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

3 Months Ended

Mar. 31, 2014

Basis of Presentation and Summary of Significant Accounting Policies

Summary of net income attributable to Exterran common stockholders used in the calculation of basic and diluted income per common share

The following table summarizes net income attributable to Exterran common stockholders used in the calculation of basic and diluted income per common share (in thousands):

	Three Months Ended March 31,
	2014			2013
Income from continuing operations attributable to Exterran stockholders	$	13,869		$	16,689
Income from discontinued operations, net of tax	18,727			33,516
Less: Net income attributable to participating securities (1)	(480		)	(932		)
Net income attributable to Exterran common stockholders	$	32,116		$	49,273

(1) Income from continuing operations attributable to participating securities was $0.2 million and $0.3 million for the three months ended March 31, 2014 and 2013, respectively. Income from discontinued operations, net of tax, attributable to participating securities was $0.3 million and $0.6 million for the three months ended March 31, 2014 and 2013, respectively.

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

	Three Months Ended March 31,
	2014		2013
Weighted average common shares outstanding including participating securities	66,416		65,291
Less: Weighted average participating securities outstanding	(1,026	)	(1,212	)
Weighted average common shares outstanding — used in basic income (loss) per common share	65,390		64,079
Net dilutive potential common shares issuable:
On exercise of options and vesting of restricted stock units	616		517
On settlement of employee stock purchase plan shares	2		2
On exercise of warrants	1,784		**
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	67,792		64,598

** 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 common 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 common stockholders per common share as their inclusion would have been anti-dilutive (in thousands):

	Three Months Ended March 31,
	2014	2013

Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value for the period	586	926
On exercise of options and vesting of restricted stock units	—	—
On settlement of employee stock purchase plan shares	—	—
On exercise of warrants	—	12,426
On conversion of 4.25% convertible senior notes due 2014	15,393	15,334
On conversion of 4.75% convertible senior notes due 2014	—	484
Net dilutive potential common shares issuable	15,979	29,170

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

	Derivatives Cash Flow Hedges			Foreign Currency Translation Adjustment			Total
Accumulated other comprehensive income (loss), January 1, 2013	$	(2,984	)	$	26,893		$	23,909
Loss recognized in other comprehensive income (loss), net of tax	(659		)(1)	(5,262		)(3)	(5,921		)
Loss reclassified from accumulated other comprehensive income (loss), net of tax	478		(2)	—			478
Other comprehensive loss attributable to Exterran stockholders	(181		)	(5,262		)	(5,443		)
Accumulated other comprehensive income (loss), March 31, 2013	$	(3,165	)	$	21,631		$	18,466

Accumulated other comprehensive income (loss), January 1, 2014	$	(1,346	)	$	31,424		$	30,078
Gain (loss) recognized in other comprehensive income (loss), net of tax	(254		)(4)	1,134		(6)	880
Loss reclassified from accumulated other comprehensive income (loss), net of tax	438		(5)	—			438
Other comprehensive income attributable to Exterran stockholders	184			1,134			1,318
Accumulated other comprehensive income (loss), March 31, 2014	$	(1,162	)	$	32,558		$	31,396

(1) During the three months ended March 31, 2013, we recognized a loss of $0.8 million and a tax benefit of $0.1 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 March 31, 2013, we reclassified a $0.7 million loss to interest expense and a tax benefit of $0.2 million to provision for (benefit from) income taxes, in our condensed consolidated statements of operations from accumulated other comprehensive income (loss).

(3) During the three months ended March 31, 2013, we recognized a loss of $5.3 million in other comprehensive income (loss), net of tax, related to changes in foreign currency translation adjustment.

(4) During the three months ended March 31, 2014, we recognized a loss of $0.4 million and a tax benefit of $0.1 million, in other comprehensive income (loss), net of tax, related to changes in the fair value of derivative financial instruments.

(5) During the three months ended March 31, 2014, we reclassified a $0.6 million loss to interest expense and a tax benefit of $0.2 million to provision for (benefit from) income taxes, in our condensed consolidated statements of operations from accumulated other comprehensive income (loss).

(6) During the three months ended March 31, 2014, we recognized a gain of $1.1 million in other comprehensive income (loss), net of tax, related to changes in foreign currency translation adjustment.

Summary of carrying amount and fair value of debt

The following table summarizes the carrying amount and fair value of our debt as of March 31, 2014 and December 31, 2013 (in thousands):

	March 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Fixed rate debt	$	1,046,423	$	1,075,000	$	1,040,155	$	1,070,000
Floating rate debt	539,000		539,000		462,000		462,000
Total debt	$	1,585,423	$	1,614,000	$	1,502,155	$	1,532,000