treatment solutions, and a supplier of new, used, original equipment manufacturer and aftermarket parts and services. We provide these products and services to a global customer base consisting of companies engaged in all aspects of the oil and natural gas industry, including large integrated oil and natural gas companies, national oil and natural gas companies, independent oil and natural gas producers and oil and natural gas processors, gatherers and pipeline operators. We operate in four primary business lines: contract operations, aftermarket services, oil and gas product sales and Belleli EPC product sales. On November 3, 2015, Archrock, Inc. (named Exterran Holdings, Inc. prior to November 3, 2015) (“Archrock”) completed the spin-off (the ‘‘Spin-off”) of its international contract operations, international aftermarket services and global fabrication businesses into an independent, publicly traded company named Exterran Corporation. 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 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 present 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 and combined financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2016 . That report contains a comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. We refer to the condensed consolidated financial statements collectively as “financial statements,” and individually as “balance sheets,” “statements of operations,” “statements of comprehensive income (loss),” “statements of stockholders’ equity” and “statements of cash flows” herein. Recent Accounting Pronouncements We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-11, Simplifying the Measurement of Inventory , which requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. On January 1, 2017, we adopted this update on a prospective basis. The adoption of this update did not have a material impact on our financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) . The update covers such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. On January 1, 2017, we adopted this update. Upon adoption, we elected to account for forfeitures as they occur rather than applying an estimated forfeiture rate, which resulted in a cumulative-effect adjustment to accumulated deficit and additional paid-in capital of $0.1 million under the modified retrospective transition method. Additionally, as a result of this adoption, cash flows related to excess tax benefits are now presented as operating activities within the statements of cash flows. The impact of this retrospective adoption was immaterial to the results of the prior year period. Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt the updates. We intend to adopt the new guidance on January 1, 2018 using the modified retrospective approach. In preparation for our adoption of the new standard, we have evaluated representative samples of contracts and other forms of agreements with our customers based upon the five-step model specified by the new guidance. We have completed a preliminary assessment of the potential impact the implementation of this new guidance may have on our financial statements. Although our preliminary assessment may change based upon completion of our evaluation, the following summarizes the more significant impacts expected from the adoption of the new standard: • Revenue from the sale of compression equipment within our oil and gas product sales segment is currently recognized over time using the percentage-of-completion method. Under the new standard, a significant amount of revenue from the sale of compression equipment is expected to be recognized at a point in time. • Revenue from installation services within our oil and gas product sales segment is currently recognized using the completed contract method. Under the new standard, revenue from such services is expected to be recognized over time. • Revenue from overhaul and reconfiguration services within our aftermarket services segment is currently recognized at a point in time. Under the new standard, revenue from such services is expected to be recognized over time. Additionally, the new guidance will require us to enhance our disclosures to provide additional information relating to disaggregated revenue, contract assets and liabilities and remaining performance obligations. We are currently evaluating potential changes to our information systems, processes and internal controls to meet the new standard’s reporting and disclosure requirements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Lessor accounting will be similar to the current model except for changes made to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance will be replaced with a new model applicable to both lessees and lessors. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) . The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) . The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. This update will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. We do not expect the adoption of this update to be material to our financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . The update requires a reporting entity to recognize the tax expense from intra-entity asset transfers of assets other than inventory in the selling entity’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buying entity’s jurisdiction would also be recognized at the time of the transfer. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash . The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period, using a retrospective transition method to each period presented. This update will result in the inclusion of our restricted cash balances with cash and cash equivalents to reflect total cash in our statements of cash flows. We do not expect the adoption of this update to be material to our financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) . This update provides guidance that clarifies that changes to the terms or conditions of a share-based payment award should be accounted for as modifications. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period, using a prospective method to an award modified on or after the adoption date. We do not expect the adoption of this update to be material to our financial statements. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 2 - Discontinued Operations In August 2012, our Venezuelan subsidiary sold its previously nationalized assets to PDVSA Gas, S.A. (“PDVSA Gas”) for a purchase price of approximately $441.7 million . We received installment payments, including an annual charge, totaling $19.7 million during the nine months ended September 30, 2017 and $19.5 million and $38.8 million during the three and nine months ended September 30, 2016 , respectively. As of September 30, 2017 , the remaining principal amount due to us was approximately $17 million . We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize payments received in the future as income from discontinued operations in the periods such payments are received. The proceeds from the sale of the assets are not subject to Venezuelan national taxes due to an exemption allowed under the Venezuelan Reserve Law applicable to expropriation settlements. In addition, and in connection with the sale, we and the Venezuelan government agreed to waive rights to assert certain claims against each other. In connection with the sale of these assets, we have agreed to suspend the arbitration proceeding previously filed by our Spanish subsidiary against Venezuela pending payment in full by PDVSA Gas of the purchase price for these nationalized assets. In accordance with the separation and distribution agreement from the Spin-off, a subsidiary of Archrock has the right to receive payments from our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”), based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our previously nationalized assets promptly after such amounts are collected by our subsidiaries. Pursuant to the separation and distribution agreement, we transferred cash of $19.7 million and $38.8 million to Archrock during the nine months ended September 30, 2017 and 2016 , respectively. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. See Note 16 for further discussion related to our contingent liability to Archrock. In the first quarter of 2016, we began executing a plan to exit certain Belleli businesses to focus on our core oil and gas businesses. Specifically, we began marketing for sale the Belleli CPE business comprised of engineering, procurement and manufacturing services related to the manufacture of critical process equipment for refinery and petrochemical facilities (referred to as “Belleli CPE” or the “Belleli CPE business” herein). In addition, we began executing our exit of the 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). Belleli CPE met the held for sale criteria and is reflected as discontinued operations in our financial statements for all periods presented. In August 2016, we completed the sale of our Belleli CPE business to Tosto S.r.l. for cash proceeds of $5.5 million . Belleli CPE was previously included in our former product sales segment. In conjunction with the planned disposition of Belleli CPE, we recorded impairments of long-lived assets and current assets that totaled $68.8 million during the nine months ended September 30, 2016 . The impairment charges are reflected in income (loss) from discontinued operations, net of tax. In accordance with GAAP, Belleli EPC will be reflected as discontinued operations upon the substantial cessation of the remaining non-oil and gas business, which is expected to occur by the end of 2017. During the first quarter of 2016, we ceased the booking of new orders for our Belleli EPC business. Our plan to exit our Belleli EPC business resulted in a reduction in the remaining useful lives of the assets that are currently used in the Belleli EPC business and a long-lived asset impairment charge of $0.7 million impacting results from continuing operations during the nine months ended September 30, 2016 . Belleli EPC is represented by our Belleli EPC product sales segment. The following table summarizes the operating results of discontinued operations (in thousands): Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Venezuela Venezuela Belleli CPE Total Revenue $ — $ — $ 4,376 $ 4,376 Cost of sales (excluding depreciation and amortization expense) — — 3,887 3,887 Selling, general and administrative 29 47 788 835 Recovery attributable to expropriation — (16,567 ) — (16,567 ) Interest expense — — 2 2 Other (income) expense, net — (2,941 ) (492 ) (3,433 ) Income (loss) from discontinued operations, net of tax $ (29 ) $ 19,461 $ 191 $ 19,652 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Venezuela Venezuela Belleli CPE Total Revenue $ — $ — $ 28,469 $ 28,469 Cost of sales (excluding depreciation and amortization expense) — — 27,323 27,323 Selling, general and administrative 94 125 4,229 4,354 Depreciation and amortization — — 861 861 Long-lived asset impairment — — 68,780 68,780 Recovery attributable to expropriation (16,514 ) (33,124 ) — (33,124 ) Interest expense — — 17 17 Other (income) expense, net (3,157 ) (5,962 ) (341 ) (6,303 ) Income (loss) from discontinued operations, net of tax $ 19,577 $ 38,961 $ (72,400 ) $ (33,439 ) The following table summarizes the balance sheet data for discontinued operations (in thousands): September 30, 2017 December 31, 2016 Venezuela Venezuela Belleli CPE Total Cash $ 3 $ 11 $ — $ 11 Other current assets 1 3 — 3 Total assets associated with discontinued operations $ 4 $ 14 $ — $ 14 Accrued liabilities $ 63 $ 906 $ 207 $ 1,113 Total current liabilities associated with discontinued operations 63 906 207 1,113 Other long-term liabilities — 2 — 2 Total liabilities associated with discontinued operations $ 63 $ 908 $ 207 $ 1,115 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 - Inventory Inventory consisted of the following amounts (in thousands): September 30, 2017 December 31, 2016 Parts and supplies $ 96,519 $ 104,897 Work in progress 28,175 32,167 Finished goods 14,057 20,452 Inventory $ 138,751 $ 157,516 |
Product Sales Contracts
Product Sales Contracts | 9 Months Ended |
Sep. 30, 2017 | |
Contractors [Abstract] | |
Product Sales Contracts | Note 4 - Product Sales Contracts Costs, estimated earnings (losses) and billings on uncompleted contracts that are recognized using the percentage-of-completion method consisted of the following (in thousands): September 30, 2017 December 31, 2016 Costs incurred on uncompleted contracts $ 677,181 $ 558,274 Estimated earnings (losses) on uncompleted contracts (1) 18,542 (10,370 ) 695,723 547,904 Less — billings to date on uncompleted contracts (751,816 ) (558,064 ) $ (56,093 ) $ (10,160 ) (1) Estimated earnings (losses) on uncompleted contracts includes $49.0 million and $56.4 million of cumulative losses realized on uncompleted Belleli EPC product sales contracts as of September 30, 2017 and December 31, 2016 , respectively. Estimated earnings (losses) on uncompleted contracts as of September 30, 2017 and December 31, 2016 excludes estimated accrued loss contract provisions on uncompleted Belleli EPC product sales contracts recognized but not realized of $8.3 million and $28.6 million , respectively. Accrued loss contract provisions are included in accrued liabilities in our balance sheets. Costs, estimated earnings and billings on uncompleted contracts are presented in the accompanying financial statements as follows (in thousands): September 30, 2017 December 31, 2016 Costs and estimated earnings in excess of billings on uncompleted contracts $ 40,696 $ 31,956 Billings on uncompleted contracts in excess of costs and estimated earnings (96,789 ) (42,116 ) $ (56,093 ) $ (10,160 ) |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 9 Months Ended |
Sep. 30, 2017 | |
