10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED June 30, 2018

OR

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

FOR THE TRANSITION PERIOD FROM                   TO                  

Commission File No. 001-36875

EXTERRAN CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	47-3282259
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
4444 Brittmoore Road
Houston, Texas	77041
(Address of principal executive offices)	(Zip Code)

(281) 836-7000

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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

Large accelerated filer	x		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o
			Emerging growth company	o

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

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

Number of shares of the common stock of the registrant outstanding as of July 31, 2018: 36,125,135 shares.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Income (Loss)	5
Condensed Consolidated Statements of Stockholders’ Equity	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3. Quantitative and Qualitative Disclosures About Market Risk	54
Item 4. Controls and Procedures	54
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	55
Item 1A. Risk Factors	55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3. Defaults Upon Senior Securities	55
Item 4. Mine Safety Disclosures	55
Item 5. Other Information	55
Item 6. Exhibits	56
SIGNATURES	57

2

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share amounts)

(unaudited)

	June 30, 2018			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	18,192		$	49,145
Restricted cash	546			546
Accounts receivable, net of allowance of $5,829 and $5,388, respectively	261,914			266,052
Inventory, net (Note 4)	161,208			107,909
Costs and estimated earnings in excess of billings on uncompleted contracts	—			40,695
Contract assets (Note 2)	72,374			—
Other current assets	30,104			38,707
Current assets held for sale (Note 6)	—			15,761
Current assets associated with discontinued operations (Note 3)	15,029			23,751
Total current assets	559,367			542,566
Property, plant and equipment, net (Note 5)	838,055			822,279
Deferred income taxes	12,477			10,550
Intangible and other assets, net	100,958			76,980
Long-term assets held for sale (Note 6)	—			4,732
Long-term assets associated with discontinued operations (Note 3)	2,577			3,700
Total assets	$	1,513,434		$	1,460,807
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, trade	$	190,613		$	148,744
Accrued liabilities	112,512			114,336
Deferred revenue	—			23,902
Billings on uncompleted contracts in excess of costs and estimated earnings	—			89,565
Contract liabilities (Note 2)	105,298			—
Current liabilities associated with discontinued operations (Note 3)	20,705			31,971
Total current liabilities	429,128			408,518
Long-term debt (Note 7)	401,119			368,472
Deferred income taxes	6,206			9,746
Long-term deferred revenue	—			92,485
Long-term contract liabilities (Note 2)	85,062			—
Other long-term liabilities	39,073			20,272
Long-term liabilities associated with discontinued operations (Note 3)	5,895			6,528
Total liabilities	966,483			906,021
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 50,000,000 shares authorized; zero issued	—			—
Common stock, $0.01 par value per share; 250,000,000 shares authorized; 36,740,016 and 36,193,930 shares issued, respectively	367			362
Additional paid-in capital	746,780			739,164
Accumulated deficit	(228,119		)	(223,510		)
Treasury stock — 618,919 and 453,178 common shares, at cost, respectively	(10,418		)	(6,937		)
Accumulated other comprehensive income	38,341			45,707
Total stockholders’ equity	546,951			554,786
Total liabilities and stockholders’ equity	$	1,513,434		$	1,460,807

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

3

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018		2017
Revenues (Note 2):
Contract operations	$	91,487		$	95,341		$	187,980	$	187,386
Aftermarket services	32,267			24,244			58,638		46,768
Product sales	219,717			198,116			447,236		328,972
	343,471			317,701			693,854		563,126
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):
Contract operations	32,372			34,691			67,757		65,489
Aftermarket services	23,706			17,278			42,603		33,890
Product sales	191,762			178,025			392,098		297,562
Selling, general and administrative	44,382			44,564			88,624		88,975
Depreciation and amortization	30,184			26,348			61,213		51,100
Long-lived asset impairment (Note 9)	—			—			1,804		—
Restatement related charges (recoveries), net (Note 10)	(597		)	(1,158		)	24		1,014
Restructuring and other charges (Note 11)	1,422			310			1,422		2,618
Interest expense	6,883			12,382			14,102		19,469
Other (income) expense, net	5,204			2,731			6,624		912
	335,318			315,171			676,271		561,029
Income before income taxes	8,153			2,530			17,583		2,097
Provision for (benefit from) income taxes (Note 12)	9,622			(640		)	15,114		11,250
Income (loss) from continuing operations	(1,469		)	3,170			2,469		(9,153		)
Income from discontinued operations, net of tax (Note 3)	1,544			374			2,943		33,018
Net income	$	75		$	3,544		$	5,412	$	23,865
Basic net income per common share (Note 14):
Income (loss) from continuing operations per common share	$	(0.04	)	$	0.09		$	0.07	$	(0.26	)
Income from discontinued operations per common share	0.04			0.01			0.08		0.94
Net income per common share	$	—		$	0.10		$	0.15	$	0.68
Diluted net income per common share (Note 14):
Income (loss) from continuing operations per common share	$	(0.04	)	$	0.09		$	0.07	$	(0.26	)
Income from discontinued operations per common share	0.04			0.01			0.08		0.94
Net income per common share	$	—		$	0.10		$	0.15	$	0.68
Weighted average common shares outstanding used in net income per common share (Note 14):
Basic	35,455			35,018			35,376		34,913
Diluted	35,455			35,094			35,446		34,913

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

4

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net income	$	75		$	3,544		$	5,412		$	23,865
Other comprehensive loss:
Foreign currency translation adjustment	(8,123		)	(2,669		)	(7,366		)	(1,026		)
Comprehensive income (loss)	$	(8,048	)	$	875		$	(1,954	)	$	22,839

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

5

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(unaudited)

	Common Stock		Additional Paid-in Capital		Accumulated Deficit			Treasury Stock			Accumulated Other Comprehensive Income			Total
Balance, January 1, 2018	$	362	$	739,164	$	(223,510	)	$	(6,937	)	$	45,707		$	554,786
Cumulative-effect adjustment from adoption of ASC Topic 606 (Note 1)					(10,021		)							(10,021		)
Net income					5,412									5,412
Options exercised			563											563
Foreign currency translation adjustment											(7,366		)	(7,366		)
Treasury stock purchased								(3,481		)				(3,481		)
Stock-based compensation, net of forfeitures	5		7,053											7,058
Balance, June 30, 2018	$	367	$	746,780	$	(228,119	)	$	(10,418	)	$	38,341		$	546,951

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

6

EXTERRAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Six Months Ended June 30,
	2018			2017
Cash flows from operating activities:
Net income	$	5,412		$	23,865
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	61,213			51,100
Long-lived asset impairment	1,804			—
Amortization of deferred financing costs	1,342			3,375
Income from discontinued operations, net of tax	(2,943		)	(33,018		)
Provision for doubtful accounts	606			953
Gain on sale of property, plant and equipment	(348		)	(1,245		)
(Gain) loss on remeasurement of intercompany balances	4,081			(26		)
Loss on sale of business	1,714			111
Stock-based compensation expense	7,058			8,561
Deferred income tax benefit	(3,366		)	(7,081		)
Changes in assets and liabilities:
Accounts receivable and notes	(3,875		)	(40,893		)
Inventory	(70,126		)	6,001
Costs and estimated earnings versus billings on uncompleted contracts	—			31,841
Contract assets	(21,582		)	—
Other current assets	9,325			(5,901		)
Accounts payable and other liabilities	39,587			23,313
Deferred revenue	—			(5,338		)
Contract liabilities	(3,746		)	—
Other	1,984			(14		)
Net cash provided by continuing operations	28,140			55,604
Net cash provided by discontinued operations	881			2,498
Net cash provided by operating activities	29,021			58,102
Cash flows from investing activities:
Capital expenditures	(94,234		)	(44,216		)
Proceeds from sale of property, plant and equipment	2,372			6,427
Proceeds from sale of business	5,000			894
Net cash used in continuing operations	(86,862		)	(36,895		)
Net cash provided by discontinued operations	66			19,164
Net cash used in investing activities	(86,796		)	(17,731		)
Cash flows from financing activities:
Proceeds from borrowings of debt	255,000			488,000
Repayments of debt	(222,758		)	(463,877		)
Cash transfer to Archrock, Inc. (Note 15)	—			(44,720		)
Payment for debt issuance costs	(47		)	(7,606		)
Proceeds from stock options exercised	563			684
Purchases of treasury stock	(3,481		)	(3,124		)
Net cash provided by (used in) financing activities	29,277			(30,643		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,455		)	(42		)
Net increase (decrease) in cash, cash equivalents and restricted cash	(30,953		)	9,686
Cash, cash equivalents and restricted cash at beginning of period	49,691			36,349
Cash, cash equivalents and restricted cash at end of period	$	18,738		$	46,035

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

7

EXTERRAN CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Description of Business and Basis of Presentation

Description of Business

Exterran Corporation (together with its subsidiaries, “Exterran Corporation,” “our,” “we” or “us”), a Delaware corporation formed in March 2015, is a global systems and process company offering solutions in the oil, gas, water and power markets. We are a leader in natural gas processing and treatment and compression products and services, providing critical midstream infrastructure solutions to customers throughout the world. Outside the United States of America (“U.S.”), we are a leading provider of full-service natural gas contract compression, and a supplier of aftermarket parts and services. We provide these products and services to a global customer base consisting of companies engaged in all aspects of the oil and natural gas industry, including large integrated oil and natural gas companies, national oil and natural gas companies, independent oil and natural gas producers and oil and natural gas processors, gatherers and pipeline operators. We operate in three primary business lines: contract operations, aftermarket services and product sales.

On November 3, 2015, Archrock, Inc. (named Exterran Holdings, Inc. prior to November 3, 2015) (“Archrock”) completed the spin-off (the ‘‘Spin-off”) of its international contract operations, international aftermarket services and global fabrication businesses into an independent, publicly traded company named Exterran Corporation.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Exterran Corporation included herein have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished includes all adjustments of a normal recurring nature that are necessary to fairly present our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2017. That report contains a comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. Certain reclassifications resulting from the adoption of ASU 2016-18, Restricted Cash have been made to the statement of cash flows for the prior year period to conform to the current year presentation.

We refer to the condensed consolidated financial statements collectively as “financial statements,” and individually as “balance sheets,” “statements of operations,” “statements of comprehensive income,” “statements of stockholders’ equity” and “statements of cash flows” herein.

Recent Accounting Pronouncements

We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our financial statements.

8

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. On January 1, 2018, we adopted this update using the modified retrospective approach to all contracts that were not completed as of January 1, 2018. As a result of this adoption, we recorded a net increase to the accumulated deficit of $10.0 million as of January 1, 2018 and an increase of $3.5 million in revenue for the six months ended June 30, 2018. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 2 for the required disclosures related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition.

9

As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the balance sheet as of January 1, 2018 (in thousands):

	Impact of Changes in Accounting Policies
	December 31, 2017			Adjustments			January 1, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	49,145		$	—		$	49,145
Restricted cash	546			—			546
Accounts receivable, net of allowance	266,052			(4,801		)	261,251
Inventory, net	107,909			(124		)	107,785
Costs and estimated earnings in excess of billings on uncompleted contracts	40,695			(40,695		)	—
Contract assets	—			50,824			50,824
Other current assets	38,707			(179		)	38,528
Current assets held for sale	15,761			—			15,761
Current assets associated with discontinued operations	23,751			—			23,751
Total current assets	542,566			5,025			547,591
Property, plant and equipment, net	822,279			(2,029		)	820,250
Deferred income taxes	10,550			404			10,954
Intangible and other assets, net	76,980			18,273			95,253
Long-term assets held for sale	4,732			—			4,732
Long-term assets associated with discontinued operations	3,700			—			3,700
Total assets	$	1,460,807		$	21,673		$	1,482,480
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, trade	$	148,744		$	—		$	148,744
Accrued liabilities	114,336			16,044			130,380
Deferred revenue	23,902			(23,902		)	—
Billings on uncompleted contracts in excess of costs and estimated earnings	89,565			(89,565		)	—
Contract liabilities	—			112,244			112,244
Current liabilities associated with discontinued operations	31,971			—			31,971
Total current liabilities	408,518			14,821			423,339
Long-term debt	368,472			—			368,472
Deferred income taxes	9,746			(1,908		)	7,838
Long-term deferred revenue	92,485			(92,485		)	—
Long-term contract liabilities	—			89,004			89,004
Other long-term liabilities	20,272			22,262			42,534
Long-term liabilities associated with discontinued operations	6,528			—			6,528
Total liabilities	906,021			31,694			937,715
Stockholders’ equity:
Preferred stock	—			—			—
Common stock	362			—			362
Additional paid-in capital	739,164			—			739,164
Accumulated deficit	(223,510		)	(10,021		)	(233,531		)
Treasury stock	(6,937		)	—			(6,937		)
Accumulated other comprehensive income	45,707			—			45,707
Total stockholders’ equity	554,786			(10,021		)	544,765
Total liabilities and stockholders’ equity	$	1,460,807		$	21,673		$	1,482,480

10

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. On January 1, 2018, we adopted this update. The adoption of this update did not have an impact on our statements of cash flows.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The update requires a reporting entity to recognize the tax expense from intra-entity asset transfers of assets other than inventory in the selling entity’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buying entity’s jurisdiction would also be recognized at the time of the transfer. On January 1, 2018, we adopted this update using a modified retrospective approach. The impact of this adoption was immaterial to our financial statements.

In November 2016, the FASB issued ASU 2016-18, Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. On January 1, 2018, we adopted this update retrospectively. As a result of this adoption, $0.7 million of restricted cash has been included in the cash and cash equivalent balances in the statement of cash flows for the prior year period. At December 31, 2017, the $49.7 million of cash, cash equivalents and restricted cash on our statement of cash flows is composed of $49.1 million of cash and cash equivalents and $0.5 million of restricted cash. At June 30, 2018, the $18.7 million of cash, cash equivalents and restricted cash on our statement of cash flows is composed of $18.2 million of cash and cash equivalents and $0.5 million of restricted cash. The impact of this adoption was immaterial to our financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718). This update provides guidance that clarifies that changes to the terms or conditions of a share-based payment award should be accounted for as modifications. On January 1, 2018, we adopted this update using a prospective approach. The impact of this adoption was immaterial to our financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Lessor accounting will be similar to the current model except for changes made to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance will be replaced with a new model applicable to both lessees and lessors. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. In preparation for our adoption of the new standard, we are analyzing and updating data previously collected to evaluate the impact the adoption will have on our financial statements. Additionally, we are assessing our use of practical expedients and the systems required to capture the increased reporting and disclosure requirements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements.

Note 2 - Revenue

On January 1, 2018, we adopted Topic 606 applying the modified retrospective method to all contracts that were not completed as of the date of adoption. For contracts that were modified before the effective date, we reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with a Topic 606 practical expedient. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported under the accounting standards in effect for the prior period. We recorded a net increase to accumulated deficit of $10.0 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606. Revenues for the three and six months ended June 30, 2018 increased by $2.6 million and $3.5 million, respectively, as a result of adopting Topic 606.

11

Disaggregation of Revenue

The following tables present disaggregated revenue by products and services lines and by geographical regions for the three and six months ended June 30, 2018 (in thousands):

Revenue by Products and Services	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
Contract Operations Segment:
Contract operations services (1)	$	91,487	$	187,980
Aftermarket Services Segment:
Operation and maintenance services (1)	$	14,722	$	28,597
Part sales (2)	11,077		20,210
Other services (1)	6,468		9,831
Total aftermarket services	$	32,267	$	58,638
Product Sales Segment:
Compression equipment (1)	$	129,436	$	260,995
Processing and treating equipment (1)	79,407		165,522
Production equipment (2)	6,782		14,780
Other product sales (1) (2)	4,092		5,939
Total product sales revenues	$	219,717	$	447,236
Total revenues	$	343,471	$	693,854

⁽¹⁾  Revenue recognized over time.

⁽²⁾  Revenue recognized at a point in time.

Revenue by Geographical Regions	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
North America	$	222,357	$	454,205
Latin America	72,638		140,589
Middle East and Africa	31,353		57,478
Asia Pacific	17,123		41,582
Total revenues	$	343,471	$	693,854

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

Revenue is recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. The following is a description of principal activities from which we generate revenue.

12

Contract Operations Segment

In our contract operations segment, we provide compression or processing and treating services through operating our natural gas compression equipment and crude oil and natural gas production and process equipment on behalf of our customers. Our services include the provision of personnel, equipment, tools, materials and supplies to meet our customers’ natural gas compression or oil and natural gas production and processing service needs. Activities we may perform in meeting our customers’ needs include engineering, designing, sourcing, constructing, installing, operating, servicing, repairing, maintaining and demobilizing equipment owned by us necessary to provide these services. Contract operation services represent a series of distinct monthly services that are substantially the same, with the same pattern of transfer to the customer. Because our customers benefit equally throughout the service period and our efforts in providing contract operation services are incurred relatively evenly over the period of performance, revenue is recognized over time using a time based measure as we provide our services to the customer. Our contracts generally require customers to pay a monthly service fee, which may contain variable consideration such as production or volume based fees, guaranteed run rates, performance bonuses or penalties, liquidated damages and standby fees. Variable considerations included in our contracts are typically resolved on a monthly basis, and as such, variable considerations included in our contracts are generally allocated to each distinct month in the series within the contract. In addition, our contracts may include billings prior to or after the performance of our contract operation services that are recognized as revenue on a straight-line basis over the contract term as we perform our services and the customer receives and consumes the benefits of the services we provide.

We generally enter into contracts with our contract operations customers with initial terms ranging between three to five years, and in some cases, in excess of 10 years. In many instances, we are able to renew those contracts prior to the expiration of the initial term and in other instances, we may sell the underlying assets to our customers pursuant to purchase options or negotiated sale. As of June 30, 2018, we had contract operation services contracts with unsatisfied performance obligations (commonly referred to as backlog) extending through the year 2028. The total aggregate transaction price allocated to the unsatisfied performance obligations as of June 30, 2018 was approximately $1.4 billion, of which approximately $139 million is expected to be recognized during the remainder of 2018 and approximately $260 million is expected to be recognized in 2019. Our contracts are subject to cancellation or modification at the election of the customer; however, due to the level of capital deployed by our customers on underlying projects, we have not been materially adversely affected by contract cancellations or modifications in the past.

Aftermarket Services Segment

In our aftermarket services business, we sell parts and components and provide operations, maintenance, overhaul, upgrade, commissioning and reconfiguration services to customers who own their own compression, production, processing, treating and related equipment. Our services range from routine maintenance services and parts sales to the full operation and maintenance of customer-owned equipment.

Operations and maintenance services: Operation and maintenance services include personnel to run the equipment and monitor the outputs of the equipment, along with performing preventative or scheduled maintenance on customer-owned equipment. Operation and maintenance services represent a series of distinct monthly services that are substantially the same, with the same pattern of transfer to the customer. Because our customers benefit equally throughout the service period and our efforts in providing operation and maintenance services are incurred relatively evenly over the period of performance, revenue is recognized over time using a time based measure as we provide our services to the customer. Our contracts generally require customers to pay a monthly service fee, which may contain variable consideration such as production or volume based fees and performance bonuses or penalties. Variable considerations included in our contracts are typically resolved on a monthly basis, and as such, variable considerations included in our contracts are generally allocated to each distinct month in the series within the contract. We generally enter into contracts with our operation and maintenance customers with initial terms ranging between two to four years, and in some cases, in excess of six years. In many instances, we are able to renew those contracts prior to the expiration of the initial term.

Parts sales: We offer our customers a full range of parts needed for the maintenance, repair and overhaul of oil and natural gas equipment, including natural gas compressors, industrial engines and production and processing equipment. We recognize revenue for parts sales at a point in time following the transfer of control of such parts to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contract. Our contracts require customers to pay a fixed fee upon shipment or delivery of the parts.

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Other services: Within our aftermarket services segment we also provide a wide variety of other services such as overhaul, commissioning, upgrade and reconfiguration services on customer-owned equipment. Overhaul services provided to customers are intended to return the major components to a “like new” condition without significantly modifying the applications for which the units were designed. Commissioning services that we provide to our customers generally include supervision and the introduction of fluids or gases into the systems to test vibrations, pressures and temperatures to ensure that customer-owned equipment is operating properly and is ready for start-up. Upgrade and reconfiguration services modify the operating parameters of customer-owned equipment such that the equipment can be used in applications for which it previously was not suited. Generally, the wide array of other services provided within the aftermarket services segment are expected to be completed within a six month period. Individually these services are generally distinct within the context of the contract and are not highly interdependent or interrelated with other service offerings. We recognize revenue from these services over time based on the proportion of labor hours expended to the total labor hours expected to complete the contract performance obligation. Our contracts generally require customers to pay a service fee that is either fixed or on a time and materials basis, which may include progress billings.

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

Product Sales Segment

In our product sales segment, we design, engineer, manufacture, install and sell natural gas compression packages as well as equipment used in the production, treating and processing of crude oil and natural gas primarily to major and independent oil and natural gas producers as well as national oil and natural gas companies in the countries where we operate.

Compression equipment: We design, engineer, manufacture and sell skid-mounted natural gas compression equipment to meet standard or unique customer specifications. We recognize revenue from the sale of compression equipment over time based on the proportion of labor hours expended to the total labor hours expected to complete the contract performance obligation. Compression equipment manufactured for our customers are specifically designed and engineered to our customers’ specification and do not have an alternative use to us. Our contracts include a fixed fee and require our customers to make progress payments based on completion of contractual milestones during the life cycle of the manufacturing process. Our contracts provide us with an enforceable right to payment for work performed to date. Components of variable considerations exist in certain of our contracts and may include unpriced change orders, liquidated damages and performance bonuses or penalties. Typically, we expect the manufacturing of our compressor equipment to be completed within a three to 12 month period.

Processing and treating equipment: Processing and treating equipment sold to our customers consists of custom-engineered processing and treating plants, such as refrigeration, amine, cryogenic and natural gas processing plants. The manufacturing of processing and treating equipment generally represents a single performance obligation within the context of the contract. We recognize revenue from the sale of processing and treating equipment over time based on the proportion of labor hours expended to the total labor hours expected to complete the contract performance obligation. Processing and treating equipment manufactured for our customers are specifically designed and engineered to our customers’ specification and do not have an alternative use to us. Our contracts include a fixed fee and require our customers to make progress payments based on our completion of contractual milestones during the life cycle of the manufacturing process. Our contracts provide us with an enforceable right to payment for work performed to date. Components of variable considerations exist in certain of our contracts and may include unpriced change orders, liquidated damages and performance bonuses or penalties. Typically, we expect the manufacturing of our processing and treating equipment to be completed within a six to 24 month period.

Production equipment: In June 2018, we completed the sale of our North America production equipment assets (“PEQ assets”), which included $12.0 million in unsatisfied performance obligations. See Note 6 for further details on the sale of our PEQ assets. We previously manufactured standard production equipment used for processing wellhead production from onshore or shallow-water offshore platform production. The manufacturing of production equipment generally represented a single performance obligation within the context of the contract. We recognized revenue from the sale of production equipment at a point in time following the transfer of control of the equipment to the customer, which typically occurred upon completion of the manufactured equipment, depending on the terms of the underlying contract. Our contracts generally required customers to pay a fixed fee upon completion.

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Other product sales: Within our product sales segment we also provide for the sale of standard and custom water treatment equipment and floating production storage and offloading equipment and supervisor site work services. We recognize revenue from the sale of standard water treatment equipment at a point in time following the transfer of control of such equipment to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contract. We recognize revenue from the sale of custom water treatment equipment over time based on the proportion of costs expended to the total costs expected to complete the contract performance obligation. We recognize revenue from the sale of custom water treatment equipment and floating production storage and offloading equipment and supervisor site work services over time based on the proportion of labor costs expended to the total labor costs expected to complete the contract performance obligation.

Product sales contracts that include engineering, design, project management, procurement, construction and installation services necessary to incorporate our products into production, processing and compression facilities are treated as a single performance obligation due to the services that significantly integrate each piece of equipment into the combined output contracted by the customer.

We provide assurance-type warranties on certain equipment in our product sales contracts. These warranties generally do not constitute a separate performance obligation. Product warranty reserves are established in the same period that revenue from the sale of the related products is recognized, or in the period that a specific issue arises as to the functionality of a product. The determination of such reserves requires that we make estimates of expected costs to repair or to replace the products under warranty. The amounts of the reserves are based on established terms and our best estimate of the amounts necessary to settle future and existing claims on product sales as of the balance sheet date. If actual repair and replacement costs differ significantly from estimates, adjustments to recognize additional cost of sales may be required in future periods.

As of June 30, 2018, the total aggregate transaction price allocated to the unsatisfied performance obligations for product sales contracts was approximately $635 million, of which approximately $379 million is expected to be recognized during the remainder of 2018 and approximately $256 million is expected to be recognized in 2019. Our contracts are subject to cancellation or modification at the election of the customer; however, due to our enforceable right to payment for work performed, we have not been materially adversely affected by contract cancellations or modifications in the past.

Significant Estimates

The recognition of revenue over time based on the proportion of labor hours expended to the total labor hours expected to complete depends largely on our ability to make reasonable dependable estimates related to the extent of progress toward completion of the contract, contract revenues and contract costs. Recognized revenues and profits are subject to revisions as the contract progresses to completion. Revisions in profit estimates are charged to income in the period in which the facts that give rise to the revision become known using the cumulative catch-up method. Due to the nature of some of our contracts, developing the estimates of costs often requires significant judgment. To calculate the proportion of labor hours expended to the total labor hours expected to complete the contract performance obligation, management uses significant judgment to estimate the number of total hours and profit expected for each project.

Variable Consideration

The nature of our contracts gives rise to several types of variable consideration. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Additionally, we include in our contract estimates additional revenue for unapproved change orders or claims against customers when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and historical, current and forecasted information that is reasonably available to us.

Contracts with Multiple Performance Obligations

Some of our contracts have multiple performance obligations. For instance, some of our product sales contracts include commissioning services or the supply of spare parts. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service.

15

Contract Assets and Contract Liabilities

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

	As of June 30, 2018		As of January 1, 2018
Accounts receivables, net	$	261,914	$	261,251
Contract assets and contract liabilities:
Current contract assets	72,374		50,824
Long-term contract assets	10,766		11,835
Current contract liabilities	105,298		112,244
Long-term contract liabilities	85,062		89,004

Accounts receivables are recorded when the right to consideration becomes unconditional. Our contract assets include amounts related to revenue that has been recognized in advance of billing the customer. The contract assets in our balance sheets include costs in excess of billings and unbilled receivables. When we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of the contract, we record a contract liability. Our contract liabilities include payments received in advance of performance under the contract. The contract liabilities in our balance sheets include billings in excess of costs and deferred revenue. Billings in excess of costs primarily relate to billings that have not been recognized as revenue on product sales jobs where the transfer of control to the customer occurs over time. Deferred revenue is primarily comprised of upfront billings on contract operations jobs and billings related to product sales jobs that have not begun where revenue is recognized over time. Upfront payments received from customers on contract operations jobs are generally deferred and amortized over the contract term as we perform our services and the customer receives and consumes the benefits of the services we provide. Contract assets and liabilities are reported in our balance sheets on a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

During the six months ended June 30, 2018, revenue recognized from contract operations services included $10.4 million of revenue deferred in previous periods. Revenue recognized during the six months ended June 30, 2018 from product sales performance obligations partially satisfied in previous periods was $360.5 million, of which $78.4 million was included in billings in excess of costs at the beginning of the period. Additionally, during the six months ended June 30, 2018, we recognized $4.1 million in revenue from contract operations services performance obligations that were satisfied in a previous period. The increase in our contract assets during the six months ended June 30, 2018 was primarily driven by progression of product sales projects and the timing of milestone billings.

Costs to Fulfill a Contract

We capitalize costs incurred to fulfill our revenue contracts that (i) relate directly to the contract (ii) are expected to generate resources that will be used to satisfy the performance obligation under the contract and (iii) are expected to be recovered through revenue generated under the contract. As of June 30, 2018, we had capitalized fulfillment costs of $8.2 million related to contractual obligations incurred at the completion of the commissioning phase and prior to providing services on contracts within our contract operations segment. Contract fulfillment costs are expensed to cost of sales as we satisfy our performance obligations by transferring contract operation services to the customer. During the three and six months ended June 30, 2018, we recorded amortization expense for capitalized fulfillment costs of $0.5 million and $1.1 million, respectively. Capitalized fulfillment costs are included in intangible and other assets, net, in the balance sheets.

Costs to Obtain a Contract

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain commissions paid to internal sales representatives and third party agents meet the requirements to be capitalized. The amount capitalized for incremental costs to obtain contracts as of June 30, 2018 was $6.6 million. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract. Capitalized costs to obtain a contract are included in intangible and other assets, net, in the balance sheets and are amortized to selling, general and administrative expense over the expected period of benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. During the three and six months ended June 30, 2018, we recorded amortization expense for capitalized costs to obtain a contract of $0.4 million and $0.8 million, respectively.

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Practical Expedients and Exemptions

We have elected the following practical expedients:

• We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less.

• We treat shipping and handling activities that occur after the transfer of control as costs to fulfill a contract rather than a separate performance obligation.

• We record taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from our customers on a net basis, and thus, such taxes are excluded from the measurement of a performance obligation’s transaction price.

• We expense sales commissions as incurred when we expect that the amortization period of such costs will be one year or less.

Impact of New Revenue Recognition Guidance on Financial Statement Line Items

The following tables summarize the impacts of the adoption of the new revenue recognition guidance on our balance sheet as of June 30, 2018 and statements of operations and cash flows for the applicable periods during the three and six months ended June 30, 2018 (in thousands):

	June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
ASSETS
Accounts receivable, net of allowance	$	261,914		$	221		$	262,135
Inventory, net	161,208			1,183			162,391
Contract assets	72,374			(17,311		)	55,063
Other current assets	30,104			9,160			39,264
Property, plant and equipment, net	838,055			1,942			839,997
Deferred income taxes	12,477			(1,571		)	10,906
Intangible and other assets, net	100,958			(17,592		)	83,366
Total assets	1,513,434			(23,968		)	1,489,466
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued liabilities	$	112,512		$	(15,554	)	$	96,958
Contract liabilities	105,298			1,625			106,923
Deferred income taxes	6,206			(3,764		)	2,442
Long-term contract liabilities	85,062			3,476			88,538
Other long-term liabilities	39,073			(18,076		)	20,997
Total liabilities	966,483			(32,293		)	934,190
Accumulated deficit	(228,119		)	8,325			(219,794		)
Total stockholders’ equity	546,951			8,325			555,276
Total liabilities and stockholders’ equity	1,513,434			(23,968		)	1,489,466

The adoption of the new revenue recognition guidance resulted in increases in total assets and liabilities of $24.0 million and $32.3 million, respectively. This was primarily due to capitalized contract fulfillment and obtainment costs and related liabilities recorded associated with contracts within our contract operations segment.

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	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606			As Reported		Adjustments			Balances Without Adoption of Topic 606
Revenues:
Contract operations	$	91,487		$	(690	)	$	90,797		$	187,980	$	(1,459	)	$	186,521
Aftermarket services	32,267			(1,909		)	30,358			58,638		(2,079		)	56,559
Cost of sales (excluding depreciation and amortization expense):
Contract operations	32,372			(501		)	31,871			67,757		(1,101		)	66,656
Aftermarket services	23,706			(1,363		)	22,343			42,603		(1,406		)	41,197
Selling, general and administrative	44,382			6,627			51,009			88,624		6,627			95,251
Depreciation and amortization	30,184			(659		)	29,525			61,213		(1,368		)	59,845
Income before income taxes	8,153			(6,703		)	1,450			17,583		(6,290		)	11,293
Provision for income taxes	9,622			(5,334		)	4,288			15,114		(4,594		)	10,520
Income (loss) from continuing operations	(1,469		)	(1,369		)	(2,838		)	2,469		(1,696		)	773
Net income (loss)	75			(1,369		)	(1,294		)	5,412		(1,696		)	3,716
Basic net income (loss) per common share	$	—		$	(0.04	)	$	(0.04	)	$	0.15	$	(0.05	)	$	0.10
Diluted net income (loss) per common share	—			(0.04		)	(0.04		)	0.15		(0.05		)	0.10

The adoption of the new revenue recognition guidance resulted in an increase in net income of $1.4 million and $1.7 million for the three and six months ended June 30, 2018, respectively. Most notably, costs to obtain a contract during the three and six months ended June 30, 2018 would have resulted in an increase in selling, general and administrative expense under previous accounting standards.

	Six Months Ended June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
Cash flows from operating activities:
Net income	$	5,412		$	(1,696	)	$	3,716
Depreciation and amortization	61,213			(1,368		)	59,845
Deferred income tax benefit	(3,366		)	(4,594		)	(7,960		)
Changes in assets and liabilities:
Inventory	(70,126		)	(1,059		)	(71,185		)
Contract assets	(21,582		)	6,576			(15,006		)
Other current assets	9,325			(4,401		)	4,924
Accounts payable and other liabilities	39,587			4,887			44,474
Contract liabilities	(3,746		)	171			(3,575		)
Other	1,984			1,484			3,468
Net cash provided by continuing operations	28,140			—			28,140

The adoption of the new revenue recognition guidance resulted in offsetting shifts in cash flows within cash flows from operating activities and did not have an impact on our total cash flows from operations.

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Note 3 - Discontinued Operations

In August 2012, our Venezuelan subsidiary sold its previously nationalized assets to PDVSA Gas, S.A. (“PDVSA Gas”) for a purchase price of approximately $441.7 million. We received an installment payment, including an annual charge, totaling $19.7 million during the six months ended June 30, 2017. As of June 30, 2018, the remaining principal amount due to us was approximately $17 million. We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize payments received in the future as income from discontinued operations in the periods such payments are received. The proceeds from the sale of the assets are not subject to Venezuelan national taxes due to an exemption allowed under the Venezuelan Reserve Law applicable to expropriation settlements. In addition, and in connection with the sale, we and the Venezuelan government agreed to waive rights to assert certain claims against each other.

