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 Exterran Corporation Announces Fourth Quarter and Full Year 2016 Results
   Wednesday, March 08, 2017 5:44:00 PM ET

--Fourth Quarter 2016 Bookings of $231 Million, Highest in the last Eight Quarters

Exterran Corporation (EXTN ) ("Exterran" or the "Company") today announced a net loss from continuing operations for the fourth quarter of 2016 of $26.6 million, or $0.77 per share, on revenue of $231.3 million. This compares to net loss from continuing operations of $32.3 million, or $0.93 per share, on revenue of $229.2 million for the third quarter of 2016 and net loss from continuing operations of $22.4 million, or $0.66 per share, on revenue of $398.7 million for the fourth quarter of 2015.

The Company also announced it has been awarded a 10-year contract to build, own and operate a processing and treating facility for a customer operating in the Middle East, valued at more than $250 million. The Company will design, construct and install the facility with operational start scheduled for the latter part of 2018.

Andrew Way, Exterran’s President and Chief Executive Officer, commented, "Our fourth quarter results were in line with our expectations. The resiliency of our contract operations business model was evident as we partially offset anticipated lower revenue with cost productivity gains, resulting in a higher gross margin percentage from third quarter levels. Low bookings early in 2016 coupled with our decision to maintain a certain level of manufacturing capacity resulted in low oil and gas product sales margins. As anticipated, maintaining manufacturing capacity was prudent given our increased level of bookings during the second half of 2016, culminating with fourth quarter bookings of $230.8 million, as well as the Middle East project award in our contract operations segment."

Mr. Way continued, "The project award is another indication of our strong brand, reputation and experience providing effective solutions to our customers’ production and midstream infrastructure needs. It also adds to our existing base of recurring and stable revenue and cash flow associated with our international contract operations business model. Contract operations projects internationally, and our increasing oil and gas product sales bookings resulting from higher demand in certain U.S. basins, give us a balanced business model and portfolio with access to growing market areas and opportunities around the world."

Adjusted net loss from continuing operations for the fourth quarter of 2016 was $17.9 million, or $0.52 per share. This compares to adjusted net loss from continuing operations of $12.4 million, or $0.36 per share, for the third quarter of 2016 and adjusted net loss from continuing operations of $7.8 million, or $0.23 per share, for the fourth quarter of 2015. Excluded from adjusted net loss from continuing operations for the fourth quarter of 2016 were pre-tax expenses of $9.1 million in non-cash long-lived impairment charges primarily related to the Company’s contract operations business and $2.0 million in restructuring costs, partially offset by $1.3 million in net restatement recoveries. See table below for reconciliation of GAAP to non-GAAP financial information.

Net loss for the fourth quarter of 2016 was $26.8 million. This compares to net loss of $12.7 million for the third quarter of 2016 and net loss of $4.1 million for the fourth quarter of 2015.

EBITDA, as adjusted, was $28.1 million for the fourth quarter of 2016, as compared with EBITDA, as adjusted, of $38.0 million for the third quarter of 2016 and $57.8 million for the fourth quarter of 2015. See table below for reconciliation of GAAP to non-GAAP financial information.

Selling, general and administrative expenses were $41.7 million in the fourth quarter of 2016, as compared with $37.9 million in the third quarter of 2016 and $52.9 million in the fourth quarter of 2015. The sequential increase was primarily due to severance and other personnel-related expenses resulting from staff and structure changes.

Contract Operations Segment

Contract operations revenue in the fourth quarter of 2016 was $93.9 million, a 5% decrease from third quarter 2016 revenue of $99.1 million and a 22% decline from fourth quarter 2015 revenue of $119.9 million.

Contract operations gross margin in the fourth quarter of 2016 was $61.2 million, a 3% decrease from third quarter 2016 gross margin of $63.1 million and a 21% decline from fourth quarter 2015 gross margin of $77.7 million. Gross margin percentage in the fourth quarter of 2016 was 65%, as compared with 64% in the third quarter of 2016 and 65% in the fourth quarter of 2015.

The sequential revenue and gross margin decreases were primarily due to contractual recoveries benefiting third quarter results that did not repeat, and a contractual project stop.

Aftermarket Services Segment

Aftermarket services revenue in the fourth quarter of 2016 was $29.1 million, a 9% increase from third quarter 2016 revenue of $26.6 million and a 10% decrease from fourth quarter 2015 revenue of $32.3 million.