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): September 30, 2017 December 31, 2016 Compression equipment, facilities and other fleet assets $ 1,544,390 $ 1,480,568 Land and buildings 106,708 110,378 Transportation and shop equipment 140,080 140,128 Other 98,001 95,817 1,889,179 1,826,891 Accumulated depreciation (1,076,382 ) (1,029,082 ) Property, plant and equipment, net $ 812,797 $ 797,809 |
Investments in Non-Consolidated
Investments in Non-Consolidated Affiliates | 9 Months Ended |
Sep. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Non-Consolidated Affiliates | Note 6 - Investments in Non-Consolidated Affiliates Investments in affiliates that are not controlled by us where we have the ability to exercise significant influence over the operations are accounted for using the equity method. We own a 30.0% interest in WilPro Energy Services (PIGAP II) Limited and a 33.3% interest in WilPro Energy Services (El Furrial) Limited, which are joint ventures that provided natural gas compression and injection services in Venezuela. In May 2009, Petroleos de Venezuela S.A. (“PDVSA”) assumed control over the assets of our Venezuelan joint ventures and transitioned the operations, including the hiring of their employees, to PDVSA. In March 2011, our Venezuelan joint ventures, together with the Netherlands’ parent company of our joint venture partners, filed a request for the institution of an arbitration proceeding against Venezuela with the International Centre for Settlement of Investment Disputes related to the seized assets and investments. In March 2012, our Venezuelan joint ventures sold their assets to PDVSA Gas. We received installment payments, including an annual charge, totaling $10.4 million during the nine months ended September 30, 2016 . As of September 30, 2017 , the remaining principal amount due to us was approximately $4 million . We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize payments received in the future as equity in income of non-consolidated affiliates in our statements of operations in the periods such payments are received. In connection with the sale of our Venezuelan joint ventures’ assets, the joint ventures and our joint venture partners have agreed to suspend their previously filed arbitration proceeding against Venezuela pending payment in full by PDVSA Gas of the purchase price for the assets. In accordance with the separation and distribution agreement, a subsidiary of Archrock has the right to receive payments from EESLP based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our joint ventures’ previously nationalized assets promptly after such amounts are collected by our subsidiaries. Pursuant to the separation and distribution agreement, we transferred cash of $10.4 million to Archrock during the nine months ended September 30, 2016 . The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. See Note 16 for further discussion related to our contingent liability to Archrock. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 7 - Long-Term Debt Long-term debt consisted of the following (in thousands): September 30, 2017 December 31, 2016 Revolving credit facility due November 2020 $ — $ 118,000 Term loan facility due November 2017 — 232,750 8.125% senior notes due May 2025 375,000 — Other, interest at various rates, collateralized by equipment and other assets 393 583 Unamortized deferred financing costs of 8.125% senior notes (7,497 ) — Unamortized deferred financing costs of term loan facility — (2,363 ) Long-term debt $ 367,896 $ 348,970 Revolving Credit Facility and Term Loan We and our wholly owned subsidiary, EESLP, are parties to an amended and restated credit agreement (the “Credit Agreement”) consisting of a $680.0 million revolving credit facility expiring in November 2020 and previously included a term loan facility. In April 2017, we paid the remaining principal amount of $232.8 million due under the term loan facility with proceeds from the 2017 Notes (as defined below) issuance. As a result of the repayment of the term loan facility, we expensed $1.7 million of unamortized deferred financing costs during the nine months ended September 30, 2017 , which is reflected in interest expense in our statements of operations. As of September 30, 2017 , we had $52.8 million in outstanding letters of credit under our revolving credit facility and, taking into account guarantees through letters of credit, we had undrawn capacity of $627.2 million under our revolving credit facility. Our Credit Agreement limits our Total Debt to EBITDA ratio (as defined in the 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, $452.9 million of the $627.2 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of September 30, 2017 . During the nine months ended September 30, 2016 , we incurred transaction costs of approximately $0.8 million related to amending the Credit Agreement. These costs were included in intangible and other assets, net, and are being amortized over the term of the revolving credit facility. 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”). The 2017 Notes are guaranteed by us on a senior unsecured basis. The net proceeds of $367.1 million from the 2017 Notes issuance were used to repay all of the borrowings outstanding under the term loan facility and revolving credit facility and for general corporate purposes. Additionally, pursuant to the separation and distribution agreement from the Spin-off, EESLP used proceeds from the issuance of the 2017 Notes to pay a subsidiary of Archrock $25.0 million in satisfaction of EESLP’s obligation to pay that sum following the occurrence of a qualified capital raise. The transfer of cash to Archrock’s subsidiary was recognized as a reduction to additional paid-in capital in the second quarter of 2017. The 2017 Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and unless so registered, may not be offered or sold in the U.S. except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. We offered and issued the 2017 Notes only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the U.S. pursuant to Regulation S. Pursuant to a registration rights agreement, we are required to register the 2017 Notes no later than 400 days after April 4, 2017. Prior to May 1, 2020, we may redeem all or a portion of the 2017 Notes at a redemption price equal to the sum of (i) the principal amount thereof, and (ii) a make-whole premium at the redemption date, plus accrued and unpaid interest, if any, to the redemption date. In addition, we may redeem up to 35% of the aggregate principal amount of the 2017 Notes prior to May 1, 2020 with the net proceeds of one or more equity offerings at a redemption price of 108.125% of the principal amount of the 2017 Notes, plus any accrued and unpaid interest to the date of redemption, if at least 65% of the aggregate principal amount of the 2017 Notes issued under the indenture remains outstanding after such redemption and the redemption occurs within 180 days of the date of the closing of such equity offering. On or after May 1, 2020, we may redeem all or a portion of the 2017 Notes at redemption prices (expressed as percentages of principal amount) equal to 106.094% for the twelve-month period beginning on May 1, 2020, 104.063% for the twelve-month period beginning on May 1, 2021, 102.031% for the twelve-month period beginning on May 1, 2022 and 100.000% for the twelve-month period beginning on May 1, 2023 and at any time thereafter, plus accrued and unpaid interest, if any, to the applicable redemption date of the 2017 Notes. During nine months ended September 30, 2017 , we incurred transaction costs of $7.9 million related to the issuance of the 2017 Notes. These costs are presented as a direct deduction from the carrying value of the 2017 Notes and are being amortized over the term of the 2017 Notes. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 8 - Fair Value Measurements The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories: • 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. The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the nine months ended September 30, 2016 , with pricing levels as of the date of valuation (in thousands): Nine Months Ended September 30, 2016 (Level 1) (Level 2) (Level 3) Impaired long-lived assets (1) $ — $ — $ 684 Impaired assets—Discontinued operations (2) — — 13,859 Note receivable from the sale of a plant (3) — — 7,037 Liability to exit the use of a corporate operating lease—restructuring and other charges (4) — — 3,580 (1) Our estimate of the fair value of the impaired long-lived assets during the nine months ended September 30, 2016 was primarily based on either the expected net sale proceeds compared to other fleet units we sold and/or a review of other units offered for sale by third parties during that time, or the estimated component value of the equipment we planned for use at that time. (2) Our estimate of the fair value of the impaired assets of Belleli CPE, which were classified as discontinued operations, during the nine months ended September 30, 2016 was based on the proceeds received from the sale of Belleli CPE, net of selling costs. (3) Our estimate of the fair value of the note receivable, including annual payments, from the sale of our plant in Argentina during the nine months ended September 30, 2016 was discounted based on a settlement period of 2.6 years and a discount rate of 5% . (4) The fair value of our liability to exit the use of a corporate operating lease relating to restructuring activities during the second quarter of 2016 was estimated based on an incremental borrowing rate of 3% and remaining lease payments, net of estimated sublease rentals, through February 2018 . We did not have any assets and liabilities measured at fair value on a nonrecurring basis during the nine months ended September 30, 2017 . Fair Value of Debt 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 September 30, 2017, the carrying amount of the 2017 Notes, excluding unamortized deferred financing costs, of $375.0 million was estimated to have a fair value of $392.8 million . Due to the variable rate nature of our revolving credit facility and term loan facility, the carrying values as of December 31, 2016 approximated their fair values as the rates were comparable to then-current market rates at which debt with similar terms could have been obtained. Other The fair values of our 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. |
Long-Lived Asset Impairment
Long-Lived Asset Impairment | 9 Months Ended |
Sep. 30, 2017 | |
Asset Impairment Charges [Abstract] | |
Long-Lived Asset Impairment | Note 9 - Long-Lived Asset Impairment We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressor units from our active fleet, indicate that the carrying amount of an asset may not be recoverable. We regularly review the future deployment of our idle compression assets used in our contract operations segment for units that are not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. During the three months ended September 30, 2016 , we determined that 25 idle compressor units totaling approximately 31,000 horsepower would be retired from the active fleet. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded a $5.4 million asset impairment to reduce the book value of each unit to its estimated fair value during the three and nine months ended September 30, 2016 . The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we sold and/or a review of other units offered for sale by third parties during that time or the estimated component value of the equipment on each compressor unit that we planned to use at that time. As discussed in Note 2 , in the first quarter of 2016, we began executing a plan to exit our Belleli EPC business to focus on our core oil and gas businesses. Based on our decision to cease the booking of new orders for the manufacture of tanks for tank farms and the manufacture of evaporators and brine heaters for desalination plants, the customer relationship intangible assets related to our Belleli EPC business were assessed to have no future benefit to us. As a result, we recorded a long-lived asset impairment charge of $0.7 million during the nine months ended September 30, 2016 . In addition, the property, plant and equipment of our Belleli EPC business was reviewed for recoverability. As a result, the remaining useful lives of Belleli EPC non-oil and gas property, plant and equipment were reduced to reflect their estimated cessation date. |
Restatement Related Charges
Restatement Related Charges | 9 Months Ended |
Sep. 30, 2017 | |
Restatement Charges [Abstract] | |
Restatement Related Charges | Note 10 - Restatement Related Charges During the first quarter of 2016, our senior management identified errors relating to the application of percentage-of-completion accounting principles to specific Belleli EPC product sales projects. During the three and nine months ended September 30, 2017 , we incurred $2.0 million and $5.8 million , respectively, of external costs associated with an ongoing SEC investigation and remediation activities related to the restatement. During the nine months ended September 30, 2017 , we recorded recoveries from Archrock pursuant to the separation and distribution agreement of $2.8 million for previously incurred restatement related costs. During the three months ended September 30, 2016 , we incurred $12.3 million of costs associated with the restatement of our financial statements, which primarily related to $10.0 million of external accounting costs and $1.7 million of external legal costs. During the nine months ended September 30, 2016 , we incurred $20.1 million of costs associated with the restatement of our financial statements, which primarily related to $14.8 million of external accounting costs and $4.4 million of external legal costs. We expect that we will continue to incur additional cash expenditures related to external legal counsel costs associated with an ongoing SEC investigation surrounding the restatement of our financial statements, of which a portion may be recoverable from Archrock. The following table summarizes the changes to our accrued liability balance related to restatement charges for the nine months ended September 30, 2016 and 2017 (in thousands): Restatement Related Charges Beginning balance at January 1, 2016 $ — Additions for costs expensed 20,149 Reductions for payments (11,370 ) Ending balance at September 30, 2016 $ 8,779 Beginning balance at January 1, 2017 $ 2,212 Additions for costs expensed, net 3,011 Add-back recoveries from Archrock 2,801 Reductions for payments, net (7,082 ) Ending balance at September 30, 2017 $ 942 The following table summarizes the components of charges included in restatement related charges in our statements of operations for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 External accounting costs $ 317 $ 10,046 $ 1,071 $ 14,827 External legal costs 1,409 1,665 4,101 4,387 Other 271 587 640 935 Recoveries from Archrock — — (2,801 ) — Total restatement related charges $ 1,997 $ 12,298 $ 3,011 $ 20,149 |