In accordance with the separation and distribution agreement from the Spin-off, a subsidiary of Archrock has the right to receive payments from our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”), based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our previously nationalized assets promptly after such amounts are collected by our subsidiaries. Pursuant to the separation and distribution agreement, we transferred cash of $19.7 million to Archrock during the six months ended June 30, 2017. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. See Note 15 for further discussion related to our contingent liability to Archrock.

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

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

	Three Months Ended June 30, 2018									Three Months Ended June 30, 2017
	Venezuela			Belleli EPC			Total			Venezuela			Belleli EPC			Total
Revenue	$	—		$	2,915		$	2,915		$	—		$	12,885		$	12,885
Cost of sales (excluding depreciation and amortization expense)	—			2,808			2,808			—			8,064			8,064
Selling, general and administrative	29			127			156			32			1,520			1,552
Depreciation and amortization	—			52			52			—			3,099			3,099
Other (income) expense, net	—			(1,689		)	(1,689		)	—			970			970
Provision for (benefit from) income taxes	—			44			44			—			(1,174		)	(1,174		)
Income (loss) from discontinued operations, net of tax	$	(29	)	$	1,573		$	1,544		$	(32	)	$	406		$	374

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	Six Months Ended June 30, 2018									Six Months Ended June 30, 2017
	Venezuela			Belleli EPC			Total			Venezuela			Belleli EPC			Total
Revenue	$	—		$	7,882		$	7,882		$	—		$	48,159		$	48,159
Cost of sales (excluding depreciation and amortization expense)	—			5,211			5,211			—			26,063			26,063
Selling, general and administrative	61			187			248			65			2,506			2,571
Depreciation and amortization	—			480			480			—			4,227			4,227
Recovery attributable to expropriation	—			—			—			(16,514		)	—			(16,514		)
Restructuring and other charges	—			—			—			—			(439		)	(439		)
Other (income) expense, net	1			(1,090		)	(1,089		)	(3,157		)	455			(2,702		)
Provision for income taxes	—			89			89			—			1,935			1,935
Income (loss) from discontinued operations, net of tax	$	(62	)	$	3,005		$	2,943		$	19,606		$	13,412		$	33,018

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

	June 30, 2018						December 31, 2017
	Venezuela		Belleli EPC		Total		Venezuela		Belleli EPC		Total
Cash	$	1	$	—	$	1	$	3	$	—	$	3
Accounts receivable	—		6,022		6,022		—		14,770		14,770
Costs and estimated earnings in excess of billings on uncompleted contracts	—		8,549		8,549		—		7,786		7,786
Other current assets	3		454		457		2		1,190		1,192
Total current assets associated with discontinued operations	4		15,025		15,029		5		23,746		23,751
Property, plant and equipment, net	—		91		91		—		1,054		1,054
Intangible and other assets, net	—		2,486		2,486		—		2,646		2,646
Total assets associated with discontinued operations	$	4	$	17,602	$	17,606	$	5	$	27,446	$	27,451
Accounts payable	$	—	$	4,046	$	4,046	$	—	$	9,253	$	9,253
Accrued liabilities	63		11,726		11,789		59		15,617		15,676
Billings on uncompleted contracts in excess of costs and estimated earnings	—		4,870		4,870		—		7,042		7,042
Total current liabilities associated with discontinued operations	63		20,642		20,705		59		31,912		31,971
Other long-term liabilities	—		5,895		5,895		1		6,527		6,528
Total liabilities associated with discontinued operations	$	63	$	26,537	$	26,600	$	60	$	38,439	$	38,499

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Note 4 - Inventory, net

Inventory, net of reserves, consisted of the following amounts (in thousands):

	June 30, 2018		December 31, 2017
Parts and supplies	$	82,744	$	79,803
Work in progress	54,906		21,853
Finished goods (1)	23,558		6,253
Inventory, net	$	161,208	$	107,909

⁽¹⁾  The increase in finished goods inventory during the six months ended June 30, 2018 was primarily due to a nonmonetary agreement that we entered into with an existing customer to receive an idle processing and treating plant from the customer in exchange for an identical processing and treating plant to be manufactured by us. We recorded the finished goods inventory received and our corresponding liability to the customer at fair value based on the estimated resale price of the processing and treating plant received. The liability resulting from this transaction is included within accounts payable, trade, in our balance sheet and will be extinguished upon our delivery of the replacement processing and treating plant to the customer.

Note 5 - Property, Plant and Equipment, net

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

	June 30, 2018			December 31, 2017
Compression equipment, facilities and other fleet assets (1)	$	1,621,706		$	1,577,052
Land and buildings	98,516			96,463
Transportation and shop equipment	81,968			82,240
Other	94,823			90,395
	1,897,013			1,846,150
Accumulated depreciation	(1,058,958		)	(1,023,871		)
Property, plant and equipment, net	$	838,055		$	822,279

⁽¹⁾  In the fourth quarter of 2017, we evaluated the estimated useful lives and salvage values of our property, plant and equipment. As a result of this evaluation, we changed the useful lives and salvage values for our compression equipment from a maximum useful life of 30 years to 23 years and a maximum salvage value of 20% to 15% based on expected future use. During the three and six months ended June 30, 2018, we recorded increases in depreciation expense of $2.0 million and $5.1 million, respectively, as a result of these changes in useful lives and salvage values which impacted our diluted net income per share by $0.06 and $0.14, respectively.

Note 6 - Sale of PEQ Assets

In the fourth quarter of 2017, we classified certain current and long-term assets primarily related to inventory and property, plant and equipment, net, within our product sales business as assets held for sale in our balance sheets. In April 2018, we entered into a definitive agreement for the sale of these assets to Titan Production Equipment Acquisition, LLC, an affiliate of Castle Harlan, Inc. During the six months ended June 30, 2018, we recorded an additional impairment of $1.8 million to reduce these assets to their approximate fair values based on the expected net proceeds. The impairment charges are reflected in long-lived asset impairment in our statements of operations.

In June 2018, we completed the sale of our PEQ assets. The sale of our PEQ assets resulted in a loss of $1.7 million during the three and six months ended June 30, 2018, which is reflected in other (income), expense, net, in our statements of operations.

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Note 7 - Debt

Debt consisted of the following (in thousands):

	June 30, 2018			December 31, 2017
Revolving credit facility due November 2020	$	32,500		$	—
8.125% senior notes due May 2025	375,000			375,000
Other debt	912			1,171
Unamortized deferred financing costs of 8.125% senior notes	(6,844		)	(7,250		)
Total debt	401,568			368,921
Less: Amounts due within one year (1)	(449		)	(449		)
Long-term debt	$	401,119		$	368,472

⁽¹⁾    Short-term debt and the current portion of long-term debt are included in accrued liabilities in our balance sheets.

Revolving Credit Facility

We and our wholly owned subsidiary, EESLP, are parties to an amended and restated credit agreement (the “Credit Agreement”) consisting of a $680.0 million revolving credit facility expiring in November 2020 and previously included a term loan facility. In April 2017, we paid the remaining principal amount of $232.8 million due under the term loan facility with proceeds from the 2017 Notes (as defined below) issuance. As a result of the repayment of the term loan facility, we expensed $1.7 million of unamortized deferred financing costs in the second quarter of 2017, which is reflected in interest expense in our statements of operations.

As of June 30, 2018, we had $32.5 million in outstanding borrowings and $57.3 million in outstanding letters of credit under our revolving credit facility. At June 30, 2018, taking into account guarantees through letters of credit, we had undrawn capacity of $590.2 million under our revolving credit facility. Our Credit Agreement limits our senior secured leverage ratio (as defined in the Credit Agreement) on the last day of the fiscal quarter to no greater than 2.75 to 1.0. As a result of this limitation, $566.3 million of the $590.2 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of June 30, 2018.

8.125% Senior Notes Due May 2025

In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. issued $375.0 million aggregate principal amount of 8.125% senior unsecured notes due 2025 (the “2017 Notes”). The 2017 Notes are guaranteed by us on a senior unsecured basis. Pursuant to the separation and distribution agreement from the Spin-off, EESLP used proceeds from the issuance of the 2017 Notes to pay a subsidiary of Archrock $25.0 million in satisfaction of EESLP’s obligation to pay that sum following the occurrence of a qualified capital raise. The transfer of cash to Archrock’s subsidiary was recognized as a reduction to additional paid-in capital in the second quarter of 2017.

In connection with the issuance of the 2017 Notes, we incurred transaction costs of $8.1 million related to the issuance of the 2017 Notes. These costs are presented as a direct deduction from the carrying value of the 2017 Notes and are being amortized over the term of the 2017 Notes.

In April 2018, the 2017 Notes were exchanged for notes with substantially identical terms and registered under the Securities Act of 1933, as amended.

Note 8 - Fair Value Measurements

The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three categories:

• Level 1 — Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement.

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• Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or prices vary substantially over time or among brokered market makers.

• Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information.

Nonrecurring Fair Value Measurements

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2018, with pricing levels as of the date of valuation (in thousands):

	Six Months Ended June 30, 2018
	(Level 1)		(Level 2)		(Level 3)
Impaired assets—assets held for sale (1)	$	—	$	—	$	21,026
Long-term note receivable (2)	—		—		14,573

⁽¹⁾  Our estimate of the fair value of the impaired PEQ assets, which were classified as assets held for sale as of March 31, 2018, was based on the expected net proceeds from the sale of the assets.

⁽²⁾  Our estimate of the fair value of a note receivable was discounted based on a settlement period of eight years and a discount rate of 5.2%.

Financial Instruments

Our financial instruments consist of cash, restricted cash, receivables, payables and debt. At June 30, 2018 and December 31, 2017, the estimated fair values of cash, restricted cash, receivables and payables approximated their carrying amounts as reflected in our balance sheets due to the short-term nature of these financial instruments.

The fair value of the 2017 Notes was estimated based on model derived calculations using market yields observed in active markets, which are Level 2 inputs. As of June 30, 2018 and December 31, 2017, the carrying amount of the 2017 Notes, excluding unamortized deferred financing costs, of $375.0 million was estimated to have a fair value of $399.0 million and $404.0 million, respectively. Due to the variable rate nature of our revolving credit facility, the carrying value as of June 30, 2018 approximated the fair value as the rate was comparable to the then-current market rate at which debt with similar terms could have been obtained.

Note 9 - Long-Lived Asset Impairment

We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressor units from our active fleet, indicate that the carrying amount of an asset may not be recoverable.

In the fourth quarter of 2017, we classified our PEQ assets primarily related to inventory and property, plant and equipment, net, within our product sales business as assets held for sale in our balance sheets. As described in Note 6, in June 2018, we completed the sale of our PEQ assets. During the six months ended June 30, 2018, we recorded an impairment of $1.8 million to reduce these assets to their approximate fair values based on the expected net proceeds.

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Note 10 - Restatement Related Charges (Recoveries), net

During the first quarter of 2016, our senior management identified errors relating to the application of percentage-of-completion accounting principles to specific Belleli EPC product sales projects. We incurred restatement related charges of $1.6 million during the three months ended June 30,2017, and $0.6 million and $3.8 million during the six months ended June 30, 2018 and 2017, respectively. The costs incurred were external costs associated with an SEC investigation and remediation activities related to the restatement of our financial statements. During the three and six months ended June 30, 2018 and 2017, we recorded recoveries from Archrock pursuant to the separation and distribution agreement of $0.6 million and $2.8 million, respectively, for previously incurred restatement related costs. We may incur additional cash expenditures related to external legal counsel costs associated with an ongoing SEC investigation surrounding the restatement of our financial statements, of which a portion may be recoverable from Archrock.

The following table summarizes the changes to our accrued liability balance related to restatement charges, net, for the six months ended June 30, 2017 and 2018 (in thousands):

	Restatement Related Charges
Beginning balance at January 1, 2017	$	2,212
Additions for costs expensed, net	1,014
Reductions for payments, net	(1,472		)
Ending balance at June 30, 2017	$	1,754
Beginning balance at January 1, 2018	$	579
Additions for costs expensed, net	24
Reductions for payments, net	(367		)
Ending balance at June 30, 2018	$	236

The following table summarizes the components of charges included in restatement related charges (recoveries), net, in our statements of operations for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
External accounting costs	$	—		$	108		$	—		$	754
External legal costs	—			1,449			533			2,692
Other	18			86			106			369
Recoveries from Archrock	(615		)	(2,801		)	(615		)	(2,801		)
Total restatement related charges (recoveries), net	$	(597	)	$	(1,158	)	$	24		$	1,014

Note 11 - Restructuring and Other Charges

In the second quarter of 2018, we initiated a relocation plan in the North America region to better align our contract operations business with our customers. As a result of this plan, during the three and six months ended June 30, 2018, we incurred restructuring and other charges of $1.4 million primarily related to employee termination benefits. As of June 30, 2018, the accrued liability balance related to this plan was $1.0 million. The charges incurred in conjunction with this relocation plan are included in restructuring and other charges in our statements of operations. We currently estimate that we will incur additional charges with respect to this relocation plan of approximately $1.5 million. We expect the majority of the estimated additional charges will result in cash expenditures.

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In connection with the Spin-off, we incurred restructuring and other charges of $0.3 million during the six months ended June 30, 2017 primarily related to retention awards to certain employees. During the three months ended June 30, 2017, we recorded a restructuring benefit of $0.1 million related to changes in estimated retention awards to be paid for certain employees. Additionally, we announced a cost reduction plan primarily focused on workforce reductions and the reorganization of certain facilities in the second quarter of 2015. We incurred restructuring and other charges associated with the cost reduction plan of $0.4 million and $2.4 million during the three and six months ended June 30, 2017, respectively, of which $0.4 million and $1.9 million, respectively, related to employee termination benefits. The charges incurred in conjunction with the Spin-off and cost reduction plan are reflected as restructuring and other charges in our statements of operations. In 2017, we completed restructuring activities related to the Spin-off and cost reduction plan.

The following table summarizes the components of charges included in restructuring and other charges in our statements of operations for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Retention awards to certain employees	$	—	$	(92	)	$	—	$	253
Employee termination benefits	1,356		361			1,356		1,894
Other	66		41			66		471
Total restructuring and other charges	$	1,422	$	310		$	1,422	$	2,618

Note 12 - Provision for Income Taxes

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Act”). Additionally, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB118”) in December 2017, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Tax Reform Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year.

For the year ended December 31, 2017, our provision for income tax included the impact of decisions regarding the various impacts of tax reform and related disclosures. In some cases where the guidance in SAB118 applied, we disclosed in our financial statements those cases where the accounting could be completed, and for matters that have not been completed, we recognized provisional amounts to the extent that they are reasonably estimable and will adjust them over time as more information becomes available. Specifically, we recorded provisional amounts associated with the transition tax on undistributed earnings, the re-measurement of deferred tax assets and liabilities due to the reduction in the corporate tax rate and the transition tax, and the tax benefit associated with the reduction of the valuation allowance. The provisional amounts incorporate assumptions made based upon our current interpretation of the Tax Reform Act and may change as we receive additional clarification and implementation guidance. We are continuing to analyze additional information to determine the final impact as well as other impacts of the Tax Reform Act. Any adjustments recorded to the provisional amounts will be included in income from operations as an adjustment to our 2018 financial statements.

The provision for income taxes for the three and six months ended June 30, 2018 includes $5.7 million related to income tax on income in Argentina recorded as a result of foreign exchange rate movements.

During the second quarter of 2017, our Brazil subsidiary entered the Tax Regularization Program (the “Program”) pursuant to Brazil Provisional Measure No. 766 issued on January 4, 2017. The Program allows for the partial settling of debts, both income tax debts and non-income-based tax debts, due by November 30, 2016 to Brazil’s Federal Revenue Service with the use of tax credits, including income tax loss carryforwards. An $11.9 million income tax benefit was recorded during the three and six months ended June 30, 2017 attributable to the reversal of valuation allowances against certain deferred tax assets related to income tax loss carryforwards that were utilized under the Program, including interest income. Additionally, during the three and six months ended June 30, 2017, we incurred $1.5 million in penalties, which is reflected in other (income) expense, net, in our statements of operations, and $2.4 million in interest expense, which is reflected in interest expense in our statements of operations, attributable to the settling of non-income-based tax debts in connection with the Program.

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Note 13 - Stock-Based Compensation

Stock Options

Stock options are granted at fair market value at the grant date, are exercisable according to the vesting schedule established and generally expire no later than ten years after the grant date. Stock options generally vest one-third per year on each of the first three anniversaries of the grant date. There were no stock options granted during the six months ended June 30, 2018.

Restricted Stock, Restricted Stock Units and Performance Units

For grants of restricted stock, restricted stock units and performance units, we recognize compensation expense over the applicable vesting period equal to the fair value of our common stock at the grant date. Grants of restricted stock, restricted stock units and performance units generally vest one third per year on each of the first three anniversaries of the grant date. Certain grants of restricted stock vest on the third anniversary of the grant date and certain grants of performance units vest on the second anniversary of the grant date.

The table below presents the changes in restricted stock, restricted stock units and performance units for our common stock during the six months ended June 30, 2018.

	Shares (in thousands)		Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards, January 1, 2018	1,165		$	23.93
Granted	558		26.25
Vested	(444	)	23.24
Cancelled	(75	)	25.36
Non-vested awards, June 30, 2018	1,204		25.17

As of June 30, 2018, we estimate $24.7 million of unrecognized compensation cost related to unvested restricted stock, restricted stock units and performance units issued to our employees to be recognized over the weighted-average vesting period of 1.8 years.

Note 14 - Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share is determined by dividing net income (loss) after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and restricted stock units that have non-forfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss from continuing operations, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses.

Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options to purchase common stock and non-participating restricted stock units, unless their effect would be anti-dilutive.

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The following table presents a reconciliation of basic and diluted net income per common share for the three and six months ended June 30, 2018 and 2017 (in thousands, except per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Numerator for basic and diluted net income per common share:
Income (loss) from continuing operations	$	(1,469	)	$	3,170		$	2,469		$	(9,153	)
Income from discontinued operations, net of tax	1,544			374			2,943			33,018
Less: Net income attributable to participating securities	—			(102		)	(143		)	—
Net income — used in basic and diluted net income per common share	$	75		$	3,442		$	5,269		$	23,865
Weighted average common shares outstanding including participating securities	36,447			36,057			36,340			35,967
Less: Weighted average participating securities outstanding	(992		)	(1,039		)	(964		)	(1,054		)
Weighted average common shares outstanding — used in basic net income per common share	35,455			35,018			35,376			34,913
Net dilutive potential common shares issuable:
On exercise of options and vesting of restricted stock units	*			76			70			*
Weighted average common shares outstanding — used in diluted net income per common share	35,455			35,094			35,446			34,913
Net income per common share:
Basic	$	—		$	0.10		$	0.15		$	0.68
Diluted	$	—		$	0.10		$	0.15		$	0.68

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

The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income per common share as their inclusion would have been anti-dilutive for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value	35	48	35	49
On exercise of options and vesting of restricted stock units	66	—	—	86
Net dilutive potential common shares issuable	101	48	35	135

Note 15 - Commitments and Contingencies

Contingencies

See Note 3 for a discussion of our gain contingencies related to assets that were expropriated in Venezuela.

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Pursuant to the separation and distribution agreement, EESLP contributed to a subsidiary of Archrock the right to receive payments based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our and our joint ventures’ previously nationalized assets promptly after such amounts are collected by our subsidiaries until Archrock’s subsidiary has received an aggregate amount of such payments up to the lesser of (i) $125.8 million, plus the aggregate amount of all reimbursable expenses incurred by Archrock and its subsidiaries in connection with recovering any PDVSA Gas default installment payments following the completion of the Spin-off or (ii) $150.0 million. Our balance sheets do not reflect this contingent liability to Archrock or the amount payable to us by PDVSA Gas as a receivable. Pursuant to the separation and distribution agreement, we transferred cash of $19.7 million to Archrock during the six months ended June 30, 2017. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. As of June 30, 2018, the remaining principal amounts due to us from PDVSA Gas in respect of the sale of our previously nationalized assets and our joint ventures’ previously nationalized assets were approximately $17 million and $4 million, respectively. In subsequent periods, the recognition of a liability, if applicable, resulting from this contingency to Archrock is expected to impact equity, and as such, is not expected to have an impact on our statements of operations.

In addition to U.S. federal, state and local and foreign income taxes, we are subject to a number of taxes that are not income-based. As many of these taxes are subject to audit by the taxing authorities, it is possible that an audit could result in additional taxes due. We accrue for such additional taxes when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the liability. As of June 30, 2018 and December 31, 2017, we had accrued $2.7 million and $2.8 million, respectively, for the outcomes of non-income-based tax audits. We do not expect that the ultimate resolutions of these audits will result in a material variance from the amounts accrued. We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim. We do not have any unasserted claims from non-income based tax audits that we have determined are probable of assertion. We also believe the likelihood is remote that the impact of potential unasserted claims from non-income-based tax audits could be material to our financial position, but it is possible that the resolution of future audits could be material to our results of operations or cash flows for the period in which the resolution occurs.

Our business can be hazardous, involving unforeseen circumstances such as uncontrollable flows of natural gas or well fluids and fires or explosions. As is customary in our industry, we review our safety equipment and procedures and carry insurance against some, but not all, risks of our business. Our insurance coverage includes property damage, general liability, commercial automobile liability and other coverage we believe is appropriate. We believe that our insurance coverage is customary for the industry and adequate for our business; however, losses and liabilities not covered by insurance would increase our costs.

Additionally, we are substantially self-insured for workers’ compensation and employee group health claims in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to the deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages.

Litigation and Claims

In the ordinary course of business, we are involved in various pending or threatened legal actions. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from any of these actions will not have a material adverse effect on our financial position, results of operations or cash flows. However, because of the inherent uncertainty of litigation and arbitration proceedings, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our financial position, results of operations or cash flows.

Contemporaneously with filing the Form 8-K on April 26, 2016, we self-reported the errors and possible irregularities at Belleli EPC to the SEC. Since then, we have been cooperating with the SEC in its investigation of this matter. The SEC’s investigation related to the circumstances giving rise to the restatement is continuing, and we are presently unable to predict the duration, scope or results or whether the SEC will commence any legal action.

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Indemnifications

In conjunction with, and effective as of the completion of, the Spin-off, we entered into the separation and distribution agreement with Archrock, which governs, among other things, the treatment between Archrock and us relating to certain aspects of indemnification, insurance, confidentiality and cooperation. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Archrock’s business with Archrock. Pursuant to the agreement, we and Archrock will generally release the other party from all claims arising prior to the Spin-off that relate to the other party’s business, subject to certain exceptions. Additionally, in conjunction with, and effective as of the completion of, the Spin-off, we entered into the tax matters agreement with Archrock. Under the tax matters agreement and subject to certain exceptions, we are generally liable for, and indemnify Archrock against, taxes attributable to our business, and Archrock is generally liable for, and indemnify us against, all taxes attributable to its business. We are generally liable for, and indemnify Archrock against, 50% of certain taxes that are not clearly attributable to our business or Archrock’s business. Any payment made by us to Archrock, or by Archrock to us, is treated by all parties for tax purposes as a nontaxable distribution or capital contribution, respectively, made immediately prior to the Spin-off.

Note 16 - Reportable Segments

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

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

The following table presents revenue and other financial information by reportable segment for the three and six months ended June 30, 2018 and 2017 (in thousands):

Three Months Ended	Contract Operations		Aftermarket Services		Product Sales		Reportable Segments Total
June 30, 2018:
Revenue	$	91,487	$	32,267	$	219,717	$	343,471
Gross margin (1)	59,115		8,561		27,955		95,631
June 30, 2017:
Revenue	$	95,341	$	24,244	$	198,116	$	317,701
Gross margin (1)	60,650		6,966		20,091		87,707

Six Months Ended	Contract Operations		Aftermarket Services		Product Sales		Reportable Segments Total
June 30, 2018:
Revenue	$	187,980	$	58,638	$	447,236	$	693,854
Gross margin (1)	120,223		16,035		55,138		191,396
June 30, 2017:
Revenue	$	187,386	$	46,768	$	328,972	$	563,126
Gross margin (1)	121,897		12,878		31,410		166,185

________________________________

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

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The following table reconciles income before income taxes to total gross margin (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018		2017
Income before income taxes	$	8,153		$	2,530		$	17,583	$	2,097
Selling, general and administrative	44,382			44,564			88,624		88,975
Depreciation and amortization	30,184			26,348			61,213		51,100
Long-lived asset impairment	—			—			1,804		—
Restatement related charges (recoveries), net	(597		)	(1,158		)	24		1,014
Restructuring and other charges	1,422			310			1,422		2,618
Interest expense	6,883			12,382			14,102		19,469
Other (income) expense, net	5,204			2,731			6,624		912
Total gross margin	$	95,631		$	87,707		$	191,396	$	166,185

Note 17 - Supplemental Guarantor Financial Information

In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. (together, the “Issuers”) issued the 2017 Notes, which consists of $375.0 million aggregate principal amount senior unsecured notes. In April 2018, the 2017 Notes were exchanged for notes with substantially identical terms and registered under the Securities Act of 1933, as amended. The 2017 Notes were, and the exchange notes issued in April 2018 are, fully and unconditionally guaranteed on a joint and several senior unsecured basis by Exterran Corporation (the “Parent Guarantor” or “Parent”). All other consolidated subsidiaries of Exterran are collectively referred to as the “Non-Guarantor Subsidiaries.” As a result of the Parent’s guarantee, we are presenting the following condensed consolidating financial information pursuant to Rule 3-10 of Regulation S-X, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. These schedules are presented using the equity method of accounting for all periods presented. For purposes of the following condensed consolidating financial information, the Parent Guarantor’s investments in its subsidiaries, the Issuers’ investments in the Non-Guarantors Subsidiaries and the Non-Guarantor Subsidiaries’ investments in the Issuers are accounted for under the equity method of accounting. Under this method, investments in subsidiaries are recorded at cost and adjusted for our share in the subsidiaries’ cumulative results of operations, capital contributions and distributions and other changes in equity. Elimination entries relate primarily to the elimination of investments in subsidiaries and associated intercompany balances and transactions.

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Condensed Consolidating Balance Sheet

June 30, 2018

(In thousands)

					Non- Guarantor Subsidiaries
	Parent Guarantor		Issuers					Eliminations			Consolidation
ASSETS
Cash and cash equivalents	$	84	$	808	$	17,300		$	—		$	18,192
Restricted cash	—		—		546			—			546
Accounts receivable, net	—		114,909		147,005			—			261,914
Inventory, net	—		100,524		60,684			—			161,208
Contract assets	—		44,327		28,047			—			72,374
Intercompany receivables	—		185,531		362,879			(548,410		)	—
Other current assets	—		7,860		22,244			—			30,104
Current assets associated with discontinued operations	—		—		15,029			—			15,029
Total current assets	84		453,959		653,734			(548,410		)	559,367
Property, plant and equipment, net	—		268,484		569,571			—			838,055
Investment in affiliates	548,122		829,223		(281,101		)	(1,096,244		)	—
Deferred income taxes	—		5,488		6,989			—			12,477
Intangible and other assets, net	—		27,214		73,744			—			100,958
Long-term assets associated with discontinued operations	—		—		2,577			—			2,577
Total assets	$	548,206	$	1,584,368	$	1,025,514		$	(1,644,654	)	$	1,513,434
LIABILITIES AND EQUITY
Accounts payable, trade	$	—	$	151,622	$	38,991		$	—		$	190,613
Accrued liabilities	—		38,453		74,059			—			112,512
Contract liabilities	—		65,707		39,591			—			105,298
Intercompany payables	1,255		362,879		184,276			(548,410		)	—
Current liabilities associated with discontinued operations	—		—		20,705			—			20,705
Total current liabilities	1,255		618,661		357,622			(548,410		)	429,128
Long-term debt	—		401,119		—			—			401,119
Deferred income taxes	—		—		6,206			—			6,206
Long-term contract liabilities	—		7,001		78,061			—			85,062
Other long-term liabilities	—		9,465		29,608			—			39,073
Long-term liabilities associated with discontinued operations	—		—		5,895			—			5,895
Total liabilities	1,255		1,036,246		477,392			(548,410		)	966,483
Total Equity	546,951		548,122		548,122			(1,096,244		)	546,951
Total liabilities and equity	$	548,206	$	1,584,368	$	1,025,514		$	(1,644,654	)	$	1,513,434

31

Condensed Consolidating Balance Sheet

December 31, 2017

(In thousands)

					Non- Guarantor Subsidiaries
	Parent Guarantor		Issuers					Eliminations			Consolidation
ASSETS
Cash and cash equivalents	$	397	$	24,195	$	24,553		$	—		$	49,145
Restricted cash	—		—		546			—			546
Accounts receivable, net	—		123,362		142,690			—			266,052
Inventory, net	—		50,528		57,381			—			107,909
Costs and estimated earnings in excess of billings on uncompleted contracts	—		33,439		7,256			—			40,695
Intercompany receivables	—		158,296		359,766			(518,062		)	—
Other current assets	—		6,095		32,612			—			38,707
Current assets held for sale	—		15,761		—			—			15,761
Current assets associated with discontinued operations	—		—		23,751			—			23,751
Total current assets	397		411,676		648,555			(518,062		)	542,566
Property, plant and equipment, net	—		288,670		533,609			—			822,279
Investment in affiliates	555,735		831,097		(275,362		)	(1,111,470		)	—
Deferred income taxes	—		5,452		5,098			—			10,550
Intangible and other assets, net	—		12,218		64,762			—			76,980
Long-term assets held for sale	—		4,732		—			—			4,732
Long-term assets associated with discontinued operations	—		—		3,700			—			3,700
Total assets	$	556,132	$	1,553,845	$	980,362		$	(1,629,532	)	$	1,460,807
LIABILITIES AND EQUITY
Accounts payable, trade	$	—	$	115,273	$	33,471		$	—		$	148,744
Accrued liabilities	57		54,724		59,555			—			114,336
Deferred revenue	—		2,162		21,740			—			23,902
Billings on uncompleted contracts in excess of costs and estimated earnings	—		89,002		563			—			89,565
Intercompany payables	1,289		359,766		157,007			(518,062		)	—
Current liabilities associated with discontinued operations	—		—		31,971			—			31,971
Total current liabilities	1,346		620,927		304,307			(518,062		)	408,518
Long-term debt	—		368,472		—			—			368,472
Deferred income taxes	—		—		9,746			—			9,746
Long-term deferred revenue	—		629		91,856			—			92,485
Other long-term liabilities	—		8,082		12,190			—			20,272
Long-term liabilities associated with discontinued operations	—		—		6,528			—			6,528
Total liabilities	1,346		998,110		424,627			(518,062		)	906,021
Total Equity	554,786		555,735		555,735			(1,111,470		)	554,786
Total liabilities and equity	$	556,132	$	1,553,845	$	980,362		$	(1,629,532	)	$	1,460,807

32

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	240,333		$	123,301		$	(20,163	)	$	343,471
Cost of sales (excluding depreciation and amortization expense)	—			198,589			69,414			(20,163		)	247,840
Selling, general and administrative	352			21,152			22,878			—			44,382
Depreciation and amortization	—			8,688			21,496			—			30,184
Restatement related recoveries, net	—			(597		)	—			—			(597		)
Restructuring and other charges	—			—			1,422			—			1,422
Interest expense	—			5,284			1,599			—			6,883
Intercompany charges, net	—			1,348			(1,348		)	—			—
Equity in (income) loss of affiliates	(274		)	423			(12,488		)	12,339			—
Other (income) expense, net	(153		)	(1,320		)	6,677			—			5,204
Income before income taxes	75			6,766			13,651			(12,339		)	8,153
Provision for (benefit from) income taxes	—			(5,299		)	3,130			11,791			9,622
Income (loss) from continuing operations	75			12,065			10,521			(24,130		)	(1,469		)
Income from discontinued operations, net of tax	—			—			1,544			—			1,544
Net income	75			12,065			12,065			(24,130		)	75
Other comprehensive loss	(8,123		)	(8,123		)	(8,123		)	16,246			(8,123		)
Comprehensive income (loss) attributable to Exterran stockholders	$	(8,048	)	$	3,942		$	3,942		$	(7,884	)	$	(8,048	)

33

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	227,755		$	124,597		$	(34,651	)	$	317,701
Cost of sales (excluding depreciation and amortization expense)	—			193,938			70,707			(34,651		)	229,994
Selling, general and administrative	209			21,910			22,445			—			44,564
Depreciation and amortization	—			8,940			17,408			—			26,348
Restatement related recoveries, net	—			(1,143		)	(15		)	—			(1,158		)
Restructuring and other charges	—			(1,376		)	1,686			—			310
Interest expense	—			10,061			2,321			—			12,382
Intercompany charges, net	—			1,521			(1,521		)	—			—
Equity in (income) loss of affiliates	(3,753		)	(3,678		)	7,257			174			—
Other (income) expense, net	—			146			2,585			—			2,731
Income (loss) before income taxes	3,544			(2,564		)	1,724			(174		)	2,530
Provision for (benefit from) income taxes	—			1,017			5,676			(7,333		)	(640		)
Income (loss) from continuing operations	3,544			(3,581		)	(3,952		)	7,159			3,170
Income from discontinued operations, net of tax	—			—			374			—			374
Net income (loss)	3,544			(3,581		)	(3,578		)	7,159			3,544
Other comprehensive loss	(2,669		)	(2,669		)	(2,669		)	5,338			(2,669		)
Comprehensive income (loss) attributable to Exterran stockholders	$	875		$	(6,250	)	$	(6,247	)	$	12,497		$	875