Aftermarket services gross margin in the fourth quarter of 2016 was $7.2 million, a 5% decrease from third quarter 2016 gross margin of $7.5 million and a 19% decrease from fourth quarter 2015 gross margin of $8.8 million. Gross margin percentage in the fourth quarter of 2016 was 25%, as compared with 28% in the third quarter of 2016 and 27% in the fourth quarter of 2015.

The sequential increase in aftermarket service revenue was driven primarily by an increase in Eastern Hemisphere parts sales. Gross margin was lower due to business mix.

Oil and Gas Product Sales Segment

Oil and gas product sales revenue in the fourth quarter of 2016 was $77.7 million, a 5% increase from third quarter 2016 revenue of $73.7 million, and a 64% decrease from fourth quarter 2015 revenue of $214.1 million.

Oil and gas product sales gross margin in the fourth quarter of 2016 was $2.5 million, a 32% decrease from third quarter 2016 gross margin of $3.6 million and a 90% decrease from fourth quarter 2015 gross margin of $24.7 million. Gross margin percentage in the fourth quarter of 2016 was 3% as compared with 5% in the third quarter of 2016 and 12% in the fourth quarter of 2015.

The sequential increase in revenue was primarily due to an increase in compression and processing equipment sales, resulting from higher activity in North America. This was partially offset by lower production equipment sales. Gross margin was lower primarily due to pricing and underabsorption of fixed costs due to management’s decision to maintain a certain level of manufacturing capacity.

Oil and gas product sales backlog was $306.2 million at December 31, 2016, as compared to $153.1 million at September 30, 2016 and $267.4 million at December 31, 2015. Oil and gas product sales bookings for the fourth quarter of 2016 were $230.8 million, resulting in a book-to-bill ratio of 297%. This compares to bookings of $132.3 million for the third quarter of 2016 and bookings of $172.1 million for the fourth quarter of 2015.

Belleli EPC Product Sales Segment

As previously disclosed, the Company is in the process of exiting the non-core business lines of Belleli EPC. Fourth quarter results for the period were in line with the Company’s internal expectations as revenue was $30.7 million and gross margin was a negative $1.7 million. The remaining backlog is approximately $64 million and the Company anticipates exiting the business by early 2018.

Project execution delays on significant projects prior to 2016 resulted in accrued contract loss provisions recorded in prior years, which in turn base-lined gross margin for such projects at near break-even in the current year periods.

Conference Call Information

The Company will host a conference call at 10 a.m. Central Time on Thursday, March 9, 2017. The call can be accessed from the Company’s website at www.exterran.com or by telephone at 877-524-8416. For those who cannot listen to the live call, a telephonic replay will be available through Friday, March 17, 2017 and may be accessed by calling 877-660-6853 and using the pass code 13656276.

About Exterran Corporation

Exterran Corporation (EXTN ) is a market leader in compression, production and processing products and services, serving customers throughout the world engaged in all aspects of the oil and natural gas industry. Its global product lines include natural gas compression, process & treating and production equipment and water treatment solutions. Outside the United States, Exterran Corporation is a leading provider of full-service natural gas contract compression and a supplier of new, used, OEM and aftermarket parts and services. Exterran Corporation is headquartered in Houston, Texas and operates in approximately 30 countries.

For more information, visit www.exterran.com.

Non-GAAP Financial Information

Gross Margin is defined as revenue less cost of sales (excluding depreciation and amortization expense). Gross margin percentage is defined as gross margin divided by revenue. The Company evaluates the performance of its segments based on gross margin for each segment.

EBITDA, as adjusted, a non-GAAP measure, is defined as net income (loss) excluding income (loss) from discontinued operations (net of tax), cumulative effect of accounting changes (net of tax), income taxes, interest expense (including debt extinguishment costs), depreciation and amortization expense, impairment charges, restructuring and other charges, non-cash gains or losses from foreign currency exchange rate changes recorded on intercompany obligations, expensed acquisition costs and other items. EBITDA, as adjusted, excludes the benefit of the two previously announced sales of our Venezuelan assets.

Adjusted net income (loss) from continuing operations and diluted adjusted net income (loss) from continuing operations per common share, non-GAAP measures, are defined as net income (loss) and earnings per share, excluding the impact of income (loss) from discontinued operations (net of tax), cumulative effect of accounting changes (net of tax), impairment charges (net of tax), restructuring and other charges (net of tax), the benefit of the previously announced sale of our joint ventures’ Venezuelan assets, the effect of income tax adjustments that are outside of the Company’s anticipated effective tax rates and other items.