Restructuring and Other Charges
Restructuring and Other Charges | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Note 11 - Restructuring and Other Charges We incurred restructuring and other charges associated with the Spin-off of $0.2 million and $0.7 million during the three months ended September 30, 2017 and 2016 , respectively, and $0.4 million and $3.5 million during the nine months ended September 30, 2017 and 2016 , respectively. These costs incurred were primarily related to retention awards to certain employees, which are being amortized over the required service period of each applicable employee. The charges incurred in conjunction with the Spin-off are included in restructuring and other charges in our statements of operations. We currently estimate that we will incur additional one-time expenditures of approximately $0.1 million related to retention awards to certain employees in the form of cash and stock-based compensation through November 2017. As a result of unfavorable market conditions in North America, combined with the impact of lower international activity due to customer budget cuts driven by lower oil prices, in the second quarter of 2015, we announced a cost reduction plan primarily focused on workforce reductions and the reorganization of certain facilities. We incurred restructuring and other charges associated with the cost reduction plan of $0.2 million and $1.5 million during the three months ended September 30, 2017 and 2016 , respectively, and $2.2 million and $21.9 million during the nine months ended September 30, 2017 and 2016 , respectively. Costs incurred for employee termination benefits during the three and nine months ended September 30, 2017 were $0.2 million and $1.7 million , respectively. Restructuring and other charges incurred during the three months ended September 30, 2016 were primarily related to employee termination benefits. Costs incurred for employee termination benefits during the three months ended September 30, 2016 were $1.3 million , of which $0.7 million related to our oil and gas product sales business. Restructuring and other charges incurred during the nine months ended September 30, 2016 were primarily related to employee termination benefits and the exit from a leased corporate building. Costs incurred for employee termination benefits during the nine months ended September 30, 2016 were $18.8 million , of which $8.8 million related to our oil and gas product sales business and $4.6 million related to our Belleli EPC product sales business. We ceased the use of a corporate building under an operating lease in the second quarter of 2016, and as a result, recorded net charges of $2.7 million during the nine months ended September 30, 2016 . These charges are reflected as restructuring and other charges in our statements of operations. Accrued liabilities related to the cost reduction plan, which are expected to be settled within the next twelve months with cash payments, are based on estimates that may vary significantly from actual costs depending, in part, upon factors that may be beyond our control. We will continue to review the status of our restructuring obligations on a quarterly basis and, if appropriate, record changes to these obligations in current operations based on management’s most current estimates. The following table summarizes the changes to our accrued liability balance related to restructuring and other charges for the nine months ended September 30, 2016 and 2017 (in thousands): Spin-off Cost Reduction Plan Total Beginning balance at January 1, 2016 $ 1,083 $ 565 $ 1,648 Additions for costs expensed 3,503 21,939 25,442 Less non-cash income (expense) (798 ) 435 (363 ) Reductions for payments (1,488 ) (15,431 ) (16,919 ) Ending balance at September 30, 2016 $ 2,300 $ 7,508 $ 9,808 Beginning balance at January 1, 2017 $ 934 $ 7,885 $ 8,819 Additions for costs expensed 442 2,153 2,595 Less non-cash income (expense) (212 ) 771 559 Reductions for payments — (8,077 ) (8,077 ) Ending balance at September 30, 2017 $ 1,164 $ 2,732 $ 3,896 The following table summarizes the components of charges included in restructuring and other charges in our statements of operations for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Consulting fees $ — $ — $ — $ 22 Start-up of stand-alone functions — — — 887 Retention awards to certain employees 189 725 442 2,616 Employee termination benefits 206 1,298 1,660 18,751 Net charges to exit the use of a corporate operating lease — — — 2,708 Other 22 216 493 458 Total restructuring and other charges $ 417 $ 2,239 $ 2,595 $ 25,442 The following table summarizes the components of restructuring and other charges incurred in connection with the Spin-off and since the announcement of the cost reduction plan (in thousands): Spin-off Cost Reduction Plan Total Financial advisor fees related to the Spin-off $ 4,598 $ — $ 4,598 Consulting fees — 1,954 1,954 Start-up of stand-alone functions 2,219 — 2,219 Retention awards to certain employees 6,619 — 6,619 Chief Executive Officer signing bonus 2,000 — 2,000 Non-cash inventory write-downs 4,700 4,007 8,707 Employee termination benefits — 31,177 31,177 Net charges to exit the use of a corporate operating lease — 2,904 2,904 Other — 1,189 1,189 Total restructuring and other charges $ 20,136 $ 41,231 $ 61,367 |
Provision for Income Taxes
Provision for Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | Note 12 - Provision for Income Taxes During the third quarter of 2017, our Brazil subsidiary entered the Tax Special Regularization Program (the “PERT Program”) pursuant to Brazil Provisional Measure No. 783 issued on May 31, 2017. The PERT Program allows for the partial settling of debts, both income tax debts and non-income-based tax debts, due by April 30, 2017 to Brazil’s Federal Revenue Service with the use of tax credits, including income tax loss carryforwards. A $2.9 million income tax benefit was recorded during the three and nine months ended September 30, 2017 attributable to the reversal of valuation allowances against certain deferred tax assets related to income tax loss carryforwards that were utilized under the PERT Program. Additionally, during the three and nine months ended September 30, 2017 , we incurred $0.4 million in penalties, which is reflected in other (income) expense, net, in our statements of operations, and $0.1 million in interest expense, which is reflected in interest expense in our statements of operations, attributable to the settling of non-income-based tax debts in connection with the PERT Program. Also, during the second quarter of 2017, our Brazil subsidiary entered the Tax Regularization Program (the “PRT Program”) pursuant to Brazil Provisional Measure No. 766 issued on January 4, 2017. Similar to the PERT Program, the PRT Program allows for the partial settling of debts, both income tax debts and non-income-based tax debts, due by November 30, 2016 to Brazil’s Federal Revenue Service with the use of tax credits, including income tax loss carryforwards. An $11.9 million income tax benefit was recorded during the nine months ended September 30, 2017 attributable to the reversal of valuation allowances against certain deferred tax assets related to income tax loss carryforwards that were utilized under the PRT Program, including interest income. Additionally, during the nine months ended September 30, 2017 , we incurred $1.5 million in penalties, which is reflected in other (income) expense, net, in our statements of operations, and $2.4 million in interest expense, which is reflected in interest expense in our statements of operations, attributable to the settling of non-income-based tax debts in connection with the PRT Program. Management assesses all available positive and negative evidence to estimate our ability to generate sufficient future taxable income of the appropriate character, and in the appropriate taxing jurisdictions, to permit use of our existing deferred tax assets. A significant piece of objective negative evidence is a cumulative loss incurred over a three -year period in a taxing jurisdiction. Prevailing accounting practice is that such objective evidence would limit the ability to consider other subjective evidence, such as our projections for future growth. Based on information available at June 30, 2016 , we expected to incur a three-year cumulative loss in the U.S. by the end of 2016. Due to this significant negative evidence of cumulative losses, which outweighed the positive evidence of firm sales backlog and projected further taxable income, we were no longer able to support that it was more-likely-than-not that we would have sufficient taxable income of the appropriate character in the future that would allow us to realize our U.S. deferred tax assets. During the three and nine months ended September 30, 2016 , we recorded valuation allowances against our U.S. deferred tax assets of $13.6 million and $101.7 million , respectively. During the three and nine months ended September 30, 2017 , we recorded additional valuation allowances against our U.S. deferred tax assets of $5.7 million and $21.1 million , respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Note 13 - Stockholders' Equity Comprehensive Income (Loss) Components of comprehensive income (loss) are net income (loss) and all changes in stockholders’ equity during a period except those resulting from transactions with owners. Our accumulated other comprehensive income consists of foreign currency translation adjustments. The following table presents the changes in accumulated other comprehensive income, net of tax, during the nine months ended September 30, 2016 and 2017 (in thousands): Foreign Currency Translation Adjustment Accumulated other comprehensive income, January 1, 2016 $ 29,198 Income recognized in other comprehensive income (loss) 5,452 Loss reclassified from accumulated other comprehensive income (1) 15,159 Accumulated other comprehensive income, September 30, 2016 $ 49,809 Accumulated other comprehensive income, January 1, 2017 $ 47,508 Income recognized in other comprehensive income (loss) 284 Accumulated other comprehensive income, September 30, 2017 $ 47,792 (1) During the three and nine months ended September 30, 2016 , we reclassified a loss of $15.2 million related to foreign currency translation adjustment to income from discontinued operations in our statements of operations. This amount represents cumulative foreign currency translation adjustments associated with our Belleli CPE business that previously had been recognized in accumulated other comprehensive income. See Note 2 for further discussion of the sale of our Belleli CPE business. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 14 - Stock-Based Compensation Stock Options Stock options are granted at fair market value at the grant date, are exercisable according to the vesting schedule established and generally expire no later than seven years after the grant date. Stock options generally vest one-third per year on each of the first three anniversaries of the grant date. There were no stock options granted during the nine months ended September 30, 2017 . Restricted Stock, Restricted Stock Units, Performance Units, Cash Settled Restricted Stock Units and Cash Settled Performance Units For grants of restricted stock, restricted stock units and performance units, we recognize compensation expense over the vesting period equal to the fair value of our common stock at the grant date. We remeasure the fair value of cash settled restricted stock units and cash settled performance units and record a cumulative adjustment of the expense previously recognized. Our obligation related to the cash settled restricted stock units and cash settled performance units is reflected as a liability in our balance sheets. Grants of restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units generally vest one-third per year on each of the first three anniversaries of the grant date. The table below presents the changes in restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units for our common stock during the nine months ended September 30, 2017 . Non-vested awards granted prior to November 3, 2015 relate to Archrock’s and our employees, directors and consultants. Awards granted subsequent to November 3, 2015 only relate to our employees, directors and consultants. Shares (in thousands) Weighted Average Grant-Date Fair Value Per Share Non-vested awards, January 1, 2017 1,292 $ 17.68 Granted 646 29.88 Vested (573 ) 20.84 Change in expected vesting of performance units 102 30.87 Cancelled (186 ) 18.62 Non-vested awards, September 30, 2017 (1) 1,281 23.33 (1) Non-vested awards as of September 30, 2017 are comprised of 3,000 cash settled restricted stock units and 1,278,000 restricted shares, restricted stock units and performance units. As of September 30, 2017 , we estimate $19.4 million of unrecognized compensation cost related to unvested restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units issued to our employees to be recognized over the weighted-average vesting period of 2.0 years . |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Note 15 - Net Income (Loss) Per Common Share Basic net income (loss) per common share is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share is determined by dividing net income (loss) after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include our unvested restricted stock and certain stock settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss from continuing operations, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses. Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options to purchase common stock and non-participating restricted stock units, unless their effect would be anti-dilutive. The following table presents a reconciliation of basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator for basic and diluted net income (loss) per common share: Income (loss) from continuing operations $ 3,382 $ (32,312 ) $ 7,641 $ (167,724 ) Income (loss) from discontinued operations, net of tax (29 ) 19,652 19,577 (33,439 ) Less: Net income attributable to participating securities (92 ) — (781 ) — Net income (loss) — used in basic and diluted net income (loss) per common share $ 3,261 $ (12,660 ) $ 26,437 $ (201,163 ) Weighted average common shares outstanding including participating securities 36,036 35,562 35,969 35,492 Less: Weighted average participating securities outstanding (990 ) (930 ) (1,032 ) (942 ) Weighted average common shares outstanding — used in basic net income (loss) per common share 35,046 34,632 34,937 34,550 Net dilutive potential common shares issuable: On exercise of options and vesting of restricted stock units 74 * 82 * Weighted average common shares outstanding — used in diluted net income (loss) per common share 35,120 34,632 35,019 34,550 Net income (loss) per common share: Basic $ 0.09 $ (0.37 ) $ 0.76 $ (5.82 ) Diluted $ 0.09 $ (0.37 ) $ 0.75 $ (5.82 ) * 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 that were excluded from computing diluted net income (loss) per common share as their inclusion would have been anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net dilutive potential common shares issuable: On exercise of options where exercise price is greater than average market value for the period 39 216 45 232 On exercise of options and vesting of restricted stock units — 46 — 51 Net dilutive potential common shares issuable 39 262 45 283 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16 - Commitments and Contingencies Guarantees We have issued the following guarantees that are not recorded on our accompanying balance sheet (dollars in thousands): Term Maximum Potential Undiscounted Payments as of September 30, 2017 Performance guarantees through letters of credit (1) 2017-2021 $ 74,402 Standby letters of credit 2017 798 Bid bonds and performance bonds (1) 2017-2027 52,380 Maximum potential undiscounted payments $ 127,580 (1) We have issued guarantees to third parties to ensure performance of our obligations, some of which may be fulfilled by third parties. Contingencies See Note 2 and Note 6 for a discussion of our gain contingencies related to assets that were expropriated in Venezuela. Pursuant to the separation and distribution agreement, EESLP contributed to a subsidiary of Archrock the right to receive payments based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our and our joint ventures’ previously nationalized assets promptly after such amounts are collected by our subsidiaries until Archrock’s subsidiary has received an aggregate amount of such payments up to the lesser of (i) $125.8 million , plus the aggregate amount of all reimbursable expenses incurred by Archrock and its subsidiaries in connection with recovering any PDVSA Gas default installment payments following the completion of the Spin-off or (ii) $150.0 million . Our balance sheets do not reflect this contingent liability to Archrock or the amount payable to us by PDVSA Gas as a receivable. Pursuant to the separation and distribution agreement, we transferred cash of $19.7 million and $49.2 million to Archrock during the nine months ended September 30, 2017 and 2016 , respectively. The transfers of cash were recognized as reductions to additional paid-in capital in our financial statements. As of September 30, 2017 , the remaining principal amount due to us from PDVSA Gas in respect of the sale of our and our joint ventures’ previously nationalized assets was approximately $21 million . In subsequent periods, the recognition of a liability, if applicable, resulting from this contingency to Archrock is expected to impact equity, and as such, is not expected to have an impact on our statements of operations. 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 September 30, 2017 and December 31, 2016 , we had accrued $2.9 million and $3.1 million , respectively, for the outcomes of non-income-based tax audits. We do not expect that the ultimate resolutions of these audits will result in a material variance from the amounts accrued. We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim. We do not have any unasserted claims from non-income-based tax audits that we have determined are probable of assertion. We also believe the likelihood is remote that the impact of potential unasserted claims from non-income-based tax audits could be material to our financial position, but it is possible that the resolution of future audits could be material to our results of operations or cash flows for the period in which the resolution occurs. Our business can be hazardous, involving unforeseen circumstances such as uncontrollable flows of natural gas or well fluids and fires or explosions. As is customary in our industry, we review our safety equipment and procedures and carry insurance against some, but not all, risks of our business. Our insurance coverage includes property damage, general liability, 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. Contracts Containing Liquidated Damages Provisions Some of our product sales contracts have schedule dates and performance obligations that could subject us to penalties for liquidated damages if not met. These generally relate to specified activities that must be completed by a set contractual date or by achievement of a specified level of output or throughput. Each contract defines the conditions under which a customer may make a claim for liquidated damages. However, in some instances, liquidated damages are not asserted by the customer, but the potential to do so is used in negotiating or settling claims and closing out the contract. As of September 30, 2017 , estimated penalties for liquidated damages of $10.0 million have been recorded in our financial statements based on our actual or projected failure to meet certain specified contractual milestone dates. We believe that we will be successful in obtaining schedule extensions or other customer-agreed changes that should resolve the potential for additional liquidated damages. Accordingly, we do not believe that we will incur any amounts for these potential liquidated damages in excess of the amounts currently reflected in our financial statements. However, we may not achieve relief on some or all of the issues involved and as a result, we could be subject to higher liquidated damages amounts. Additionally, we have asserted claims, or intend to assert claims, against certain customers that could result in a release of such claims in exchange for release of certain liquidated damages currently recorded in our financial statements if settled. We recognize claims for recovery of incurred cost when it is probable that the claim will result in additional contract revenue and when the amount of the claim can be reliably estimated. These requirements are satisfied when the contract or other evidence provides a legal basis for the claim, additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in our performance, claim-related costs are identifiable and considered reasonable in view of the work performed, evidence supporting the claim is objective and verifiable and collection is probable. These assessments require judgments concerning matters such as litigation developments and outcomes, the anticipated outcome of negotiations, the number of future claims and the cost of both pending and future claims. Litigation and Claims In the ordinary course of business, we are involved in various pending or threatened legal actions. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from any of these actions will not have a material adverse effect on our financial position, results of operations or cash flows. However, because of the inherent uncertainty of litigation and arbitration proceedings, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our financial position, results of operations or cash flows. Contemporaneously with filing the Form 8-K on April 26, 2016, we self-reported the errors and possible irregularities at Belleli EPC to the SEC. Since then, we have been cooperating with the SEC in its investigation of this matter, including responding to a subpoena for documents related to the restatement and of our compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”), which were also provided to the Department of Justice at its request. The FCPA related requests in the SEC subpoena pertain to our policies and procedures, information about our third-party sales agents, and documents related to historical internal investigations completed prior to November 2015. Indemnifications In conjunction with, and effective as of the completion of, the Spin-off, we entered into the separation and distribution agreement with Archrock, which governs, among other things, the treatment between Archrock and us of aspects relating to indemnification, insurance, confidentiality and cooperation. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Archrock’s business with Archrock. Pursuant to the agreement, we and Archrock will generally release the other party from all claims arising prior to the Spin-off that relate to the other party’s business, subject to certain exceptions. Additionally, in conjunction with, and effective as of the completion of, the Spin-off, we entered into the tax matters agreement with Archrock. Under the tax matters agreement and subject to certain exceptions, we are generally liable for, and indemnify Archrock against, taxes attributable to our business, and Archrock is generally liable for, and indemnify us against, all taxes attributable to its business. We are generally liable for, and indemnify Archrock against, 50% of certain taxes that are not clearly attributable to our business or Archrock’s business. Any payment made by us to Archrock, or by Archrock to us, is treated by all parties for tax purposes as a nontaxable distribution or capital contribution, respectively, made immediately prior to the Spin-off. |
Reportable Segments
Reportable Segments | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Reportable Segments | Note 17 - Reportable Segments We manage our business segments primarily based upon the type of product or service provided. We have four reportable segments: contract operations, aftermarket services, oil and gas product sales and Belleli EPC product sales. The contract operations segment primarily provides natural gas compression services, production and processing equipment services and maintenance services to meet specific customer requirements on assets owned by us. The aftermarket services segment provides a full range of services to support the surface production, compression and processing needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets. The oil and gas product sales segment provides design, engineering, manufacturing, installation and sale of natural gas compression units and accessories and equipment used in the production, treating and processing of crude oil and natural gas. The Belleli EPC product sales segment, which comprises the operations of our Belleli EPC subsidiary that we are exiting, has historically provided engineering, procurement and construction for the manufacture of tanks for tank farms and the manufacture of evaporators and brine heaters for desalination plants. We evaluate the performance of our segments based on gross margin for each segment. Revenue includes sales to external customers and affiliates. We do not include intersegment sales when we evaluate our segments’ performance. The following table presents revenues and other financial information by reportable segment during the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended Contract Operations Aftermarket Services Oil and Gas Product Sales Belleli EPC Product Sales Reportable September 30, 2017: Revenue $ 92,561 $ 29,799 $ 192,119 $ 12,616 $ 327,095 Gross margin (1) 58,921 7,896 20,500 3,500 90,817 September 30, 2016: Revenue $ 99,143 $ 26,590 $ 73,685 $ 29,740 $ 229,158 Gross margin (1) 63,087 7,544 3,611 636 74,878 Nine Months Ended Contract Operations Aftermarket Services Oil and Gas Product Sales Belleli EPC Product Sales Reportable September 30, 2017: Revenue $ 279,947 $ 76,567 $ 521,091 $ 60,775 $ 938,380 Gross margin (1) 180,818 20,774 51,910 25,596 279,098 September 30, 2016: Revenue $ 298,591 $ 91,499 $ 314,684 $ 93,161 $ 797,935 Gross margin (1) 187,636 26,016 24,519 (792 ) 237,379 (1) Gross margin is defined as revenue less cost of sales (excluding depreciation and amortization expense). The following table reconciles income (loss) before income taxes to total gross margin (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Income (loss) before income taxes $ 10,528 $ (15,969 ) $ 27,972 $ (47,037 ) Selling, general and administrative 44,197 37,864 135,678 124,250 Depreciation and amortization 28,314 28,183 83,641 106,533 Long-lived asset impairment — 5,358 — 6,009 Restatement related charges 1,997 12,298 3,011 20,149 Restructuring and other charges 417 2,239 2,595 25,442 Interest expense 7,860 8,254 27,329 25,596 Equity in income of non-consolidated affiliates — — — (10,403 ) Other (income) expense, net (2,496 ) (3,349 ) (1,128 ) (13,160 ) Total gross margin $ 90,817 $ 74,878 $ 279,098 $ 237,379 |