34

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Six Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	498,649		$	239,692		$	(44,487	)	$	693,854
Cost of sales (excluding depreciation and amortization expense)	—			416,753			130,192			(44,487		)	502,458
Selling, general and administrative	635			42,117			45,872			—			88,624
Depreciation and amortization	—			18,015			43,198			—			61,213
Long-lived asset impairment	—			1,804			—			—			1,804
Restatement related charges, net	—			24			—			—			24
Restructuring and other charges	—			—			1,422			—			1,422
Interest expense	—			12,497			1,605			—			14,102
Intercompany charges, net	—			3,073			(3,073		)	—			—
Equity in income of affiliates	(5,894		)	(9,631		)	(9,842		)	25,367			—
Other (income) expense, net	(153		)	(1,369		)	8,146			—			6,624
Income before income taxes	5,412			15,366			22,172			(25,367		)	17,583
Provision for (benefit from) income taxes	—			(4,107		)	5,642			13,579			15,114
Income from continuing operations	5,412			19,473			16,530			(38,946		)	2,469
Income from discontinued operations, net of tax	—			—			2,943			—			2,943
Net income	5,412			19,473			19,473			(38,946		)	5,412
Other comprehensive loss	(7,366		)	(7,366		)	(7,366		)	14,732			(7,366		)
Comprehensive income (loss) attributable to Exterran stockholders	$	(1,954	)	$	12,107		$	12,107		$	(24,214	)	$	(1,954	)

35

Condensed Consolidating Statement of Operations and Comprehensive Income

Six Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	378,112		$	241,665		$	(56,651	)	$	563,126
Cost of sales (excluding depreciation and amortization expense)	—			321,106			132,486			(56,651		)	396,941
Selling, general and administrative	1,701			43,393			43,881			—			88,975
Depreciation and amortization	—			16,740			34,360			—			51,100
Restatement related charges (recoveries), net	—			1,029			(15		)	—			1,014
Restructuring and other charges	—			1,679			939			—			2,618
Interest expense	—			17,272			2,197			—			19,469
Intercompany charges, net	—			3,653			(3,653		)	—			—
Equity in (income) loss of affiliates	(25,566		)	(61,469		)	27,913			59,122			—
Other (income) expense, net	—			(2,007		)	2,919			—			912
Income before income taxes	23,865			36,716			638			(59,122		)	2,097
Provision for income taxes	—			3,161			100			7,989			11,250
Income (loss) from continuing operations	23,865			33,555			538			(67,111		)	(9,153		)
Income from discontinued operations, net of tax	—			—			33,018			—			33,018
Net income	23,865			33,555			33,556			(67,111		)	23,865
Other comprehensive loss	(1,026		)	(1,026		)	(1,026		)	2,052			(1,026		)
Comprehensive income attributable to Exterran stockholders	$	22,839		$	32,529		$	32,530		$	(65,059	)	$	22,839

36

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	(279	)	$	(33,278	)	$	61,697		$	—		$	28,140
Net cash provided by discontinued operations	—			—			881			—			881
Net cash provided by (used in) operating activities	(279		)	(33,278		)	62,578			—			29,021
Cash flows from investing activities:
Capital expenditures	—			(27,737		)	(66,497		)	—			(94,234		)
Proceeds from sale of property, plant and equipment	—			45			2,327			—			2,372
Proceeds from sale of business	—			5,000			—			—			5,000
Intercompany transfers	—			34			(3,272		)	3,238			—
Net cash used in continuing operations	—			(22,658		)	(67,442		)	3,238			(86,862		)
Net cash provided by discontinued operations	—			—			66			—			66
Net cash used in investing activities	—			(22,658		)	(67,376		)	3,238			(86,796		)
Cash flows from financing activities:
Proceeds from borrowings of debt	—			255,000			—			—			255,000
Repayments of debt	—			(222,758		)	—			—			(222,758		)
Intercompany transfers	(34		)	3,272			—			(3,238		)	—
Payments for debt issuance costs	—			(47		)	—			—			(47		)
Proceeds from stock options exercised	—			563			—			—			563
Purchases of treasury stock	—			(3,481		)	—			—			(3,481		)
Net cash provided by (used in) financing activities	(34		)	32,549			—			(3,238		)	29,277
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(2,455		)	—			(2,455		)
Net decrease in cash, cash equivalents and restricted cash	(313		)	(23,387		)	(7,253		)	—			(30,953		)
Cash, cash equivalents and restricted cash at beginning of period	397			24,195			25,099			—			49,691
Cash, cash equivalents and restricted cash at end of period	$	84		$	808		$	17,846		$	—		$	18,738

37

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	(286	)	$	18,091		$	37,799		$	—		$	55,604
Net cash provided by discontinued operations	—			—			2,498			—			2,498
Net cash provided by (used in) operating activities	(286		)	18,091			40,297			—			58,102
Cash flows from investing activities:
Capital expenditures	—			(17,999		)	(26,217		)	—			(44,216		)
Proceeds from sale of property, plant and equipment	—			1,930			4,497			—			6,427
Proceeds from sale of business	—			894			—			—			894
Intercompany transfers	—			(757		)	(36,494		)	37,251			—
Net cash used in continuing operations	—			(15,932		)	(58,214		)	37,251			(36,895		)
Net cash provided by discontinued operations	—			—			19,164			—			19,164
Net cash used in investing activities	—			(15,932		)	(39,050		)	37,251			(17,731		)
Cash flows from financing activities:
Proceeds from borrowings of debt	—			488,000			—			—			488,000
Repayments of debt	—			(463,877		)	—			—			(463,877		)
Intercompany transfers	757			36,494			—			(37,251		)	—
Cash transfer to Archrock, Inc.	—			(44,720		)	—			—			(44,720		)
Payments for debt issuance costs	—			(7,606		)	—			—			(7,606		)
Proceeds from stock options exercised	—			684			—			—			684
Purchases of treasury stock	—			(3,124		)	—			—			(3,124		)
Net cash provided by (used in) financing activities	757			5,851			—			(37,251		)	(30,643		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(42		)	—			(42		)
Net increase in cash, cash equivalents and restricted cash	471			8,010			1,205			—			9,686
Cash, cash equivalents and restricted cash at beginning of period	131			16,645			19,573			—			36,349
Cash, cash equivalents and restricted cash at end of period	$	602		$	24,655		$	20,778		$	—		$	46,035

38

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes thereto included in the Condensed Consolidated Financial Statements in Part I, Item 1 (“Financial Statements”) of this report and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017.

Disclosure Regarding Forward-Looking Statements

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

Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this report. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, no assurance can be given that these expectations will prove to be correct. Known material factors that could cause our actual results to differ materially from the expectations reflected in these forward-looking statements include the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2017, and those set forth from time to time in our filings with the Securities and Exchange Commission (“SEC”), which are available through our website at www.exterran.com and through the SEC’s website at www.sec.gov, as well as the following risks and uncertainties:

• conditions in the oil and natural gas industry, including a sustained imbalance in the level of supply or demand for oil or natural gas or a sustained low price of oil or natural gas, which could depress or reduce the demand or pricing for our natural gas compression and oil and natural gas production and processing equipment and services;

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

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

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

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

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

• risks associated with our operations, such as equipment defects, equipment malfunctions and natural disasters;

• the risk that counterparties will not perform their obligations under our financial instruments;

• the financial condition of our customers;

• our ability to timely and cost-effectively obtain components necessary to conduct our business;

• employment and workforce factors, including our ability to hire, train and retain key employees;

• our ability to implement our business and financial objectives, including:

• winning profitable new business;

• timely and cost-effective execution of projects;

• enhancing our asset utilization, particularly with respect to our fleet of compressors;

• integrating acquired businesses;

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

• accessing the financial markets at an acceptable cost;

39

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

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

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

• the results of governmental actions relating to the current investigation; and

• our level of indebtedness and ability to fund our business.

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

General

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

We provide our products and services to a global customer base consisting of companies engaged in all aspects of the oil and natural gas industry, including large integrated oil and natural gas companies, national oil and natural gas companies, independent oil and natural gas producers and oil and natural gas processors, gatherers and pipeline operators. We operate in three primary business lines: contract operations, aftermarket services and product sales. The nature and inherent interactions between and among our business lines provide us with opportunities to cross-sell or offer integrated product and service solutions to our customers.

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

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

On November 3, 2015, Archrock, Inc. (named Exterran Holdings, Inc. prior to November 3, 2015) (“Archrock”) completed the spin-off (the ‘‘Spin-off”) of its international contract operations, international aftermarket services and global fabrication businesses into an independent, publicly traded company named Exterran Corporation.

We refer to the condensed consolidated financial statements collectively as “financial statements,” and individually as “balance sheets,” “statements of operations,” “statements of comprehensive income,” “statements of stockholders’ equity” and “statements of cash flows” herein.

40

Overview

Industry Conditions and Trends

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

Industry observers anticipate that commodity prices and customer spending should continue to increase in 2018 due to the predicted strong global demand for hydrocarbons, including increased demand for liquefied natural gas. Geographically, North America is expected to see the largest increase in industry spending with international markets anticipated to grow for the first time in four years, albeit at modest levels.

However, customer cash flows and returns on capital could drive customer investment priorities. Industry observers believe shareholders are encouraging management teams of energy producers to focus operational and compensation strategies on returns and cash flow generation rather than solely on production growth. To accomplish these strategies, industry observers believe that energy producers would need to better prioritize capital spending such that cash required for their investments would not exceed cash generated from their operating cash flows. This could impact resource allocation and ultimately the amount of new projects and capital spending by our customers.

Our Performance Trends and Outlook

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

Historically, oil, natural gas and natural gas liquids and the level of drilling and exploration activity in North America have been volatile. The Henry Hub spot price for natural gas was $2.96 per MMBtu at June 30, 2018, which was 20% and 1%lower than prices at December 31, 2017 and June 30, 2017, respectively, and the U.S. natural gas liquid composite price was $7.49 per MMBtu for the month of April 2018, which was 4%lower than the price for the month of December 2017 and 31%higher than prices for the month of June 2017. In addition, the West Texas Intermediate crude oil spot price as of June 30, 2018 was 23% and 61%higher than prices at December 31, 2017 and June 30, 2017, respectively. Increased stability of oil, natural gas and natural gas liquids prices in 2017 and thus far in 2018 has encouraged increased customer spending and investments in equipment that have led to increased activity and bookings in North America. Booking activity levels for our manufactured products in North America during the three months ended June 30, 2018 were $232.3 million, which represents an increase of 125% and a decrease of 10% compared to the three months ended December 31, 2017 and June 30, 2017, respectively, and our North America product sales backlog as of June 30, 2018 was $428.1 million, which represents an increase of 2% and a decrease of 4% compared to December 31, 2017 and June 30, 2017, respectively. Additionally, our North America contract operations services backlog as of June 30, 2018 was approximately $75 million. We believe that recent booking levels reflect the expectation that commodity prices will continue to remain above the low levels experienced in early 2016.

We expect that industry spending in international markets will increase in 2018. Longer-term fundamentals in our international markets partially depends on international oil and gas infrastructure projects, many of which are based on longer-term plans of our customers that can be driven by their local market demand and local pricing for natural gas. As a result, we believe our international customers make decisions based on longer-term fundamentals that may be less tied to near term commodity prices than our North American customers. Over the long term, we believe the demand for our products and services in international markets will continue, and we expect to have opportunities to grow our international businesses. Booking activity levels for our manufactured products in international markets during the three months ended June 30, 2018 were $207.4 million, which represents increases of 1,996% and 789% compared to the three months ended December 31, 2017 and June 30, 2017, respectively, and our international product sales backlog as of June 30, 2018 was $206.8 million, which represents increases of 420% and 233% compared to December 31, 2017 and June 30, 2017, respectively. Additionally, as a result of recent booking activity levels for our contract operations services, our international contract operations services backlog as of June 30, 2018 grew to approximately $1.3 billion.

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Aggregate booking activity levels for our manufactured products in North America and international markets during the three months ended June 30, 2018 were $439.7 million, which represents increases of 289% and 57% compared to the three months ended December 31, 2017 and June 30, 2017, respectively. Fluctuations in the size and timing of customers’ requests for bid proposals and awards of new contracts tend to create variability in booking activity levels from period to period.

The timing of any change in activity levels by our customers is difficult to predict. As a result, our ability to project the anticipated activity level for our business, and particularly our product sales segment, is limited. Throughout 2017 and thus far in 2018, we experienced an increase in product sales bookings. However, volatility in commodity prices could delay investments by our customers in significant projects, which could result in a material adverse effect on our business, financial condition, results of operations and cash flows.

Our level of capital spending largely depends on the demand for our contract operations services and the equipment required to provide such services to our customers. Based on the demand we see for contract operations, we anticipate investing more capital in our contract operations business in 2018 than we did in 2017. The increased investment during 2018 is driven by several large multi-year projects contracted in 2017 and 2018 that are scheduled to start earning revenue in 2018 and 2019.

Operating Highlights

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

	June 30, 2018		December 31, 2017		June 30, 2017
Product Sales Backlog:
Compression equipment	$	294,498	$	254,745	$	248,147
Processing and treating equipment	330,654		178,814		200,940
Production equipment (1)	—		14,138		36,782
Other product sales	9,741		13,349		20,662
Total product sales backlog	$	634,893	$	461,046	$	506,531

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⁽¹⁾  In June 2018, we completed the sale of our North America production equipment assets (“PEQ assets”), which included $12.0 million in unsatisfied performance obligations (commonly referred to as backlog).

Financial Results of Operations

Summary of Results

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

Revenue.

Revenue during the three months ended June 30, 2018 and 2017 was $343.5 million and $317.7 million, respectively. The increase in revenue during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was caused by revenue increases in our product sales and aftermarket services segments, partially offset by a decrease in our contract operations segment.

Revenue during the six months ended June 30, 2018 and 2017 was $693.9 million and $563.1 million, respectively. The increase in revenue during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was caused by revenue increases in all three of our segments with a significant increase in revenue in our product sales segment.

Net income.

We generated net income of $0.1 million and $3.5 million during the three months ended June 30, 2018 and 2017, respectively. The decrease in net income during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to an increase in income tax expense, an increase in depreciation and amortization expense and a loss of $1.7 million on the sale of our PEQ assets in the current year period. These activities were partially offset by an increase in gross margin for our product sales segment and a decrease in interest expense.

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We generated net income of $5.4 million and $23.9 million during the six months ended June 30, 2018 and 2017, respectively. The decrease in net income during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to a decrease in income from discontinued operations, net of tax, an increase in depreciation and amortization expense, an increase in income tax expense and a loss of $1.7 million on the sale of our PEQ assets in the current year period. These activities were partially offset by an increase in gross margin for our product sales segment and a decrease in interest expense. Net income during the six months ended June 30, 2018 and 2017 included income from discontinued operations, net of tax, of $2.9 million and $33.0 million, respectively. Income for discontinued operations, net of tax, for the six months ended June 30, 2017 was positively impacted by recoveries from liquidated damages releases and customer approved change orders related to Belleli EPC.

EBITDA, as adjusted.

Our EBITDA, as adjusted, was $51.2 million and $43.3 million during the three months ended June 30, 2018 and 2017, respectively. EBITDA, as adjusted, during the three months ended June 30, 2018 compared to the three months ended June 30, 2017increased primarily due to an increase in gross margin for our product sales segment.

Our EBITDA, as adjusted, was $101.9 million and $77.9 million during the six months ended June 30, 2018 and 2017, respectively. EBITDA, as adjusted, during the six months ended June 30, 2018 compared to the six months ended June 30, 2017increased primarily due to an increase in gross margin for our product sales segment. EBITDA, as adjusted, is a non-GAAP financial measure. For a reconciliation of EBITDA, as adjusted, to net income (loss), its most directly comparable financial measure calculated and presented in accordance with GAAP, please read “— Non-GAAP Financial Measures” included elsewhere in this Quarterly Report.

The Three Months Ended June 30, 2018 Compared to the Three Months Ended June 30, 2017

Contract Operations

(dollars in thousands)

	Three Months Ended June 30,
	2018			2017			Change			% Change
Revenue	$	91,487		$	95,341		$	(3,854	)	(4	)%
Cost of sales (excluding depreciation and amortization expense)	32,372			34,691			(2,319		)	(7	)%
Gross margin	$	59,115		$	60,650		$	(1,535	)	(3	)%
Gross margin percentage (1)	65		%	64		%	1		%	2	%

___________________

(1) Defined as gross margin divided by revenue.

The decrease in revenue during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to decreases in revenue of $4.3 million and $0.8 million in the North America region and Latin America region, respectively, partially offset by an increase in revenue of $1.3 million in the Middle East and Africa region. The decrease in the North America region was primarily driven by renegotiations on a contract extension that resulted in lower revenue in the current year period and a project that terminated operations in the first quarter of 2018. The increase in the Middle East and Africa region was primarily driven by a $2.4 million increase in revenue resulting from the start-up of projects that were not operating in the prior year period. Gross margin decreased during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 primarily due to the revenue decreases explained above. Gross margin percentage during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 remained relatively flat.

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Aftermarket Services

(dollars in thousands)

	Three Months Ended June 30,
	2018			2017			Change			% Change
Revenue	$	32,267		$	24,244		$	8,023		33	%
Cost of sales (excluding depreciation and amortization expense)	23,706			17,278			6,428			37	%
Gross margin	$	8,561		$	6,966		$	1,595		23	%
Gross margin percentage	27		%	29		%	(2		)%	(7	)%

The increase in revenue during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to increases in revenue of $5.1 million and $1.8 million in the Middle East and Africa region and Latin America region, respectively. The increase in revenue in the Middle East and Africa region was primarily driven by an increase in part sales. The increase in the Latin America region was primarily driven by an increase in commissioning services. Gross margin increased during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 primarily due to the revenue increase explained above. The decrease in gross margin percentage during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily driven by an increase in part sales during the current year period.

Product Sales

(dollars in thousands)

	Three Months Ended June 30,
	2018			2017			Change			% Change
Revenue	$	219,717		$	198,116		$	21,601		11	%
Cost of sales (excluding depreciation and amortization expense)	191,762			178,025			13,737			8	%
Gross margin	$	27,955		$	20,091		$	7,864		39	%
Gross margin percentage	13		%	10		%	3		%	30	%

The increase in revenue during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to increases in revenue of $28.9 million in the North America region and $5.3 million in the Asia Pacific region, partially offset by a decrease in revenue of $13.0 million in the Middle East and Africa region. The increase in revenue in the North America region was primarily due to increases of $27.7 million and $9.1 million in processing and treating equipment revenue and compression equipment revenue, respectively, partially offset by a decrease of $7.9 million in production equipment revenue. The increase in revenue in the Asia Pacific region was primarily due to an increase of $5.5 million in compression equipment revenue. The decrease in revenue in the Middle East and Africa region was primarily due to a decrease of $11.9 million in processing and treating equipment revenue. Gross margin and gross margin percentage increasedduring the three months ended June 30, 2018 compared to the three months ended June 30, 2017 due to the revenue increase explained above and a shift in product mix in the North America region during the current year period.

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Costs and Expenses

(dollars in thousands)

	Three Months Ended June 30,
	2018			2017			Change			% Change
Selling, general and administrative	$	44,382		$	44,564		$	(182	)	—	%
Depreciation and amortization	30,184			26,348			3,836			15	%
Restatement related charges (recoveries), net	(597		)	(1,158		)	561			(48	)%
Restructuring and other charges	1,422			310			1,112			359	%
Interest expense	6,883			12,382			(5,499		)	(44	)%
Other (income) expense, net	5,204			2,731			2,473			91	%

Selling, general and administrative

Selling, general and administrative (“SG&A”) expense remained relatively flat during the three months ended June 30, 2018 compared to the three months ended June 30, 2017. SG&A expense as a percentage of revenue was 13% and 14% during the three months ended June 30, 2018 and 2017, respectively.

Depreciation and amortization

Depreciation and amortization expense during the three months ended June 30, 2018 compared to the three months ended June 30, 2017increased primarily due to an increase in depreciation expense of $2.0 million for our compression equipment driven by policy changes relating to the useful lives and salvage values made in the fourth quarter of 2017. Additionally, depreciation expense of capitalized installation costs increased by $1.1 million primarily due to additional depreciation on projects that were not operating in the prior year period. Capitalized installation costs, included, among other things, civil engineering, piping, electrical instrumentation and project management costs.

Restatement related charges (recoveries), net

As discussed in Note 10 to the Financial Statements, during the first quarter of 2016, our senior management identified errors relating to the application of percentage-of-completion accounting principles to specific Belleli EPC product sales projects. During the three months ended June 30,2017, we incurred $1.6 million of external costs associated with an SEC investigation and remediation activities related to the restatement of our financial statements. During the three months ended June 30, 2018 and 2017, we recorded recoveries from Archrock pursuant to the separation and distribution agreement of $0.6 million and $2.8 million, respectively, for previously incurred restatement related costs.

Restructuring and other charges

In the second quarter of 2018, we initiated a relocation plan in the North America region to better align our contract operations business with our customers. As a result of this plan, during the three months ended June 30, 2018, we incurred restructuring and other charges of $1.4 million primarily related to employee termination benefits.

In the second quarter of 2015, we announced a cost reduction plan, primarily focused on workforce reductions and the reorganization of certain facilities. As a result of this plan, during the three months ended June 30, 2017, we incurred restructuring and other charges of $0.4 million primarily related to employee termination benefits. Additionally, during the three months ended June 30, 2017, we recorded a restructuring benefit of $0.1 million related to changes in estimated retention awards to be paid for certain employees associated with the Spin-off. The charges incurred in conjunction with the relocation plan, cost reduction plan and Spin-off are included in restructuring and other charges in our statements of operations. See Note 11 to the Financial Statements for further discussion of these charges.

Interest expense

The decrease in interest expense during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to interest expense of $2.4 million recorded for the settling of non-income-based tax debt during the prior year period in connection with the Brazilian Tax Regularization Program, $1.7 million of unamortized deferred financing costs expensed in prior year period resulting from the repayment of the term loan facility and an increase in capitalized interest resulting from increased construction activities during the current year period. During the three months ended June 30, 2018 and 2017, the average daily outstanding borrowings of long-term debt were $436.7 million and $375.3 million, respectively. For further discussion on the Brazilian Tax Regularization Program, see Note 12 to the Financial Statements.

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Other (income) expense, net

The change in other (income) expense, net, was primarily due to foreign currency losses of $3.8 million and $2.2 million during the three months ended June 30, 2018 and 2017, respectively. Our foreign currency losses included translation losses of $3.5 million and $1.4 million during the three months ended June 30, 2018 and 2017, respectively, related to the currency remeasurement of our foreign subsidiaries’ non-functional currency denominated intercompany obligations. Other (income) expense, net, also included a loss of $1.7 million on the sale of our PEQ assets in the current year period and penalties of $1.5 million incurred for the settling of non-income-based tax debt during the prior year period in connection with the Brazilian Tax Regularization Program discussed above. For further discussion on the sale of our PEQ assets, see Note 6 to the Financial Statements.

Income Taxes

(dollars in thousands)

	Three Months Ended June 30,
	2018			2017			Change			% Change
Provision for (benefit from) income taxes	$	9,622		$	(640	)	$	10,262		(1,603	)%
Effective tax rate	118.0		%	(25.3		)%	143.3		%	(566	)%

Our income tax expense for the three months ended June 30, 2018 included a $5.7 million tax expense related to income tax on income in Argentina recorded as a result of foreign exchange rate movements. Our income tax expense for the three months ended June 30, 2017 included an $11.9 million income tax benefit attributable to the reversal of valuation allowances against certain deferred tax assets related to income tax loss carryforwards that were utilized under the Brazilian Tax Regularization Program and a $5.7 million valuation allowance recorded against U.S. deferred tax assets. Our effective tax rate is impacted by valuation allowances recorded against loss carryforwards in the U.S. and certain other jurisdictions, foreign withholding taxes and changes in foreign currency exchange rates.

Discontinued Operations

(dollars in thousands)

	Three Months Ended June 30,
	2018		2017		Change		% Change
Income from discontinued operations, net of tax	$	1,544	$	374	$	1,170	313	%

Income from discontinued operations, net of tax, includes our Venezuelan subsidiary’s operations that were expropriated in June 2009, including compensation for expropriation, and our Belleli EPC business.

Income from discontinued operations, net of tax, during the three months ended June 30, 2018 compared to the three months ended June 30, 2017increased primarily due to a $1.2 millionincrease in income from Belleli EPC. The increase in income from Belleli EPC was primarily driven by higher overall costs in the prior year period and foreign currency gains during the current year period. For further details on our discontinued operations, see Note 3 to the Financial Statements.

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The Six Months Ended June 30, 2018 Compared to the Six Months Ended June 30, 2017

Contract Operations

(dollars in thousands)

	Six Months Ended June 30,
	2018			2017			Change			% Change
Revenue	$	187,980		$	187,386		$	594		—	%
Cost of sales (excluding depreciation and amortization expense)	67,757			65,489			2,268			3	%
Gross margin	$	120,223		$	121,897		$	(1,674	)	(1	)%
Gross margin percentage (1)	64		%	65		%	(1		)%	(2	)%

___________________

(1) Defined as gross margin divided by revenue.

The increase in revenue during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to increases in revenue of $7.3 million and $2.5 million in the Middle East and Africa region and Asia Pacific region, respectively, partially offset by decreases in revenue of $7.2 million and $2.0 million in the North America region and Latin America region, respectively. The increase in the Middle East and Africa region was primarily driven by a $5.9 million increase in revenue resulting from the start-up of projects that were not operating in the prior year period and a $3.4 million increase in revenue from the sale of equipment pursuant to a customer exercised purchase option. The increase in revenue in the Asia Pacific region was primarily driven by a $2.8 million recovery of an early termination fee for a contract that terminated in January 2016. The decrease of revenue in the North America region was primarily due to renegotiations on a contract extension that resulted in lower revenue in the current year period and a project that terminated operations in the first quarter of 2018. The decrease of revenue in the Latin America region was primarily driven by a $3.8 million decrease in Argentina due to unfavorable exchange rate impacts. Gross margin decreased during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 primarily due to lower maintenance expenses in the prior year period resulting from delayed expenditures. Gross margin percentage during the six months ended June 30, 2018 compared to thesix months ended June 30, 2017 remained relatively flat.

Aftermarket Services

(dollars in thousands)

	Six Months Ended June 30,
	2018			2017			Change			% Change
Revenue	$	58,638		$	46,768		$	11,870		25	%
Cost of sales (excluding depreciation and amortization expense)	42,603			33,890			8,713			26	%
Gross margin	$	16,035		$	12,878		$	3,157		25	%
Gross margin percentage	27		%	28		%	(1		)%	(4	)%

The increase in revenue during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to increases in revenue of $7.2 million, $2.7 million and $1.4 million in the Middle East and Africa, Latin America and North America regions, respectively. The increase in revenue in the Middle East and Africa region was primarily driven by an increase in part sales. The increase in the Latin America region was primarily driven by increases in overhaul services and commissioning services. The increase in the North America region was primarily driven by increases in part sales and commissioning services. Gross margin increased during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 primarily due to the revenue increase explained above. Gross margin percentage during the six months ended June 30, 2018 compared to thesix months ended June 30, 2017 remained relatively flat.

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Product Sales

(dollars in thousands)

	Six Months Ended June 30,
	2018			2017			Change			% Change
Revenue	$	447,236		$	328,972		$	118,264		36	%
Cost of sales (excluding depreciation and amortization expense)	392,098			297,562			94,536			32	%
Gross margin	$	55,138		$	31,410		$	23,728		76	%
Gross margin percentage	12		%	10		%	2		%	20	%

The increase in revenue during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to increases in revenue of $135.3 million in the North America region and $16.8 million in the Asia Pacific region, partially offset by a decrease in revenue of $35.4 million in the Middle East and Africa region. The increase in revenue in the North America region was primarily due to increases of $94.7 million and $58.3 million in processing and treating equipment revenue and compression equipment revenue, respectively, partially offset by a decrease of $17.5 million in production equipment revenue. The increase in revenue in the Asia Pacific region was due to an increase in compression equipment revenue. The decrease in revenue in the Middle East and Africa region was primarily due to decreases of $21.8 million and $12.9 million in processing and treating equipment revenue and compression equipment revenue, respectively. Gross margin and gross margin percentage increasedduring the six months ended June 30, 2018 compared to thesix months ended June 30, 2017 due to the revenue increase explained above and a shift in product mix in the North America region during the current year period.

Costs and Expenses

(dollars in thousands)

	Six Months Ended June 30,
	2018		2017		Change			% Change
Selling, general and administrative	$	88,624	$	88,975	$	(351	)	—	%
Depreciation and amortization	61,213		51,100		10,113			20	%
Long-lived asset impairment	1,804		—		1,804			n/a
Restatement related charges, net	24		1,014		(990		)	(98	)%
Restructuring and other charges	1,422		2,618		(1,196		)	(46	)%
Interest expense	14,102		19,469		(5,367		)	(28	)%
Other (income) expense, net	6,624		912		5,712			626	%

Selling, general and administrative

SG&A expense remained relatively flat during the six months ended June 30, 2018 compared to the six months ended June 30, 2017. SG&A expense as a percentage of revenue was 13% and 16% during the six months ended June 30, 2018 and 2017, respectively.

Depreciation and amortization

Depreciation and amortization expense during the six months ended June 30, 2018 compared to the six months ended June 30, 2017increased primarily due to an increase in depreciation expense of $5.1 million for our compression equipment driven by policy changes relating to the useful lives and salvage values made in the fourth quarter of 2017. Additionally, depreciation expense of capitalized installation costs increased by $3.1 million primarily due to additional depreciation on projects that were not operating in the prior year period. Capitalized installation costs, included, among other things, civil engineering, piping, electrical instrumentation and project management costs.

Long-lived asset impairment

In the fourth quarter of 2017, we classified certain current and long-term assets primarily related to inventory and property, plant and equipment, net, within our product sales business as assets held for sale in our balance sheets. In June 2018, we completed the sale of our PEQ assets. During the six months ended June 30, 2018, we recorded an impairment of $1.8 million to reduce these assets to their approximate fair values based on the expected net proceeds. For further details, see Note 6 to the Financial Statements.

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Restatement related charges, net

As discussed in Note 10 to the Financial Statements, during the first quarter of 2016, our senior management identified errors relating to the application of percentage-of-completion accounting principles to specific Belleli EPC product sales projects. During the six months ended June 30, 2018 and 2017, we incurred $0.6 million and $3.8 million, respectively, of external costs associated with an SEC investigation and remediation activities related to the restatement of our financial statements. During the six months ended June 30, 2018 and 2017, we recorded recoveries from Archrock pursuant to the separation and distribution agreement of $0.6 million and $2.8 million, respectively, for previously incurred restatement related costs.

Restructuring and other charges

In the second quarter of 2018, we initiated a relocation plan in the North America region to better align our contract operations business with our customers. As a result of this plan, during the six months ended June 30, 2018, we incurred restructuring and other charges of $1.4 million primarily related to employee termination benefits.

In the second quarter of 2015, we announced a cost reduction plan, primarily focused on workforce reductions and the reorganization of certain facilities. As a result of this plan, during the six months ended June 30, 2017, we incurred restructuring and other charges of $2.4 million primarily related to employee termination benefits. Additionally, during the six months ended June 30, 2017, we incurred $0.3 million of costs associated with the Spin-off primarily related to retention awards to certain employees. The charges incurred in conjunction with the relocation plan, cost reduction plan and Spin-off are included in restructuring and other charges in our statements of operations. See Note 11 to the Financial Statements for further discussion of these charges.

Interest expense

The decrease in interest expense during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to interest expense of $2.4 million recorded for the settling of non-income-based tax debt during the prior year period in connection with the Brazilian Tax Regularization Program, $1.7 million of unamortized deferred financing costs expensed in prior year period resulting from the repayment of the term loan facility and an increase in capitalized interest resulting from increased construction activities during the current year period, partially offset by a higher average balance of long-term debt. During the six months ended June 30, 2018 and 2017, the average daily outstanding borrowings of long-term debt were $431.8 million and $363.5 million, respectively. For further discussion on the Brazilian Tax Regularization Program, see Note 12 to the Financial Statements.

Other (income) expense, net

The change in other (income) expense, net, was primarily due to foreign currency losses of $5.7 million and $0.8 million during the six months ended June 30, 2018 and 2017, respectively. Our foreign currency losses during the six months ended June 30, 2018 included translation losses of $4.1 million related to the currency remeasurement of our foreign subsidiaries’ non-functional currency denominated intercompany obligations. Other (income) expense, net, also included a loss of $1.7 million on the sale of our PEQ assets in the current year period and penalties of $1.5 million incurred for the settling of non-income-based tax debt during the prior year period in connection with the Brazilian Tax Regularization Program discussed above. For further discussion on the sale of our PEQ assets, see Note 6 to the Financial Statements.

Income Taxes

(dollars in thousands)

	Six Months Ended June 30,
	2018			2017			Change			% Change
Provision for income taxes	$	15,114		$	11,250		$	3,864		34	%
Effective tax rate	86.0		%	536.5		%	(450.5		)%	(84	)%

Our income tax expense for the six months ended June 30, 2018 included a $5.7 million tax expense related to income tax on income in Argentina recorded as a result of foreign exchange rate movements and a $1.7 million valuation allowance charge against current period U.S. deferred tax assets. Our income tax expense for the six months ended June 30, 2017 included an $11.9 million income tax benefit attributable to the reversal of valuation allowances against certain deferred tax assets related to income tax loss carryforwards that were utilized under the Brazilian Tax Regularization Program and a $15.4 million valuation allowance recorded against U.S. deferred tax assets. Our effective tax rate is impacted by valuation allowances recorded against loss carryforwards in the U.S. and certain other jurisdictions, foreign withholding taxes and changes in foreign currency exchange rates.

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Discontinued Operations

(dollars in thousands)

	Six Months Ended June 30,
	2018		2017		Change			% Change
Income from discontinued operations, net of tax	$	2,943	$	33,018	$	(30,075	)	(91	)%

Income from discontinued operations, net of tax, includes our Venezuelan subsidiary’s operations that were expropriated in June 2009, including compensation for expropriation, and our Belleli EPC business.

Income from discontinued operations, net of tax, during the six months ended June 30, 2018 compared to the six months ended June 30, 2017decreased primarily due to a $19.7 milliondecrease in income from our Venezuelan subsidiary and a $10.4 milliondecrease in income from Belleli EPC. The decrease in income from our Venezuelan subsidiary was primarily related to payments received from PDVSA Gas, S.A. (“PDVSA Gas”) in the prior year period associated with our Venezuelan subsidiary’s sale of its previously nationalized assets. During the six months ended June 30, 2017, we received an installment payment, including an annual charge, of $19.7 million. We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize payments received in the future as income from discontinued operations in the periods such payments are received. The decrease in income from Belleli EPC was primarily due to recoveries in the first quarter of 2017 resulting from our release of liquidated damages by a customer in exchange for us releasing them from certain extension of time claims and the obtainment of customer approved change orders. For further details on our discontinued operations, see Note 3 to the Financial Statements.