See tables below for additional information concerning non-GAAP financial information, including a reconciliation of the non-GAAP financial information presented in this press release to the most directly comparable financial information presented in accordance with GAAP. Non-GAAP financial information supplements should be read together with, and are not an alternative or substitute for, the Company’s financial results reported in accordance with GAAP. Because non-GAAP financial information is not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

Forward-Looking Statements

All statements in this release (and oral statements made regarding the subjects of this release) other than historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements may include words such as "guidance," "anticipate," "estimate," "expect," "forecast," "project," "plan," "intend," "believe," "confident," "may," "should," "can have," "likely," "future" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Examples of forward-looking information in this release include, but are not limited to: Exterran’s financial and operational strategies and ability to successfully effect those strategies; Exterran’s expectations regarding future economic and market conditions; Exterran’s financial and operational outlook and ability to fulfill that outlook; demand for Exterran’s products and services and growth opportunities for those products and services; and statements regarding industry activity levels and infrastructure build-out opportunities.

These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside Exterran’s control, which could cause actual results to differ materially from such statements. As a result, any such forward-looking statements are not guarantees of future performance or results. While Exterran believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: local, regional, national and international economic conditions and the impact they may have on Exterran and its customers; Exterran’s reduced profit margins or loss of market share resulting from competition or the introduction of competing technologies by other companies; Exterran’s ability to secure new oil and gas product sales customers; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for oil or natural gas or a sustained decrease in the price of oil or natural gas; Exterran’s ability to timely and cost-effectively execute larger projects; changes in political or economic conditions in key operating markets, including international markets; changes in current exchange rates, including the risk of currency devaluations by foreign governments, and restrictions on currency repatriation; the inherent risks associated with Exterran’s operations, such as equipment defects, malfunctions and natural disasters; any non-performance by third parties of their contractual obligations; changes in safety, health, environmental and other regulations; Exterran’s ability to implement appropriate changes to its internal controls and procedures in a timely and cost efficient manner; the effectiveness of Exterran’s internal controls going forward, including the existence of any control deficiencies identified in the future; the resolution of Exterran’s pending Securities and Exchange Commission investigation; the results of governmental actions relating to pending investigations; and the results of any shareholder actions relating to the recent restatement of Exterran’s financial statements.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Exterran’s Annual Report on Form 10-K/A for the year ended December 31, 2015, and other filings with the Securities and Exchange Commission available on the Securities and Exchange Commission’s website www.sec.gov. A discussion of these risks is expressly incorporated by reference into this release. Except as required by law, Exterran expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                      EXTERRAN CORPORATION
                                                                                                                                                                                                                   UNAUDITED CONSOLIDATED AND
                                                                                                                                                                                                                COMBINED STATEMENTS OF OPERATIONS
                                                                                                                                                                                                                      (In thousands, except
                                                                                                                                                                                                                       per share amounts)
                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                      Three Months Ended                                                                                                                                                                     Years Ended
                                                                                                               ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  December 31,                                                           September 30,                                                          December 31,                                                            December 31,                                                             December 31,
                                                                                                                                      2016                                                                   2016                                                                   2015                                                                    2016                                                                     2015
                                                                                                               --------------------------------------------------                     --------------------------------------------------                     --------------------------------------------------                     ----------------------------------------------------                     ----------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                              
Revenues:
   Contract operations                                                                                                            $  93,872                                                              $  99,143                                                              $ 119,855                                                              $   392,463                                                              $   469,900
   Aftermarket services                                                                                                              29,051                                                                 26,590                                                                 32,255                                                                  120,550                                                                  127,802
                                                                                                                                     77,700                                                                 73,685                                                                206,119                                                                  392,384                                                                  935,295
   Oil and gas product sales--third parties (1)
                                                                                                                                          -                                                                      -                                                                  8,004                                                                        -                                                                  154,267
   Oil and gas product sales--affiliates (1)
   Belleli EPC product sales                                                                                      30,695                           29,740                           32,478                            123,856                            103,221  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                 231,318                          229,158                          398,711                          1,029,253                          1,790,485  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Costs and expenses:
   Cost of sales (excluding depreciation and amortization expense):
      Contract operations                                                                                                            32,715                                                                 36,056                                                                 42,193                                                                  143,670                                                                  172,391
      Aftermarket services                                                                                                           21,859                                                                 19,046                                                                 23,413                                                                   87,342                                                                   91,233
      Oil and gas product sales                                                                                                      75,229                                                                 70,074                                                                189,435                                                                  365,394                                                                  925,737
      Belleli EPC product sales                                                                                                      32,369                                                                 29,104                                                                 31,363                                                                  126,322                                                                  134,846
   Selling, general and administrative                                                                                               41,735                                                                 37,864                                                                 52,944                                                                  165,985                                                                  220,396