Description of Business and B25
Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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 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 present 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 and combined financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2016 . That report contains a comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. We refer to the condensed consolidated financial statements collectively as “financial statements,” and individually as “balance sheets,” “statements of operations,” “statements of comprehensive income (loss),” “statements of stockholders’ equity” and “statements of cash flows” herein. |
Recent Accounting 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 either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. Recently Adopted Accounting Pronouncements In July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-11, Simplifying the Measurement of Inventory , which requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. On January 1, 2017, we adopted this update on a prospective basis. The adoption of this update did not have a material impact on our financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) . The update covers such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. On January 1, 2017, we adopted this update. Upon adoption, we elected to account for forfeitures as they occur rather than applying an estimated forfeiture rate, which resulted in a cumulative-effect adjustment to accumulated deficit and additional paid-in capital of $0.1 million under the modified retrospective transition method. Additionally, as a result of this adoption, cash flows related to excess tax benefits are now presented as operating activities within the statements of cash flows. The impact of this retrospective adoption was immaterial to the results of the prior year period. Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt the updates. We intend to adopt the new guidance on January 1, 2018 using the modified retrospective approach. In preparation for our adoption of the new standard, we have evaluated representative samples of contracts and other forms of agreements with our customers based upon the five-step model specified by the new guidance. We have completed a preliminary assessment of the potential impact the implementation of this new guidance may have on our financial statements. Although our preliminary assessment may change based upon completion of our evaluation, the following summarizes the more significant impacts expected from the adoption of the new standard: • Revenue from the sale of compression equipment within our oil and gas product sales segment is currently recognized over time using the percentage-of-completion method. Under the new standard, a significant amount of revenue from the sale of compression equipment is expected to be recognized at a point in time. • Revenue from installation services within our oil and gas product sales segment is currently recognized using the completed contract method. Under the new standard, revenue from such services is expected to be recognized over time. • Revenue from overhaul and reconfiguration services within our aftermarket services segment is currently recognized at a point in time. Under the new standard, revenue from such services is expected to be recognized over time. Additionally, the new guidance will require us to enhance our disclosures to provide additional information relating to disaggregated revenue, contract assets and liabilities and remaining performance obligations. We are currently evaluating potential changes to our information systems, processes and internal controls to meet the new standard’s reporting and disclosure requirements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Lessor accounting will be similar to the current model except for changes made to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance will be replaced with a new model applicable to both lessees and lessors. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) . The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) . The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. This update will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. We do not expect the adoption of this update to be material to our financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . The update requires a reporting entity to recognize the tax expense from intra-entity asset transfers of assets other than inventory in the selling entity’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buying entity’s jurisdiction would also be recognized at the time of the transfer. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash . The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period, using a retrospective transition method to each period presented. This update will result in the inclusion of our restricted cash balances with cash and cash equivalents to reflect total cash in our statements of cash flows. We do not expect the adoption of this update to be material to our financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) . This update provides guidance that clarifies that changes to the terms or conditions of a share-based payment award should be accounted for as modifications. This update will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period, using a prospective method to an award modified on or after the adoption date. We do not expect the adoption of this update to be material to our financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Operating Results and Balance Sheet Data for Discontinued Operations | The following table summarizes the operating results of discontinued operations (in thousands): Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Venezuela Venezuela Belleli CPE Total Revenue $ — $ — $ 4,376 $ 4,376 Cost of sales (excluding depreciation and amortization expense) — — 3,887 3,887 Selling, general and administrative 29 47 788 835 Recovery attributable to expropriation — (16,567 ) — (16,567 ) Interest expense — — 2 2 Other (income) expense, net — (2,941 ) (492 ) (3,433 ) Income (loss) from discontinued operations, net of tax $ (29 ) $ 19,461 $ 191 $ 19,652 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Venezuela Venezuela Belleli CPE Total Revenue $ — $ — $ 28,469 $ 28,469 Cost of sales (excluding depreciation and amortization expense) — — 27,323 27,323 Selling, general and administrative 94 125 4,229 4,354 Depreciation and amortization — — 861 861 Long-lived asset impairment — — 68,780 68,780 Recovery attributable to expropriation (16,514 ) (33,124 ) — (33,124 ) Interest expense — — 17 17 Other (income) expense, net (3,157 ) (5,962 ) (341 ) (6,303 ) Income (loss) from discontinued operations, net of tax $ 19,577 $ 38,961 $ (72,400 ) $ (33,439 ) The following table summarizes the balance sheet data for discontinued operations (in thousands): September 30, 2017 December 31, 2016 Venezuela Venezuela Belleli CPE Total Cash $ 3 $ 11 $ — $ 11 Other current assets 1 3 — 3 Total assets associated with discontinued operations $ 4 $ 14 $ — $ 14 Accrued liabilities $ 63 $ 906 $ 207 $ 1,113 Total current liabilities associated with discontinued operations 63 906 207 1,113 Other long-term liabilities — 2 — 2 Total liabilities associated with discontinued operations $ 63 $ 908 $ 207 $ 1,115 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following amounts (in thousands): September 30, 2017 December 31, 2016 Parts and supplies $ 96,519 $ 104,897 Work in progress 28,175 32,167 Finished goods 14,057 20,452 Inventory $ 138,751 $ 157,516 |
Product Sales Contracts (Tables
Product Sales Contracts (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Contractors [Abstract] | |
Schedule of Costs, Estimated Earnings (Losses) and Billings on Uncompleted Contracts Recognized Using the Percentage-of-Completion Method | Costs, estimated earnings (losses) and billings on uncompleted contracts that are recognized using the percentage-of-completion method consisted of the following (in thousands): September 30, 2017 December 31, 2016 Costs incurred on uncompleted contracts $ 677,181 $ 558,274 Estimated earnings (losses) on uncompleted contracts (1) 18,542 (10,370 ) 695,723 547,904 Less — billings to date on uncompleted contracts (751,816 ) (558,064 ) $ (56,093 ) $ (10,160 ) (1) Estimated earnings (losses) on uncompleted contracts includes $49.0 million and $56.4 million of cumulative losses realized on uncompleted Belleli EPC product sales contracts as of September 30, 2017 and December 31, 2016 , respectively. Estimated earnings (losses) on uncompleted contracts as of September 30, 2017 and December 31, 2016 excludes estimated accrued loss contract provisions on uncompleted Belleli EPC product sales contracts recognized but not realized of $8.3 million and $28.6 million , respectively. Accrued loss contract provisions are included in accrued liabilities in our balance sheets. |
Schedule of Costs, Estimated Earnings and Billings on Uncompleted Contracts Presented in the Accompanying Financial Statements | Costs, estimated earnings and billings on uncompleted contracts are presented in the accompanying financial statements as follows (in thousands): September 30, 2017 December 31, 2016 Costs and estimated earnings in excess of billings on uncompleted contracts $ 40,696 $ 31,956 Billings on uncompleted contracts in excess of costs and estimated earnings (96,789 ) (42,116 ) $ (56,093 ) $ (10,160 ) |
Property, Plant and Equipment29
Property, Plant and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, net | Property, plant and equipment, net, consisted of the following (in thousands): September 30, 2017 December 31, 2016 Compression equipment, facilities and other fleet assets $ 1,544,390 $ 1,480,568 Land and buildings 106,708 110,378 Transportation and shop equipment 140,080 140,128 Other 98,001 95,817 1,889,179 1,826,891 Accumulated depreciation (1,076,382 ) (1,029,082 ) Property, plant and equipment, net $ 812,797 $ 797,809 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following (in thousands): September 30, 2017 December 31, 2016 Revolving credit facility due November 2020 $ — $ 118,000 Term loan facility due November 2017 — 232,750 8.125% senior notes due May 2025 375,000 — Other, interest at various rates, collateralized by equipment and other assets 393 583 Unamortized deferred financing costs of 8.125% senior notes (7,497 ) — Unamortized deferred financing costs of term loan facility — (2,363 ) Long-term debt $ 367,896 $ 348,970 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the nine months ended September 30, 2016 , with pricing levels as of the date of valuation (in thousands): Nine Months Ended September 30, 2016 (Level 1) (Level 2) (Level 3) Impaired long-lived assets (1) $ — $ — $ 684 Impaired assets—Discontinued operations (2) — — 13,859 Note receivable from the sale of a plant (3) — — 7,037 Liability to exit the use of a corporate operating lease—restructuring and other charges (4) — — 3,580 (1) Our estimate of the fair value of the impaired long-lived assets during the nine months ended September 30, 2016 was primarily based on either the expected net sale proceeds compared to other fleet units we sold and/or a review of other units offered for sale by third parties during that time, or the estimated component value of the equipment we planned for use at that time. (2) Our estimate of the fair value of the impaired assets of Belleli CPE, which were classified as discontinued operations, during the nine months ended September 30, 2016 was based on the proceeds received from the sale of Belleli CPE, net of selling costs. (3) Our estimate of the fair value of the note receivable, including annual payments, from the sale of our plant in Argentina during the nine months ended September 30, 2016 was discounted based on a settlement period of 2.6 years and a discount rate of 5% . (4) The fair value of our liability to exit the use of a corporate operating lease relating to restructuring activities during the second quarter of 2016 was estimated based on an incremental borrowing rate of 3% and remaining lease payments, net of estimated sublease rentals, through February 2018 . |
Restatement Related Charges (Ta
Restatement Related Charges (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restatement Charges [Abstract] | |
Summary of Changes to Accrued Liability Balance Related to Restatement Charges (Recoveries), Net | The following table summarizes the changes to our accrued liability balance related to restatement charges for the nine months ended September 30, 2016 and 2017 (in thousands): Restatement Related Charges Beginning balance at January 1, 2016 $ — Additions for costs expensed 20,149 Reductions for payments (11,370 ) Ending balance at September 30, 2016 $ 8,779 Beginning balance at January 1, 2017 $ 2,212 Additions for costs expensed, net 3,011 Add-back recoveries from Archrock 2,801 Reductions for payments, net (7,082 ) Ending balance at September 30, 2017 $ 942 |