Liquidity and Capital Resources

Our unrestricted cash balance was $18.2 million at June 30, 2018, compared to $49.1 million at December 31, 2017. Working capital decreased to $130.2 million at June 30, 2018 from $134.0 million at December 31, 2017. The decrease in working capital was primarily due to an increase in accounts payable and a decrease in current assets held for sale, partially offset by increases in inventory and contract assets. The increases in accounts payable and inventory were primarily due to a nonmonetary purchase of finished goods inventory during the current year period as discussed in further detail in Note 4 to the Financial Statements and higher product sales activity in North America. The increase in contract assets was primarily driven by higher product sales activity in North America. The decrease in current assets held for sale was driven by the sale of our PEQ assets in June 2018 as discussed in further detail in Note 6 to the Financial Statements.

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

	Six Months Ended June 30,
	2018			2017
Net cash provided by (used in) continuing operations:
Operating activities	$	28,140		$	55,604
Investing activities	(86,862		)	(36,895		)
Financing activities	29,277			(30,643		)
Effect of exchange rate changes on cash and cash equivalents	(2,455		)	(42		)
Discontinued operations	947			21,662
Net change in cash and cash equivalents	$	(30,953	)	$	9,686

Operating Activities.  The decrease in net cash provided by operating activities during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily attributable to lower current year period decreases in working capital, partially offset by improved gross margins for our product sales segment. Working capital changes during the six months ended June 30, 2018 included an increase of $70.1 million in inventory and an increase of $21.6 million in contract assets. Working capital changes during the six months ended June 30, 2017 included an increase of $40.9 million in accounts receivable and a decrease of $31.8 million in costs and estimated earnings versus billings on uncompleted contracts.

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Investing Activities.  The increase in net cash used in investing activities during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily attributable to a $50.0 million increase in capital expenditures. The increase in capital expenditures was primarily driven by an increase in growth capital expenditures on contract operation services contracts in the Middle East and Africa region.

Financing Activities.  The increase in net cash provided by financing activities during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily attributable to an increase in net borrowings of $8.1 million on our long-term debt and a $44.7 milliondecrease in cash transferred to Archrock pursuant to the separation and distribution agreement. The transfers of cash to Archrock during the six months ended June 30, 2017 were triggered by our receipt of a payment from PDVSA Gas in respect of the sale of our and our joint ventures’ previously nationalized assets and our occurrence of a qualified capital raise.

Discontinued Operations.  The decrease in net cash provided by discontinued operations during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily attributable to $19.7 million in proceeds received from the sale of our Venezuelan subsidiary’s assets to PDVSA Gas during the six months ended June 30, 2017.

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

• growth capital expenditures, which are made to expand or to replace partially or fully depreciated assets or to expand the operating capacity or revenue generating capabilities of existing or new assets, whether through construction, acquisition or modification; and

• maintenance capital expenditures, which are made to maintain the existing operating capacity of our assets and related cash flows further extending the useful lives of the assets.

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

We generally invest funds necessary to manufacture contract operations fleet additions when our idle equipment cannot be reconfigured to economically fulfill a project’s requirements and the new equipment expenditure is expected to generate economic returns over its expected useful life that exceeds our targeted return on capital. We currently plan to spend approximately $200 million to $260 million in capital expenditures during 2018, including (1) approximately $170 million to $230 million on contract operations growth capital expenditures and (2) approximately $15 million to $30 million on equipment maintenance capital related to our contract operations business.

Long-Term Debt. We and our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”), are parties to an amended and restated credit agreement (the “Credit Agreement”) consisting of a $680.0 million revolving credit facility expiring in November 2020 and previously included a term loan facility.

During the six months ended June 30, 2018 and 2017, the average daily outstanding borrowings of long-term debt were $431.8 million and $363.5 million, respectively. The weighted average annual interest rate on outstanding borrowings under our revolving credit facility at June 30, 2018 was 3.9%.

As of June 30, 2018, we had $32.5 million in outstanding borrowings and $57.3 million in outstanding letters of credit under our revolving credit facility. At June 30, 2018, taking into account guarantees through letters of credit, we had undrawn capacity of $590.2 million under our revolving credit facility. Our Credit Agreement limits our senior secured leverage ratio (as defined in the Credit Agreement) on the last day of the fiscal quarter to no greater than 2.75 to 1.0. As a result of this limitation, $566.3 million of the $590.2 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of June 30, 2018.

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The Credit Agreement contains various covenants with which we, EESLP and our respective restricted subsidiaries must comply, including, but not limited to, limitations on the incurrence of indebtedness, investments, liens on assets, repurchasing equity, making distributions, transactions with affiliates, mergers, consolidations, dispositions of assets and other provisions customary in similar types of agreements. We are required to maintain, on a consolidated basis, a minimum interest coverage ratio (as defined in the Credit Agreement) of 2.25 to 1.00; a maximum total leverage ratio (as defined in the Credit Agreement) of 4.50 to 1.00; and a maximum senior secured leverage ratio (as defined in the Credit Agreement) of 2.75 to 1.00. As of June 30, 2018, we maintained a 9.0 to 1.0 interest coverage ratio, a 1.8 to 1.0 total leverage ratio and a 0.2 to 1.0 senior secured leverage ratio. As of June 30, 2018, we were in compliance with all financial covenants under the Credit Agreement.

In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. issued $375.0 million aggregate principal amount of 8.125% senior unsecured notes due 2025 (the “2017 Notes”). In April 2018, the 2017 Notes were exchanged for notes with substantially identical terms and registered under the Securities Act of 1933, as amended. The 2017 Notes were, and the exchange notes issued in April 2018 are, guaranteed by us on a senior unsecured basis. The net proceeds of $367.1 million from the 2017 Notes issuance were used to repay all of the borrowings outstanding under the term loan facility and revolving credit facility, and for general corporate purposes. Additionally, pursuant to the separation and distribution agreement from the Spin-off, EESLP used proceeds from the issuance of the 2017 Notes to pay a subsidiary of Archrock $25.0 million in satisfaction of EESLP’s obligation to pay that sum following the occurrence of a qualified capital raise. The transfer of cash to a subsidiary of Archrock was recognized as a reduction to additional paid-in capital in the second quarter of 2017.

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

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

Contingencies to Archrock. Pursuant to the separation and distribution agreement, EESLP contributed to a subsidiary of Archrock the right to receive payments based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our and our joint ventures’ previously nationalized assets promptly after such amounts are collected by our subsidiaries until Archrock’s subsidiary has received an aggregate amount of such payments up to the lesser of (i) $125.8 million, plus the aggregate amount of all reimbursable expenses incurred by Archrock and its subsidiaries in connection with recovering any PDVSA Gas default installment payments following the completion of the Spin-off or (ii) $150.0 million. Our balance sheets do not reflect this contingent liability to Archrock or the amount payable to us by PDVSA Gas as a receivable. Pursuant to the separation and distribution agreement, we transferred cash of $19.7 million to Archrock during the six months ended June 30, 2017. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. As of June 30, 2018, the remaining principal amounts due to us from PDVSA Gas in respect of the sale of our previously nationalized assets and our joint ventures’ previously nationalized assets were approximately $17 million and $4 million, respectively.

Unrestricted Cash. Of our $18.2 million unrestricted cash balance at June 30, 2018, $17.8 million was held by our non-U.S. subsidiaries. In the event of a distribution of earnings to the U.S. in the form of dividends, we may be subject to foreign withholding taxes. We do not believe that the cash held by our non-U.S. subsidiaries has an adverse impact on our liquidity because we expect that the cash we generate in the U.S., the available borrowing capacity under our revolving credit facility and the repayment of intercompany liabilities from our non-U.S. subsidiaries will be sufficient to fund the cash needs of our U.S. operations for the foreseeable future.

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

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Indemnifications. In conjunction with, and effective as of the completion of, the Spin-off, we entered into the separation and distribution agreement with Archrock, which governs, among other things, the treatment between Archrock and us of aspects relating to certain aspects of indemnification, insurance, confidentiality and cooperation. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Archrock’s business with Archrock. Pursuant to the agreement, we and Archrock will generally release the other party from all claims arising prior to the Spin-off that relate to the other party’s business, subject to certain exceptions. Additionally, in conjunction with, and effective as of the completion of, the Spin-off, we entered into the tax matters agreement with Archrock. Under the tax matters agreement and subject to certain exceptions, we are generally liable for, and indemnify Archrock against, taxes attributable to our business, and Archrock is generally liable for, and indemnify us against, all taxes attributable to its business. We are generally liable for, and indemnify Archrock against, 50% of certain taxes that are not clearly attributable to our business or Archrock’s business. Any payment made by us to Archrock, or by Archrock to us, is treated by all parties for tax purposes as a nontaxable distribution or capital contribution, respectively, made immediately prior to the Spin-off.

Non-GAAP Financial Measures

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

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

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net income	$	75		$	3,544		$	5,412		$	23,865
Income from discontinued operations, net of tax	(1,544		)	(374		)	(2,943		)	(33,018		)
Depreciation and amortization	30,184			26,348			61,213			51,100
Long-lived asset impairment	—			—			1,804			—
Restatement related charges (recoveries), net	(597		)	(1,158		)	24			1,014
Restructuring and other charges	1,422			310			1,422			2,618
Interest expense	6,883			12,382			14,102			19,469
(Gain) loss on currency exchange rate remeasurement of intercompany balances	3,451			1,436			4,081			(26		)
Loss on sale of business	1,714			—			1,714			111
Brazilian Tax Regularization Program penalties	—			1,476			—			1,476
Provision for (benefit from) income taxes	9,622			(640		)	15,114			11,250
EBITDA, as adjusted	$	51,210		$	43,324		$	101,943		$	77,859

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Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks associated with changes in foreign currency exchange rates due to our significant international operations. The net assets and liabilities of these operations are exposed to changes in currency exchange rates. These operations may also have net assets and liabilities not denominated in their functional currency, which exposes us to changes in foreign currency exchange rates that impact income. We currently do not have any derivative financial instruments outstanding to mitigate foreign currency risk. In the future, we may utilize derivative instruments to manage the risk of fluctuations in foreign currency exchange rates that could potentially impact our future earnings and forecasted cash flows. We recorded foreign currency losses of $5.7 million and $0.8 million in our statements of operations during the six months ended June 30, 2018 and 2017, respectively. Our foreign currency gains and losses are primarily due to exchange rate fluctuations related to monetary asset balances denominated in currencies other than the functional currency, including foreign currency exchange rate changes recorded on intercompany obligations. Our material exchange rate exposure relates to intercompany loans to subsidiaries whose functional currency are the Brazilian Real and Canadian Dollar, which loans carried U.S. dollars balances of $11.2 million and $32.8 million, respectively, as of June 30, 2018. Foreign currency losses during the six months ended June 30, 2018 included translation losses of $4.1 million related to the functional currency remeasurement of our foreign subsidiaries’ non-functional currency denominated intercompany obligations. Changes in exchange rates may create gains or losses in future periods to the extent we maintain net assets and liabilities not denominated in the functional currency.

Item 4.  Controls and Procedures

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

Management’s Evaluation of Disclosure Controls and Procedures

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

In connection with the preparation of this Quarterly Report on Form 10-Q, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2018. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed in reports that we file or submit under the Exchange Act is accumulated and communicated to management, and made known to our principal executive officer and principle financial officer, on a timely basis to ensure that it is recoded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

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

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

In the ordinary course of business, we are involved in various pending or threatened legal actions. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from any of these actions will not have a material adverse effect on our financial position, results of operations or cash flows. However, because of the inherent uncertainty of litigation and arbitration proceedings, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our financial position, results of operations or cash flows.

Contemporaneously with filing the Form 8-K on April 26, 2016, we self-reported the errors and possible irregularities at Belleli EPC to the SEC. Since then, we have been cooperating with the SEC in its investigation of this matter. The SEC’s investigation related to the circumstances giving rise to the restatement is continuing, and we are presently unable to predict the duration, scope or results or whether the SEC will commence any legal action.

Item 1A.  Risk Factors

There have been no material changes or updates to our risk factors that were previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2017.

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

(a)  Not applicable.

(b)  Not applicable.

(c)  The following table summarizes our repurchases of equity securities during the three months ended June 30, 2018:

Period	Total Number  of Shares  Repurchased(1)	Average Price Paid Per Unit		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares yet to be Purchased Under the Publicly Announced Plans or Programs
April 1, 2018 - April 30, 2018	944	$	28.56	N/A	N/A
May 1, 2018 - May 31, 2018	481	28.88		N/A	N/A
June 1, 2018 - June 30, 2018	—	—		N/A	N/A
Total	1,425	$	28.67	N/A	N/A

____________________

⁽¹⁾ Represents shares withheld to satisfy employees’ tax withholding obligations in connection with vesting of restricted stock awards during the period.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

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Item 6.  Exhibits

Exhibit No.	Description
2.1	Separation and Distribution Agreement, dated as of November 3, 2015, by and among Exterran Holdings, Inc., Exterran General Holdings LLC, Exterran Energy Solutions, L.P., Exterran Corporation, AROC Corp., EESLP LP LLC, AROC Services GP LLC, AROC Services LP LLC and Archrock Services, L.P., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
2.2	First Amendment to Separation and Distribution Agreement, dated as of December 15, 2015, by and among Archrock, Inc., Exterran General Holdings LLC, Exterran Energy Solutions, L.P., Exterran Corporation, AROC Corp., EESLP LP LLC, AROC Services GP LLC, AROC Services LP LLC and Archrock Services, L.P., incorporated by reference to Exhibit 2.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015
3.1	Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on From 8-K filed on April 30, 2018
31.1*	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

________________________________

*	Filed herewith.
**	Furnished, not filed.

56

SIGNATURES

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

	Exterran Corporation
Date: August 7, 2018	By:	/s/ DAVID A. BARTA
		David A. Barta
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

57

EX-31.1

Exhibit 31.1

Certification

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

I, Andrew J. Way, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: August 7, 2018

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

EX-31.2

Exhibit 31.2

Certification

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

I, David A. Barta, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: August 7, 2018

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

EX-32.1

Exhibit 32.1

Certification of CEO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Exterran Corporation (the “Company”) for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Andrew J. Way, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

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

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

/s/ ANDREW J. WAY
Name:	Andrew J. Way
Title:	President and Chief Executive Officer
Date: August 7, 2018

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

EX-32.2

Exhibit 32.2

Certification of CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Exterran Corporation (the “Company”) for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), David A. Barta, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

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

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

/s/ DAVID A. BARTA
Name:	David A. Barta
Title:	Senior Vice President and Chief Financial Officer
Date: August 7, 2018

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

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document and Entity Information
Entity Registrant Name	Exterran Corporation
Entity Central Index Key	0001635881
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		36,125,135
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 18,192	$ 49,145
Restricted cash	546	546
Accounts receivable, net of allowance of $5,829 and $5,388, respectively	261,914	266,052
Inventory, net (Note 4)	161,208	107,909
Costs and estimated earnings in excess of billings on uncompleted contracts	0	40,695
Contract assets (Note 2)	72,374	0
Other current assets	30,104	38,707
Current assets held for sale (Note 6)	0	15,761
Current assets associated with discontinued operations (Note 3)	15,029	23,751
Total current assets	559,367	542,566
Property, plant and equipment, net (Note 5)	838,055	822,279
Deferred income taxes	12,477	10,550
Intangible and other assets, net	100,958	76,980
Long-term assets held for sale (Note 6)	0	4,732
Long-term assets associated with discontinued operations (Note 3)	2,577	3,700
Total assets	1,513,434	1,460,807
Current liabilities:
Accounts payable, trade	190,613	148,744
Accrued liabilities	112,512	114,336
Deferred revenue	0	23,902
Billings on uncompleted contracts in excess of costs and estimated earnings	0	89,565
Contract liabilities (Note 2)	105,298	0
Current liabilities associated with discontinued operations (Note 3)	20,705	31,971
Total current liabilities	429,128	408,518
Long-term debt (Note 7)	401,119	368,472
Deferred income taxes	6,206	9,746
Long-term deferred revenue	0	92,485
Long-term contract liabilities (Note 2)	85,062	0
Other long-term liabilities	39,073	20,272
Long-term liabilities associated with discontinued operations (Note 3)	5,895	6,528
Total liabilities	966,483	906,021
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 50,000,000 shares authorized; zero issued	0	0
Common stock, $0.01 par value per share; 250,000,000 shares authorized; 36,740,016 and 36,193,930 shares issued, respectively	367	362
Additional paid-in capital	746,780	739,164
Accumulated deficit	(228,119)	(223,510)
Treasury stock — 618,919 and 453,178 common shares, at cost, respectively	(10,418)	(6,937)
Accumulated other comprehensive income	38,341	45,707
Total stockholders’ equity	546,951	554,786
Total liabilities and equity	$ 1,513,434	$ 1,460,807

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accounts receivable, allowance	$ 5,829	$ 5,388
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	36,740,016	36,193,930
Treasury stock, common shares	618,919	453,178

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues (Note 2):
Revenues	$ 343,471	$ 317,701	$ 693,854	$ 563,126
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	247,840	229,994	502,458	396,941
Selling, general and administrative	44,382	44,564	88,624	88,975
Depreciation and amortization	30,184	26,348	61,213	51,100
Long-lived asset impairment (Note 9)	0	0	1,804	0
Restatement related charges (recoveries), net (Note 10)	(597)	(1,158)	24	1,014
Restructuring and other charges (Note 11)	1,422	310	1,422	2,618
Interest expense	6,883	12,382	14,102	19,469
Other (income) expense, net	5,204	2,731	6,624	912
Total costs and expenses	335,318	315,171	676,271	561,029
Income before income taxes	8,153	2,530	17,583	2,097
Provision for (benefit from) income taxes (Note 12)	9,622	(640)	15,114	11,250
Income (loss) from continuing operations	(1,469)	3,170	2,469	(9,153)
Income from discontinued operations, net of tax (Note 3)	1,544	374	2,943	33,018
Net income	$ 75	$ 3,544	$ 5,412	$ 23,865
Basic net income per common share (Note 14):
Income (loss) from continuing operations per common share (in dollars per share)	$ (0.04)	$ 0.09	$ 0.07	$ (0.26)
Income from discontinued operations per common share (in dollars per share)	0.04	0.01	0.08	0.94
Net income per common share (in dollars per share)	0.00	0.10	0.15	0.68
Diluted net income per common share (Note 14):
Income (loss) from continuing operations per common share (in dollars per share)	(0.04)	0.09	0.07	(0.26)
Income from discontinued operations per common share (in dollars per share)	0.04	0.01	0.08	0.94
Net income per common share (in dollars per share)	$ 0.00	$ 0.10	$ 0.15	$ 0.68
Weighted average common shares outstanding used in net income per common share (Note 14):
Basic (in shares)	35,455	35,018	35,376	34,913
Diluted (in shares)	35,455	35,094	35,446	34,913
Contract Operations
Revenues (Note 2):
Revenues	$ 91,487	$ 95,341	$ 187,980	$ 187,386
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	32,372	34,691	67,757	65,489
Aftermarket services
Revenues (Note 2):
Revenues	32,267	24,244	58,638	46,768
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	23,706	17,278	42,603	33,890
Product Sales
Revenues (Note 2):
Revenues	219,717	198,116	447,236	328,972
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	$ 191,762	$ 178,025	$ 392,098	$ 297,562

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 75	$ 3,544	$ 5,412	$ 23,865
Other comprehensive loss:
Foreign currency translation adjustment	(8,123)	(2,669)	(7,366)	(1,026)
Comprehensive income (loss)	$ (8,048)	$ 875	$ (1,954)	$ 22,839

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock	Accumulated Other Comprehensive Income
Increase (Decrease) in Stockholders' Equity
Cumulative-effect adjustment from adoption of ASC Topic 606 (Note 1)	$ (10,021)			$ (10,021)
Beginning balance at Dec. 31, 2017	554,786	$ 362	$ 739,164	(223,510)	$ (6,937)	$ 45,707
Increase (Decrease) in Stockholders' Equity
Net income	5,412			5,412
Options exercised	563		563
Foreign currency translation adjustment	(7,366)					(7,366)
Treasury stock purchased	(3,481)				(3,481)
Stock-based compensation, net of forfeitures	7,058	5	7,053
Ending balance at Jun. 30, 2018	$ 546,951	$ 367	$ 746,780	$ (228,119)	$ (10,418)	$ 38,341

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 5,412	$ 23,865
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	61,213	51,100
Long-lived asset impairment	1,804	0
Amortization of deferred financing costs	1,342	3,375
Income from discontinued operations, net of tax	(2,943)	(33,018)
Provision for doubtful accounts	606	953
Gain on sale of property, plant and equipment	(348)	(1,245)
(Gain) loss on remeasurement of intercompany balances	4,081	(26)
Loss on sale of business	1,714	111
Stock-based compensation expense	7,058	8,561
Deferred income tax benefit	(3,366)	(7,081)
Changes in assets and liabilities:
Accounts receivable and notes	(3,875)	(40,893)
Inventory	(70,126)	6,001
Costs and estimated earnings versus billings on uncompleted contracts	0	31,841
Contract assets	(21,582)	0
Other current assets	9,325	(5,901)
Accounts payable and other liabilities	39,587	23,313
Deferred revenue	0	(5,338)
Contract liabilities	(3,746)	0
Other	1,984	(14)
Net cash provided by continuing operations	28,140	55,604
Net cash provided by discontinued operations	881	2,498
Net cash provided by operating activities	29,021	58,102
Cash flows from investing activities:
Capital expenditures	(94,234)	(44,216)
Proceeds from sale of property, plant and equipment	2,372	6,427
Proceeds from sale of business	5,000	894
Net cash used in continuing operations	(86,862)	(36,895)
Net cash provided by discontinued operations	66	19,164
Net cash used in investing activities	(86,796)	(17,731)
Cash flows from financing activities:
Proceeds from borrowings of debt	255,000	488,000
Repayments of debt	(222,758)	(463,877)
Cash transfer to Archrock, Inc. (Note 15)	0	(44,720)
Payment for debt issuance costs	(47)	(7,606)
Proceeds from stock options exercised	563	684
Purchases of treasury stock	(3,481)	(3,124)
Net cash provided by (used in) financing activities	29,277	(30,643)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,455)	(42)
Net increase (decrease) in cash, cash equivalents and restricted cash	(30,953)	9,686
Cash, cash equivalents and restricted cash at beginning of period	49,691	36,349
Cash, cash equivalents and restricted cash at end of period	$ 18,738	$ 46,035

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Description of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

Note 1 - Description of Business and Basis of Presentation

Description of Business

Exterran Corporation (together with its subsidiaries, “Exterran Corporation,” “our,” “we” or “us”), a Delaware corporation formed in March 2015, is a global systems and process company offering solutions in the oil, gas, water and power markets. We are a leader in natural gas processing and treatment and compression products and services, providing critical midstream infrastructure solutions to customers throughout the world. Outside the United States of America (“U.S.”), we are a leading provider of full-service natural gas contract compression, and a supplier of aftermarket parts and services. We provide these products and services to a global customer base consisting of companies engaged in all aspects of the oil and natural gas industry, including large integrated oil and natural gas companies, national oil and natural gas companies, independent oil and natural gas producers and oil and natural gas processors, gatherers and pipeline operators. We operate in three primary business lines: contract operations, aftermarket services and product sales.

On November 3, 2015, Archrock, Inc. (named Exterran Holdings, Inc. prior to November 3, 2015) (“Archrock”) completed the spin-off (the ‘‘Spin-off”) of its international contract operations, international aftermarket services and global fabrication businesses into an independent, publicly traded company named Exterran Corporation.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Exterran Corporation included herein have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished includes all adjustments of a normal recurring nature that are necessary to fairly present our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2017. That report contains a comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. Certain reclassifications resulting from the adoption of ASU 2016-18, Restricted Cash have been made to the statement of cash flows for the prior year period to conform to the current year presentation.

We refer to the condensed consolidated financial statements collectively as “financial statements,” and individually as “balance sheets,” “statements of operations,” “statements of comprehensive income,” “statements of stockholders’ equity” and “statements of cash flows” herein.

Recent Accounting Pronouncements

We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our financial statements.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. On January 1, 2018, we adopted this update using the modified retrospective approach to all contracts that were not completed as of January 1, 2018. As a result of this adoption, we recorded a net increase to the accumulated deficit of $10.0 million as of January 1, 2018 and an increase of $3.5 million in revenue for the six months ended June 30, 2018. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 2 for the required disclosures related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition.

As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the balance sheet as of January 1, 2018 (in thousands):

	Impact of Changes in Accounting Policies
	December 31, 2017			Adjustments			January 1, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	49,145		$	—		$	49,145
Restricted cash	546			—			546
Accounts receivable, net of allowance	266,052			(4,801		)	261,251
Inventory, net	107,909			(124		)	107,785
Costs and estimated earnings in excess of billings on uncompleted contracts	40,695			(40,695		)	—
Contract assets	—			50,824			50,824
Other current assets	38,707			(179		)	38,528
Current assets held for sale	15,761			—			15,761
Current assets associated with discontinued operations	23,751			—			23,751
Total current assets	542,566			5,025			547,591
Property, plant and equipment, net	822,279			(2,029		)	820,250
Deferred income taxes	10,550			404			10,954
Intangible and other assets, net	76,980			18,273			95,253
Long-term assets held for sale	4,732			—			4,732
Long-term assets associated with discontinued operations	3,700			—			3,700
Total assets	$	1,460,807		$	21,673		$	1,482,480
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, trade	$	148,744		$	—		$	148,744
Accrued liabilities	114,336			16,044			130,380
Deferred revenue	23,902			(23,902		)	—
Billings on uncompleted contracts in excess of costs and estimated earnings	89,565			(89,565		)	—
Contract liabilities	—			112,244			112,244
Current liabilities associated with discontinued operations	31,971			—			31,971
Total current liabilities	408,518			14,821			423,339
Long-term debt	368,472			—			368,472
Deferred income taxes	9,746			(1,908		)	7,838
Long-term deferred revenue	92,485			(92,485		)	—
Long-term contract liabilities	—			89,004			89,004
Other long-term liabilities	20,272			22,262			42,534
Long-term liabilities associated with discontinued operations	6,528			—			6,528
Total liabilities	906,021			31,694			937,715
Stockholders’ equity:
Preferred stock	—			—			—
Common stock	362			—			362
Additional paid-in capital	739,164			—			739,164
Accumulated deficit	(223,510		)	(10,021		)	(233,531		)
Treasury stock	(6,937		)	—			(6,937		)
Accumulated other comprehensive income	45,707			—			45,707
Total stockholders’ equity	554,786			(10,021		)	544,765
Total liabilities and stockholders’ equity	$	1,460,807		$	21,673		$	1,482,480

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. On January 1, 2018, we adopted this update. The adoption of this update did not have an impact on our statements of cash flows.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The update requires a reporting entity to recognize the tax expense from intra-entity asset transfers of assets other than inventory in the selling entity’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buying entity’s jurisdiction would also be recognized at the time of the transfer. On January 1, 2018, we adopted this update using a modified retrospective approach. The impact of this adoption was immaterial to our financial statements.

In November 2016, the FASB issued ASU 2016-18, Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. On January 1, 2018, we adopted this update retrospectively. As a result of this adoption, $0.7 million of restricted cash has been included in the cash and cash equivalent balances in the statement of cash flows for the prior year period. At December 31, 2017, the $49.7 million of cash, cash equivalents and restricted cash on our statement of cash flows is composed of $49.1 million of cash and cash equivalents and $0.5 million of restricted cash. At June 30, 2018, the $18.7 million of cash, cash equivalents and restricted cash on our statement of cash flows is composed of $18.2 million of cash and cash equivalents and $0.5 million of restricted cash. The impact of this adoption was immaterial to our financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718). This update provides guidance that clarifies that changes to the terms or conditions of a share-based payment award should be accounted for as modifications. On January 1, 2018, we adopted this update using a prospective approach. The impact of this adoption was immaterial to our financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Lessor accounting will be similar to the current model except for changes made to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance will be replaced with a new model applicable to both lessees and lessors. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. In preparation for our adoption of the new standard, we are analyzing and updating data previously collected to evaluate the impact the adoption will have on our financial statements. Additionally, we are assessing our use of practical expedients and the systems required to capture the increased reporting and disclosure requirements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements.

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Revenue

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenue

Note 2 - Revenue

On January 1, 2018, we adopted Topic 606 applying the modified retrospective method to all contracts that were not completed as of the date of adoption. For contracts that were modified before the effective date, we reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with a Topic 606 practical expedient. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported under the accounting standards in effect for the prior period. We recorded a net increase to accumulated deficit of $10.0 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606. Revenues for the three and six months ended June 30, 2018 increased by $2.6 million and $3.5 million, respectively, as a result of adopting Topic 606.

Disaggregation of Revenue

The following tables present disaggregated revenue by products and services lines and by geographical regions for the three and six months ended June 30, 2018 (in thousands):

Revenue by Products and Services	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
Contract Operations Segment:
Contract operations services (1)	$	91,487	$	187,980
Aftermarket Services Segment:
Operation and maintenance services (1)	$	14,722	$	28,597
Part sales (2)	11,077		20,210
Other services (1)	6,468		9,831
Total aftermarket services	$	32,267	$	58,638
Product Sales Segment:
Compression equipment (1)	$	129,436	$	260,995
Processing and treating equipment (1)	79,407		165,522
Production equipment (2)	6,782		14,780
Other product sales (1) (2)	4,092		5,939
Total product sales revenues	$	219,717	$	447,236
Total revenues	$	343,471	$	693,854

⁽¹⁾  Revenue recognized over time.

⁽²⁾  Revenue recognized at a point in time.

Revenue by Geographical Regions	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
North America	$	222,357	$	454,205
Latin America	72,638		140,589
Middle East and Africa	31,353		57,478
Asia Pacific	17,123		41,582
Total revenues	$	343,471	$	693,854

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

Revenue is recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. The following is a description of principal activities from which we generate revenue.

Contract Operations Segment

In our contract operations segment, we provide compression or processing and treating services through operating our natural gas compression equipment and crude oil and natural gas production and process equipment on behalf of our customers. Our services include the provision of personnel, equipment, tools, materials and supplies to meet our customers’ natural gas compression or oil and natural gas production and processing service needs. Activities we may perform in meeting our customers’ needs include engineering, designing, sourcing, constructing, installing, operating, servicing, repairing, maintaining and demobilizing equipment owned by us necessary to provide these services. Contract operation services represent a series of distinct monthly services that are substantially the same, with the same pattern of transfer to the customer. Because our customers benefit equally throughout the service period and our efforts in providing contract operation services are incurred relatively evenly over the period of performance, revenue is recognized over time using a time based measure as we provide our services to the customer. Our contracts generally require customers to pay a monthly service fee, which may contain variable consideration such as production or volume based fees, guaranteed run rates, performance bonuses or penalties, liquidated damages and standby fees. Variable considerations included in our contracts are typically resolved on a monthly basis, and as such, variable considerations included in our contracts are generally allocated to each distinct month in the series within the contract. In addition, our contracts may include billings prior to or after the performance of our contract operation services that are recognized as revenue on a straight-line basis over the contract term as we perform our services and the customer receives and consumes the benefits of the services we provide.

We generally enter into contracts with our contract operations customers with initial terms ranging between three to five years, and in some cases, in excess of 10 years. In many instances, we are able to renew those contracts prior to the expiration of the initial term and in other instances, we may sell the underlying assets to our customers pursuant to purchase options or negotiated sale. As of June 30, 2018, we had contract operation services contracts with unsatisfied performance obligations (commonly referred to as backlog) extending through the year 2028. The total aggregate transaction price allocated to the unsatisfied performance obligations as of June 30, 2018 was approximately $1.4 billion, of which approximately $139 million is expected to be recognized during the remainder of 2018 and approximately $260 million is expected to be recognized in 2019. Our contracts are subject to cancellation or modification at the election of the customer; however, due to the level of capital deployed by our customers on underlying projects, we have not been materially adversely affected by contract cancellations or modifications in the past.

Aftermarket Services Segment

In our aftermarket services business, we sell parts and components and provide operations, maintenance, overhaul, upgrade, commissioning and reconfiguration services to customers who own their own compression, production, processing, treating and related equipment. Our services range from routine maintenance services and parts sales to the full operation and maintenance of customer-owned equipment.

Operations and maintenance services: Operation and maintenance services include personnel to run the equipment and monitor the outputs of the equipment, along with performing preventative or scheduled maintenance on customer-owned equipment. Operation and maintenance services represent a series of distinct monthly services that are substantially the same, with the same pattern of transfer to the customer. Because our customers benefit equally throughout the service period and our efforts in providing operation and maintenance services are incurred relatively evenly over the period of performance, revenue is recognized over time using a time based measure as we provide our services to the customer. Our contracts generally require customers to pay a monthly service fee, which may contain variable consideration such as production or volume based fees and performance bonuses or penalties. Variable considerations included in our contracts are typically resolved on a monthly basis, and as such, variable considerations included in our contracts are generally allocated to each distinct month in the series within the contract. We generally enter into contracts with our operation and maintenance customers with initial terms ranging between two to four years, and in some cases, in excess of six years. In many instances, we are able to renew those contracts prior to the expiration of the initial term.

Parts sales: We offer our customers a full range of parts needed for the maintenance, repair and overhaul of oil and natural gas equipment, including natural gas compressors, industrial engines and production and processing equipment. We recognize revenue for parts sales at a point in time following the transfer of control of such parts to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contract. Our contracts require customers to pay a fixed fee upon shipment or delivery of the parts.