   Depreciation and amortization                                                                                                     31,441                                                                 28,183                                                                 44,650                                                                  137,974                                                                  154,801
   Long-lived asset impairment                                                                                                        9,137                                                                  5,358                                                                  6,524                                                                   15,146                                                                   20,788
   Restatement charges (recoveries)                                                                                                  (1,270 )                                                               12,298                                                                      -                                                                   18,879                                                                        -
   Restructuring and other charges                                                                                                    2,015                                                                  2,239                                                                 13,618                                                                   27,457                                                                   31,315
   Interest expense                                                                                                                   8,585                                                                  8,254                                                                  5,865                                                                   34,181                                                                    7,272
   Equity in income of non-consolidated affiliates                                                                                        -                                                                      -                                                                      -                                                                  (10,403 )                                                                (15,152 )
   Other (income) expense, net                                                                                        72                           (3,349 )                                            (3,842 )                                             (13,088 )                                              35,438  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                                                 253,887                          245,127                          406,163                          1,098,859                          1,779,065  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Income (loss) before income taxes                                                                                                   (22,569 )                                                              (15,969 )                                                               (7,452 )                                                                (69,606 )                                                                 11,420
Provision for income taxes                                                                                         4,073                           16,343                           14,991                            124,760                             39,546  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Loss from continuing operations                                                                                                     (26,642 )                                                              (32,312 )                                                              (22,443 )                                                               (194,366 )                                                                (28,126 )
Income (loss) from discontinued operations, net of tax                                                              (132 )                                            19,652                           18,360                            (33,571 )                                              54,774  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Net income (loss)                                                                                                                 $ (26,774 )                                                            $ (12,660 )                                                            $  (4,083 )                                                            $  (227,937 )                                                            $    26,648  
                                                                                                               ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                              
Basic net income (loss) per common share:
   Loss from continuing operations per common share                                                                               $   (0.77 )                                                            $   (0.93 )                                                            $   (0.66 )                                                            $     (5.62 )                                                            $     (0.82 )
   Income (loss) from discontinued operations per common share                                                         -                             0.56                             0.54                              (0.97 )                                                1.60  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
      Net income (loss) per common share                                                                                          $   (0.77 )                                                            $   (0.37 )                                                            $   (0.12 )                                                            $     (6.59 )                                                            $      0.78  
                                                                                                               ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                              
Diluted net income (loss) per common share:
   Loss from continuing operations per common share                                                                               $   (0.77 )                                                            $   (0.93 )                                                            $   (0.66 )                                                            $     (5.62 )                                                            $     (0.82 )
   Income (loss) from discontinued operations per common share                                                         -                             0.56                             0.54                              (0.97 )                                                1.60  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
      Net income (loss) per common share                                                                                          $   (0.77 )                                                            $   (0.37 )                                                            $   (0.12 )                                                            $     (6.59 )                                                            $      0.78  
                                                                                                               ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                              
Weighted average common shares outstanding used in net income (loss)
per common share:
   Basic                                                                                                          34,675                           34,632                           34,294                             34,568                             34,288  
                                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
   Diluted                                                                                                        34,675                           34,632                           34,294                             34,568                             34,288  
                                                                                                               ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                             
(1) Sales to Archrock Partners (named Exterran Partners, L.P. prior
to November 3, 2015) ("Archrock Partners") prior to the Spin-off are
presented as oil and gas product sales--affiliates revenue.
Subsequent to November 3, 2015, sales to Archrock Partners are
considered sales to third parties.
                                                                                                                  
                                                                                                     EXTERRAN CORPORATION
                                                                                                UNAUDITED CONSOLIDATED BALANCE
                                                                                                            SHEETS
                                                                                                        (In thousands)
                                                                                                                                                                                                
                                                                                                                                                                    December 31,
                                                                                                                      ---------------------------------------------------------------------------------------------------------
                                                                                                                                   2016                                                                      2015
                                                                                                                      -------------------------------                                          --------------------------------
                                                                                                                                                                                                