Summary of the Components of Charges Included in Restatement Charges (Recoveries), Net | The following table summarizes the components of charges included in restatement related charges in our statements of operations for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 External accounting costs $ 317 $ 10,046 $ 1,071 $ 14,827 External legal costs 1,409 1,665 4,101 4,387 Other 271 587 640 935 Recoveries from Archrock — — (2,801 ) — Total restatement related charges $ 1,997 $ 12,298 $ 3,011 $ 20,149 |
Restructuring and Other Charg33
Restructuring and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 nine months ended September 30, 2016 and 2017 (in thousands): Spin-off Cost Reduction Plan Total Beginning balance at January 1, 2016 $ 1,083 $ 565 $ 1,648 Additions for costs expensed 3,503 21,939 25,442 Less non-cash income (expense) (798 ) 435 (363 ) Reductions for payments (1,488 ) (15,431 ) (16,919 ) Ending balance at September 30, 2016 $ 2,300 $ 7,508 $ 9,808 Beginning balance at January 1, 2017 $ 934 $ 7,885 $ 8,819 Additions for costs expensed 442 2,153 2,595 Less non-cash income (expense) (212 ) 771 559 Reductions for payments — (8,077 ) (8,077 ) Ending balance at September 30, 2017 $ 1,164 $ 2,732 $ 3,896 |
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 and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Consulting fees $ — $ — $ — $ 22 Start-up of stand-alone functions — — — 887 Retention awards to certain employees 189 725 442 2,616 Employee termination benefits 206 1,298 1,660 18,751 Net charges to exit the use of a corporate operating lease — — — 2,708 Other 22 216 493 458 Total restructuring and other charges $ 417 $ 2,239 $ 2,595 $ 25,442 The following table summarizes the components of restructuring and other charges incurred in connection with the Spin-off and since the announcement of the cost reduction plan (in thousands): Spin-off Cost Reduction Plan Total Financial advisor fees related to the Spin-off $ 4,598 $ — $ 4,598 Consulting fees — 1,954 1,954 Start-up of stand-alone functions 2,219 — 2,219 Retention awards to certain employees 6,619 — 6,619 Chief Executive Officer signing bonus 2,000 — 2,000 Non-cash inventory write-downs 4,700 4,007 8,707 Employee termination benefits — 31,177 31,177 Net charges to exit the use of a corporate operating lease — 2,904 2,904 Other — 1,189 1,189 Total restructuring and other charges $ 20,136 $ 41,231 $ 61,367 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income, Net of Tax | The following table presents the changes in accumulated other comprehensive income, net of tax, during the nine months ended September 30, 2016 and 2017 (in thousands): Foreign Currency Translation Adjustment Accumulated other comprehensive income, January 1, 2016 $ 29,198 Income recognized in other comprehensive income (loss) 5,452 Loss reclassified from accumulated other comprehensive income (1) 15,159 Accumulated other comprehensive income, September 30, 2016 $ 49,809 Accumulated other comprehensive income, January 1, 2017 $ 47,508 Income recognized in other comprehensive income (loss) 284 Accumulated other comprehensive income, September 30, 2017 $ 47,792 (1) During the three and nine months ended September 30, 2016 , we reclassified a loss of $15.2 million related to foreign currency translation adjustment to income from discontinued operations in our statements of operations. This amount represents cumulative foreign currency translation adjustments associated with our Belleli CPE business that previously had been recognized in accumulated other comprehensive income. See Note 2 for further discussion of the sale of our Belleli CPE business. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Restricted Stock, Restricted Stock Units, Performance Units, Cash Settled Restricted Stock Units and Cash Settled Performance Units | The table below presents the changes in restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units for our common stock during the nine months ended September 30, 2017 . Non-vested awards granted prior to November 3, 2015 relate to Archrock’s and our employees, directors and consultants. Awards granted subsequent to November 3, 2015 only relate to our employees, directors and consultants. Shares (in thousands) Weighted Average Grant-Date Fair Value Per Share Non-vested awards, January 1, 2017 1,292 $ 17.68 Granted 646 29.88 Vested (573 ) 20.84 Change in expected vesting of performance units 102 30.87 Cancelled (186 ) 18.62 Non-vested awards, September 30, 2017 (1) 1,281 23.33 (1) Non-vested awards as of September 30, 2017 are comprised of 3,000 cash settled restricted stock units and 1,278,000 restricted shares, restricted stock units and performance units. |
Net Income (Loss) Per Common 36
Net Income (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Net Income (Loss) Per Common Share | The following table presents a reconciliation of basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator for basic and diluted net income (loss) per common share: Income (loss) from continuing operations $ 3,382 $ (32,312 ) $ 7,641 $ (167,724 ) Income (loss) from discontinued operations, net of tax (29 ) 19,652 19,577 (33,439 ) Less: Net income attributable to participating securities (92 ) — (781 ) — Net income (loss) — used in basic and diluted net income (loss) per common share $ 3,261 $ (12,660 ) $ 26,437 $ (201,163 ) Weighted average common shares outstanding including participating securities 36,036 35,562 35,969 35,492 Less: Weighted average participating securities outstanding (990 ) (930 ) (1,032 ) (942 ) Weighted average common shares outstanding — used in basic net income (loss) per common share 35,046 34,632 34,937 34,550 Net dilutive potential common shares issuable: On exercise of options and vesting of restricted stock units 74 * 82 * Weighted average common shares outstanding — used in diluted net income (loss) per common share 35,120 34,632 35,019 34,550 Net income (loss) per common share: Basic $ 0.09 $ (0.37 ) $ 0.76 $ (5.82 ) Diluted $ 0.09 $ (0.37 ) $ 0.75 $ (5.82 ) * 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 (Loss) Per Common Share | The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income (loss) per common share as their inclusion would have been anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net dilutive potential common shares issuable: On exercise of options where exercise price is greater than average market value for the period 39 216 45 232 On exercise of options and vesting of restricted stock units — 46 — 51 Net dilutive potential common shares issuable 39 262 45 283 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Guarantees | We have issued the following guarantees that are not recorded on our accompanying balance sheet (dollars in thousands): Term Maximum Potential Undiscounted Payments as of September 30, 2017 Performance guarantees through letters of credit (1) 2017-2021 $ 74,402 Standby letters of credit 2017 798 Bid bonds and performance bonds (1) 2017-2027 52,380 Maximum potential undiscounted payments $ 127,580 (1) We have issued guarantees to third parties to ensure performance of our obligations, some of which may be fulfilled by third parties. |
Reportable Segments (Tables)
Reportable Segments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenues and Other Financial Information | The following table presents revenues and other financial information by reportable segment during the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended Contract Operations Aftermarket Services Oil and Gas Product Sales Belleli EPC Product Sales Reportable September 30, 2017: Revenue $ 92,561 $ 29,799 $ 192,119 $ 12,616 $ 327,095 Gross margin (1) 58,921 7,896 20,500 3,500 90,817 September 30, 2016: Revenue $ 99,143 $ 26,590 $ 73,685 $ 29,740 $ 229,158 Gross margin (1) 63,087 7,544 3,611 636 74,878 Nine Months Ended Contract Operations Aftermarket Services Oil and Gas Product Sales Belleli EPC Product Sales Reportable September 30, 2017: Revenue $ 279,947 $ 76,567 $ 521,091 $ 60,775 $ 938,380 Gross margin (1) 180,818 20,774 51,910 25,596 279,098 September 30, 2016: Revenue $ 298,591 $ 91,499 $ 314,684 $ 93,161 $ 797,935 Gross margin (1) 187,636 26,016 24,519 (792 ) 237,379 (1) Gross margin is defined as revenue less cost of sales (excluding depreciation and amortization expense). |
Reconciliation of Income (Loss) Before Income Taxes to Total Gross Margin | The following table reconciles income (loss) before income taxes to total gross margin (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Income (loss) before income taxes $ 10,528 $ (15,969 ) $ 27,972 $ (47,037 ) Selling, general and administrative 44,197 37,864 135,678 124,250 Depreciation and amortization 28,314 28,183 83,641 106,533 Long-lived asset impairment — 5,358 — 6,009 Restatement related charges 1,997 12,298 3,011 20,149 Restructuring and other charges 417 2,239 2,595 25,442 Interest expense 7,860 8,254 27,329 25,596 Equity in income of non-consolidated affiliates — — — (10,403 ) Other (income) expense, net (2,496 ) (3,349 ) (1,128 ) (13,160 ) Total gross margin $ 90,817 $ 74,878 $ 279,098 $ 237,379 |
Description of Business and B39
Description of Business and Basis of Presentation (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017business_line | Dec. 31, 2016USD ($) | |
Accounting Policies [Abstract] | ||
Number of business lines | business_line | 4 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment under the modified retrospective transition method | $ 0 | |
Accumulated deficit | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment under the modified retrospective transition method | (138) | |
Additional paid-in capital | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment under the modified retrospective transition method | 138 | |
ASU 2016-09 | Accumulated deficit | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment under the modified retrospective transition method | 100 | |
ASU 2016-09 | Additional paid-in capital | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment under the modified retrospective transition method | $ 100 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Aug. 31, 2016 | Aug. 31, 2012 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash proceeds from sale of business | $ 894 | $ 0 | ||||
Long-lived asset impairment | $ 0 | $ 5,358 | 0 | 6,009 | ||
Archrock | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash transferred pursuant to the separation and distribution agreement | 19,700 | 38,800 | ||||
Venezuelan subsidiary | Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sales price of previously nationalized assets | $ 441,700 | |||||
Installment payment, including annual charge | $ 19,500 | 19,700 | 38,800 | |||
Remaining principal amount due | $ 17,000 | $ 17,000 | ||||
Belleli CPE | Disposed of by Sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash proceeds from sale of business | $ 5,500 | |||||
Long-lived asset impairment | 68,800 | |||||
Continuing Operations | Belleli EPC | Held-for-sale | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Long-lived asset impairment charge | $ 700 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Operating Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from discontinued operations, net of tax | $ (29) | $ 19,652 | $ 19,577 | $ (33,439) |
Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 4,376 | 28,469 | ||
Cost of sales (excluding depreciation and amortization expense) | 3,887 | 27,323 | ||
Selling, general and administrative | 835 | 4,354 | ||
Depreciation and amortization | 861 | |||
Long-lived asset impairment | 68,780 | |||
Recovery attributable to expropriation | (16,567) | (33,124) | ||
Interest expense | 2 | 17 | ||
Other (income) expense, net | (3,433) | (6,303) | ||
Income (loss) from discontinued operations, net of tax | 19,652 | (33,439) | ||
Venezuela | Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost of sales (excluding depreciation and amortization expense) | 0 | 0 | 0 | 0 |
Selling, general and administrative | 29 | 47 | 94 | 125 |
Depreciation and amortization | 0 | 0 | ||
Long-lived asset impairment | 0 | 0 | ||
Recovery attributable to expropriation | 0 | (16,567) | (16,514) | (33,124) |
Interest expense | 0 | 0 | 0 | 0 |
Other (income) expense, net | 0 | (2,941) | (3,157) | (5,962) |
Income (loss) from discontinued operations, net of tax | $ (29) | 19,461 | $ 19,577 | 38,961 |
Belleli CPE | Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 4,376 | 28,469 | ||
Cost of sales (excluding depreciation and amortization expense) | 3,887 | 27,323 | ||
Selling, general and administrative | 788 | 4,229 | ||
Depreciation and amortization | 861 | |||
Long-lived asset impairment | 68,780 | |||
Recovery attributable to expropriation | 0 | 0 | ||
Interest expense | 2 | 17 | ||
Other (income) expense, net | (492) | (341) | ||
Income (loss) from discontinued operations, net of tax | $ 191 | $ (72,400) |
Discontinued Operations - Sum42
Discontinued Operations - Summary of Balance Sheet Data for Discontinued Operations (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total current liabilities associated with discontinued operations | $ 63 | $ 1,113 |
Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash | 11 | |
Other current assets | 3 | |
Total assets associated with discontinued operations | 14 | |
Accrued liabilities | 1,113 | |
Total current liabilities associated with discontinued operations | 1,113 | |
Other long-term liabilities | 2 | |
Total liabilities associated with discontinued operations | 1,115 | |
Venezuela | Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash | 3 | 11 |
Other current assets | 1 | 3 |
Total assets associated with discontinued operations | 4 | 14 |
Accrued liabilities | 63 | 906 |
Total current liabilities associated with discontinued operations | 63 | 906 |
Other long-term liabilities | 0 | 2 |
Total liabilities associated with discontinued operations | $ 63 | 908 |
Belleli CPE | Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash | 0 | |
Other current assets | 0 | |