Other services: Within our aftermarket services segment we also provide a wide variety of other services such as overhaul, commissioning, upgrade and reconfiguration services on customer-owned equipment. Overhaul services provided to customers are intended to return the major components to a “like new” condition without significantly modifying the applications for which the units were designed. Commissioning services that we provide to our customers generally include supervision and the introduction of fluids or gases into the systems to test vibrations, pressures and temperatures to ensure that customer-owned equipment is operating properly and is ready for start-up. Upgrade and reconfiguration services modify the operating parameters of customer-owned equipment such that the equipment can be used in applications for which it previously was not suited. Generally, the wide array of other services provided within the aftermarket services segment are expected to be completed within a six month period. Individually these services are generally distinct within the context of the contract and are not highly interdependent or interrelated with other service offerings. We recognize revenue from these services over time based on the proportion of labor hours expended to the total labor hours expected to complete the contract performance obligation. Our contracts generally require customers to pay a service fee that is either fixed or on a time and materials basis, which may include progress billings.

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

Product Sales Segment

In our product sales segment, we design, engineer, manufacture, install and sell natural gas compression packages as well as equipment used in the production, treating and processing of crude oil and natural gas primarily to major and independent oil and natural gas producers as well as national oil and natural gas companies in the countries where we operate.

Compression equipment: We design, engineer, manufacture and sell skid-mounted natural gas compression equipment to meet standard or unique customer specifications. We recognize revenue from the sale of compression equipment over time based on the proportion of labor hours expended to the total labor hours expected to complete the contract performance obligation. Compression equipment manufactured for our customers are specifically designed and engineered to our customers’ specification and do not have an alternative use to us. Our contracts include a fixed fee and require our customers to make progress payments based on completion of contractual milestones during the life cycle of the manufacturing process. Our contracts provide us with an enforceable right to payment for work performed to date. Components of variable considerations exist in certain of our contracts and may include unpriced change orders, liquidated damages and performance bonuses or penalties. Typically, we expect the manufacturing of our compressor equipment to be completed within a three to 12 month period.

Processing and treating equipment: Processing and treating equipment sold to our customers consists of custom-engineered processing and treating plants, such as refrigeration, amine, cryogenic and natural gas processing plants. The manufacturing of processing and treating equipment generally represents a single performance obligation within the context of the contract. We recognize revenue from the sale of processing and treating equipment over time based on the proportion of labor hours expended to the total labor hours expected to complete the contract performance obligation. Processing and treating equipment manufactured for our customers are specifically designed and engineered to our customers’ specification and do not have an alternative use to us. Our contracts include a fixed fee and require our customers to make progress payments based on our completion of contractual milestones during the life cycle of the manufacturing process. Our contracts provide us with an enforceable right to payment for work performed to date. Components of variable considerations exist in certain of our contracts and may include unpriced change orders, liquidated damages and performance bonuses or penalties. Typically, we expect the manufacturing of our processing and treating equipment to be completed within a six to 24 month period.

Production equipment: In June 2018, we completed the sale of our North America production equipment assets (“PEQ assets”), which included $12.0 million in unsatisfied performance obligations. See Note 6 for further details on the sale of our PEQ assets. We previously manufactured standard production equipment used for processing wellhead production from onshore or shallow-water offshore platform production. The manufacturing of production equipment generally represented a single performance obligation within the context of the contract. We recognized revenue from the sale of production equipment at a point in time following the transfer of control of the equipment to the customer, which typically occurred upon completion of the manufactured equipment, depending on the terms of the underlying contract. Our contracts generally required customers to pay a fixed fee upon completion.

Other product sales: Within our product sales segment we also provide for the sale of standard and custom water treatment equipment and floating production storage and offloading equipment and supervisor site work services. We recognize revenue from the sale of standard water treatment equipment at a point in time following the transfer of control of such equipment to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contract. We recognize revenue from the sale of custom water treatment equipment over time based on the proportion of costs expended to the total costs expected to complete the contract performance obligation. We recognize revenue from the sale of custom water treatment equipment and floating production storage and offloading equipment and supervisor site work services over time based on the proportion of labor costs expended to the total labor costs expected to complete the contract performance obligation.

Product sales contracts that include engineering, design, project management, procurement, construction and installation services necessary to incorporate our products into production, processing and compression facilities are treated as a single performance obligation due to the services that significantly integrate each piece of equipment into the combined output contracted by the customer.

We provide assurance-type warranties on certain equipment in our product sales contracts. These warranties generally do not constitute a separate performance obligation. Product warranty reserves are established in the same period that revenue from the sale of the related products is recognized, or in the period that a specific issue arises as to the functionality of a product. The determination of such reserves requires that we make estimates of expected costs to repair or to replace the products under warranty. The amounts of the reserves are based on established terms and our best estimate of the amounts necessary to settle future and existing claims on product sales as of the balance sheet date. If actual repair and replacement costs differ significantly from estimates, adjustments to recognize additional cost of sales may be required in future periods.

As of June 30, 2018, the total aggregate transaction price allocated to the unsatisfied performance obligations for product sales contracts was approximately $635 million, of which approximately $379 million is expected to be recognized during the remainder of 2018 and approximately $256 million is expected to be recognized in 2019. Our contracts are subject to cancellation or modification at the election of the customer; however, due to our enforceable right to payment for work performed, we have not been materially adversely affected by contract cancellations or modifications in the past.

Significant Estimates

The recognition of revenue over time based on the proportion of labor hours expended to the total labor hours expected to complete depends largely on our ability to make reasonable dependable estimates related to the extent of progress toward completion of the contract, contract revenues and contract costs. Recognized revenues and profits are subject to revisions as the contract progresses to completion. Revisions in profit estimates are charged to income in the period in which the facts that give rise to the revision become known using the cumulative catch-up method. Due to the nature of some of our contracts, developing the estimates of costs often requires significant judgment. To calculate the proportion of labor hours expended to the total labor hours expected to complete the contract performance obligation, management uses significant judgment to estimate the number of total hours and profit expected for each project.

Variable Consideration

The nature of our contracts gives rise to several types of variable consideration. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Additionally, we include in our contract estimates additional revenue for unapproved change orders or claims against customers when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and historical, current and forecasted information that is reasonably available to us.

Contracts with Multiple Performance Obligations

Some of our contracts have multiple performance obligations. For instance, some of our product sales contracts include commissioning services or the supply of spare parts. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service.

Contract Assets and Contract Liabilities

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

	As of June 30, 2018		As of January 1, 2018
Accounts receivables, net	$	261,914	$	261,251
Contract assets and contract liabilities:
Current contract assets	72,374		50,824
Long-term contract assets	10,766		11,835
Current contract liabilities	105,298		112,244
Long-term contract liabilities	85,062		89,004

Accounts receivables are recorded when the right to consideration becomes unconditional. Our contract assets include amounts related to revenue that has been recognized in advance of billing the customer. The contract assets in our balance sheets include costs in excess of billings and unbilled receivables. When we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of the contract, we record a contract liability. Our contract liabilities include payments received in advance of performance under the contract. The contract liabilities in our balance sheets include billings in excess of costs and deferred revenue. Billings in excess of costs primarily relate to billings that have not been recognized as revenue on product sales jobs where the transfer of control to the customer occurs over time. Deferred revenue is primarily comprised of upfront billings on contract operations jobs and billings related to product sales jobs that have not begun where revenue is recognized over time. Upfront payments received from customers on contract operations jobs are generally deferred and amortized over the contract term as we perform our services and the customer receives and consumes the benefits of the services we provide. Contract assets and liabilities are reported in our balance sheets on a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

During the six months ended June 30, 2018, revenue recognized from contract operations services included $10.4 million of revenue deferred in previous periods. Revenue recognized during the six months ended June 30, 2018 from product sales performance obligations partially satisfied in previous periods was $360.5 million, of which $78.4 million was included in billings in excess of costs at the beginning of the period. Additionally, during the six months ended June 30, 2018, we recognized $4.1 million in revenue from contract operations services performance obligations that were satisfied in a previous period. The increase in our contract assets during the six months ended June 30, 2018 was primarily driven by progression of product sales projects and the timing of milestone billings.

Costs to Fulfill a Contract

We capitalize costs incurred to fulfill our revenue contracts that (i) relate directly to the contract (ii) are expected to generate resources that will be used to satisfy the performance obligation under the contract and (iii) are expected to be recovered through revenue generated under the contract. As of June 30, 2018, we had capitalized fulfillment costs of $8.2 million related to contractual obligations incurred at the completion of the commissioning phase and prior to providing services on contracts within our contract operations segment. Contract fulfillment costs are expensed to cost of sales as we satisfy our performance obligations by transferring contract operation services to the customer. During the three and six months ended June 30, 2018, we recorded amortization expense for capitalized fulfillment costs of $0.5 million and $1.1 million, respectively. Capitalized fulfillment costs are included in intangible and other assets, net, in the balance sheets.

Costs to Obtain a Contract

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain commissions paid to internal sales representatives and third party agents meet the requirements to be capitalized. The amount capitalized for incremental costs to obtain contracts as of June 30, 2018 was $6.6 million. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract. Capitalized costs to obtain a contract are included in intangible and other assets, net, in the balance sheets and are amortized to selling, general and administrative expense over the expected period of benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. During the three and six months ended June 30, 2018, we recorded amortization expense for capitalized costs to obtain a contract of $0.4 million and $0.8 million, respectively.

Practical Expedients and Exemptions

We have elected the following practical expedients:

• We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less.

• We treat shipping and handling activities that occur after the transfer of control as costs to fulfill a contract rather than a separate performance obligation.

• We record taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from our customers on a net basis, and thus, such taxes are excluded from the measurement of a performance obligation’s transaction price.

• We expense sales commissions as incurred when we expect that the amortization period of such costs will be one year or less.

Impact of New Revenue Recognition Guidance on Financial Statement Line Items

The following tables summarize the impacts of the adoption of the new revenue recognition guidance on our balance sheet as of June 30, 2018 and statements of operations and cash flows for the applicable periods during the three and six months ended June 30, 2018 (in thousands):

	June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
ASSETS
Accounts receivable, net of allowance	$	261,914		$	221		$	262,135
Inventory, net	161,208			1,183			162,391
Contract assets	72,374			(17,311		)	55,063
Other current assets	30,104			9,160			39,264
Property, plant and equipment, net	838,055			1,942			839,997
Deferred income taxes	12,477			(1,571		)	10,906
Intangible and other assets, net	100,958			(17,592		)	83,366
Total assets	1,513,434			(23,968		)	1,489,466
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued liabilities	$	112,512		$	(15,554	)	$	96,958
Contract liabilities	105,298			1,625			106,923
Deferred income taxes	6,206			(3,764		)	2,442
Long-term contract liabilities	85,062			3,476			88,538
Other long-term liabilities	39,073			(18,076		)	20,997
Total liabilities	966,483			(32,293		)	934,190
Accumulated deficit	(228,119		)	8,325			(219,794		)
Total stockholders’ equity	546,951			8,325			555,276
Total liabilities and stockholders’ equity	1,513,434			(23,968		)	1,489,466

The adoption of the new revenue recognition guidance resulted in increases in total assets and liabilities of $24.0 million and $32.3 million, respectively. This was primarily due to capitalized contract fulfillment and obtainment costs and related liabilities recorded associated with contracts within our contract operations segment.

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606			As Reported		Adjustments			Balances Without Adoption of Topic 606
Revenues:
Contract operations	$	91,487		$	(690	)	$	90,797		$	187,980	$	(1,459	)	$	186,521
Aftermarket services	32,267			(1,909		)	30,358			58,638		(2,079		)	56,559
Cost of sales (excluding depreciation and amortization expense):
Contract operations	32,372			(501		)	31,871			67,757		(1,101		)	66,656
Aftermarket services	23,706			(1,363		)	22,343			42,603		(1,406		)	41,197
Selling, general and administrative	44,382			6,627			51,009			88,624		6,627			95,251
Depreciation and amortization	30,184			(659		)	29,525			61,213		(1,368		)	59,845
Income before income taxes	8,153			(6,703		)	1,450			17,583		(6,290		)	11,293
Provision for income taxes	9,622			(5,334		)	4,288			15,114		(4,594		)	10,520
Income (loss) from continuing operations	(1,469		)	(1,369		)	(2,838		)	2,469		(1,696		)	773
Net income (loss)	75			(1,369		)	(1,294		)	5,412		(1,696		)	3,716
Basic net income (loss) per common share	$	—		$	(0.04	)	$	(0.04	)	$	0.15	$	(0.05	)	$	0.10
Diluted net income (loss) per common share	—			(0.04		)	(0.04		)	0.15		(0.05		)	0.10

The adoption of the new revenue recognition guidance resulted in an increase in net income of $1.4 million and $1.7 million for the three and six months ended June 30, 2018, respectively. Most notably, costs to obtain a contract during the three and six months ended June 30, 2018 would have resulted in an increase in selling, general and administrative expense under previous accounting standards.

	Six Months Ended June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
Cash flows from operating activities:
Net income	$	5,412		$	(1,696	)	$	3,716
Depreciation and amortization	61,213			(1,368		)	59,845
Deferred income tax benefit	(3,366		)	(4,594		)	(7,960		)
Changes in assets and liabilities:
Inventory	(70,126		)	(1,059		)	(71,185		)
Contract assets	(21,582		)	6,576			(15,006		)
Other current assets	9,325			(4,401		)	4,924
Accounts payable and other liabilities	39,587			4,887			44,474
Contract liabilities	(3,746		)	171			(3,575		)
Other	1,984			1,484			3,468
Net cash provided by continuing operations	28,140			—			28,140

The adoption of the new revenue recognition guidance resulted in offsetting shifts in cash flows within cash flows from operating activities and did not have an impact on our total cash flows from operations.

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Discontinued Operations

6 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3 - Discontinued Operations

In August 2012, our Venezuelan subsidiary sold its previously nationalized assets to PDVSA Gas, S.A. (“PDVSA Gas”) for a purchase price of approximately $441.7 million. We received an installment payment, including an annual charge, totaling $19.7 million during the six months ended June 30, 2017. As of June 30, 2018, the remaining principal amount due to us was approximately $17 million. We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize payments received in the future as income from discontinued operations in the periods such payments are received. The proceeds from the sale of the assets are not subject to Venezuelan national taxes due to an exemption allowed under the Venezuelan Reserve Law applicable to expropriation settlements. In addition, and in connection with the sale, we and the Venezuelan government agreed to waive rights to assert certain claims against each other.

In accordance with the separation and distribution agreement from the Spin-off, a subsidiary of Archrock has the right to receive payments from our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”), based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our previously nationalized assets promptly after such amounts are collected by our subsidiaries. Pursuant to the separation and distribution agreement, we transferred cash of $19.7 million to Archrock during the six months ended June 30, 2017. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. See Note 15 for further discussion related to our contingent liability to Archrock.

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

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

	Three Months Ended June 30, 2018									Three Months Ended June 30, 2017
	Venezuela			Belleli EPC			Total			Venezuela			Belleli EPC			Total
Revenue	$	—		$	2,915		$	2,915		$	—		$	12,885		$	12,885
Cost of sales (excluding depreciation and amortization expense)	—			2,808			2,808			—			8,064			8,064
Selling, general and administrative	29			127			156			32			1,520			1,552
Depreciation and amortization	—			52			52			—			3,099			3,099
Other (income) expense, net	—			(1,689		)	(1,689		)	—			970			970
Provision for (benefit from) income taxes	—			44			44			—			(1,174		)	(1,174		)
Income (loss) from discontinued operations, net of tax	$	(29	)	$	1,573		$	1,544		$	(32	)	$	406		$	374

	Six Months Ended June 30, 2018									Six Months Ended June 30, 2017
	Venezuela			Belleli EPC			Total			Venezuela			Belleli EPC			Total
Revenue	$	—		$	7,882		$	7,882		$	—		$	48,159		$	48,159
Cost of sales (excluding depreciation and amortization expense)	—			5,211			5,211			—			26,063			26,063
Selling, general and administrative	61			187			248			65			2,506			2,571
Depreciation and amortization	—			480			480			—			4,227			4,227
Recovery attributable to expropriation	—			—			—			(16,514		)	—			(16,514		)
Restructuring and other charges	—			—			—			—			(439		)	(439		)
Other (income) expense, net	1			(1,090		)	(1,089		)	(3,157		)	455			(2,702		)
Provision for income taxes	—			89			89			—			1,935			1,935
Income (loss) from discontinued operations, net of tax	$	(62	)	$	3,005		$	2,943		$	19,606		$	13,412		$	33,018

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

	June 30, 2018						December 31, 2017
	Venezuela		Belleli EPC		Total		Venezuela		Belleli EPC		Total
Cash	$	1	$	—	$	1	$	3	$	—	$	3
Accounts receivable	—		6,022		6,022		—		14,770		14,770
Costs and estimated earnings in excess of billings on uncompleted contracts	—		8,549		8,549		—		7,786		7,786
Other current assets	3		454		457		2		1,190		1,192
Total current assets associated with discontinued operations	4		15,025		15,029		5		23,746		23,751
Property, plant and equipment, net	—		91		91		—		1,054		1,054
Intangible and other assets, net	—		2,486		2,486		—		2,646		2,646
Total assets associated with discontinued operations	$	4	$	17,602	$	17,606	$	5	$	27,446	$	27,451
Accounts payable	$	—	$	4,046	$	4,046	$	—	$	9,253	$	9,253
Accrued liabilities	63		11,726		11,789		59		15,617		15,676
Billings on uncompleted contracts in excess of costs and estimated earnings	—		4,870		4,870		—		7,042		7,042
Total current liabilities associated with discontinued operations	63		20,642		20,705		59		31,912		31,971
Other long-term liabilities	—		5,895		5,895		1		6,527		6,528
Total liabilities associated with discontinued operations	$	63	$	26,537	$	26,600	$	60	$	38,439	$	38,499

Note 6 - Sale of PEQ Assets

In the fourth quarter of 2017, we classified certain current and long-term assets primarily related to inventory and property, plant and equipment, net, within our product sales business as assets held for sale in our balance sheets. In April 2018, we entered into a definitive agreement for the sale of these assets to Titan Production Equipment Acquisition, LLC, an affiliate of Castle Harlan, Inc. During the six months ended June 30, 2018, we recorded an additional impairment of $1.8 million to reduce these assets to their approximate fair values based on the expected net proceeds. The impairment charges are reflected in long-lived asset impairment in our statements of operations.

In June 2018, we completed the sale of our PEQ assets. The sale of our PEQ assets resulted in a loss of $1.7 million during the three and six months ended June 30, 2018, which is reflected in other (income), expense, net, in our statements of operations.

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Inventory, net

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Inventory, net

Note 4 - Inventory, net

Inventory, net of reserves, consisted of the following amounts (in thousands):

	June 30, 2018		December 31, 2017
Parts and supplies	$	82,744	$	79,803
Work in progress	54,906		21,853
Finished goods (1)	23,558		6,253
Inventory, net	$	161,208	$	107,909

⁽¹⁾  The increase in finished goods inventory during the six months ended June 30, 2018 was primarily due to a nonmonetary agreement that we entered into with an existing customer to receive an idle processing and treating plant from the customer in exchange for an identical processing and treating plant to be manufactured by us. We recorded the finished goods inventory received and our corresponding liability to the customer at fair value based on the estimated resale price of the processing and treating plant received. The liability resulting from this transaction is included within accounts payable, trade, in our balance sheet and will be extinguished upon our delivery of the replacement processing and treating plant to the customer.

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Property, Plant and Equipment, net

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, net

Note 5 - Property, Plant and Equipment, net

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

	June 30, 2018			December 31, 2017
Compression equipment, facilities and other fleet assets (1)	$	1,621,706		$	1,577,052
Land and buildings	98,516			96,463
Transportation and shop equipment	81,968			82,240
Other	94,823			90,395
	1,897,013			1,846,150
Accumulated depreciation	(1,058,958		)	(1,023,871		)
Property, plant and equipment, net	$	838,055		$	822,279

⁽¹⁾  In the fourth quarter of 2017, we evaluated the estimated useful lives and salvage values of our property, plant and equipment. As a result of this evaluation, we changed the useful lives and salvage values for our compression equipment from a maximum useful life of 30 years to 23 years and a maximum salvage value of 20% to 15% based on expected future use. During the three and six months ended June 30, 2018, we recorded increases in depreciation expense of $2.0 million and $5.1 million, respectively, as a result of these changes in useful lives and salvage values which impacted our diluted net income per share by $0.06 and $0.14, respectively.

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Sale of PEQ Assets

6 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Sale of PEQ Assets

Note 3 - Discontinued Operations

In August 2012, our Venezuelan subsidiary sold its previously nationalized assets to PDVSA Gas, S.A. (“PDVSA Gas”) for a purchase price of approximately $441.7 million. We received an installment payment, including an annual charge, totaling $19.7 million during the six months ended June 30, 2017. As of June 30, 2018, the remaining principal amount due to us was approximately $17 million. We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize payments received in the future as income from discontinued operations in the periods such payments are received. The proceeds from the sale of the assets are not subject to Venezuelan national taxes due to an exemption allowed under the Venezuelan Reserve Law applicable to expropriation settlements. In addition, and in connection with the sale, we and the Venezuelan government agreed to waive rights to assert certain claims against each other.

In accordance with the separation and distribution agreement from the Spin-off, a subsidiary of Archrock has the right to receive payments from our wholly owned subsidiary, Exterran Energy Solutions, L.P. (“EESLP”), based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our previously nationalized assets promptly after such amounts are collected by our subsidiaries. Pursuant to the separation and distribution agreement, we transferred cash of $19.7 million to Archrock during the six months ended June 30, 2017. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. See Note 15 for further discussion related to our contingent liability to Archrock.

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

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

	Three Months Ended June 30, 2018									Three Months Ended June 30, 2017
	Venezuela			Belleli EPC			Total			Venezuela			Belleli EPC			Total
Revenue	$	—		$	2,915		$	2,915		$	—		$	12,885		$	12,885
Cost of sales (excluding depreciation and amortization expense)	—			2,808			2,808			—			8,064			8,064
Selling, general and administrative	29			127			156			32			1,520			1,552
Depreciation and amortization	—			52			52			—			3,099			3,099
Other (income) expense, net	—			(1,689		)	(1,689		)	—			970			970
Provision for (benefit from) income taxes	—			44			44			—			(1,174		)	(1,174		)
Income (loss) from discontinued operations, net of tax	$	(29	)	$	1,573		$	1,544		$	(32	)	$	406		$	374

	Six Months Ended June 30, 2018									Six Months Ended June 30, 2017
	Venezuela			Belleli EPC			Total			Venezuela			Belleli EPC			Total
Revenue	$	—		$	7,882		$	7,882		$	—		$	48,159		$	48,159
Cost of sales (excluding depreciation and amortization expense)	—			5,211			5,211			—			26,063			26,063
Selling, general and administrative	61			187			248			65			2,506			2,571
Depreciation and amortization	—			480			480			—			4,227			4,227
Recovery attributable to expropriation	—			—			—			(16,514		)	—			(16,514		)
Restructuring and other charges	—			—			—			—			(439		)	(439		)
Other (income) expense, net	1			(1,090		)	(1,089		)	(3,157		)	455			(2,702		)
Provision for income taxes	—			89			89			—			1,935			1,935
Income (loss) from discontinued operations, net of tax	$	(62	)	$	3,005		$	2,943		$	19,606		$	13,412		$	33,018

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

	June 30, 2018						December 31, 2017
	Venezuela		Belleli EPC		Total		Venezuela		Belleli EPC		Total
Cash	$	1	$	—	$	1	$	3	$	—	$	3
Accounts receivable	—		6,022		6,022		—		14,770		14,770
Costs and estimated earnings in excess of billings on uncompleted contracts	—		8,549		8,549		—		7,786		7,786
Other current assets	3		454		457		2		1,190		1,192
Total current assets associated with discontinued operations	4		15,025		15,029		5		23,746		23,751
Property, plant and equipment, net	—		91		91		—		1,054		1,054
Intangible and other assets, net	—		2,486		2,486		—		2,646		2,646
Total assets associated with discontinued operations	$	4	$	17,602	$	17,606	$	5	$	27,446	$	27,451
Accounts payable	$	—	$	4,046	$	4,046	$	—	$	9,253	$	9,253
Accrued liabilities	63		11,726		11,789		59		15,617		15,676
Billings on uncompleted contracts in excess of costs and estimated earnings	—		4,870		4,870		—		7,042		7,042
Total current liabilities associated with discontinued operations	63		20,642		20,705		59		31,912		31,971
Other long-term liabilities	—		5,895		5,895		1		6,527		6,528
Total liabilities associated with discontinued operations	$	63	$	26,537	$	26,600	$	60	$	38,439	$	38,499

Note 6 - Sale of PEQ Assets

In the fourth quarter of 2017, we classified certain current and long-term assets primarily related to inventory and property, plant and equipment, net, within our product sales business as assets held for sale in our balance sheets. In April 2018, we entered into a definitive agreement for the sale of these assets to Titan Production Equipment Acquisition, LLC, an affiliate of Castle Harlan, Inc. During the six months ended June 30, 2018, we recorded an additional impairment of $1.8 million to reduce these assets to their approximate fair values based on the expected net proceeds. The impairment charges are reflected in long-lived asset impairment in our statements of operations.

In June 2018, we completed the sale of our PEQ assets. The sale of our PEQ assets resulted in a loss of $1.7 million during the three and six months ended June 30, 2018, which is reflected in other (income), expense, net, in our statements of operations.

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Note 7 - Debt

Debt consisted of the following (in thousands):

	June 30, 2018			December 31, 2017
Revolving credit facility due November 2020	$	32,500		$	—
8.125% senior notes due May 2025	375,000			375,000
Other debt	912			1,171
Unamortized deferred financing costs of 8.125% senior notes	(6,844		)	(7,250		)
Total debt	401,568			368,921
Less: Amounts due within one year (1)	(449		)	(449		)
Long-term debt	$	401,119		$	368,472

⁽¹⁾    Short-term debt and the current portion of long-term debt are included in accrued liabilities in our balance sheets.

Revolving Credit Facility

We and our wholly owned subsidiary, EESLP, are parties to an amended and restated credit agreement (the “Credit Agreement”) consisting of a $680.0 million revolving credit facility expiring in November 2020 and previously included a term loan facility. In April 2017, we paid the remaining principal amount of $232.8 million due under the term loan facility with proceeds from the 2017 Notes (as defined below) issuance. As a result of the repayment of the term loan facility, we expensed $1.7 million of unamortized deferred financing costs in the second quarter of 2017, which is reflected in interest expense in our statements of operations.

As of June 30, 2018, we had $32.5 million in outstanding borrowings and $57.3 million in outstanding letters of credit under our revolving credit facility. At June 30, 2018, taking into account guarantees through letters of credit, we had undrawn capacity of $590.2 million under our revolving credit facility. Our Credit Agreement limits our senior secured leverage ratio (as defined in the Credit Agreement) on the last day of the fiscal quarter to no greater than 2.75 to 1.0. As a result of this limitation, $566.3 million of the $590.2 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of June 30, 2018.

8.125% Senior Notes Due May 2025

In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. issued $375.0 million aggregate principal amount of 8.125% senior unsecured notes due 2025 (the “2017 Notes”). The 2017 Notes are guaranteed by us on a senior unsecured basis. Pursuant to the separation and distribution agreement from the Spin-off, EESLP used proceeds from the issuance of the 2017 Notes to pay a subsidiary of Archrock $25.0 million in satisfaction of EESLP’s obligation to pay that sum following the occurrence of a qualified capital raise. The transfer of cash to Archrock’s subsidiary was recognized as a reduction to additional paid-in capital in the second quarter of 2017.

In connection with the issuance of the 2017 Notes, we incurred transaction costs of $8.1 million related to the issuance of the 2017 Notes. These costs are presented as a direct deduction from the carrying value of the 2017 Notes and are being amortized over the term of the 2017 Notes.

In April 2018, the 2017 Notes were exchanged for notes with substantially identical terms and registered under the Securities Act of 1933, as amended.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8 - Fair Value Measurements

The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three categories:

• Level 1 — Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement.

• Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or prices vary substantially over time or among brokered market makers.

• Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information.

Nonrecurring Fair Value Measurements

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2018, with pricing levels as of the date of valuation (in thousands):

	Six Months Ended June 30, 2018
	(Level 1)		(Level 2)		(Level 3)
Impaired assets—assets held for sale (1)	$	—	$	—	$	21,026
Long-term note receivable (2)	—		—		14,573

⁽¹⁾  Our estimate of the fair value of the impaired PEQ assets, which were classified as assets held for sale as of March 31, 2018, was based on the expected net proceeds from the sale of the assets.

⁽²⁾  Our estimate of the fair value of a note receivable was discounted based on a settlement period of eight years and a discount rate of 5.2%.

Financial Instruments

Our financial instruments consist of cash, restricted cash, receivables, payables and debt. At June 30, 2018 and December 31, 2017, the estimated fair values of cash, restricted cash, receivables and payables approximated their carrying amounts as reflected in our balance sheets due to the short-term nature of these financial instruments.

The fair value of the 2017 Notes was estimated based on model derived calculations using market yields observed in active markets, which are Level 2 inputs. As of June 30, 2018 and December 31, 2017, the carrying amount of the 2017 Notes, excluding unamortized deferred financing costs, of $375.0 million was estimated to have a fair value of $399.0 million and $404.0 million, respectively. Due to the variable rate nature of our revolving credit facility, the carrying value as of June 30, 2018 approximated the fair value as the rate was comparable to the then-current market rate at which debt with similar terms could have been obtained.

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Long-Lived Asset Impairment

6 Months Ended

Jun. 30, 2018

Asset Impairment Charges [Abstract]

Long-Lived Asset Impairment

Note 9 - Long-Lived Asset Impairment

We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressor units from our active fleet, indicate that the carrying amount of an asset may not be recoverable.

In the fourth quarter of 2017, we classified our PEQ assets primarily related to inventory and property, plant and equipment, net, within our product sales business as assets held for sale in our balance sheets. As described in Note 6, in June 2018, we completed the sale of our PEQ assets. During the six months ended June 30, 2018, we recorded an impairment of $1.8 million to reduce these assets to their approximate fair values based on the expected net proceeds.

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Restatement Related Charges (Recoveries), net

6 Months Ended

Jun. 30, 2018

Restatement Charges [Abstract]

Restatement Related Charges

Note 10 - Restatement Related Charges (Recoveries), net

During the first quarter of 2016, our senior management identified errors relating to the application of percentage-of-completion accounting principles to specific Belleli EPC product sales projects. We incurred restatement related charges of $1.6 million during the three months ended June 30,2017, and $0.6 million and $3.8 million during the six months ended June 30, 2018 and 2017, respectively. The costs incurred were external costs associated with an SEC investigation and remediation activities related to the restatement of our financial statements. During the three and six months ended June 30, 2018 and 2017, we recorded recoveries from Archrock pursuant to the separation and distribution agreement of $0.6 million and $2.8 million, respectively, for previously incurred restatement related costs. We may incur additional cash expenditures related to external legal counsel costs associated with an ongoing SEC investigation surrounding the restatement of our financial statements, of which a portion may be recoverable from Archrock.

The following table summarizes the changes to our accrued liability balance related to restatement charges, net, for the six months ended June 30, 2017 and 2018 (in thousands):

	Restatement Related Charges
Beginning balance at January 1, 2017	$	2,212
Additions for costs expensed, net	1,014
Reductions for payments, net	(1,472		)
Ending balance at June 30, 2017	$	1,754
Beginning balance at January 1, 2018	$	579
Additions for costs expensed, net	24
Reductions for payments, net	(367		)
Ending balance at June 30, 2018	$	236

The following table summarizes the components of charges included in restatement related charges (recoveries), net, in our statements of operations for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
External accounting costs	$	—		$	108		$	—		$	754
External legal costs	—			1,449			533			2,692
Other	18			86			106			369
Recoveries from Archrock	(615		)	(2,801		)	(615		)	(2,801		)
Total restatement related charges (recoveries), net	$	(597	)	$	(1,158	)	$	24		$	1,014

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Restructuring and Other Charges

6 Months Ended

Jun. 30, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Other Charges

Note 11 - Restructuring and Other Charges

In the second quarter of 2018, we initiated a relocation plan in the North America region to better align our contract operations business with our customers. As a result of this plan, during the three and six months ended June 30, 2018, we incurred restructuring and other charges of $1.4 million primarily related to employee termination benefits. As of June 30, 2018, the accrued liability balance related to this plan was $1.0 million. The charges incurred in conjunction with this relocation plan are included in restructuring and other charges in our statements of operations. We currently estimate that we will incur additional charges with respect to this relocation plan of approximately $1.5 million. We expect the majority of the estimated additional charges will result in cash expenditures.

In connection with the Spin-off, we incurred restructuring and other charges of $0.3 million during the six months ended June 30, 2017 primarily related to retention awards to certain employees. During the three months ended June 30, 2017, we recorded a restructuring benefit of $0.1 million related to changes in estimated retention awards to be paid for certain employees. Additionally, we announced a cost reduction plan primarily focused on workforce reductions and the reorganization of certain facilities in the second quarter of 2015. We incurred restructuring and other charges associated with the cost reduction plan of $0.4 million and $2.4 million during the three and six months ended June 30, 2017, respectively, of which $0.4 million and $1.9 million, respectively, related to employee termination benefits. The charges incurred in conjunction with the Spin-off and cost reduction plan are reflected as restructuring and other charges in our statements of operations. In 2017, we completed restructuring activities related to the Spin-off and cost reduction plan.

The following table summarizes the components of charges included in restructuring and other charges in our statements of operations for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Retention awards to certain employees	$	—	$	(92	)	$	—	$	253
Employee termination benefits	1,356		361			1,356		1,894
Other	66		41			66		471
Total restructuring and other charges	$	1,422	$	310		$	1,422	$	2,618

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Provision for Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Provision for Income Taxes

Note 12 - Provision for Income Taxes

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Act”). Additionally, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB118”) in December 2017, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Tax Reform Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year.