                                   ASSETS
                                                                                                                                                                                                
Current assets:
   Cash and cash equivalents                                                                                                             $    35,678                                                              $     29,032
   Restricted cash                                                                                                                               671                                                                     1,490
   Accounts receivable, net                                                                                                                  230,607                                                                   363,581
   Inventory, net                                                                                                                            157,516                                                                   208,081
   Costs and estimated earnings in excess of billings on uncompleted                                                                          31,956                                                                    65,311
   contracts
   Other current assets                                                                                                                       55,516                                                                    53,866
   Current assets associated with discontinued operations                                                                      14                                                 32,923
                                                                                                                      -------------------- ---------                                           -------------------- ----------
      Total current assets                                                                                                                   511,958                                                                   754,284
Property, plant and equipment, net                                                                                                           797,809                                                                   858,188
Deferred income taxes                                                                                                                          6,015                                                                    86,110
Intangible and other assets, net                                                                                                              58,996                                                                    51,533
Long-term assets associated with discontinued operations                                                                        -                                                 38,281
                                                                                                                      -------------------- ---------                                           -------------------- ----------
      Total assets                                                                                                                       $ 1,374,778                                                              $  1,788,396
                                                                                                                      ==================== =========                                           ==================== ==========
                                                                                                                                                                                                
       LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                                                                                                                                                                
Current liabilities:
   Accounts payable, trade                                                                                                               $    95,959                                                              $     86,727
   Accrued liabilities                                                                                                                       162,792                                                                   175,841
   Deferred revenue                                                                                                                           32,154                                                                    31,675
   Billings on uncompleted contracts in excess of costs and estimated                                                                         42,116                                                                    37,908
   earnings
   Current liabilities associated with discontinued operations                                                              1,113                                                 13,645
                                                                                                                      -------------------- ---------                                           -------------------- ----------
      Total current liabilities                                                                                                              334,134                                                                   345,796
Long-term debt                                                                                                                               348,970                                                                   525,593
Deferred income taxes                                                                                                                         11,700                                                                    22,519
Long-term deferred revenue                                                                                                                    98,964                                                                    59,769
Other long-term liabilities                                                                                                                   24,237                                                                    22,708
Long-term liabilities associated with discontinued operations                                                                   2                                                  6,075
                                                                                                                      -------------------- ---------                                           -------------------- ----------
      Total liabilities                                                                                                                      818,007                                                                   982,460
      Total stockholders’ equity                                                               556,771                                                805,936
                                                                                                                      -------------------- ---------                                           -------------------- ----------
      Total liabilities and stockholders’ equity                                                              $ 1,374,778                                                              $  1,788,396
                                                                                                                      ==================== =========                                           ==================== ==========
                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                 EXTERRAN CORPORATION
                                                                                                                                                                                                UNAUDITED SUPPLEMENTAL
                                                                                                                                                                                                      INFORMATION
                                                                                                                                                                                          (In thousands, except percentages)
                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                            Three Months Ended                                                                                                                                                                     Years Ended
                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------------------------------------
                                                                                        December 31,                                                           September 30,                                                          December 31,                                                            December 31,                                                             December 31,
                                                                                            2016                                                                   2016                                                                   2015                                                                    2016                                                                     2015
                                                                     --------------------------------------------------                     --------------------------------------------------                     --------------------------------------------------                     ----------------------------------------------------                     ----------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                    
Revenues:
  Contract operations                                                                   $  93,872                                                              $  99,143                                                              $ 119,855                                                              $   392,463                                                              $   469,900
  Aftermarket services                                                                     29,051                                                                 26,590                                                                 32,255                                                                  120,550                                                                  127,802
  Oil and gas product sales                                                                77,700                                                                 73,685                                                                214,123                                                                  392,384                                                                1,089,562
  Belleli EPC product sales                                             30,695                           29,740                           32,478                            123,856                            103,221  
                                                                     -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
                                                                                        $ 231,318                                           $ 229,158                                           $ 398,711                                           $ 1,029,253                                           $ 1,790,485  
                                                                     ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                    
Gross margin:
  Contract operations                                                                   $  61,157                                                              $  63,087                                                              $  77,662                                                              $   248,793                                                              $   297,509
  Aftermarket services                                                                      7,192                                                                  7,544                                                                  8,842                                                                   33,208                                                                   36,569
  Oil and gas product sales                                                                 2,471                                                                  3,611                                                                 24,688                                                                   26,990                                                                  163,825
  Belleli EPC product sales                                             (1,674 )                                               636                            1,115                             (2,466 )                                             (31,625 )
                                                                     -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
     Total                                                                              $  69,146                                           $  74,878                                           $ 112,307                                           $   306,525                                           $   466,278  
                                                                     ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                    
Gross margin percentage:
  Contract operations                                                                          65 %                                                                   64 %                                                                   65 %                                                                     63 %                                                                     63 %
  Aftermarket services                                                                         25 %                                                                   28 %                                                                   27 %                                                                     28 %                                                                     29 %
  Oil and gas product sales                                                                     3 %                                                                    5 %                                                                   12 %                                                                      7 %                                                                     15 %
  Belleli EPC product sales                                                                    (5 )%                                                                   2 %                                                                    3 %                                                                     (2 )%                                                                   (31 )%
     Total                                                                                     30 %                                                                   33 %                                                                   28 %                                                                     30 %                                                                     26 %
                                                                                                                                                                                                                                                                                                                                                                    
