Basis of Presentation and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2013

Basis of Presentation and Summary of Significant Accounting Policies

Summary of net income (loss) attributable to Exterran stockholders

The following table summarizes net income (loss) attributable to Exterran stockholders (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013		2012
Income (loss) from continuing operations attributable to Exterran stockholders	$	10,910		$	(109,717	)	$	27,865	$	(103,060	)
Income (loss) from discontinued operations, net of tax	(1,575		)	(42,891		)	31,675		(44,053		)
Net income (loss) attributable to Exterran stockholders	$	9,335		$	(152,608	)	$	59,540	$	(147,113	)

Schedule of potential shares of common stock that were included in computing diluted income (loss) attributable to Exterran stockholders per common share

The following table shows the potential shares of common stock that were included in computing diluted income (loss) attributable to Exterran stockholders per common share (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
Weighted average common shares outstanding — used in basic income (loss) per common share	65,716	63,478	65,498	63,321
Net dilutive potential common shares issuable:
On exercise of options and vesting of restricted stock and restricted stock units	530	**	523	**
On settlement of employee stock purchase plan shares	2	**	2	**
On exercise of warrants	**	**	**	**
On conversion of 4.25% convertible senior notes due 2014	**	**	**	**
On conversion of 4.75% convertible senior notes due 2014	**	**	**	**
Weighted average common shares outstanding — used in diluted income (loss) per common share	66,248	63,478	66,023	63,321

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

Schedule of potential shares of common stock issuable, excluded from computation of diluted income (loss), attributable to Exterran stockholders per common share

The following table shows the potential shares of common stock issuable that were excluded from computing diluted income (loss) attributable to Exterran stockholders per common share as their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value for the period	741	2,272	834	2,391
On exercise of options and vesting of restricted stock and restricted stock units	—	1,341	—	698
On settlement of employee stock purchase plan shares	—	—	—	13
On exercise of warrants	12,426	12,426	12,426	12,426
On conversion of 4.25% convertible senior notes due 2014	15,334	15,334	15,334	15,334
On conversion of 4.75% convertible senior notes due 2014	—	3,114	241	3,114
Net dilutive potential common shares issuable	28,501	34,487	28,835	33,976

Schedule of changes in accumulated other comprehensive income (loss) by component, net of tax, excluding noncontrolling interest

	Derivatives -			Foreign Currency
	Cash Flow Hedges			Translation Adjustment			Total
Accumulated other comprehensive income (loss), December 31, 2012	$	(2,984	)	$	26,893		$	23,909
Loss recognized in other comprehensive income (loss), net of tax	(26		)(1)	(6,145		)(3)	(6,171		)
Loss reclassified from accumulated other comprehensive income (loss), net of tax	1,146		(2)	2,375		(4)	3,521
Other comprehensive income (loss) attributable to Exterran stockholders	1,120			(3,770		)	(2,650		)
Accumulated other comprehensive income (loss), June 30, 2013	$	(1,864	)	$	23,123		$	21,259

(1) During the three and six months ended June 30, 2013, we recognized a gain of $0.6 million and loss of $26 thousand, respectively, in other comprehensive income (loss), net of tax, related to changes in the fair value of derivative financial instruments.

(2) During the three months ended June 30, 2013, we reclassified a $1.0 million loss, net of a tax benefit of $0.4 million, to interest expense and provision for (benefit from) income taxes, respectively, in our condensed consolidated statements of operations from accumulated other comprehensive income (loss). During the six months ended June 30, 2013, we reclassified a $1.7 million loss, net of a tax benefit of $0.6 million, to interest expense and provision for (benefit from) income taxes, respectively, in our condensed consolidated statements of operations from accumulated other comprehensive income (loss).

(3) During the three and six months ended June 30, 2013, we recognized a loss of $0.9 million and $6.1 million, respectively, in other comprehensive income (loss), net of tax, related to changes in foreign currency translation adjustment.

(4) During the three and six months ended June 30, 2013, we reclassified a $2.4 million loss on foreign currency translation adjustment to long-lived asset impairment in our condensed consolidated statements of operations. This amount represents cumulative foreign currency translation adjustment associated with our United Kingdom entity that had been previously recognized in accumulated other comprehensive income (loss). As discussed in Note 9, we sold the entity that owned our fabrication facility in the United Kingdom in July 2013 and, based on the net transaction value of the agreement, we recognized an impairment during the three months ended June 30, 2013.

	Derivatives -			Foreign Currency
	Cash Flow Hedges			Translation Adjustment			Total
Accumulated other comprehensive income (loss), December 31, 2011	$	(17,072	)	$	23,131		$	6,059
Loss recognized in other comprehensive income (loss), net of tax	(603		)(1)	(4,759		)(3)	(5,362		)
Loss reclassified from accumulated other comprehensive income (loss), net of tax	11,631		(2)	—			11,631
Other comprehensive income (loss) attributable to Exterran stockholders	11,028			(4,759		)	6,269
Accumulated other comprehensive income (loss), June 30, 2012	$	(6,044	)	$	18,372		$	12,328

(1) During each of the three and six month periods ended June 30, 2012, we recognized a loss of $0.6 million in other comprehensive income (loss), net of tax, related to changes in the fair value of derivative financial instruments.

(2) During the three months ended June 30, 2012, we reclassified a $9.0 million loss, net of a tax benefit of $3.2 million, to interest expense and provision for (benefit from) income taxes, respectively, in our condensed consolidated statements of operations from accumulated other comprehensive income (loss). During the six months ended June 30, 2012, we reclassified a $17.9 million loss, net of a tax benefit of $6.3 million, to interest expense and provision for (benefit from) income taxes, respectively, in our condensed consolidated statements of operations from accumulated other comprehensive income (loss).

(3) During the three and six months ended June 30, 2012, we recognized a loss of $5.5 million and $4.8 million, respectively, in other comprehensive income (loss), net of tax, related to changes in foreign currency translation adjustment.

Summary of fair value and carrying value of debt

The following table summarizes the fair value and carrying value of our debt as of June 30, 2013 and December 31, 2012 (in thousands):

	June 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Fixed rate debt	$	1,026,847	$	1,060,000	$	814,423	$	857,000
Floating rate debt	616,000		615,000		750,500		761,000
Total debt	$	1,642,847	$	1,675,000	$	1,564,923	$	1,618,000