For the year ended December 31, 2017, our provision for income tax included the impact of decisions regarding the various impacts of tax reform and related disclosures. In some cases where the guidance in SAB118 applied, we disclosed in our financial statements those cases where the accounting could be completed, and for matters that have not been completed, we recognized provisional amounts to the extent that they are reasonably estimable and will adjust them over time as more information becomes available. Specifically, we recorded provisional amounts associated with the transition tax on undistributed earnings, the re-measurement of deferred tax assets and liabilities due to the reduction in the corporate tax rate and the transition tax, and the tax benefit associated with the reduction of the valuation allowance. The provisional amounts incorporate assumptions made based upon our current interpretation of the Tax Reform Act and may change as we receive additional clarification and implementation guidance. We are continuing to analyze additional information to determine the final impact as well as other impacts of the Tax Reform Act. Any adjustments recorded to the provisional amounts will be included in income from operations as an adjustment to our 2018 financial statements.

The provision for income taxes for the three and six months ended June 30, 2018 includes $5.7 million related to income tax on income in Argentina recorded as a result of foreign exchange rate movements.

During the second quarter of 2017, our Brazil subsidiary entered the Tax Regularization Program (the “Program”) pursuant to Brazil Provisional Measure No. 766 issued on January 4, 2017. The Program allows for the partial settling of debts, both income tax debts and non-income-based tax debts, due by November 30, 2016 to Brazil’s Federal Revenue Service with the use of tax credits, including income tax loss carryforwards. An $11.9 million income tax benefit was recorded during the three and six months ended June 30, 2017 attributable to the reversal of valuation allowances against certain deferred tax assets related to income tax loss carryforwards that were utilized under the Program, including interest income. Additionally, during the three and six months ended June 30, 2017, we incurred $1.5 million in penalties, which is reflected in other (income) expense, net, in our statements of operations, and $2.4 million in interest expense, which is reflected in interest expense in our statements of operations, attributable to the settling of non-income-based tax debts in connection with the Program.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Note 13 - Stock-Based Compensation

Stock Options

Stock options are granted at fair market value at the grant date, are exercisable according to the vesting schedule established and generally expire no later than ten years after the grant date. Stock options generally vest one-third per year on each of the first three anniversaries of the grant date. There were no stock options granted during the six months ended June 30, 2018.

Restricted Stock, Restricted Stock Units and Performance Units

For grants of restricted stock, restricted stock units and performance units, we recognize compensation expense over the applicable vesting period equal to the fair value of our common stock at the grant date. Grants of restricted stock, restricted stock units and performance units generally vest one third per year on each of the first three anniversaries of the grant date. Certain grants of restricted stock vest on the third anniversary of the grant date and certain grants of performance units vest on the second anniversary of the grant date.

The table below presents the changes in restricted stock, restricted stock units and performance units for our common stock during the six months ended June 30, 2018.

	Shares (in thousands)		Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards, January 1, 2018	1,165		$	23.93
Granted	558		26.25
Vested	(444	)	23.24
Cancelled	(75	)	25.36
Non-vested awards, June 30, 2018	1,204		25.17

As of June 30, 2018, we estimate $24.7 million of unrecognized compensation cost related to unvested restricted stock, restricted stock units and performance units issued to our employees to be recognized over the weighted-average vesting period of 1.8 years.

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Net Income (Loss) Per Common Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Net Income (Loss) Per Common Share

Note 14 - Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share is determined by dividing net income (loss) after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and restricted stock units that have non-forfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss from continuing operations, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses.

Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options to purchase common stock and non-participating restricted stock units, unless their effect would be anti-dilutive.

The following table presents a reconciliation of basic and diluted net income per common share for the three and six months ended June 30, 2018 and 2017 (in thousands, except per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Numerator for basic and diluted net income per common share:
Income (loss) from continuing operations	$	(1,469	)	$	3,170		$	2,469		$	(9,153	)
Income from discontinued operations, net of tax	1,544			374			2,943			33,018
Less: Net income attributable to participating securities	—			(102		)	(143		)	—
Net income — used in basic and diluted net income per common share	$	75		$	3,442		$	5,269		$	23,865
Weighted average common shares outstanding including participating securities	36,447			36,057			36,340			35,967
Less: Weighted average participating securities outstanding	(992		)	(1,039		)	(964		)	(1,054		)
Weighted average common shares outstanding — used in basic net income per common share	35,455			35,018			35,376			34,913
Net dilutive potential common shares issuable:
On exercise of options and vesting of restricted stock units	*			76			70			*
Weighted average common shares outstanding — used in diluted net income per common share	35,455			35,094			35,446			34,913
Net income per common share:
Basic	$	—		$	0.10		$	0.15		$	0.68
Diluted	$	—		$	0.10		$	0.15		$	0.68

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

The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income per common share as their inclusion would have been anti-dilutive for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value	35	48	35	49
On exercise of options and vesting of restricted stock units	66	—	—	86
Net dilutive potential common shares issuable	101	48	35	135

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 15 - Commitments and Contingencies

Contingencies

See Note 3 for a discussion of our gain contingencies related to assets that were expropriated in Venezuela.

Pursuant to the separation and distribution agreement, EESLP contributed to a subsidiary of Archrock the right to receive payments based on a notional amount corresponding to payments received by our subsidiaries from PDVSA Gas in respect of the sale of our and our joint ventures’ previously nationalized assets promptly after such amounts are collected by our subsidiaries until Archrock’s subsidiary has received an aggregate amount of such payments up to the lesser of (i) $125.8 million, plus the aggregate amount of all reimbursable expenses incurred by Archrock and its subsidiaries in connection with recovering any PDVSA Gas default installment payments following the completion of the Spin-off or (ii) $150.0 million. Our balance sheets do not reflect this contingent liability to Archrock or the amount payable to us by PDVSA Gas as a receivable. Pursuant to the separation and distribution agreement, we transferred cash of $19.7 million to Archrock during the six months ended June 30, 2017. The transfer of cash was recognized as a reduction to additional paid-in capital in our financial statements. As of June 30, 2018, the remaining principal amounts due to us from PDVSA Gas in respect of the sale of our previously nationalized assets and our joint ventures’ previously nationalized assets were approximately $17 million and $4 million, respectively. In subsequent periods, the recognition of a liability, if applicable, resulting from this contingency to Archrock is expected to impact equity, and as such, is not expected to have an impact on our statements of operations.

In addition to U.S. federal, state and local and foreign income taxes, we are subject to a number of taxes that are not income-based. As many of these taxes are subject to audit by the taxing authorities, it is possible that an audit could result in additional taxes due. We accrue for such additional taxes when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the liability. As of June 30, 2018 and December 31, 2017, we had accrued $2.7 million and $2.8 million, respectively, for the outcomes of non-income-based tax audits. We do not expect that the ultimate resolutions of these audits will result in a material variance from the amounts accrued. We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim. We do not have any unasserted claims from non-income based tax audits that we have determined are probable of assertion. We also believe the likelihood is remote that the impact of potential unasserted claims from non-income-based tax audits could be material to our financial position, but it is possible that the resolution of future audits could be material to our results of operations or cash flows for the period in which the resolution occurs.

Our business can be hazardous, involving unforeseen circumstances such as uncontrollable flows of natural gas or well fluids and fires or explosions. As is customary in our industry, we review our safety equipment and procedures and carry insurance against some, but not all, risks of our business. Our insurance coverage includes property damage, general liability, commercial automobile liability and other coverage we believe is appropriate. We believe that our insurance coverage is customary for the industry and adequate for our business; however, losses and liabilities not covered by insurance would increase our costs.

Additionally, we are substantially self-insured for workers’ compensation and employee group health claims in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to the deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages.

Litigation and Claims

In the ordinary course of business, we are involved in various pending or threatened legal actions. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from any of these actions will not have a material adverse effect on our financial position, results of operations or cash flows. However, because of the inherent uncertainty of litigation and arbitration proceedings, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our financial position, results of operations or cash flows.

Contemporaneously with filing the Form 8-K on April 26, 2016, we self-reported the errors and possible irregularities at Belleli EPC to the SEC. Since then, we have been cooperating with the SEC in its investigation of this matter. The SEC’s investigation related to the circumstances giving rise to the restatement is continuing, and we are presently unable to predict the duration, scope or results or whether the SEC will commence any legal action.

Indemnifications

In conjunction with, and effective as of the completion of, the Spin-off, we entered into the separation and distribution agreement with Archrock, which governs, among other things, the treatment between Archrock and us relating to certain aspects of indemnification, insurance, confidentiality and cooperation. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Archrock’s business with Archrock. Pursuant to the agreement, we and Archrock will generally release the other party from all claims arising prior to the Spin-off that relate to the other party’s business, subject to certain exceptions. Additionally, in conjunction with, and effective as of the completion of, the Spin-off, we entered into the tax matters agreement with Archrock. Under the tax matters agreement and subject to certain exceptions, we are generally liable for, and indemnify Archrock against, taxes attributable to our business, and Archrock is generally liable for, and indemnify us against, all taxes attributable to its business. We are generally liable for, and indemnify Archrock against, 50% of certain taxes that are not clearly attributable to our business or Archrock’s business. Any payment made by us to Archrock, or by Archrock to us, is treated by all parties for tax purposes as a nontaxable distribution or capital contribution, respectively, made immediately prior to the Spin-off.

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Reportable Segments

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Reportable Segments

Note 16 - Reportable Segments

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

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

The following table presents revenue and other financial information by reportable segment for the three and six months ended June 30, 2018 and 2017 (in thousands):

Three Months Ended	Contract Operations		Aftermarket Services		Product Sales		Reportable Segments Total
June 30, 2018:
Revenue	$	91,487	$	32,267	$	219,717	$	343,471
Gross margin (1)	59,115		8,561		27,955		95,631
June 30, 2017:
Revenue	$	95,341	$	24,244	$	198,116	$	317,701
Gross margin (1)	60,650		6,966		20,091		87,707

Six Months Ended	Contract Operations		Aftermarket Services		Product Sales		Reportable Segments Total
June 30, 2018:
Revenue	$	187,980	$	58,638	$	447,236	$	693,854
Gross margin (1)	120,223		16,035		55,138		191,396
June 30, 2017:
Revenue	$	187,386	$	46,768	$	328,972	$	563,126
Gross margin (1)	121,897		12,878		31,410		166,185

________________________________

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

The following table reconciles income before income taxes to total gross margin (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018		2017
Income before income taxes	$	8,153		$	2,530		$	17,583	$	2,097
Selling, general and administrative	44,382			44,564			88,624		88,975
Depreciation and amortization	30,184			26,348			61,213		51,100
Long-lived asset impairment	—			—			1,804		—
Restatement related charges (recoveries), net	(597		)	(1,158		)	24		1,014
Restructuring and other charges	1,422			310			1,422		2,618
Interest expense	6,883			12,382			14,102		19,469
Other (income) expense, net	5,204			2,731			6,624		912
Total gross margin	$	95,631		$	87,707		$	191,396	$	166,185

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Supplemental Guarantor Financial Information

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Guarantor Financial Information

Note 17 - Supplemental Guarantor Financial Information

In April 2017, our 100% owned subsidiaries EESLP and EES Finance Corp. (together, the “Issuers”) issued the 2017 Notes, which consists of $375.0 million aggregate principal amount senior unsecured notes. In April 2018, the 2017 Notes were exchanged for notes with substantially identical terms and registered under the Securities Act of 1933, as amended. The 2017 Notes were, and the exchange notes issued in April 2018 are, fully and unconditionally guaranteed on a joint and several senior unsecured basis by Exterran Corporation (the “Parent Guarantor” or “Parent”). All other consolidated subsidiaries of Exterran are collectively referred to as the “Non-Guarantor Subsidiaries.” As a result of the Parent’s guarantee, we are presenting the following condensed consolidating financial information pursuant to Rule 3-10 of Regulation S-X, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. These schedules are presented using the equity method of accounting for all periods presented. For purposes of the following condensed consolidating financial information, the Parent Guarantor’s investments in its subsidiaries, the Issuers’ investments in the Non-Guarantors Subsidiaries and the Non-Guarantor Subsidiaries’ investments in the Issuers are accounted for under the equity method of accounting. Under this method, investments in subsidiaries are recorded at cost and adjusted for our share in the subsidiaries’ cumulative results of operations, capital contributions and distributions and other changes in equity. Elimination entries relate primarily to the elimination of investments in subsidiaries and associated intercompany balances and transactions.

Condensed Consolidating Balance Sheet

June 30, 2018

(In thousands)

					Non- Guarantor Subsidiaries
	Parent Guarantor		Issuers					Eliminations			Consolidation
ASSETS
Cash and cash equivalents	$	84	$	808	$	17,300		$	—		$	18,192
Restricted cash	—		—		546			—			546
Accounts receivable, net	—		114,909		147,005			—			261,914
Inventory, net	—		100,524		60,684			—			161,208
Contract assets	—		44,327		28,047			—			72,374
Intercompany receivables	—		185,531		362,879			(548,410		)	—
Other current assets	—		7,860		22,244			—			30,104
Current assets associated with discontinued operations	—		—		15,029			—			15,029
Total current assets	84		453,959		653,734			(548,410		)	559,367
Property, plant and equipment, net	—		268,484		569,571			—			838,055
Investment in affiliates	548,122		829,223		(281,101		)	(1,096,244		)	—
Deferred income taxes	—		5,488		6,989			—			12,477
Intangible and other assets, net	—		27,214		73,744			—			100,958
Long-term assets associated with discontinued operations	—		—		2,577			—			2,577
Total assets	$	548,206	$	1,584,368	$	1,025,514		$	(1,644,654	)	$	1,513,434
LIABILITIES AND EQUITY
Accounts payable, trade	$	—	$	151,622	$	38,991		$	—		$	190,613
Accrued liabilities	—		38,453		74,059			—			112,512
Contract liabilities	—		65,707		39,591			—			105,298
Intercompany payables	1,255		362,879		184,276			(548,410		)	—
Current liabilities associated with discontinued operations	—		—		20,705			—			20,705
Total current liabilities	1,255		618,661		357,622			(548,410		)	429,128
Long-term debt	—		401,119		—			—			401,119
Deferred income taxes	—		—		6,206			—			6,206
Long-term contract liabilities	—		7,001		78,061			—			85,062
Other long-term liabilities	—		9,465		29,608			—			39,073
Long-term liabilities associated with discontinued operations	—		—		5,895			—			5,895
Total liabilities	1,255		1,036,246		477,392			(548,410		)	966,483
Total Equity	546,951		548,122		548,122			(1,096,244		)	546,951
Total liabilities and equity	$	548,206	$	1,584,368	$	1,025,514		$	(1,644,654	)	$	1,513,434

Condensed Consolidating Balance Sheet

December 31, 2017

(In thousands)

					Non- Guarantor Subsidiaries
	Parent Guarantor		Issuers					Eliminations			Consolidation
ASSETS
Cash and cash equivalents	$	397	$	24,195	$	24,553		$	—		$	49,145
Restricted cash	—		—		546			—			546
Accounts receivable, net	—		123,362		142,690			—			266,052
Inventory, net	—		50,528		57,381			—			107,909
Costs and estimated earnings in excess of billings on uncompleted contracts	—		33,439		7,256			—			40,695
Intercompany receivables	—		158,296		359,766			(518,062		)	—
Other current assets	—		6,095		32,612			—			38,707
Current assets held for sale	—		15,761		—			—			15,761
Current assets associated with discontinued operations	—		—		23,751			—			23,751
Total current assets	397		411,676		648,555			(518,062		)	542,566
Property, plant and equipment, net	—		288,670		533,609			—			822,279
Investment in affiliates	555,735		831,097		(275,362		)	(1,111,470		)	—
Deferred income taxes	—		5,452		5,098			—			10,550
Intangible and other assets, net	—		12,218		64,762			—			76,980
Long-term assets held for sale	—		4,732		—			—			4,732
Long-term assets associated with discontinued operations	—		—		3,700			—			3,700
Total assets	$	556,132	$	1,553,845	$	980,362		$	(1,629,532	)	$	1,460,807
LIABILITIES AND EQUITY
Accounts payable, trade	$	—	$	115,273	$	33,471		$	—		$	148,744
Accrued liabilities	57		54,724		59,555			—			114,336
Deferred revenue	—		2,162		21,740			—			23,902
Billings on uncompleted contracts in excess of costs and estimated earnings	—		89,002		563			—			89,565
Intercompany payables	1,289		359,766		157,007			(518,062		)	—
Current liabilities associated with discontinued operations	—		—		31,971			—			31,971
Total current liabilities	1,346		620,927		304,307			(518,062		)	408,518
Long-term debt	—		368,472		—			—			368,472
Deferred income taxes	—		—		9,746			—			9,746
Long-term deferred revenue	—		629		91,856			—			92,485
Other long-term liabilities	—		8,082		12,190			—			20,272
Long-term liabilities associated with discontinued operations	—		—		6,528			—			6,528
Total liabilities	1,346		998,110		424,627			(518,062		)	906,021
Total Equity	554,786		555,735		555,735			(1,111,470		)	554,786
Total liabilities and equity	$	556,132	$	1,553,845	$	980,362		$	(1,629,532	)	$	1,460,807

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	240,333		$	123,301		$	(20,163	)	$	343,471
Cost of sales (excluding depreciation and amortization expense)	—			198,589			69,414			(20,163		)	247,840
Selling, general and administrative	352			21,152			22,878			—			44,382
Depreciation and amortization	—			8,688			21,496			—			30,184
Restatement related recoveries, net	—			(597		)	—			—			(597		)
Restructuring and other charges	—			—			1,422			—			1,422
Interest expense	—			5,284			1,599			—			6,883
Intercompany charges, net	—			1,348			(1,348		)	—			—
Equity in (income) loss of affiliates	(274		)	423			(12,488		)	12,339			—
Other (income) expense, net	(153		)	(1,320		)	6,677			—			5,204
Income before income taxes	75			6,766			13,651			(12,339		)	8,153
Provision for (benefit from) income taxes	—			(5,299		)	3,130			11,791			9,622
Income (loss) from continuing operations	75			12,065			10,521			(24,130		)	(1,469		)
Income from discontinued operations, net of tax	—			—			1,544			—			1,544
Net income	75			12,065			12,065			(24,130		)	75
Other comprehensive loss	(8,123		)	(8,123		)	(8,123		)	16,246			(8,123		)
Comprehensive income (loss) attributable to Exterran stockholders	$	(8,048	)	$	3,942		$	3,942		$	(7,884	)	$	(8,048	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	227,755		$	124,597		$	(34,651	)	$	317,701
Cost of sales (excluding depreciation and amortization expense)	—			193,938			70,707			(34,651		)	229,994
Selling, general and administrative	209			21,910			22,445			—			44,564
Depreciation and amortization	—			8,940			17,408			—			26,348
Restatement related recoveries, net	—			(1,143		)	(15		)	—			(1,158		)
Restructuring and other charges	—			(1,376		)	1,686			—			310
Interest expense	—			10,061			2,321			—			12,382
Intercompany charges, net	—			1,521			(1,521		)	—			—
Equity in (income) loss of affiliates	(3,753		)	(3,678		)	7,257			174			—
Other (income) expense, net	—			146			2,585			—			2,731
Income (loss) before income taxes	3,544			(2,564		)	1,724			(174		)	2,530
Provision for (benefit from) income taxes	—			1,017			5,676			(7,333		)	(640		)
Income (loss) from continuing operations	3,544			(3,581		)	(3,952		)	7,159			3,170
Income from discontinued operations, net of tax	—			—			374			—			374
Net income (loss)	3,544			(3,581		)	(3,578		)	7,159			3,544
Other comprehensive loss	(2,669		)	(2,669		)	(2,669		)	5,338			(2,669		)
Comprehensive income (loss) attributable to Exterran stockholders	$	875		$	(6,250	)	$	(6,247	)	$	12,497		$	875

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Six Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	498,649		$	239,692		$	(44,487	)	$	693,854
Cost of sales (excluding depreciation and amortization expense)	—			416,753			130,192			(44,487		)	502,458
Selling, general and administrative	635			42,117			45,872			—			88,624
Depreciation and amortization	—			18,015			43,198			—			61,213
Long-lived asset impairment	—			1,804			—			—			1,804
Restatement related charges, net	—			24			—			—			24
Restructuring and other charges	—			—			1,422			—			1,422
Interest expense	—			12,497			1,605			—			14,102
Intercompany charges, net	—			3,073			(3,073		)	—			—
Equity in income of affiliates	(5,894		)	(9,631		)	(9,842		)	25,367			—
Other (income) expense, net	(153		)	(1,369		)	8,146			—			6,624
Income before income taxes	5,412			15,366			22,172			(25,367		)	17,583
Provision for (benefit from) income taxes	—			(4,107		)	5,642			13,579			15,114
Income from continuing operations	5,412			19,473			16,530			(38,946		)	2,469
Income from discontinued operations, net of tax	—			—			2,943			—			2,943
Net income	5,412			19,473			19,473			(38,946		)	5,412
Other comprehensive loss	(7,366		)	(7,366		)	(7,366		)	14,732			(7,366		)
Comprehensive income (loss) attributable to Exterran stockholders	$	(1,954	)	$	12,107		$	12,107		$	(24,214	)	$	(1,954	)

Condensed Consolidating Statement of Operations and Comprehensive Income

Six Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	378,112		$	241,665		$	(56,651	)	$	563,126
Cost of sales (excluding depreciation and amortization expense)	—			321,106			132,486			(56,651		)	396,941
Selling, general and administrative	1,701			43,393			43,881			—			88,975
Depreciation and amortization	—			16,740			34,360			—			51,100
Restatement related charges (recoveries), net	—			1,029			(15		)	—			1,014
Restructuring and other charges	—			1,679			939			—			2,618
Interest expense	—			17,272			2,197			—			19,469
Intercompany charges, net	—			3,653			(3,653		)	—			—
Equity in (income) loss of affiliates	(25,566		)	(61,469		)	27,913			59,122			—
Other (income) expense, net	—			(2,007		)	2,919			—			912
Income before income taxes	23,865			36,716			638			(59,122		)	2,097
Provision for income taxes	—			3,161			100			7,989			11,250
Income (loss) from continuing operations	23,865			33,555			538			(67,111		)	(9,153		)
Income from discontinued operations, net of tax	—			—			33,018			—			33,018
Net income	23,865			33,555			33,556			(67,111		)	23,865
Other comprehensive loss	(1,026		)	(1,026		)	(1,026		)	2,052			(1,026		)
Comprehensive income attributable to Exterran stockholders	$	22,839		$	32,529		$	32,530		$	(65,059	)	$	22,839

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	(279	)	$	(33,278	)	$	61,697		$	—		$	28,140
Net cash provided by discontinued operations	—			—			881			—			881
Net cash provided by (used in) operating activities	(279		)	(33,278		)	62,578			—			29,021
Cash flows from investing activities:
Capital expenditures	—			(27,737		)	(66,497		)	—			(94,234		)
Proceeds from sale of property, plant and equipment	—			45			2,327			—			2,372
Proceeds from sale of business	—			5,000			—			—			5,000
Intercompany transfers	—			34			(3,272		)	3,238			—
Net cash used in continuing operations	—			(22,658		)	(67,442		)	3,238			(86,862		)
Net cash provided by discontinued operations	—			—			66			—			66
Net cash used in investing activities	—			(22,658		)	(67,376		)	3,238			(86,796		)
Cash flows from financing activities:
Proceeds from borrowings of debt	—			255,000			—			—			255,000
Repayments of debt	—			(222,758		)	—			—			(222,758		)
Intercompany transfers	(34		)	3,272			—			(3,238		)	—
Payments for debt issuance costs	—			(47		)	—			—			(47		)
Proceeds from stock options exercised	—			563			—			—			563
Purchases of treasury stock	—			(3,481		)	—			—			(3,481		)
Net cash provided by (used in) financing activities	(34		)	32,549			—			(3,238		)	29,277
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(2,455		)	—			(2,455		)
Net decrease in cash, cash equivalents and restricted cash	(313		)	(23,387		)	(7,253		)	—			(30,953		)
Cash, cash equivalents and restricted cash at beginning of period	397			24,195			25,099			—			49,691
Cash, cash equivalents and restricted cash at end of period	$	84		$	808		$	17,846		$	—		$	18,738

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	(286	)	$	18,091		$	37,799		$	—		$	55,604
Net cash provided by discontinued operations	—			—			2,498			—			2,498
Net cash provided by (used in) operating activities	(286		)	18,091			40,297			—			58,102
Cash flows from investing activities:
Capital expenditures	—			(17,999		)	(26,217		)	—			(44,216		)
Proceeds from sale of property, plant and equipment	—			1,930			4,497			—			6,427
Proceeds from sale of business	—			894			—			—			894
Intercompany transfers	—			(757		)	(36,494		)	37,251			—
Net cash used in continuing operations	—			(15,932		)	(58,214		)	37,251			(36,895		)
Net cash provided by discontinued operations	—			—			19,164			—			19,164
Net cash used in investing activities	—			(15,932		)	(39,050		)	37,251			(17,731		)
Cash flows from financing activities:
Proceeds from borrowings of debt	—			488,000			—			—			488,000
Repayments of debt	—			(463,877		)	—			—			(463,877		)
Intercompany transfers	757			36,494			—			(37,251		)	—
Cash transfer to Archrock, Inc.	—			(44,720		)	—			—			(44,720		)
Payments for debt issuance costs	—			(7,606		)	—			—			(7,606		)
Proceeds from stock options exercised	—			684			—			—			684
Purchases of treasury stock	—			(3,124		)	—			—			(3,124		)
Net cash provided by (used in) financing activities	757			5,851			—			(37,251		)	(30,643		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(42		)	—			(42		)
Net increase in cash, cash equivalents and restricted cash	471			8,010			1,205			—			9,686
Cash, cash equivalents and restricted cash at beginning of period	131			16,645			19,573			—			36,349
Cash, cash equivalents and restricted cash at end of period	$	602		$	24,655		$	20,778		$	—		$	46,035

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Description of Business and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Exterran Corporation included herein have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished includes all adjustments of a normal recurring nature that are necessary to fairly present our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated and combined financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2017. That report contains a comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. Certain reclassifications resulting from the adoption of ASU 2016-18, Restricted Cash have been made to the statement of cash flows for the prior year period to conform to the current year presentation.

We refer to the condensed consolidated financial statements collectively as “financial statements,” and individually as “balance sheets,” “statements of operations,” “statements of comprehensive income,” “statements of stockholders’ equity” and “statements of cash flows” herein.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our financial statements.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. The update also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. On January 1, 2018, we adopted this update using the modified retrospective approach to all contracts that were not completed as of January 1, 2018. As a result of this adoption, we recorded a net increase to the accumulated deficit of $10.0 million as of January 1, 2018 and an increase of $3.5 million in revenue for the six months ended June 30, 2018. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 2 for the required disclosures related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition.

As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the balance sheet as of January 1, 2018 (in thousands):

	Impact of Changes in Accounting Policies
	December 31, 2017			Adjustments			January 1, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	49,145		$	—		$	49,145
Restricted cash	546			—			546
Accounts receivable, net of allowance	266,052			(4,801		)	261,251
Inventory, net	107,909			(124		)	107,785
Costs and estimated earnings in excess of billings on uncompleted contracts	40,695			(40,695		)	—
Contract assets	—			50,824			50,824
Other current assets	38,707			(179		)	38,528
Current assets held for sale	15,761			—			15,761
Current assets associated with discontinued operations	23,751			—			23,751
Total current assets	542,566			5,025			547,591
Property, plant and equipment, net	822,279			(2,029		)	820,250
Deferred income taxes	10,550			404			10,954
Intangible and other assets, net	76,980			18,273			95,253
Long-term assets held for sale	4,732			—			4,732
Long-term assets associated with discontinued operations	3,700			—			3,700
Total assets	$	1,460,807		$	21,673		$	1,482,480
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, trade	$	148,744		$	—		$	148,744
Accrued liabilities	114,336			16,044			130,380
Deferred revenue	23,902			(23,902		)	—
Billings on uncompleted contracts in excess of costs and estimated earnings	89,565			(89,565		)	—
Contract liabilities	—			112,244			112,244
Current liabilities associated with discontinued operations	31,971			—			31,971
Total current liabilities	408,518			14,821			423,339
Long-term debt	368,472			—			368,472
Deferred income taxes	9,746			(1,908		)	7,838
Long-term deferred revenue	92,485			(92,485		)	—
Long-term contract liabilities	—			89,004			89,004
Other long-term liabilities	20,272			22,262			42,534
Long-term liabilities associated with discontinued operations	6,528			—			6,528
Total liabilities	906,021			31,694			937,715
Stockholders’ equity:
Preferred stock	—			—			—
Common stock	362			—			362
Additional paid-in capital	739,164			—			739,164
Accumulated deficit	(223,510		)	(10,021		)	(233,531		)
Treasury stock	(6,937		)	—			(6,937		)
Accumulated other comprehensive income	45,707			—			45,707
Total stockholders’ equity	554,786			(10,021		)	544,765
Total liabilities and stockholders’ equity	$	1,460,807		$	21,673		$	1,482,480

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. On January 1, 2018, we adopted this update. The adoption of this update did not have an impact on our statements of cash flows.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The update requires a reporting entity to recognize the tax expense from intra-entity asset transfers of assets other than inventory in the selling entity’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buying entity’s jurisdiction would also be recognized at the time of the transfer. On January 1, 2018, we adopted this update using a modified retrospective approach. The impact of this adoption was immaterial to our financial statements.

In November 2016, the FASB issued ASU 2016-18, Restricted Cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. On January 1, 2018, we adopted this update retrospectively. As a result of this adoption, $0.7 million of restricted cash has been included in the cash and cash equivalent balances in the statement of cash flows for the prior year period. At December 31, 2017, the $49.7 million of cash, cash equivalents and restricted cash on our statement of cash flows is composed of $49.1 million of cash and cash equivalents and $0.5 million of restricted cash. At June 30, 2018, the $18.7 million of cash, cash equivalents and restricted cash on our statement of cash flows is composed of $18.2 million of cash and cash equivalents and $0.5 million of restricted cash. The impact of this adoption was immaterial to our financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718). This update provides guidance that clarifies that changes to the terms or conditions of a share-based payment award should be accounted for as modifications. On January 1, 2018, we adopted this update using a prospective approach. The impact of this adoption was immaterial to our financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations. The update also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. Lessor accounting will be similar to the current model except for changes made to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance will be replaced with a new model applicable to both lessees and lessors. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. In preparation for our adoption of the new standard, we are analyzing and updating data previously collected to evaluate the impact the adoption will have on our financial statements. Additionally, we are assessing our use of practical expedients and the systems required to capture the increased reporting and disclosure requirements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326). The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Adoption will require a modified retrospective approach beginning with the earliest period presented. We are currently evaluating the potential impact of the update on our financial statements.

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Description of Business and Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the balance sheet as of January 1, 2018 (in thousands):

	Impact of Changes in Accounting Policies
	December 31, 2017			Adjustments			January 1, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	49,145		$	—		$	49,145
Restricted cash	546			—			546
Accounts receivable, net of allowance	266,052			(4,801		)	261,251
Inventory, net	107,909			(124		)	107,785
Costs and estimated earnings in excess of billings on uncompleted contracts	40,695			(40,695		)	—
Contract assets	—			50,824			50,824
Other current assets	38,707			(179		)	38,528
Current assets held for sale	15,761			—			15,761
Current assets associated with discontinued operations	23,751			—			23,751
Total current assets	542,566			5,025			547,591
Property, plant and equipment, net	822,279			(2,029		)	820,250
Deferred income taxes	10,550			404			10,954
Intangible and other assets, net	76,980			18,273			95,253
Long-term assets held for sale	4,732			—			4,732
Long-term assets associated with discontinued operations	3,700			—			3,700
Total assets	$	1,460,807		$	21,673		$	1,482,480
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, trade	$	148,744		$	—		$	148,744
Accrued liabilities	114,336			16,044			130,380
Deferred revenue	23,902			(23,902		)	—
Billings on uncompleted contracts in excess of costs and estimated earnings	89,565			(89,565		)	—
Contract liabilities	—			112,244			112,244
Current liabilities associated with discontinued operations	31,971			—			31,971
Total current liabilities	408,518			14,821			423,339
Long-term debt	368,472			—			368,472
Deferred income taxes	9,746			(1,908		)	7,838
Long-term deferred revenue	92,485			(92,485		)	—
Long-term contract liabilities	—			89,004			89,004
Other long-term liabilities	20,272			22,262			42,534
Long-term liabilities associated with discontinued operations	6,528			—			6,528
Total liabilities	906,021			31,694			937,715
Stockholders’ equity:
Preferred stock	—			—			—
Common stock	362			—			362
Additional paid-in capital	739,164			—			739,164
Accumulated deficit	(223,510		)	(10,021		)	(233,531		)
Treasury stock	(6,937		)	—			(6,937		)
Accumulated other comprehensive income	45,707			—			45,707
Total stockholders’ equity	554,786			(10,021		)	544,765
Total liabilities and stockholders’ equity	$	1,460,807		$	21,673		$	1,482,480

The following tables summarize the impacts of the adoption of the new revenue recognition guidance on our balance sheet as of June 30, 2018 and statements of operations and cash flows for the applicable periods during the three and six months ended June 30, 2018 (in thousands):

	June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
ASSETS
Accounts receivable, net of allowance	$	261,914		$	221		$	262,135
Inventory, net	161,208			1,183			162,391
Contract assets	72,374			(17,311		)	55,063
Other current assets	30,104			9,160			39,264
Property, plant and equipment, net	838,055			1,942			839,997
Deferred income taxes	12,477			(1,571		)	10,906
Intangible and other assets, net	100,958			(17,592		)	83,366
Total assets	1,513,434			(23,968		)	1,489,466
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued liabilities	$	112,512		$	(15,554	)	$	96,958
Contract liabilities	105,298			1,625			106,923
Deferred income taxes	6,206			(3,764		)	2,442
Long-term contract liabilities	85,062			3,476			88,538
Other long-term liabilities	39,073			(18,076		)	20,997
Total liabilities	966,483			(32,293		)	934,190
Accumulated deficit	(228,119		)	8,325			(219,794		)
Total stockholders’ equity	546,951			8,325			555,276
Total liabilities and stockholders’ equity	1,513,434			(23,968		)	1,489,466

The adoption of the new revenue recognition guidance resulted in increases in total assets and liabilities of $24.0 million and $32.3 million, respectively. This was primarily due to capitalized contract fulfillment and obtainment costs and related liabilities recorded associated with contracts within our contract operations segment.