Selling, general and administrative                                                     $  41,735                                                              $  37,864                                                              $  52,944                                                              $   165,985                                                              $   220,396
  % of revenue                                                                                 18 %                                                                   17 %                                                                   13 %                                                                     16 %                                                                     12 %
                                                                                                                                                                                                                                                                                                                                                                    
EBITDA, as adjusted                                                                     $  28,115                                                              $  38,028                                                              $  57,782                                                              $   145,069                                                              $   240,571
  % of revenue                                                                                 12 %                                                                   17 %                                                                   14 %                                                                     14 %                                                                     13 %
                                                                                                                                                                                                                                                                                                                                                                    
Capital expenditures                                                                    $  26,636                                                              $  16,902                                                              $  34,648                                                              $    74,325                                                              $   156,745
Less: Proceeds from sale of PP&E                                        (1,842 )                                               (73 )                                            (1,350 )                                              (2,814 )                                              (6,625 )
                                                                     -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
Net Capital expenditures                                                                $  24,794                                           $  16,829                                           $  33,298                                           $    71,511                                           $   150,120  
                                                                     ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                    
  Total Available Horsepower (at period end)                                                1,138                                                                  1,192                                                                  1,181                                                                    1,138                                                                    1,181
  Total Operating Horsepower (at period end)                                                  936                                                                    944                                                                    964                                                                      936                                                                      964
  Average Operating Horsepower                                                                939                                                                    949                                                                    964                                                                      953                                                                      959
  Horsepower Utilization (at period end)                                                       82 %                                                                   79 %                                                                   82 %                                                                     82 %                                                                     82 %
                                                                                                                                                                                                                                                                                                                                                                    