Total assets associated with discontinued operations | 0 | |
Accrued liabilities | 207 | |
Total current liabilities associated with discontinued operations | 207 | |
Other long-term liabilities | 0 | |
Total liabilities associated with discontinued operations | $ 207 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Parts and supplies | $ 96,519 | $ 104,897 |
Work in progress | 28,175 | 32,167 |
Finished goods | 14,057 | 20,452 |
Inventory | $ 138,751 | $ 157,516 |
Product Sales Contracts - Sched
Product Sales Contracts - Schedule of Costs, Estimated Earnings (Losses) and Billings on Uncompleted Contracts Recognized Using the Percentage-of-Completion Method (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Contractors [Abstract] | ||
Costs incurred on uncompleted contracts | $ 677,181 | $ 558,274 |
Estimated earnings (losses) on uncompleted contracts | 18,542 | (10,370) |
Costs, estimated earnings and billings on uncompleted contracts | 695,723 | 547,904 |
Less — billings to date on uncompleted contracts | (751,816) | (558,064) |
Costs incurred and estimated losses on uncompleted contracts | (56,093) | (10,160) |
Belleli EPC product sales | ||
Segment Reporting Information [Line Items] | ||
Cumulative losses realized | 49,000 | 56,400 |
Estimated accrued loss contract provisions | $ 8,300 | $ 28,600 |
Product Sales Contracts - Sch45
Product Sales Contracts - Schedule of Costs, Estimated Earnings and Billings on Uncompleted Contracts Presented in the Accompanying Financial Statements (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Contractors [Abstract] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 40,696 | $ 31,956 |
Billings on uncompleted contracts in excess of costs and estimated earnings | (96,789) | (42,116) |
Costs, estimated earnings and billings on uncompleted contracts | $ (56,093) | $ (10,160) |
Property, Plant and Equipment46
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 1,889,179 | $ 1,826,891 |
Accumulated depreciation | (1,076,382) | (1,029,082) |
Property, plant and equipment, net | 812,797 | 797,809 |
Compression equipment, facilities and other fleet assets | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 1,544,390 | 1,480,568 |
Land and buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 106,708 | 110,378 |
Transportation and shop equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 140,080 | 140,128 |
Other | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 98,001 | $ 95,817 |
Investments in Non-Consolidat47
Investments in Non-Consolidated Affiliates (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | |
Investments in non-consolidated affiliates | ||
Installment payment, including annual charge | $ 10.4 | |
Remaining principal amount due | $ 4 | |
Archrock | ||
Investments in non-consolidated affiliates | ||
Cash transferred to Archrock | $ 10.4 | |
PIGAP II | ||
Investments in non-consolidated affiliates | ||
Ownership interest (as a percent) | 30.00% | |
El Furrial | ||
Investments in non-consolidated affiliates | ||
Ownership interest (as a percent) | 33.30% |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Apr. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 367,896 | $ 348,970 | |
Other, interest at various rates, collateralized by equipment and other assets | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 393 | 583 | |
8.125% senior notes due May 2025 | Senior notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 375,000 | 0 | |
Stated interest rate | 8.125% | 8.125% | |
Unamortized deferred financing costs | $ (7,497) | 0 | |
Revolving credit facility due November 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 0 | 118,000 | |
Term loan facility due November 2017 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 0 | 232,750 | |
Unamortized deferred financing costs | $ 0 | $ (2,363) |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facility and Term Loan (Narrative) (Details) | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Debt Instrument [Line Items] | |||
Unamortized deferred financing costs expensed | $ 4,044,000 | $ 3,453,000 | |
Transaction costs incurred | $ 7,911,000 | 779,000 | |
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total Debt to EBITDA ratio (no greater than) | 4.5 | ||
Credit Agreement | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Borrowing capacity under restated credit agreement | $ 680,000,000 | ||
Undrawn capacity under revolving credit facility | 627,200,000 | ||
Undrawn capacity available for additional borrowings | 452,900,000 | ||
Credit Agreement | Term loan facility | |||
Debt Instrument [Line Items] | |||
Remaining principal amount paid under the term loan facility | $ 232,800,000 | ||
Unamortized deferred financing costs expensed | 1,700,000 | ||
Credit Agreement | Credit Agreement | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Transaction costs incurred | $ 800,000 | ||
Letters of credit | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Outstanding letters of credit | $ 52,800,000 |
Long-Term Debt - 8.125% Senior
Long-Term Debt - 8.125% Senior Notes Due May 2025 (Narrative) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | |||
Payment to subsidiary of Archrock | $ 44,720,000 | $ 49,176,000 | |
Transaction costs incurred | $ 7,911,000 | $ 779,000 | |
Senior unsecured notes | 8.125% senior unsecured notes due 2025 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 8.125% | 8.125% | |
Transaction costs incurred | $ 7,900,000 | ||
EESLP And EES Finance Corp. | Senior unsecured notes | 8.125% senior unsecured notes due 2025 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 8.125% | ||
Aggregate principal amount of senior unsecured notes | $ 375,000,000 | ||
Net proceeds from the 2017 Notes | $ 367,100,000 | ||
Registration period | 400 days | ||
Debt that may be redeemed with net proceeds of equity offerings (as a percent) | 35.00% | ||
Redemption price (as a percent) | 108.125% | ||
Amount required to remain outstanding after redemption (as a percent) | 65.00% | ||
Maximum period between redemption and closing of equity offering | 180 days | ||
EESLP And EES Finance Corp. | Senior unsecured notes | 8.125% senior unsecured notes due 2025 | Twelve-month period beginning on May 1, 2020 | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 106.094% | ||
EESLP And EES Finance Corp. | Senior unsecured notes | 8.125% senior unsecured notes due 2025 | Twelve-month period beginning on May 1, 2021 | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 104.063% | ||
EESLP And EES Finance Corp. | Senior unsecured notes | 8.125% senior unsecured notes due 2025 | Twelve-month period beginning on May 1, 2022 | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 102.031% | ||
EESLP And EES Finance Corp. | Senior unsecured notes | 8.125% senior unsecured notes due 2025 | Twelve-month period beginning on May 1, 2023 | |||
Debt Instrument [Line Items] | |||
Redemption price (as a percent) | 100.00% | ||
EESLP And EES Finance Corp. | Archrock | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Payment to subsidiary of Archrock | $ 25,000,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2017 | |
Liability to exit use of corporate operating lease | |||
Valuation of our interest rate swaps and impaired assets | |||
Discount rate | 3.00% | ||
Note receivable | |||
Valuation of our interest rate swaps and impaired assets | |||
Settlement period | 2 years 7 months 6 days | ||
Discount rate | 5.00% | ||
Senior notes | 2017 Notes | Carrying amount | |||
Valuation of our interest rate swaps and impaired assets | |||
2017 Notes, excluding unamortized deferred financing costs | $ 375,000 | ||
Senior notes | 2017 Notes | Fair value | |||
Valuation of our interest rate swaps and impaired assets | |||
2017 Notes, excluding unamortized deferred financing costs | $ 392,800 | ||
Nonrecurring basis | (Level 1) | |||
Valuation of our interest rate swaps and impaired assets | |||
Impaired long-lived assets | $ 0 | ||
Impaired assets—Discontinued operations | 0 | ||
Note receivable from the sale of a plant | 0 | ||
Liability to exit the use of a corporate operating lease—restructuring and other charges | 0 | ||
Nonrecurring basis | (Level 2) | |||
Valuation of our interest rate swaps and impaired assets | |||
Impaired long-lived assets | 0 | ||
Impaired assets—Discontinued operations | 0 | ||
Note receivable from the sale of a plant | 0 | ||
Liability to exit the use of a corporate operating lease—restructuring and other charges | 0 | ||
Nonrecurring basis | (Level 3) | |||
Valuation of our interest rate swaps and impaired assets | |||
Impaired long-lived assets | 684 | ||
Impaired assets—Discontinued operations | 13,859 | ||
Note receivable from the sale of a plant | 7,037 | ||
Liability to exit the use of a corporate operating lease—restructuring and other charges | $ 3,580 |
Long-Lived Asset Impairment (De
Long-Lived Asset Impairment (Details) hp in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($)idle_compressor_unithp | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Long-Lived Asset Impairment | ||||
Number of idle compressor units to be retired from active fleet | idle_compressor_unit | 25 | |||
Number of horsepower to be retired from active fleet | hp | 31 | |||
Asset impairment to reduce the book value of each unit | $ 0 | $ 5,358 | $ 0 | $ 6,009 |
Continuing Operations | Belleli EPC | Held-for-sale | ||||
Long-Lived Asset Impairment | ||||
Long-lived asset impairment charge | 700 | |||
Contract Operations | ||||
Long-Lived Asset Impairment | ||||
Asset impairment to reduce the book value of each unit | $ 5,400 | $ 5,400 |
Restatement Related Charges - N
Restatement Related Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restatement Charges [Line Items] | ||||
External costs associated with the current SEC investigation and remediation activities related to the restatement | $ 2,000 | $ 5,800 | ||
Recoveries from Archrock pursuant to the separation and distribution agreement | 0 | $ 0 | 2,801 | $ 0 |
Incurred costs associated with restatement | 1,997 | 12,298 | 3,011 | 20,149 |
External accounting costs | 317 | 10,046 | 1,071 | 14,827 |
External legal costs | $ 1,409 | 1,665 | 4,101 | 4,387 |
Restatement charges | ||||
Restatement Charges [Line Items] | ||||
External accounting costs | 10,000 | 14,800 | ||
External legal costs | $ 1,700 | $ 4,400 | ||
Spin-off | ||||
Restatement Charges [Line Items] | ||||
Recoveries from Archrock pursuant to the separation and distribution agreement | $ 2,800 |
Restatement Related Charges - S
Restatement Related Charges - Summary of Changes to Accrued Liability Balance Related to Restatement Charges (Recoveries), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restatement Related Charges | ||||
Beginning balance | $ 2,212 | $ 0 | ||
Additions for costs expensed | $ 1,997 | $ 12,298 | 3,011 | 20,149 |
Add-back recoveries from Archrock | 0 | 0 | 2,801 | 0 |
Reductions for payments | (7,082) | (11,370) | ||
Ending balance | $ 942 | $ 8,779 | $ 942 | $ 8,779 |
Restatement Related Charges -55
Restatement Related Charges - Summary of the Components of Charges Included in Restatement Charges (Recoveries), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restatement Charges [Abstract] | ||||
External accounting costs | $ 317 | $ 10,046 | $ 1,071 | $ 14,827 |
External legal costs | 1,409 | 1,665 | 4,101 | 4,387 |
Other | 271 | 587 | 640 | 935 |
Recoveries from Archrock | 0 | 0 | (2,801) | 0 |
Total restatement related charges | $ 1,997 | $ 12,298 | $ 3,011 | $ 20,149 |
Restructuring and Other Charg56
Restructuring and Other Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 417 | $ 2,239 | $ 2,595 | $ 25,442 |
Retention awards to certain employees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 189 | 725 | 442 | 2,616 |
Employee termination benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 206 | 1,298 | 1,660 | 18,751 |
Net charges to exit the use of a corporate operating lease | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 0 | 0 | 0 | 2,708 |
Spin-off | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 200 | 700 | 400 | 3,500 |
Spin-off | Retention awards to certain employees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Additional one-time expenditures related to retention awards | 100 | 100 | ||
Cost Reduction Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 200 | 1,500 | 2,200 | 21,900 |
Cost Reduction Plan | Employee termination benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 200 | 1,300 | $ 1,700 | 18,800 |
Cost Reduction Plan | Employee termination benefits | Oil and gas product sales | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 700 | 8,800 | ||
Cost Reduction Plan | Employee termination benefits | Belleli EPC product sales | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 4,600 | |||
Cost Reduction Plan | Net charges to exit the use of a corporate operating lease | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 2,700 |
Restructuring and Other Charg57
Restructuring and Other Charges - Summary of Changes to Accrued Liability Balance Related to Restructuring and Other Charges (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Charges Accrual | ||
Beginning balance | $ 8,819 | $ 1,648 |
Additions for costs expensed | 2,595 | 25,442 |
Less non-cash income (expense) | 559 | (363) |
Reductions for payments | (8,077) | (16,919) |
Ending balance | 3,896 | 9,808 |
Spin-off | ||
Restructuring Charges Accrual | ||
Beginning balance | 934 | 1,083 |
Additions for costs expensed | 442 | 3,503 |
Less non-cash income (expense) | (212) | (798) |
Reductions for payments | 0 | (1,488) |
Ending balance | 1,164 | 2,300 |
Cost Reduction Plan | ||
Restructuring Charges Accrual | ||
Beginning balance | 7,885 | 565 |
Additions for costs expensed | 2,153 | 21,939 |
Less non-cash income (expense) | 771 | 435 |
Reductions for payments | (8,077) | (15,431) |