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606			As Reported		Adjustments			Balances Without Adoption of Topic 606
Revenues:
Contract operations	$	91,487		$	(690	)	$	90,797		$	187,980	$	(1,459	)	$	186,521
Aftermarket services	32,267			(1,909		)	30,358			58,638		(2,079		)	56,559
Cost of sales (excluding depreciation and amortization expense):
Contract operations	32,372			(501		)	31,871			67,757		(1,101		)	66,656
Aftermarket services	23,706			(1,363		)	22,343			42,603		(1,406		)	41,197
Selling, general and administrative	44,382			6,627			51,009			88,624		6,627			95,251
Depreciation and amortization	30,184			(659		)	29,525			61,213		(1,368		)	59,845
Income before income taxes	8,153			(6,703		)	1,450			17,583		(6,290		)	11,293
Provision for income taxes	9,622			(5,334		)	4,288			15,114		(4,594		)	10,520
Income (loss) from continuing operations	(1,469		)	(1,369		)	(2,838		)	2,469		(1,696		)	773
Net income (loss)	75			(1,369		)	(1,294		)	5,412		(1,696		)	3,716
Basic net income (loss) per common share	$	—		$	(0.04	)	$	(0.04	)	$	0.15	$	(0.05	)	$	0.10
Diluted net income (loss) per common share	—			(0.04		)	(0.04		)	0.15		(0.05		)	0.10

The adoption of the new revenue recognition guidance resulted in an increase in net income of $1.4 million and $1.7 million for the three and six months ended June 30, 2018, respectively. Most notably, costs to obtain a contract during the three and six months ended June 30, 2018 would have resulted in an increase in selling, general and administrative expense under previous accounting standards.

	Six Months Ended June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
Cash flows from operating activities:
Net income	$	5,412		$	(1,696	)	$	3,716
Depreciation and amortization	61,213			(1,368		)	59,845
Deferred income tax benefit	(3,366		)	(4,594		)	(7,960		)
Changes in assets and liabilities:
Inventory	(70,126		)	(1,059		)	(71,185		)
Contract assets	(21,582		)	6,576			(15,006		)
Other current assets	9,325			(4,401		)	4,924
Accounts payable and other liabilities	39,587			4,887			44,474
Contract liabilities	(3,746		)	171			(3,575		)
Other	1,984			1,484			3,468
Net cash provided by continuing operations	28,140			—			28,140

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Revenue (Tables)

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables present disaggregated revenue by products and services lines and by geographical regions for the three and six months ended June 30, 2018 (in thousands):

Revenue by Products and Services	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
Contract Operations Segment:
Contract operations services (1)	$	91,487	$	187,980
Aftermarket Services Segment:
Operation and maintenance services (1)	$	14,722	$	28,597
Part sales (2)	11,077		20,210
Other services (1)	6,468		9,831
Total aftermarket services	$	32,267	$	58,638
Product Sales Segment:
Compression equipment (1)	$	129,436	$	260,995
Processing and treating equipment (1)	79,407		165,522
Production equipment (2)	6,782		14,780
Other product sales (1) (2)	4,092		5,939
Total product sales revenues	$	219,717	$	447,236
Total revenues	$	343,471	$	693,854

⁽¹⁾  Revenue recognized over time.

⁽²⁾  Revenue recognized at a point in time.

Revenue by Geographical Regions	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
North America	$	222,357	$	454,205
Latin America	72,638		140,589
Middle East and Africa	31,353		57,478
Asia Pacific	17,123		41,582
Total revenues	$	343,471	$	693,854

Contract with Customer, Asset and Liability

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

	As of June 30, 2018		As of January 1, 2018
Accounts receivables, net	$	261,914	$	261,251
Contract assets and contract liabilities:
Current contract assets	72,374		50,824
Long-term contract assets	10,766		11,835
Current contract liabilities	105,298		112,244
Long-term contract liabilities	85,062		89,004

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the balance sheet as of January 1, 2018 (in thousands):

	Impact of Changes in Accounting Policies
	December 31, 2017			Adjustments			January 1, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	49,145		$	—		$	49,145
Restricted cash	546			—			546
Accounts receivable, net of allowance	266,052			(4,801		)	261,251
Inventory, net	107,909			(124		)	107,785
Costs and estimated earnings in excess of billings on uncompleted contracts	40,695			(40,695		)	—
Contract assets	—			50,824			50,824
Other current assets	38,707			(179		)	38,528
Current assets held for sale	15,761			—			15,761
Current assets associated with discontinued operations	23,751			—			23,751
Total current assets	542,566			5,025			547,591
Property, plant and equipment, net	822,279			(2,029		)	820,250
Deferred income taxes	10,550			404			10,954
Intangible and other assets, net	76,980			18,273			95,253
Long-term assets held for sale	4,732			—			4,732
Long-term assets associated with discontinued operations	3,700			—			3,700
Total assets	$	1,460,807		$	21,673		$	1,482,480
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, trade	$	148,744		$	—		$	148,744
Accrued liabilities	114,336			16,044			130,380
Deferred revenue	23,902			(23,902		)	—
Billings on uncompleted contracts in excess of costs and estimated earnings	89,565			(89,565		)	—
Contract liabilities	—			112,244			112,244
Current liabilities associated with discontinued operations	31,971			—			31,971
Total current liabilities	408,518			14,821			423,339
Long-term debt	368,472			—			368,472
Deferred income taxes	9,746			(1,908		)	7,838
Long-term deferred revenue	92,485			(92,485		)	—
Long-term contract liabilities	—			89,004			89,004
Other long-term liabilities	20,272			22,262			42,534
Long-term liabilities associated with discontinued operations	6,528			—			6,528
Total liabilities	906,021			31,694			937,715
Stockholders’ equity:
Preferred stock	—			—			—
Common stock	362			—			362
Additional paid-in capital	739,164			—			739,164
Accumulated deficit	(223,510		)	(10,021		)	(233,531		)
Treasury stock	(6,937		)	—			(6,937		)
Accumulated other comprehensive income	45,707			—			45,707
Total stockholders’ equity	554,786			(10,021		)	544,765
Total liabilities and stockholders’ equity	$	1,460,807		$	21,673		$	1,482,480

The following tables summarize the impacts of the adoption of the new revenue recognition guidance on our balance sheet as of June 30, 2018 and statements of operations and cash flows for the applicable periods during the three and six months ended June 30, 2018 (in thousands):

	June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
ASSETS
Accounts receivable, net of allowance	$	261,914		$	221		$	262,135
Inventory, net	161,208			1,183			162,391
Contract assets	72,374			(17,311		)	55,063
Other current assets	30,104			9,160			39,264
Property, plant and equipment, net	838,055			1,942			839,997
Deferred income taxes	12,477			(1,571		)	10,906
Intangible and other assets, net	100,958			(17,592		)	83,366
Total assets	1,513,434			(23,968		)	1,489,466
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued liabilities	$	112,512		$	(15,554	)	$	96,958
Contract liabilities	105,298			1,625			106,923
Deferred income taxes	6,206			(3,764		)	2,442
Long-term contract liabilities	85,062			3,476			88,538
Other long-term liabilities	39,073			(18,076		)	20,997
Total liabilities	966,483			(32,293		)	934,190
Accumulated deficit	(228,119		)	8,325			(219,794		)
Total stockholders’ equity	546,951			8,325			555,276
Total liabilities and stockholders’ equity	1,513,434			(23,968		)	1,489,466

The adoption of the new revenue recognition guidance resulted in increases in total assets and liabilities of $24.0 million and $32.3 million, respectively. This was primarily due to capitalized contract fulfillment and obtainment costs and related liabilities recorded associated with contracts within our contract operations segment.

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606			As Reported		Adjustments			Balances Without Adoption of Topic 606
Revenues:
Contract operations	$	91,487		$	(690	)	$	90,797		$	187,980	$	(1,459	)	$	186,521
Aftermarket services	32,267			(1,909		)	30,358			58,638		(2,079		)	56,559
Cost of sales (excluding depreciation and amortization expense):
Contract operations	32,372			(501		)	31,871			67,757		(1,101		)	66,656
Aftermarket services	23,706			(1,363		)	22,343			42,603		(1,406		)	41,197
Selling, general and administrative	44,382			6,627			51,009			88,624		6,627			95,251
Depreciation and amortization	30,184			(659		)	29,525			61,213		(1,368		)	59,845
Income before income taxes	8,153			(6,703		)	1,450			17,583		(6,290		)	11,293
Provision for income taxes	9,622			(5,334		)	4,288			15,114		(4,594		)	10,520
Income (loss) from continuing operations	(1,469		)	(1,369		)	(2,838		)	2,469		(1,696		)	773
Net income (loss)	75			(1,369		)	(1,294		)	5,412		(1,696		)	3,716
Basic net income (loss) per common share	$	—		$	(0.04	)	$	(0.04	)	$	0.15	$	(0.05	)	$	0.10
Diluted net income (loss) per common share	—			(0.04		)	(0.04		)	0.15		(0.05		)	0.10

The adoption of the new revenue recognition guidance resulted in an increase in net income of $1.4 million and $1.7 million for the three and six months ended June 30, 2018, respectively. Most notably, costs to obtain a contract during the three and six months ended June 30, 2018 would have resulted in an increase in selling, general and administrative expense under previous accounting standards.

	Six Months Ended June 30, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
Cash flows from operating activities:
Net income	$	5,412		$	(1,696	)	$	3,716
Depreciation and amortization	61,213			(1,368		)	59,845
Deferred income tax benefit	(3,366		)	(4,594		)	(7,960		)
Changes in assets and liabilities:
Inventory	(70,126		)	(1,059		)	(71,185		)
Contract assets	(21,582		)	6,576			(15,006		)
Other current assets	9,325			(4,401		)	4,924
Accounts payable and other liabilities	39,587			4,887			44,474
Contract liabilities	(3,746		)	171			(3,575		)
Other	1,984			1,484			3,468
Net cash provided by continuing operations	28,140			—			28,140

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Summary of Operating Results and Balance Sheet Data for Discontinued Operations

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

	Three Months Ended June 30, 2018									Three Months Ended June 30, 2017
	Venezuela			Belleli EPC			Total			Venezuela			Belleli EPC			Total
Revenue	$	—		$	2,915		$	2,915		$	—		$	12,885		$	12,885
Cost of sales (excluding depreciation and amortization expense)	—			2,808			2,808			—			8,064			8,064
Selling, general and administrative	29			127			156			32			1,520			1,552
Depreciation and amortization	—			52			52			—			3,099			3,099
Other (income) expense, net	—			(1,689		)	(1,689		)	—			970			970
Provision for (benefit from) income taxes	—			44			44			—			(1,174		)	(1,174		)
Income (loss) from discontinued operations, net of tax	$	(29	)	$	1,573		$	1,544		$	(32	)	$	406		$	374

	Six Months Ended June 30, 2018									Six Months Ended June 30, 2017
	Venezuela			Belleli EPC			Total			Venezuela			Belleli EPC			Total
Revenue	$	—		$	7,882		$	7,882		$	—		$	48,159		$	48,159
Cost of sales (excluding depreciation and amortization expense)	—			5,211			5,211			—			26,063			26,063
Selling, general and administrative	61			187			248			65			2,506			2,571
Depreciation and amortization	—			480			480			—			4,227			4,227
Recovery attributable to expropriation	—			—			—			(16,514		)	—			(16,514		)
Restructuring and other charges	—			—			—			—			(439		)	(439		)
Other (income) expense, net	1			(1,090		)	(1,089		)	(3,157		)	455			(2,702		)
Provision for income taxes	—			89			89			—			1,935			1,935
Income (loss) from discontinued operations, net of tax	$	(62	)	$	3,005		$	2,943		$	19,606		$	13,412		$	33,018

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

	June 30, 2018						December 31, 2017
	Venezuela		Belleli EPC		Total		Venezuela		Belleli EPC		Total
Cash	$	1	$	—	$	1	$	3	$	—	$	3
Accounts receivable	—		6,022		6,022		—		14,770		14,770
Costs and estimated earnings in excess of billings on uncompleted contracts	—		8,549		8,549		—		7,786		7,786
Other current assets	3		454		457		2		1,190		1,192
Total current assets associated with discontinued operations	4		15,025		15,029		5		23,746		23,751
Property, plant and equipment, net	—		91		91		—		1,054		1,054
Intangible and other assets, net	—		2,486		2,486		—		2,646		2,646
Total assets associated with discontinued operations	$	4	$	17,602	$	17,606	$	5	$	27,446	$	27,451
Accounts payable	$	—	$	4,046	$	4,046	$	—	$	9,253	$	9,253
Accrued liabilities	63		11,726		11,789		59		15,617		15,676
Billings on uncompleted contracts in excess of costs and estimated earnings	—		4,870		4,870		—		7,042		7,042
Total current liabilities associated with discontinued operations	63		20,642		20,705		59		31,912		31,971
Other long-term liabilities	—		5,895		5,895		1		6,527		6,528
Total liabilities associated with discontinued operations	$	63	$	26,537	$	26,600	$	60	$	38,439	$	38,499

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Inventory, net (Tables)

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory, net of reserves, consisted of the following amounts (in thousands):

	June 30, 2018		December 31, 2017
Parts and supplies	$	82,744	$	79,803
Work in progress	54,906		21,853
Finished goods (1)	23,558		6,253
Inventory, net	$	161,208	$	107,909

⁽¹⁾  The increase in finished goods inventory during the six months ended June 30, 2018 was primarily due to a nonmonetary agreement that we entered into with an existing customer to receive an idle processing and treating plant from the customer in exchange for an identical processing and treating plant to be manufactured by us. We recorded the finished goods inventory received and our corresponding liability to the customer at fair value based on the estimated resale price of the processing and treating plant received. The liability resulting from this transaction is included within accounts payable, trade, in our balance sheet and will be extinguished upon our delivery of the replacement processing and treating plant to the customer.

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Property, Plant and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment, net

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

	June 30, 2018			December 31, 2017
Compression equipment, facilities and other fleet assets (1)	$	1,621,706		$	1,577,052
Land and buildings	98,516			96,463
Transportation and shop equipment	81,968			82,240
Other	94,823			90,395
	1,897,013			1,846,150
Accumulated depreciation	(1,058,958		)	(1,023,871		)
Property, plant and equipment, net	$	838,055		$	822,279

⁽¹⁾  In the fourth quarter of 2017, we evaluated the estimated useful lives and salvage values of our property, plant and equipment. As a result of this evaluation, we changed the useful lives and salvage values for our compression equipment from a maximum useful life of 30 years to 23 years and a maximum salvage value of 20% to 15% based on expected future use. During the three and six months ended June 30, 2018, we recorded increases in depreciation expense of $2.0 million and $5.1 million, respectively, as a result of these changes in useful lives and salvage values which impacted our diluted net income per share by $0.06 and $0.14, respectively.

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt

Debt consisted of the following (in thousands):

	June 30, 2018			December 31, 2017
Revolving credit facility due November 2020	$	32,500		$	—
8.125% senior notes due May 2025	375,000			375,000
Other debt	912			1,171
Unamortized deferred financing costs of 8.125% senior notes	(6,844		)	(7,250		)
Total debt	401,568			368,921
Less: Amounts due within one year (1)	(449		)	(449		)
Long-term debt	$	401,119		$	368,472

⁽¹⁾    Short-term debt and the current portion of long-term debt are included in accrued liabilities in our balance sheets.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

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

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2018, with pricing levels as of the date of valuation (in thousands):

	Six Months Ended June 30, 2018
	(Level 1)		(Level 2)		(Level 3)
Impaired assets—assets held for sale (1)	$	—	$	—	$	21,026
Long-term note receivable (2)	—		—		14,573

⁽¹⁾  Our estimate of the fair value of the impaired PEQ assets, which were classified as assets held for sale as of March 31, 2018, was based on the expected net proceeds from the sale of the assets.

⁽²⁾  Our estimate of the fair value of a note receivable was discounted based on a settlement period of eight years and a discount rate of 5.2%.

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Restatement Related Charges (Recoveries), net (Tables)

6 Months Ended

Jun. 30, 2018

Restatement Charges [Abstract]

Summary of Changes to Accrued Liability Balance Related to Restatement Charges

The following table summarizes the changes to our accrued liability balance related to restatement charges, net, for the six months ended June 30, 2017 and 2018 (in thousands):

	Restatement Related Charges
Beginning balance at January 1, 2017	$	2,212
Additions for costs expensed, net	1,014
Reductions for payments, net	(1,472		)
Ending balance at June 30, 2017	$	1,754
Beginning balance at January 1, 2018	$	579
Additions for costs expensed, net	24
Reductions for payments, net	(367		)
Ending balance at June 30, 2018	$	236

Summary of the Components of Charges Included in Restatement Charges

The following table summarizes the components of charges included in restatement related charges (recoveries), net, in our statements of operations for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
External accounting costs	$	—		$	108		$	—		$	754
External legal costs	—			1,449			533			2,692
Other	18			86			106			369
Recoveries from Archrock	(615		)	(2,801		)	(615		)	(2,801		)
Total restatement related charges (recoveries), net	$	(597	)	$	(1,158	)	$	24		$	1,014

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Restructuring and Other Charges (Tables)

6 Months Ended

Jun. 30, 2018

Restructuring and Related Activities [Abstract]

Summary of the Components of Charges Included in Restructuring and Other Charges

The following table summarizes the components of charges included in restructuring and other charges in our statements of operations for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Retention awards to certain employees	$	—	$	(92	)	$	—	$	253
Employee termination benefits	1,356		361			1,356		1,894
Other	66		41			66		471
Total restructuring and other charges	$	1,422	$	310		$	1,422	$	2,618

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

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

The table below presents the changes in restricted stock, restricted stock units and performance units for our common stock during the six months ended June 30, 2018.

	Shares (in thousands)		Weighted Average Grant-Date Fair  Value Per Share
Non-vested awards, January 1, 2018	1,165		$	23.93
Granted	558		26.25
Vested	(444	)	23.24
Cancelled	(75	)	25.36
Non-vested awards, June 30, 2018	1,204		25.17

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Net Income (Loss) Per Common Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Reconciliation of Basic and Diluted Net Income (Loss) Per Common Share

The following table presents a reconciliation of basic and diluted net income per common share for the three and six months ended June 30, 2018 and 2017 (in thousands, except per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Numerator for basic and diluted net income per common share:
Income (loss) from continuing operations	$	(1,469	)	$	3,170		$	2,469		$	(9,153	)
Income from discontinued operations, net of tax	1,544			374			2,943			33,018
Less: Net income attributable to participating securities	—			(102		)	(143		)	—
Net income — used in basic and diluted net income per common share	$	75		$	3,442		$	5,269		$	23,865
Weighted average common shares outstanding including participating securities	36,447			36,057			36,340			35,967
Less: Weighted average participating securities outstanding	(992		)	(1,039		)	(964		)	(1,054		)
Weighted average common shares outstanding — used in basic net income per common share	35,455			35,018			35,376			34,913
Net dilutive potential common shares issuable:
On exercise of options and vesting of restricted stock units	*			76			70			*
Weighted average common shares outstanding — used in diluted net income per common share	35,455			35,094			35,446			34,913
Net income per common share:
Basic	$	—		$	0.10		$	0.15		$	0.68
Diluted	$	—		$	0.10		$	0.15		$	0.68

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

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

The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income per common share as their inclusion would have been anti-dilutive for the three and six months ended June 30, 2018 and 2017 (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value	35	48	35	49
On exercise of options and vesting of restricted stock units	66	—	—	86
Net dilutive potential common shares issuable	101	48	35	135

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Reportable Segments (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Schedule of Revenues and Other Financial Information

The following table presents revenue and other financial information by reportable segment for the three and six months ended June 30, 2018 and 2017 (in thousands):

Three Months Ended	Contract Operations		Aftermarket Services		Product Sales		Reportable Segments Total
June 30, 2018:
Revenue	$	91,487	$	32,267	$	219,717	$	343,471
Gross margin (1)	59,115		8,561		27,955		95,631
June 30, 2017:
Revenue	$	95,341	$	24,244	$	198,116	$	317,701
Gross margin (1)	60,650		6,966		20,091		87,707

Six Months Ended	Contract Operations		Aftermarket Services		Product Sales		Reportable Segments Total
June 30, 2018:
Revenue	$	187,980	$	58,638	$	447,236	$	693,854
Gross margin (1)	120,223		16,035		55,138		191,396
June 30, 2017:
Revenue	$	187,386	$	46,768	$	328,972	$	563,126
Gross margin (1)	121,897		12,878		31,410		166,185

________________________________

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

Reconciliation of Income (Loss) Before Income Taxes to Total Gross Margin

The following table reconciles income before income taxes to total gross margin (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018		2017
Income before income taxes	$	8,153		$	2,530		$	17,583	$	2,097
Selling, general and administrative	44,382			44,564			88,624		88,975
Depreciation and amortization	30,184			26,348			61,213		51,100
Long-lived asset impairment	—			—			1,804		—
Restatement related charges (recoveries), net	(597		)	(1,158		)	24		1,014
Restructuring and other charges	1,422			310			1,422		2,618
Interest expense	6,883			12,382			14,102		19,469
Other (income) expense, net	5,204			2,731			6,624		912
Total gross margin	$	95,631		$	87,707		$	191,396	$	166,185

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Supplemental Guarantor Financial Information (Tables)

6 Months Ended

Jun. 30, 2018

Table Text Block Supplement [Abstract]

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet

June 30, 2018

(In thousands)

					Non- Guarantor Subsidiaries
	Parent Guarantor		Issuers					Eliminations			Consolidation
ASSETS
Cash and cash equivalents	$	84	$	808	$	17,300		$	—		$	18,192
Restricted cash	—		—		546			—			546
Accounts receivable, net	—		114,909		147,005			—			261,914
Inventory, net	—		100,524		60,684			—			161,208
Contract assets	—		44,327		28,047			—			72,374
Intercompany receivables	—		185,531		362,879			(548,410		)	—
Other current assets	—		7,860		22,244			—			30,104
Current assets associated with discontinued operations	—		—		15,029			—			15,029
Total current assets	84		453,959		653,734			(548,410		)	559,367
Property, plant and equipment, net	—		268,484		569,571			—			838,055
Investment in affiliates	548,122		829,223		(281,101		)	(1,096,244		)	—
Deferred income taxes	—		5,488		6,989			—			12,477
Intangible and other assets, net	—		27,214		73,744			—			100,958
Long-term assets associated with discontinued operations	—		—		2,577			—			2,577
Total assets	$	548,206	$	1,584,368	$	1,025,514		$	(1,644,654	)	$	1,513,434
LIABILITIES AND EQUITY
Accounts payable, trade	$	—	$	151,622	$	38,991		$	—		$	190,613
Accrued liabilities	—		38,453		74,059			—			112,512
Contract liabilities	—		65,707		39,591			—			105,298
Intercompany payables	1,255		362,879		184,276			(548,410		)	—
Current liabilities associated with discontinued operations	—		—		20,705			—			20,705
Total current liabilities	1,255		618,661		357,622			(548,410		)	429,128
Long-term debt	—		401,119		—			—			401,119
Deferred income taxes	—		—		6,206			—			6,206
Long-term contract liabilities	—		7,001		78,061			—			85,062
Other long-term liabilities	—		9,465		29,608			—			39,073
Long-term liabilities associated with discontinued operations	—		—		5,895			—			5,895
Total liabilities	1,255		1,036,246		477,392			(548,410		)	966,483
Total Equity	546,951		548,122		548,122			(1,096,244		)	546,951
Total liabilities and equity	$	548,206	$	1,584,368	$	1,025,514		$	(1,644,654	)	$	1,513,434

Condensed Consolidating Balance Sheet

December 31, 2017

(In thousands)

					Non- Guarantor Subsidiaries
	Parent Guarantor		Issuers					Eliminations			Consolidation
ASSETS
Cash and cash equivalents	$	397	$	24,195	$	24,553		$	—		$	49,145
Restricted cash	—		—		546			—			546
Accounts receivable, net	—		123,362		142,690			—			266,052
Inventory, net	—		50,528		57,381			—			107,909
Costs and estimated earnings in excess of billings on uncompleted contracts	—		33,439		7,256			—			40,695
Intercompany receivables	—		158,296		359,766			(518,062		)	—
Other current assets	—		6,095		32,612			—			38,707
Current assets held for sale	—		15,761		—			—			15,761
Current assets associated with discontinued operations	—		—		23,751			—			23,751
Total current assets	397		411,676		648,555			(518,062		)	542,566
Property, plant and equipment, net	—		288,670		533,609			—			822,279
Investment in affiliates	555,735		831,097		(275,362		)	(1,111,470		)	—
Deferred income taxes	—		5,452		5,098			—			10,550
Intangible and other assets, net	—		12,218		64,762			—			76,980
Long-term assets held for sale	—		4,732		—			—			4,732
Long-term assets associated with discontinued operations	—		—		3,700			—			3,700
Total assets	$	556,132	$	1,553,845	$	980,362		$	(1,629,532	)	$	1,460,807
LIABILITIES AND EQUITY
Accounts payable, trade	$	—	$	115,273	$	33,471		$	—		$	148,744
Accrued liabilities	57		54,724		59,555			—			114,336
Deferred revenue	—		2,162		21,740			—			23,902
Billings on uncompleted contracts in excess of costs and estimated earnings	—		89,002		563			—			89,565
Intercompany payables	1,289		359,766		157,007			(518,062		)	—
Current liabilities associated with discontinued operations	—		—		31,971			—			31,971
Total current liabilities	1,346		620,927		304,307			(518,062		)	408,518
Long-term debt	—		368,472		—			—			368,472
Deferred income taxes	—		—		9,746			—			9,746
Long-term deferred revenue	—		629		91,856			—			92,485
Other long-term liabilities	—		8,082		12,190			—			20,272
Long-term liabilities associated with discontinued operations	—		—		6,528			—			6,528
Total liabilities	1,346		998,110		424,627			(518,062		)	906,021
Total Equity	554,786		555,735		555,735			(1,111,470		)	554,786
Total liabilities and equity	$	556,132	$	1,553,845	$	980,362		$	(1,629,532	)	$	1,460,807

Condensed Consolidating Statement of Operations and Comprehensive Income

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	240,333		$	123,301		$	(20,163	)	$	343,471
Cost of sales (excluding depreciation and amortization expense)	—			198,589			69,414			(20,163		)	247,840
Selling, general and administrative	352			21,152			22,878			—			44,382
Depreciation and amortization	—			8,688			21,496			—			30,184
Restatement related recoveries, net	—			(597		)	—			—			(597		)
Restructuring and other charges	—			—			1,422			—			1,422
Interest expense	—			5,284			1,599			—			6,883
Intercompany charges, net	—			1,348			(1,348		)	—			—
Equity in (income) loss of affiliates	(274		)	423			(12,488		)	12,339			—
Other (income) expense, net	(153		)	(1,320		)	6,677			—			5,204
Income before income taxes	75			6,766			13,651			(12,339		)	8,153
Provision for (benefit from) income taxes	—			(5,299		)	3,130			11,791			9,622
Income (loss) from continuing operations	75			12,065			10,521			(24,130		)	(1,469		)
Income from discontinued operations, net of tax	—			—			1,544			—			1,544
Net income	75			12,065			12,065			(24,130		)	75
Other comprehensive loss	(8,123		)	(8,123		)	(8,123		)	16,246			(8,123		)
Comprehensive income (loss) attributable to Exterran stockholders	$	(8,048	)	$	3,942		$	3,942		$	(7,884	)	$	(8,048	)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	227,755		$	124,597		$	(34,651	)	$	317,701
Cost of sales (excluding depreciation and amortization expense)	—			193,938			70,707			(34,651		)	229,994
Selling, general and administrative	209			21,910			22,445			—			44,564
Depreciation and amortization	—			8,940			17,408			—			26,348
Restatement related recoveries, net	—			(1,143		)	(15		)	—			(1,158		)
Restructuring and other charges	—			(1,376		)	1,686			—			310
Interest expense	—			10,061			2,321			—			12,382
Intercompany charges, net	—			1,521			(1,521		)	—			—
Equity in (income) loss of affiliates	(3,753		)	(3,678		)	7,257			174			—
Other (income) expense, net	—			146			2,585			—			2,731
Income (loss) before income taxes	3,544			(2,564		)	1,724			(174		)	2,530
Provision for (benefit from) income taxes	—			1,017			5,676			(7,333		)	(640		)
Income (loss) from continuing operations	3,544			(3,581		)	(3,952		)	7,159			3,170
Income from discontinued operations, net of tax	—			—			374			—			374
Net income (loss)	3,544			(3,581		)	(3,578		)	7,159			3,544
Other comprehensive loss	(2,669		)	(2,669		)	(2,669		)	5,338			(2,669		)
Comprehensive income (loss) attributable to Exterran stockholders	$	875		$	(6,250	)	$	(6,247	)	$	12,497		$	875

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Six Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	498,649		$	239,692		$	(44,487	)	$	693,854
Cost of sales (excluding depreciation and amortization expense)	—			416,753			130,192			(44,487		)	502,458
Selling, general and administrative	635			42,117			45,872			—			88,624
Depreciation and amortization	—			18,015			43,198			—			61,213
Long-lived asset impairment	—			1,804			—			—			1,804
Restatement related charges, net	—			24			—			—			24
Restructuring and other charges	—			—			1,422			—			1,422
Interest expense	—			12,497			1,605			—			14,102
Intercompany charges, net	—			3,073			(3,073		)	—			—
Equity in income of affiliates	(5,894		)	(9,631		)	(9,842		)	25,367			—
Other (income) expense, net	(153		)	(1,369		)	8,146			—			6,624
Income before income taxes	5,412			15,366			22,172			(25,367		)	17,583
Provision for (benefit from) income taxes	—			(4,107		)	5,642			13,579			15,114
Income from continuing operations	5,412			19,473			16,530			(38,946		)	2,469
Income from discontinued operations, net of tax	—			—			2,943			—			2,943
Net income	5,412			19,473			19,473			(38,946		)	5,412
Other comprehensive loss	(7,366		)	(7,366		)	(7,366		)	14,732			(7,366		)
Comprehensive income (loss) attributable to Exterran stockholders	$	(1,954	)	$	12,107		$	12,107		$	(24,214	)	$	(1,954	)

Condensed Consolidating Statement of Operations and Comprehensive Income

Six Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Revenues	$	—		$	378,112		$	241,665		$	(56,651	)	$	563,126
Cost of sales (excluding depreciation and amortization expense)	—			321,106			132,486			(56,651		)	396,941
Selling, general and administrative	1,701			43,393			43,881			—			88,975
Depreciation and amortization	—			16,740			34,360			—			51,100
Restatement related charges (recoveries), net	—			1,029			(15		)	—			1,014
Restructuring and other charges	—			1,679			939			—			2,618
Interest expense	—			17,272			2,197			—			19,469
Intercompany charges, net	—			3,653			(3,653		)	—			—
Equity in (income) loss of affiliates	(25,566		)	(61,469		)	27,913			59,122			—
Other (income) expense, net	—			(2,007		)	2,919			—			912
Income before income taxes	23,865			36,716			638			(59,122		)	2,097
Provision for income taxes	—			3,161			100			7,989			11,250
Income (loss) from continuing operations	23,865			33,555			538			(67,111		)	(9,153		)
Income from discontinued operations, net of tax	—			—			33,018			—			33,018
Net income	23,865			33,555			33,556			(67,111		)	23,865
Other comprehensive loss	(1,026		)	(1,026		)	(1,026		)	2,052			(1,026		)
Comprehensive income attributable to Exterran stockholders	$	22,839		$	32,529		$	32,530		$	(65,059	)	$	22,839

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2018

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	(279	)	$	(33,278	)	$	61,697		$	—		$	28,140
Net cash provided by discontinued operations	—			—			881			—			881
Net cash provided by (used in) operating activities	(279		)	(33,278		)	62,578			—			29,021
Cash flows from investing activities:
Capital expenditures	—			(27,737		)	(66,497		)	—			(94,234		)
Proceeds from sale of property, plant and equipment	—			45			2,327			—			2,372
Proceeds from sale of business	—			5,000			—			—			5,000
Intercompany transfers	—			34			(3,272		)	3,238			—
Net cash used in continuing operations	—			(22,658		)	(67,442		)	3,238			(86,862		)
Net cash provided by discontinued operations	—			—			66			—			66
Net cash used in investing activities	—			(22,658		)	(67,376		)	3,238			(86,796		)
Cash flows from financing activities:
Proceeds from borrowings of debt	—			255,000			—			—			255,000
Repayments of debt	—			(222,758		)	—			—			(222,758		)
Intercompany transfers	(34		)	3,272			—			(3,238		)	—
Payments for debt issuance costs	—			(47		)	—			—			(47		)
Proceeds from stock options exercised	—			563			—			—			563
Purchases of treasury stock	—			(3,481		)	—			—			(3,481		)
Net cash provided by (used in) financing activities	(34		)	32,549			—			(3,238		)	29,277
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(2,455		)	—			(2,455		)
Net decrease in cash, cash equivalents and restricted cash	(313		)	(23,387		)	(7,253		)	—			(30,953		)
Cash, cash equivalents and restricted cash at beginning of period	397			24,195			25,099			—			49,691
Cash, cash equivalents and restricted cash at end of period	$	84		$	808		$	17,846		$	—		$	18,738

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2017

(In thousands)