                                                                                        December 31,                                                           September 30,                                                          December 31,                                                            December 31,                                                             December 31,
                                                                                            2016                                                                   2016                                                                   2015                                                                    2016                                                                     2015
                                                                     -----------------------------------------------                        -----------------------------------------------                        -----------------------------------------------                        -------------------------------------------------                        -------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                    
Product Sales Backlog:
  Oil and Gas Product Sales Backlog:
    Compression and Accessory Backlog                                                   $ 160,006                                                              $  86,206                                                              $ 141,059                                                              $   160,006                                                              $   141,059
    Production and Processing Equipment Backlog                                           144,252                                                                 64,680                                                                118,914                                                                  144,252                                                                  118,914
    Installation Backlog                                                                    1,964                                                                  2,213                                                                  7,445                                                                    1,964                                                                    7,445
  Belleli EPC Backlog                                                   63,578                           95,366                          162,424                             63,578                            162,424  
                                                                     -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- --------------------
     Total Product Sales Backlog                                                        $ 369,800                                           $ 248,465                                           $ 429,842                                           $   369,800                                           $   429,842  
                                                                     ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ========= ====================                      ==================== ========= ====================
                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                     EXTERRAN CORPORATION
                                                                                                                                                                                                                 UNAUDITED NON-GAAP FINANCIAL
                                                                                                                                                                                                                           MEASURES
                                                                                                                                                                                                           (In thousands, except per share amounts)
                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                       Three Months Ended                                                                                                                                                 Years Ended
                                                                                                                -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   December 31,                                                           September 30,                                                          December 31,                                                           December 31,                                                            December 31,
                                                                                                                                       2016                                                                   2016                                                                   2015                                                                   2016                                                                    2015
                                                                                                                --------------------------------------------------                     --------------------------------------------------                     --------------------------------------------------                     ---------------------------------------------------                     --------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                              
Non-GAAP Financial Information--Reconciliation of Income (loss)
before income taxes to Total gross margin:
Income (loss) before income taxes                                                                                                  $ (22,569 )                                                            $ (15,969 )                                                            $  (7,452 )                                                            $  (69,606 )                                                            $  11,420
  Selling, general and administrative                                                                                                 41,735                                                                 37,864                                                                 52,944                                                                 165,985                                                                220,396
  Depreciation and amortization                                                                                                       31,441                                                                 28,183                                                                 44,650                                                                 137,974                                                                154,801
  Long-lived asset impairment                                                                                                          9,137                                                                  5,358                                                                  6,524                                                                  15,146                                                                 20,788
  Restatement charges (recoveries)                                                                                                    (1,270 )                                                               12,298                                                                      -                                                                  18,879                                                                      -
  Restructuring and other charges                                                                                                      2,015                                                                  2,239                                                                 13,618                                                                  27,457                                                                 31,315
  Interest expense                                                                                                                     8,585                                                                  8,254                                                                  5,865                                                                  34,181                                                                  7,272
  Equity in income of non-consolidated affiliates                                                                                          -                                                                      -                                                                      -                                                                 (10,403 )                                                              (15,152 )
  Other (income) expense, net                                                                                          72                           (3,349 )                                            (3,842 )                                            (13,088 )                                            35,438  
                                                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- ------- --------------------
  Total gross margin (1)                                                                                                           $  69,146                                           $  74,878                                           $ 112,307                                           $  306,525                                           $ 466,278  
                                                                                                                ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======== ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                              
Non-GAAP Financial Information--Reconciliation of Net income
(loss) to EBITDA, as adjusted:
  Net income (loss)                                                                                                                $ (26,774 )                                                            $ (12,660 )                                                            $  (4,083 )                                                            $ (227,937 )                                                            $  26,648
  (Income) loss from discontinued operations, net of tax                                                                                 132                                                                (19,652 )                                                              (18,360 )                                                                33,571                                                                (54,774 )
  Depreciation and amortization                                                                                                       31,441                                                                 28,183                                                                 44,650                                                                 137,974                                                                154,801
  Long-lived asset impairment                                                                                                          9,137                                                                  5,358                                                                  6,524                                                                  15,146                                                                 20,788
  Restatement charges (recoveries)                                                                                                    (1,270 )                                                               12,298                                                                      -                                                                  18,879                                                                      -
  Restructuring and other charges                                                                                                      2,015                                                                  2,239                                                                 13,618                                                                  27,457                                                                 31,315
  Investment in non-consolidated affiliates impairment                                                                                     -                                                                      -                                                                      -                                                                       -                                                                     33
  Proceeds from sale of joint venture assets                                                                                               -                                                                      -                                                                      -                                                                 (10,403 )                                                              (15,185 )
  Interest expense                                                                                                                     8,585                                                                  8,254                                                                  5,865                                                                  34,181                                                                  7,272
  (Gain) loss on currency exchange rate remeasurement of intercompany                                                                    776                                                                 (2,335 )                                                               (5,423 )                                                                (8,559 )                                                               30,127
  balances
  Provision for income taxes                                                                                        4,073                           16,343                           14,991                           124,760                           39,546  
                                                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- ------- --------------------
  EBITDA, as adjusted (2)                                                                                                          $  28,115                                           $  38,028                                           $  57,782                                           $  145,069                                           $ 240,571  
                                                                                                                ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======== ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                              
Non-GAAP Financial Information--Reconciliation of Net income
(loss) to Adjusted net loss from continuing operations:
  Net income (loss)                                                                                                                $ (26,774 )                                                            $ (12,660 )                                                            $  (4,083 )                                                            $ (227,937 )                                                            $  26,648
  (Income) loss from discontinued operations, net of tax                                                              132                          (19,652 )                                           (18,360 )                                             33,571                          (54,774 )
                                                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- ------- --------------------
  Loss from continuing operations                                                                                                    (26,642 )                                                              (32,312 )                                                              (22,443 )                                                              (194,366 )                                                              (28,126 )
  Adjustment for items:
     Long-lived asset impairment                                                                                                       9,137                                                                  5,358                                                                  6,524                                                                  15,146                                                                 20,788
     Restatement charges (recoveries)                                                                                                 (1,270 )                                                               12,298                                                                      -                                                                  18,879                                                                      -
     Restructuring and other charges                                                                                                   2,015                                                                  2,239                                                                 13,618                                                                  27,457                                                                 31,315
     Investment in non-consolidated affiliates impairment                                                                                  -                                                                      -                                                                      -                                                                       -                                                                     33
     Proceeds from sale of joint venture assets                                                                                            -                                                                      -                                                                      -                                                                 (10,403 )                                                              (15,185 )
     Tax impact of adjustments (3)                                                                                                    (1,116 )                                                                   (9 )                                                               (7,010 )                                                                (1,173 )                                                              (16,742 )
     Deferred tax assets valuation allowances                                                                                              -                                                                      -                                                                      -                                                                  93,284                                                                      -
     Non-cash charge related to a Nigeria tax audit                                                                                        -                                                                      -                                                                      -                                                                   7,407                                                                      -
     Research and development tax credits                                                                               -                                -                            1,510                                 -                          (19,157 )
                                                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- ------- --------------------
  Adjusted net loss from continuing operations (4)                                                                                 $ (17,876 )                                                            $ (12,426 )                                                            $  (7,801 )                                                            $  (43,769 )                                                            $ (27,074 )
                                                                                                                ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======== ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                              
  Diluted loss from continuing operations per common share                                                                         $   (0.77 )                                                            $   (0.93 )                                                            $   (0.66 )                                                            $    (5.62 )                                                            $   (0.82 )
  Adjustment for items, after-tax, per diluted common share                                                          0.25                             0.57                             0.43                              4.35                             0.03  
                                                                                                                -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- ------- --------------------
  Diluted adjusted net loss from continuing operations per common                                                                  $   (0.52 )                                                            $   (0.36 )                                                            $   (0.23 )                                                            $    (1.27 )                                                            $   (0.79 )
  share (4)
                                                                                                                ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======== ====================                      ==================== ======= ====================
 