Ending balance | $ 2,732 | $ 7,508 |
Restructuring and Other Charg58
Restructuring and Other Charges - Summary of the Components of Charges Included in Restructuring and Other Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other charges | $ 417 | $ 2,239 | $ 2,595 | $ 25,442 |
Consulting fees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other charges | 0 | 0 | 0 | 22 |
Start-up of stand-alone functions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other charges | 0 | 0 | 0 | 887 |
Retention awards to certain employees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other charges | 189 | 725 | 442 | 2,616 |
Employee termination benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other charges | 206 | 1,298 | 1,660 | 18,751 |
Net charges to exit the use of a corporate operating lease | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other charges | 0 | 0 | 0 | 2,708 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other charges | $ 22 | $ 216 | $ 493 | $ 458 |
Restructuring and Other Charg59
Restructuring and Other Charges - Summary of the Components of Restructuring and Other Charges Incurred To Date (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | $ 61,367 |
Financial advisor fees related to the Spin-off | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 4,598 |
Consulting fees | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 1,954 |
Start-up of stand-alone functions | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 2,219 |
Retention awards to certain employees | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 6,619 |
Chief Executive Officer signing bonus | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 2,000 |
Non-cash inventory write-downs | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 8,707 |
Employee termination benefits | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 31,177 |
Net charges to exit the use of a corporate operating lease | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 2,904 |
Other | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 1,189 |
Spin-off | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 20,136 |
Spin-off | Financial advisor fees related to the Spin-off | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 4,598 |
Spin-off | Consulting fees | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 0 |
Spin-off | Start-up of stand-alone functions | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 2,219 |
Spin-off | Retention awards to certain employees | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 6,619 |
Spin-off | Chief Executive Officer signing bonus | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 2,000 |
Spin-off | Non-cash inventory write-downs | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 4,700 |
Spin-off | Employee termination benefits | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 0 |
Spin-off | Net charges to exit the use of a corporate operating lease | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 0 |
Spin-off | Other | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 0 |
Cost Reduction Plan | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 41,231 |
Cost Reduction Plan | Financial advisor fees related to the Spin-off | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 0 |
Cost Reduction Plan | Consulting fees | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 1,954 |
Cost Reduction Plan | Start-up of stand-alone functions | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 0 |
Cost Reduction Plan | Retention awards to certain employees | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 0 |
Cost Reduction Plan | Chief Executive Officer signing bonus | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 0 |
Cost Reduction Plan | Non-cash inventory write-downs | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 4,007 |
Cost Reduction Plan | Employee termination benefits | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 31,177 |
Cost Reduction Plan | Net charges to exit the use of a corporate operating lease | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | 2,904 |
Cost Reduction Plan | Other | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and other charges | $ 1,189 |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Valuation Allowance [Line Items] | ||||
Period of cumulative loss incurred | 3 years | |||
U.S. deferred tax assets | ||||
Valuation Allowance [Line Items] | ||||
Valuation allowance against U.S. deferred tax assets | $ 5.7 | $ 13.6 | $ 21.1 | $ 101.7 |
Secretariat of the Federal Revenue Bureau of Brazil | The PERT Program | ||||
Valuation Allowance [Line Items] | ||||
Income tax benefit | 2.9 | 2.9 | ||
Penalties | 0.4 | 0.4 | ||
Interest expense | $ 0.1 | 0.1 | ||
Secretariat of the Federal Revenue Bureau of Brazil | The PRT Program | ||||
Valuation Allowance [Line Items] | ||||
Income tax benefit | 11.9 | |||
Penalties | 1.5 | |||
Interest expense | $ 2.4 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | $ 556,771 | $ 805,936 | |
Ending balance | $ 585,592 | 548,583 | 585,592 |
Accumulated Other Comprehensive Income | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | 47,508 | 29,198 | |
Ending balance | 49,809 | 47,792 | 49,809 |
Foreign Currency Translation Adjustment | |||
AOCI Attributable to Parent, Net of Tax | |||
Income recognized in other comprehensive income (loss) | $ 284 | 5,452 | |
Loss reclassified from accumulated other comprehensive income | $ 15,159 | $ 15,200 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options granted (in shares) | shares | 0 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Stock options | First anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33.33% |
Stock options | Second anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33.33% |
Stock options | Third anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33.33% |
Stock options | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period of stock options | 7 years |
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Estimated unrecognized compensation cost | $ | $ 19.4 |
Weighted-average vesting period | 2 years |
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | First anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33.33% |
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | Second anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33.33% |
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | Third anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33.33% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Restricted Stock, Restricted Stock Units, Performance Units, Cash Settled Restricted Stock Units and Cash Settled Performance Units (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | |
Shares | |
Non-vested awards at the beginning of the period (in shares) | 1,292 |
Granted (in shares) | 646 |
Vested (in shares) | (573) |
Change in expected vesting of performance units (in shares) | 102 |
Cancelled (in shares) | (186) |
Non-vested awards at the end of the period (in shares) | 1,281 |
Weighted Average Grant-Date Fair Value Per Share | |
Non-vested awards at the beginning of the period (in dollars per share) | $ / shares | $ 17.68 |
Granted (in dollars per share) | $ / shares | 29.88 |
Vested (in dollars per share) | $ / shares | 20.84 |
Change in expected vesting of performance units (in dollars per share) | $ / shares | 30.87 |
Cancelled (in dollars per share) | $ / shares | 18.62 |
Non-vested awards at the end of the period (in dollars per share) | $ / shares | $ 23.33 |
Cash settled restricted stock units | |
Shares | |
Non-vested awards at the end of the period (in shares) | 3 |
Restricted shares, restricted stock units and performance units | |
Shares | |
Non-vested awards at the end of the period (in shares) | 1,278 |
Net Income (Loss) Per Common 64
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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator for basic and diluted net income (loss) per common share: | ||||
Income (loss) from continuing operations | $ 3,382 | $ (32,312) | $ 7,641 | $ (167,724) |
Income (loss) from discontinued operations, net of tax | (29) | 19,652 | 19,577 | (33,439) |
Less: Net income attributable to participating securities | (92) | 0 | (781) | 0 |
Net income (loss) — used in basic and diluted net income (loss) per common share | $ 3,261 | $ (12,660) | $ 26,437 | $ (201,163) |
Weighted average common shares outstanding including participating securities | ||||
Weighted average common shares outstanding including participating securities (in shares) | 36,036 | 35,562 | 35,969 | 35,492 |
Less: Weighted average participating securities outstanding (in shares) | (990) | (930) | (1,032) | (942) |
Weighted average common shares outstanding — used in basic net income (loss) per common share (in shares) | 35,046 | 34,632 | 34,937 | 34,550 |
Net dilutive potential common shares issuable: | ||||
On exercise of options and vesting of restricted stock units (in shares) | 74 | 82 | ||
Weighted average common shares outstanding — used in diluted net income (loss) per common share (in shares) | 35,120 | 34,632 | 35,019 | 34,550 |
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.09 | $ (0.37) | $ 0.76 | $ (5.82) |
Diluted (in dollars per share) | $ 0.09 | $ (0.37) | $ 0.75 | $ (5.82) |
Net Income (Loss) Per Common 65
Net Income (Loss) Per Common Share - Schedule of Antidilutive Shares Excluded from Computation of Net Income (Loss) Per Common Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net dilutive potential common shares issuable (in shares) | 39 | 262 | 45 | 283 |
On exercise of options where exercise price is greater than average market value for the period | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net dilutive potential common shares issuable (in shares) | 39 | 216 | 45 | 232 |
On exercise of options and vesting of restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net dilutive potential common shares issuable (in shares) | 0 | 46 | 0 | 51 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Guarantees (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Commitments and contingencies | |
Maximum potential undiscounted payments | $ 127,580 |
Performance guarantees through letters of credit | |
Commitments and contingencies | |
Maximum potential undiscounted payments | 74,402 |
Standby letters of credit | |
Commitments and contingencies | |
Maximum potential undiscounted payments | 798 |
Bid bonds and performance bonds | |
Commitments and contingencies | |
Maximum potential undiscounted payments | $ 52,380 |
Commitments and Contingencies67
Commitments and Contingencies - Contingencies (Narrative) (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Nov. 03, 2015 | |
Business acquisition, contingent consideration | ||||
Cash transferred to Archrock | $ 44,720,000 | $ 49,176,000 | ||
Amount accrued for the outcomes of non-income-based tax audits | 2,900,000 | $ 3,100,000 | ||
EESLP | ||||
Business acquisition, contingent consideration | ||||
Payments to be received by Archrock's subsidiary (up to) | $ 125,800,000 | |||
Aggregate amount of all reimbursable expenses incurred | $ 150,000,000 | |||
Remaining principal amount due from PDVSA Gas | 21,000,000 | |||
Spinoff | Archrock | ||||
Business acquisition, contingent consideration | ||||
Cash transferred to Archrock | $ 19,700,000 | $ 49,200,000 |
Commitments and Contingencies68
Commitments and Contingencies - Contracts Containing Liquidated Damages Provisions (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | ||
Estimated penalties for liquidated damages | $ 2.9 | $ 3.1 |
Contract Containing Liquidated Damages | ||
Loss Contingencies [Line Items] | ||
Estimated penalties for liquidated damages | $ 10 |
Commitments and Contingencies69
Commitments and Contingencies - Indemnifications (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Tax Attributable to Business after Spin-off | |
Loss Contingencies [Line Items] | |
Liability for certain taxes not clearly attributable to the business (as a percent) | 50.00% |
Reportable Segments - Schedule
Reportable Segments - Schedule of Revenues and Other Financial Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 4 | |||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 327,095 | $ 229,158 | $ 938,380 | $ 797,935 |
Gross margin | 90,817 | 74,878 | 279,098 | 237,379 |
Contract Operations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 92,561 | 99,143 | 279,947 | 298,591 |
Gross margin | 58,921 | 63,087 | 180,818 | 187,636 |
Aftermarket Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 29,799 | 26,590 | 76,567 | 91,499 |
Gross margin | 7,896 | 7,544 | 20,774 | 26,016 |
Oil and Gas Product Sales | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 192,119 | 73,685 | 521,091 | 314,684 |
Gross margin | 20,500 | 3,611 | 51,910 | 24,519 |
Belleli EPC Product Sales | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 12,616 | 29,740 | 60,775 | 93,161 |
Gross margin | $ 3,500 | $ 636 | $ 25,596 | $ (792) |
Reportable Segments - Reconcili
Reportable Segments - Reconciliation of Income (Loss) Before Income Taxes to Total Gross Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting [Abstract] | ||||
Income (loss) before income taxes | $ 10,528 | $ (15,969) | $ 27,972 | $ (47,037) |
Selling, general and administrative | 44,197 | 37,864 | 135,678 | 124,250 |
Depreciation and amortization | 28,314 | 28,183 | 83,641 | 106,533 |
Long-lived asset impairment | 0 | 5,358 | 0 | 6,009 |
Restatement related charges | 1,997 | 12,298 | 3,011 | 20,149 |
Restructuring and other charges | 417 | 2,239 | 2,595 | 25,442 |
Interest expense | 7,860 | 8,254 | 27,329 | 25,596 |
Equity in income of non-consolidated affiliates | 0 | 0 | 0 | (10,403) |
Other (income) expense, net | (2,496) | (3,349) | (1,128) | (13,160) |
Total gross margin | $ 90,817 | $ 74,878 | $ 279,098 | $ 237,379 |