(1) Management evaluates the performance of each of the Company’s
segments based on gross margin. Total gross margin, a non-GAAP
measure, is included as a supplemental disclosure because it is a
primary measure used by our management to evaluate the results of
revenue and cost of sales (excluding depreciation and amortization
expense), which are key components of our operations. Management
believes gross margin is important supplemental information for
investors because it focuses on the current performance of our
operations and excludes the impact of the prior historical costs of
the assets acquired or constructed that are utilized in those
operations, the indirect costs associated with our SG&A activities,
the impact of our financing methods, restatement charges
(recoveries), restructuring and other charges, and income taxes. In
addition, the inclusion of depreciation and amortization expense may
not accurately reflect the costs required to maintain and replenish
the operational usage of our assets and therefore may not portray
the costs from current operating activity.
 
(2) Management believes EBITDA, as adjusted, is an important measure
of operating performance because it allows management, investors and
others to evaluate and compare our core operating results from
period to period by removing the impact of our capital structure
(interest expense from outstanding debt), asset base (depreciation
and amortization), our subsidiaries’ capital structure (non-cash
gains or losses from foreign currency exchange rate changes on
intercompany obligations), tax consequences, impairment charges,
restatement charges (recoveries), restructuring and other charges,
expensed acquisition costs and other items. Management uses EBITDA,
as adjusted, as supplemental measures to review current period
operating performance, comparability measures and performance
measures for period to period comparisons. In addition, the
Company’s compensation committee has used EBITDA, as adjusted, in
evaluating the performance of the Company and management and in
evaluating certain components of executive compensation, including
performance-based annual incentive programs.
                                                
(3) The tax impacts of adjustments were based on the Company’s
statutory tax rates applicable to each item in the appropriate
taxing jurisdictions. Using statutory tax rates for presentation of
the non-GAAP measures allows a consistent basis for investors to
understand financial performance of the Company across historical
periods. The overall effective tax rate on adjustments was impacted
by non-taxable proceeds from sale of joint venture assets for
applicable periods and the inability to recognize tax benefits from
charges in jurisdictions that are in cumulative loss positions.
                                                
(4) Management believes adjusted net income (loss) from continuing
operations and diluted adjusted net income (loss) from continuing
operations per common share provide useful information to investors
because it allows management, investors and others to evaluate and
compare our core operating results from period to period by removing
the impact of impairment charges, restructuring and other charges,
restatement charges (recoveries), expensed acquisition costs and
other items not appropriately reflective of our core business.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170308006451r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170308006451/en/

SOURCE: Exterran Corporation

Exterran Corporation 
Investors: Greg Rosenstein, 281-854-3199 
Media: George Smalley, 281-854-3163


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