							Non- Guarantor Subsidiaries
	Parent Guarantor			Issuers						Eliminations			Consolidation
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$	(286	)	$	18,091		$	37,799		$	—		$	55,604
Net cash provided by discontinued operations	—			—			2,498			—			2,498
Net cash provided by (used in) operating activities	(286		)	18,091			40,297			—			58,102
Cash flows from investing activities:
Capital expenditures	—			(17,999		)	(26,217		)	—			(44,216		)
Proceeds from sale of property, plant and equipment	—			1,930			4,497			—			6,427
Proceeds from sale of business	—			894			—			—			894
Intercompany transfers	—			(757		)	(36,494		)	37,251			—
Net cash used in continuing operations	—			(15,932		)	(58,214		)	37,251			(36,895		)
Net cash provided by discontinued operations	—			—			19,164			—			19,164
Net cash used in investing activities	—			(15,932		)	(39,050		)	37,251			(17,731		)
Cash flows from financing activities:
Proceeds from borrowings of debt	—			488,000			—			—			488,000
Repayments of debt	—			(463,877		)	—			—			(463,877		)
Intercompany transfers	757			36,494			—			(37,251		)	—
Cash transfer to Archrock, Inc.	—			(44,720		)	—			—			(44,720		)
Payments for debt issuance costs	—			(7,606		)	—			—			(7,606		)
Proceeds from stock options exercised	—			684			—			—			684
Purchases of treasury stock	—			(3,124		)	—			—			(3,124		)
Net cash provided by (used in) financing activities	757			5,851			—			(37,251		)	(30,643		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(42		)	—			(42		)
Net increase in cash, cash equivalents and restricted cash	471			8,010			1,205			—			9,686
Cash, cash equivalents and restricted cash at beginning of period	131			16,645			19,573			—			36,349
Cash, cash equivalents and restricted cash at end of period	$	602		$	24,655		$	20,778		$	—		$	46,035

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Description of Business and Basis of Presentation - Narrative (Details)	6 Months Ended
	Jun. 30, 2018 business_line
Accounting Policies [Abstract]
Number of business lines	3

XML

Description of Business and Basis of Presentation - ASU 2014-09 (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 18,192		$ 18,192		$ 49,145	$ 49,145
Restricted cash	546		546		546	546
Accounts receivable, net of allowance	261,914		261,914		261,251	266,052
Inventory, net	161,208		161,208		107,785	107,909
Costs and estimated earnings in excess of billings on uncompleted contracts	0		0		0	40,695
Contract assets	72,374		72,374		50,824	0
Other current assets	30,104		30,104		38,528	38,707
Current assets held for sale	0		0		15,761	15,761
Current assets associated with discontinued operations	15,029		15,029		23,751	23,751
Total current assets	559,367		559,367		547,591	542,566
Property, plant and equipment, net	838,055		838,055		820,250	822,279
Deferred income taxes	12,477		12,477		10,954	10,550
Intangible and other assets, net	100,958		100,958		95,253	76,980
Long-term assets held for sale	0		0		4,732	4,732
Long-term assets associated with discontinued operations	2,577		2,577		3,700	3,700
Total assets	1,513,434		1,513,434		1,482,480	1,460,807
Current liabilities:
Accounts payable, trade	190,613		190,613		148,744	148,744
Accrued liabilities	112,512		112,512		130,380	114,336
Deferred revenue	0		0		0	23,902
Billings on uncompleted contracts in excess of costs and estimated earnings	0		0		0	89,565
Contract liabilities	105,298		105,298		112,244	0
Current liabilities associated with discontinued operations	20,705		20,705		31,971	31,971
Total current liabilities	429,128		429,128		423,339	408,518
Long-term debt	401,119		401,119		368,472	368,472
Deferred income taxes	6,206		6,206		7,838	9,746
Long-term deferred revenue	0		0		0	92,485
Long-term contract liabilities	85,062		85,062		89,004	0
Other long-term liabilities	39,073		39,073		42,534	20,272
Long-term liabilities associated with discontinued operations	5,895		5,895		6,528	6,528
Total liabilities	966,483		966,483		937,715	906,021
Stockholders’ equity:
Preferred stock	0		0		0	0
Common stock	367		367		362	362
Additional paid-in capital	746,780		746,780		739,164	739,164
Accumulated deficit	(228,119)		(228,119)		(233,531)	(223,510)
Treasury stock	(10,418)		(10,418)		(6,937)	(6,937)
Accumulated other comprehensive income	38,341		38,341		45,707	45,707
Total stockholders’ equity	546,951		546,951		544,765	554,786
Total liabilities and equity	1,513,434		1,513,434		1,482,480	1,460,807
Revenue	343,471	$ 317,701	693,854	$ 563,126
Calculated under Revenue Guidance in Effect before Topic 606
Current assets:
Cash and cash equivalents						49,145
Restricted cash						546
Accounts receivable, net of allowance	262,135		262,135			266,052
Inventory, net	162,391		162,391			107,909
Costs and estimated earnings in excess of billings on uncompleted contracts						40,695
Contract assets	55,063		55,063			0
Other current assets	39,264		39,264			38,707
Current assets held for sale						15,761
Current assets associated with discontinued operations						23,751
Total current assets						542,566
Property, plant and equipment, net	839,997		839,997			822,279
Deferred income taxes	10,906		10,906			10,550
Intangible and other assets, net	83,366		83,366			76,980
Long-term assets held for sale						4,732
Long-term assets associated with discontinued operations						3,700
Total assets	1,489,466		1,489,466			1,460,807
Current liabilities:
Accounts payable, trade						148,744
Accrued liabilities	96,958		96,958			114,336
Deferred revenue						23,902
Billings on uncompleted contracts in excess of costs and estimated earnings						89,565
Contract liabilities	106,923		106,923			0
Current liabilities associated with discontinued operations						31,971
Total current liabilities						408,518
Long-term debt						368,472
Deferred income taxes	2,442		2,442			9,746
Long-term deferred revenue						92,485
Long-term contract liabilities	88,538		88,538			0
Other long-term liabilities	20,997		20,997			20,272
Long-term liabilities associated with discontinued operations						6,528
Total liabilities	934,190		934,190			906,021
Stockholders’ equity:
Preferred stock						0
Common stock						362
Additional paid-in capital						739,164
Accumulated deficit	(219,794)		(219,794)			(223,510)
Treasury stock						(6,937)
Accumulated other comprehensive income						45,707
Total stockholders’ equity	555,276		555,276			554,786
Total liabilities and equity	1,489,466		1,489,466			$ 1,460,807
Adjustments | Difference between Revenue Guidance in Effect before and after Topic 606
Current assets:
Cash and cash equivalents					0
Restricted cash					0
Accounts receivable, net of allowance	221		221		(4,801)
Inventory, net	1,183		1,183		(124)
Costs and estimated earnings in excess of billings on uncompleted contracts					(40,695)
Contract assets	(17,311)		(17,311)		50,824
Other current assets	9,160		9,160		(179)
Current assets held for sale					0
Current assets associated with discontinued operations					0
Total current assets					5,025
Property, plant and equipment, net	1,942		1,942		(2,029)
Deferred income taxes	(1,571)		(1,571)		404
Intangible and other assets, net	(17,592)		(17,592)		18,273
Long-term assets held for sale					0
Long-term assets associated with discontinued operations					0
Total assets	(23,968)		(23,968)		21,673
Current liabilities:
Accounts payable, trade					0
Accrued liabilities	(15,554)		(15,554)		16,044
Deferred revenue					(23,902)
Billings on uncompleted contracts in excess of costs and estimated earnings					(89,565)
Contract liabilities	1,625		1,625		112,244
Current liabilities associated with discontinued operations					0
Total current liabilities					14,821
Long-term debt					0
Deferred income taxes	(3,764)		(3,764)		(1,908)
Long-term deferred revenue					(92,485)
Long-term contract liabilities	3,476		3,476		89,004
Other long-term liabilities	(18,076)		(18,076)		22,262
Long-term liabilities associated with discontinued operations					0
Total liabilities	(32,293)		(32,293)		31,694
Stockholders’ equity:
Preferred stock					0
Common stock					0
Additional paid-in capital					0
Accumulated deficit	8,325		8,325		(10,021)
Treasury stock					0
Accumulated other comprehensive income					0
Total stockholders’ equity	8,325		8,325		(10,021)
Total liabilities and equity	(23,968)		(23,968)		$ 21,673
Revenue	$ 2,600		$ 3,500

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Description of Business and Basis of Presentation - ASU 2016-18 (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash, cash equivalents and restricted cash	$ 18,738		$ 49,691	$ 46,035	$ 36,349
Cash and cash equivalents	18,192	$ 49,145	49,145
Restricted cash	$ 546	$ 546	$ 546
Accounting Standards Update 2016-18 | Cash and Cash Equivalents
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Restricted cash				$ 700

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Revenue - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accumulated deficit	$ 228,119		$ 228,119		$ 233,531	$ 223,510
Revenue	343,471	$ 317,701	693,854	$ 563,126
Assets	(1,513,434)		(1,513,434)		(1,482,480)	(1,460,807)
Total liabilities	(966,483)		(966,483)		(937,715)	$ (906,021)
Net income	75	3,544	5,412	23,865
Revenue recognized from contract operations services including revenue deferred in previous periods			10,400
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accumulated deficit	(8,325)		(8,325)		10,021
Revenue	2,600		3,500
Assets	23,968		23,968		(21,673)
Total liabilities	32,293		32,293		$ (31,694)
Net income	(1,369)		(1,696)
Product Sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	219,717	198,116	447,236	328,972
Performance obligation satisfied in previous periods			360,500
Performance obligation satisfied in previous periods, included in billings in excess of costs			$ 78,400
Product Sales | Minimum | Compression equipment
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Product Manufacturing Period			3 months
Product Sales | Minimum | Processing and treating equipment
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Product Manufacturing Period			6 months
Product Sales | Maximum | Compression equipment
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Product Manufacturing Period			12 months
Product Sales | Maximum | Processing and treating equipment
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Product Manufacturing Period			24 months
Contract Operations
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Special contract term period in excess of			10 years
Revenue	91,487	95,341	$ 187,980	187,386
Performance obligation satisfied in previous periods			4,100
Contract Operations | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	(690)		$ (1,459)
Contract Operations | Minimum
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
General contract term period			3 years
Contract Operations | Maximum
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
General contract term period			5 years
Aftermarket services
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	32,267	$ 24,244	$ 58,638	$ 46,768
Aftermarket services | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	(1,909)		$ (2,079)
Aftermarket services | Operation and maintenance services
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Special contract term period in excess of			6 years
Aftermarket services | Other services
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
General contract term period			6 months
Aftermarket services | Minimum | Operation and maintenance services
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
General contract term period			2 years
Aftermarket services | Maximum | Operation and maintenance services
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
General contract term period			4 years
Costs to Fulfill a Contract
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Capitalized contract costs	8,200		$ 8,200
Amortization expense for capitalized contract costs	500		1,100
Costs to Obtain a Contract
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Capitalized contract costs	6,600		6,600
Amortization expense for capitalized contract costs	400		800
Products Sales Business
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Unsatisfied performance obligation	$ 12,000		$ 12,000

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Revenue - Disaggregation of Revenue by Products and Services (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation of Revenue [Line Items]
Revenue	$ 343,471	$ 317,701	$ 693,854	$ 563,126
Contract operations services
Disaggregation of Revenue [Line Items]
Revenue	91,487	95,341	187,980	187,386
Contract operations services | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	91,487		187,980
Total aftermarket services
Disaggregation of Revenue [Line Items]
Revenue	32,267	24,244	58,638	46,768
Total aftermarket services | Operation and maintenance services | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	14,722		28,597
Total aftermarket services | Part sales | Revenue recognized at a point in time
Disaggregation of Revenue [Line Items]
Revenue	11,077		20,210
Total aftermarket services | Other services | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	6,468		9,831
Total product sales revenues
Disaggregation of Revenue [Line Items]
Revenue	219,717	$ 198,116	447,236	$ 328,972
Total product sales revenues | Compression equipment | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	129,436		260,995
Total product sales revenues | Processing and treating equipment | Revenue recognized over time
Disaggregation of Revenue [Line Items]
Revenue	79,407		165,522
Total product sales revenues | Production equipment | Revenue recognized at a point in time
Disaggregation of Revenue [Line Items]
Revenue	6,782		14,780
Total product sales revenues | Other product sales | Transferred over time and transferred at point in time
Disaggregation of Revenue [Line Items]
Revenue	$ 4,092		$ 5,939

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Revenue - Disaggregation of Revenue by Geographical Regions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation of Revenue [Line Items]
Revenue	$ 343,471	$ 317,701	$ 693,854	$ 563,126
North America
Disaggregation of Revenue [Line Items]
Revenue	222,357		454,205
Latin America
Disaggregation of Revenue [Line Items]
Revenue	72,638		140,589
Middle East and Africa
Disaggregation of Revenue [Line Items]
Revenue	31,353		57,478
Asia Pacific
Disaggregation of Revenue [Line Items]
Revenue	$ 17,123		$ 41,582

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Revenue - Performance Obligation Narrative (Details) $ in Millions	Jun. 30, 2018 USD ($)
Contract Operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligation	$ 139
Unsatisfied performance obligation, expected time of satisfaction (in years)	6 months
Contract Operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligation	$ 260
Unsatisfied performance obligation, expected time of satisfaction (in years)	1 year
Contract Operations | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligation	$ 1,400
Product Sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligation	$ 379
Unsatisfied performance obligation, expected time of satisfaction (in years)	6 months
Product Sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligation	$ 256
Unsatisfied performance obligation, expected time of satisfaction (in years)	1 year
Product Sales | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unsatisfied performance obligation	$ 635

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Revenue - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Revenue from Contract with Customer [Abstract]
Accounts receivable, net	$ 261,914	$ 261,251	$ 266,052
Contract with Customer, Asset and Liability [Abstract]
Current contract assets	72,374	50,824	0
Long-term contract assets	10,766	11,835
Current contract liabilities	105,298	112,244	0
Long-term contract liabilities	$ 85,062	$ 89,004	$ 0

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Revenue - Comparison of the Reported Balance Sheet to Pro-Forma Amounts (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
ASSETS
Accounts receivable, net of allowance	$ 261,914	$ 261,251	$ 266,052
Inventory, net	161,208	107,785	107,909
Contract assets	72,374	50,824	0
Other current assets	30,104	38,528	38,707
Property, plant and equipment, net	838,055	820,250	822,279
Deferred income taxes	12,477	10,954	10,550
Intangible and other assets, net	100,958	95,253	76,980
Total assets	1,513,434	1,482,480	1,460,807
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued liabilities	112,512	130,380	114,336
Contract liabilities	105,298	112,244	0
Deferred income taxes	6,206	7,838	9,746
Long-term contract liabilities	85,062	89,004	0
Other long-term liabilities	39,073	42,534	20,272
Total liabilities	966,483	937,715	906,021
Accumulated deficit	(228,119)	(233,531)	(223,510)
Total stockholders’ equity	546,951	544,765	554,786
Total liabilities and stockholders’ equity	1,513,434	1,482,480	1,460,807
Adjustments | Accounting Standards Update 2014-09
ASSETS
Accounts receivable, net of allowance	221	(4,801)
Inventory, net	1,183	(124)
Contract assets	(17,311)	50,824
Other current assets	9,160	(179)
Property, plant and equipment, net	1,942	(2,029)
Deferred income taxes	(1,571)	404
Intangible and other assets, net	(17,592)	18,273
Total assets	(23,968)	21,673
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued liabilities	(15,554)	16,044
Contract liabilities	1,625	112,244
Deferred income taxes	(3,764)	(1,908)
Long-term contract liabilities	3,476	89,004
Other long-term liabilities	(18,076)	22,262
Total liabilities	(32,293)	31,694
Accumulated deficit	8,325	(10,021)
Total stockholders’ equity	8,325	(10,021)
Total liabilities and stockholders’ equity	(23,968)	$ 21,673
Balances Without Adoption of Topic 606
ASSETS
Accounts receivable, net of allowance	262,135		266,052
Inventory, net	162,391		107,909
Contract assets	55,063		0
Other current assets	39,264		38,707
Property, plant and equipment, net	839,997		822,279
Deferred income taxes	10,906		10,550
Intangible and other assets, net	83,366		76,980
Total assets	1,489,466		1,460,807
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued liabilities	96,958		114,336
Contract liabilities	106,923		0
Deferred income taxes	2,442		9,746
Long-term contract liabilities	88,538		0
Other long-term liabilities	20,997		20,272
Total liabilities	934,190		906,021
Accumulated deficit	(219,794)		(223,510)
Total stockholders’ equity	555,276		554,786
Total liabilities and stockholders’ equity	$ 1,489,466		$ 1,460,807

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Revenue - Comparison of the Reported Statement of Operations to Pro-Forma Amounts (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues:
Revenue	$ 343,471	$ 317,701	$ 693,854	$ 563,126
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	247,840	229,994	502,458	396,941
Selling, general and administrative	44,382	44,564	88,624	88,975
Depreciation and amortization	30,184	26,348	61,213	51,100
Income before income taxes	8,153	2,530	17,583	2,097
Provision for income taxes	9,622	(640)	15,114	11,250
Income from continuing operations	(1,469)	3,170	2,469	(9,153)
Net income	$ 75	$ 3,544	$ 5,412	$ 23,865
Basic (in dollars per share)	$ 0.00	$ 0.10	$ 0.15	$ 0.68
Diluted (in dollars per share)	$ 0.00	$ 0.10	$ 0.15	$ 0.68
Adjustments | Accounting Standards Update 2014-09
Revenues:
Revenue	$ 2,600		$ 3,500
Cost of sales (excluding depreciation and amortization expense):
Selling, general and administrative	6,627		6,627
Depreciation and amortization	(659)		(1,368)
Income before income taxes	(6,703)		(6,290)
Provision for income taxes	(5,334)		(4,594)
Income from continuing operations	(1,369)		(1,696)
Net income	$ (1,369)		$ (1,696)
Basic (in dollars per share)	$ (0.04)		$ (0.05)
Diluted (in dollars per share)	$ (0.04)		$ (0.05)
Balances Without Adoption of Topic 606
Cost of sales (excluding depreciation and amortization expense):
Selling, general and administrative	$ 51,009		$ 95,251
Depreciation and amortization	29,525		59,845
Income before income taxes	1,450		11,293
Provision for income taxes	4,288		10,520
Income from continuing operations	(2,838)		773
Net income	$ (1,294)		$ 3,716
Basic (in dollars per share)	$ (0.04)		$ 0.10
Diluted (in dollars per share)	$ (0.04)		$ 0.10
Contract Operations
Revenues:
Revenue	$ 91,487	$ 95,341	$ 187,980	$ 187,386
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	32,372	34,691	67,757	65,489
Contract Operations | Adjustments | Accounting Standards Update 2014-09
Revenues:
Revenue	(690)		(1,459)
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	(501)		(1,101)
Contract Operations | Balances Without Adoption of Topic 606
Revenues:
Revenue	90,797		186,521
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	31,871		66,656
Aftermarket services
Revenues:
Revenue	32,267	24,244	58,638	46,768
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	23,706	$ 17,278	42,603	$ 33,890
Aftermarket services | Adjustments | Accounting Standards Update 2014-09
Revenues:
Revenue	(1,909)		(2,079)
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	(1,363)		(1,406)
Aftermarket services | Balances Without Adoption of Topic 606
Revenues:
Revenue	30,358		56,559
Cost of sales (excluding depreciation and amortization expense):
Cost of sales (excluding depreciation and amortization expense)	$ 22,343		$ 41,197

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Revenue - Comparison of the Reported Cash Flows to Pro-Forma Amounts (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 75	$ 3,544	$ 5,412	$ 23,865
Depreciation and amortization	30,184	$ 26,348	61,213	51,100
Deferred income tax benefit			(3,366)	(7,081)
Changes in assets and liabilities:
Inventory			(70,126)	6,001
Contract assets			(21,582)	0
Other current assets			9,325	(5,901)
Accounts payable and other liabilities			39,587	23,313
Contract liabilities			(3,746)	0
Other			1,984	(14)
Net cash provided by continuing operations			28,140	$ 55,604
Adjustments | Accounting Standards Update 2014-09
Cash flows from operating activities:
Net income	(1,369)		(1,696)
Depreciation and amortization	(659)		(1,368)
Deferred income tax benefit			(4,594)
Changes in assets and liabilities:
Inventory			(1,059)
Contract assets			6,576
Other current assets			(4,401)
Accounts payable and other liabilities			4,887
Contract liabilities			171
Other			1,484
Net cash provided by continuing operations			0
Balances Without Adoption of Topic 606
Cash flows from operating activities:
Net income	(1,294)		3,716
Depreciation and amortization	$ 29,525		59,845
Deferred income tax benefit			(7,960)
Changes in assets and liabilities:
Inventory			(71,185)
Contract assets			(15,006)
Other current assets			4,924
Accounts payable and other liabilities			44,474
Contract liabilities			(3,575)
Other			3,468
Net cash provided by continuing operations			$ 28,140

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Discontinued Operations - Narrative (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Aug. 31, 2012	Jun. 30, 2017	Jun. 30, 2018
Venezuelan subsidiary
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sales price of previously nationalized assets	$ 441.7
Installment payment, including annual charge		$ 19.7
Remaining principal amount due			$ 17.0
Archrock
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash transferred to Archrock		$ 19.7

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Discontinued Operations - Summary of Operating Results of Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income (loss) from discontinued operations, net of tax	$ 1,544	$ 374	$ 2,943	$ 33,018
Exit of Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	2,915	12,885	7,882	48,159
Cost of sales (excluding depreciation and amortization expense)	2,808	8,064	5,211	26,063
Selling, general and administrative	156	1,552	248	2,571
Depreciation and amortization	52	3,099	480	4,227
Recovery attributable to expropriation			0	(16,514)
Restructuring and other charges			0	(439)
Other (income) expense, net	(1,689)	970	(1,089)	(2,702)
Provision for (benefit from) income taxes	44	(1,174)	89	1,935
Income (loss) from discontinued operations, net of tax	1,544	374	2,943	33,018
Venezuela | Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	0	0	0	0
Cost of sales (excluding depreciation and amortization expense)	0	0	0	0
Selling, general and administrative	29	32	61	65
Depreciation and amortization	0	0	0	0
Recovery attributable to expropriation			0	(16,514)
Restructuring and other charges			0	0
Other (income) expense, net	0	0	1	(3,157)
Provision for (benefit from) income taxes	0	0	0	0
Income (loss) from discontinued operations, net of tax	(29)	(32)	(62)	19,606
Belleli EPC | Exit of Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	2,915	12,885	7,882	48,159
Cost of sales (excluding depreciation and amortization expense)	2,808	8,064	5,211	26,063
Selling, general and administrative	127	1,520	187	2,506
Depreciation and amortization	52	3,099	480	4,227
Recovery attributable to expropriation			0	0
Restructuring and other charges			0	(439)
Other (income) expense, net	(1,689)	970	(1,090)	455
Provision for (benefit from) income taxes	44	(1,174)	89	1,935
Income (loss) from discontinued operations, net of tax	$ 1,573	$ 406	$ 3,005	$ 13,412

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Discontinued Operations - Summary of Balance Sheet Data for Discontinued Operations (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total current assets associated with discontinued operations	$ 15,029	$ 23,751	$ 23,751
Total current liabilities associated with discontinued operations	20,705	$ 31,971	31,971
Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash	1		3
Accounts receivable	6,022		14,770
Costs and estimated earnings in excess of billings on uncompleted contracts	8,549		7,786
Other current assets	457		1,192
Total current assets associated with discontinued operations	15,029		23,751
Property, plant and equipment, net	91		1,054
Intangible and other assets, net	2,486		2,646
Total assets associated with discontinued operations	17,606		27,451
Accounts payable	4,046		9,253
Accrued liabilities	11,789		15,676
Billings on uncompleted contracts in excess of costs and estimated earnings	4,870		7,042
Total current liabilities associated with discontinued operations	20,705		31,971
Other long-term liabilities	5,895		6,528
Total liabilities associated with discontinued operations	26,600		38,499
Venezuela | Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash	1		3
Accounts receivable	0		0
Costs and estimated earnings in excess of billings on uncompleted contracts	0		0
Other current assets	3		2
Total current assets associated with discontinued operations	4		5
Property, plant and equipment, net	0		0
Intangible and other assets, net	0		0
Total assets associated with discontinued operations	4		5
Accounts payable	0		0
Accrued liabilities	63		59
Billings on uncompleted contracts in excess of costs and estimated earnings	0		0
Total current liabilities associated with discontinued operations	63		59
Other long-term liabilities	0		1
Total liabilities associated with discontinued operations	63		60
Belleli EPC | Exit of Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash	0		0
Accounts receivable	6,022		14,770
Costs and estimated earnings in excess of billings on uncompleted contracts	8,549		7,786
Other current assets	454		1,190
Total current assets associated with discontinued operations	15,025		23,746
Property, plant and equipment, net	91		1,054
Intangible and other assets, net	2,486		2,646
Total assets associated with discontinued operations	17,602		27,446
Accounts payable	4,046		9,253
Accrued liabilities	11,726		15,617
Billings on uncompleted contracts in excess of costs and estimated earnings	4,870		7,042
Total current liabilities associated with discontinued operations	20,642		31,912
Other long-term liabilities	5,895		6,527
Total liabilities associated with discontinued operations	$ 26,537		$ 38,439

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Inventory, net - Schedule of Inventory, Net of Reserves (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Composition of Inventory net of reserves
Parts and supplies	$ 82,744		$ 79,803
Work in progress	54,906		21,853
Finished goods	23,558		6,253
Inventory, net	$ 161,208	$ 107,785	$ 107,909

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Property, Plant and Equipment, net - Schedule of Property, Plant and Equipment, net (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2018	Sep. 30, 2017	Jan. 01, 2018
Property, Plant and Equipment
Property, plant and equipment, gross	$ 1,897,013	$ 1,846,150	$ 1,897,013
Accumulated depreciation	(1,058,958)	(1,023,871)	(1,058,958)
Property, plant and equipment, net	838,055	822,279	838,055		$ 820,250
Depreciation, period increase	$ 2,000		$ 5,100
Increase in diluted net income (in usd per share)	$ 0.06		$ 0.14
Compression equipment, facilities and other fleet assets
Property, Plant and Equipment
Property, plant and equipment, gross	$ 1,621,706	1,577,052	$ 1,621,706
Land and buildings
Property, Plant and Equipment
Property, plant and equipment, gross	98,516	96,463	98,516
Transportation and shop equipment
Property, Plant and Equipment
Property, plant and equipment, gross	81,968	82,240	81,968
Other
Property, Plant and Equipment
Property, plant and equipment, gross	$ 94,823	$ 90,395	$ 94,823
Service Life | Compression equipment
Property, Plant and Equipment
Change in accounting estimate, useful life		23 years		30 years
Salvage Value | Compression equipment
Property, Plant and Equipment
Change in accounting estimate, salvage value		15.00%		20.00%

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Sale of PEQ Assets (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017
Long Lived Asset Impairments [Line Items]
Loss on sale of business		$ 1,714	$ 111
Assets Held for Sale | Products Sales Business
Long Lived Asset Impairments [Line Items]
Long-lived asset impairment charge		1,800
Loss on sale of business	$ 1,700	$ 1,700

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total debt	$ 401,568		$ 368,921
Less: Amounts due within one year	(449)		(449)
Long-term debt	401,119	$ 368,472	368,472
Other debt
Debt Instrument [Line Items]
Total debt	912		1,171
Revolving credit facility due November 2020
Debt Instrument [Line Items]
Total debt	32,500		0
8.125% senior unsecured notes due 2025 | Senior Notes
Debt Instrument [Line Items]
Total debt	375,000		375,000
Unamortized deferred financing costs	$ (6,844)		$ (7,250)
Stated interest rate	8.125%

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Debt - Revolving Credit Facility and Term Loan (Narrative) (Details)	1 Months Ended	3 Months Ended	6 Months Ended
	Apr. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)
Debt Instrument [Line Items]
Amortization of deferred financing costs			$ 1,342,000	$ 3,375,000
Credit Agreement
Debt Instrument [Line Items]
Senior secured leverage ratio			2.75
Credit Agreement | Revolving credit facility
Debt Instrument [Line Items]
Borrowing capacity under restated credit agreement			$ 680,000,000.000
Outstanding borrowings			32,500,000
Outstanding letters of credit			57,300,000
Undrawn capacity under revolving credit facility			590,200,000
Available for additional borrowings			$ 566,300,000
Credit Agreement | Term Loan Facility [Member]
Debt Instrument [Line Items]
Repayments of Lines of Credit	$ 232,800,000
Amortization of deferred financing costs		$ 1,700,000

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Debt - 8.125% Senior Notes Due May 2025 (Narrative) (Details) - USD ($)	1 Months Ended	6 Months Ended
	Apr. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Debt Instrument [Line Items]
Payment to subsidiary of Archrock		$ 0	$ 44,720,000
Payments of Debt Issuance Costs		$ 47,000	7,606,000
Senior unsecured notes | 8.125% senior unsecured notes due 2025
Debt Instrument [Line Items]
Stated interest rate		8.125%
Archrock
Debt Instrument [Line Items]
Payment to subsidiary of Archrock			$ 19,700,000
EESLP And EES Finance Corp. | Senior unsecured notes | 8.125% senior unsecured notes due 2025
Debt Instrument [Line Items]
Aggregate principal amount of senior unsecured notes		$ 375,000,000
Subsidiaries | EESLP And EES Finance Corp. | Senior unsecured notes | 8.125% senior unsecured notes due 2025
Debt Instrument [Line Items]
Stated interest rate	8.125%
Aggregate principal amount of senior unsecured notes	$ 375,000,000.000000
Payments of Debt Issuance Costs	8,100,000
Subsidiaries | EESLP And EES Finance Corp. | Archrock | Credit Agreement
Debt Instrument [Line Items]
Payment to subsidiary of Archrock	$ 25,000,000
EESLP And EES Finance Corp. | Subsidiaries
Debt Instrument [Line Items]
Ownership percentage by parent	100.00%

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Fair Value Measurements - Assets and Liabilities at Fair Value on a Nonrecurring Basis (Details) - Nonrecurring basis $ in Thousands	Jun. 30, 2018 USD ($)
Settlement period
Valuation of our interest rate swaps and impaired assets
Fair value measurement input	8
Discount rate
Valuation of our interest rate swaps and impaired assets
Fair value measurement input	0.052
(Level 1)
Valuation of our interest rate swaps and impaired assets
Impaired assets - assets held for sale	$ 0
Long-term note receivable	0
(Level 2)
Valuation of our interest rate swaps and impaired assets
Impaired assets - assets held for sale	0
Long-term note receivable	0
(Level 3)
Valuation of our interest rate swaps and impaired assets
Impaired assets - assets held for sale	21,026
Long-term note receivable	$ 14,573

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Fair Value Measurements - Narrative (Details) - Senior Notes - 8.125% senior unsecured notes due 2025 - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Reported Value Measurement
Valuation of our interest rate swaps and impaired assets
Long-term debt, fair value	$ 375.0	$ 375.0
Estimate of Fair Value Measurement
Valuation of our interest rate swaps and impaired assets
Long-term debt, fair value	$ 399.0	$ 404.0

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Long-Lived Asset Impairment - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($)
Products Sales Business | Held-for-sale
Long-Lived Asset Impairment
Long-lived asset impairment charge	$ 1.8

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Restatement Related Charges (Recoveries), net - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restatement Charges [Abstract]
External costs associated with the current SEC investigation and remediation activities related to the restatement		$ 1,600	$ 600	$ 3,800
Restatement Charges [Line Items]
Recoveries from Archrock	$ (615)	$ (2,801)	$ (615)	$ (2,801)

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Restatement Related Charges (Recoveries), net - Summary of Changes to Accrued Liability Balance Related to Restatement Charges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restatement Related Charges
Beginning balance			$ 579	$ 2,212
Additions for costs expensed, net	$ (597)	$ (1,158)	24	1,014
Reductions for payments, net			(367)	(1,472)
Ending balance	$ 236	$ 1,754	$ 236	$ 1,754

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Restatement Related Charges (Recoveries), net - Summary of the Components of Charges Included in Restatement Charges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restatement Charges [Abstract]
External accounting costs	$ 0	$ 108	$ 0	$ 754
External legal costs	0	1,449	533	2,692
Other	18	86	106	369
Recoveries from Archrock	(615)	(2,801)	(615)	(2,801)
Total restatement related charges (recoveries), net	$ (597)	$ (1,158)	$ 24	$ 1,014

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Restructuring and Other Charges - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 1,422	$ 310	$ 1,422	$ 2,618
Employee termination benefits
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	1,356	361	1,356	1,894
Retention awards to certain employees
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	0	(92)	0	253
Relocation Plan | Employee termination benefits
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	1,400		1,400
Accrued liability	1,000		1,000
Additional charges expected	$ 1,500		$ 1,500
Spin-off
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges				300
Cost Reduction Plan
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges		400		2,400
Cost Reduction Plan | Employee termination benefits
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges		$ 400		$ 1,900

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Restructuring and Other Charges - Summary of the Components of Charges Included in Restructuring and Other Charges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 1,422	$ 310	$ 1,422	$ 2,618
Retention awards to certain employees
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	0	(92)	0	253
Employee termination benefits
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	1,356	361	1,356	1,894
Other
Restructuring Cost and Reserve [Line Items]
Restructuring and other charges	$ 66	$ 41	$ 66	$ 471

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Provision for Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Tax Examination [Line Items]
Argentina income tax due to foreign exchange rate movement	$ 5.7		$ 5.7
Secretariat of the Federal Revenue Bureau of Brazil
Income Tax Examination [Line Items]
Penalties incurred		$ 1.5		$ 1.5
Interest expense		2.4		2.4
Tax Loss Carryforwards Realized, Net Of Penalties And Interest
Income Tax Examination [Line Items]
Income tax benefit		$ 11.9		$ 11.9

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Stock-Based Compensation - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted (in shares) | shares	0
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of stock options	3 years
Stock options | First anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Stock options | Second anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Stock options | Third anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Stock options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period of stock options	10 years
Restricted stock, restricted stock units and performance units for common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated unrecognized compensation cost | $	$ 24.7
Weighted-average vesting period	1 year 9 months 18 days
Restricted stock, restricted stock units and performance units for common stock | First anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Restricted stock, restricted stock units and performance units for common stock | Second anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Restricted stock, restricted stock units and performance units for common stock | Third anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	33.33%
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of stock options	3 years
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of stock options	2 years

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Stock-Based Compensation - Schedule of Restricted Stock, Restricted Stock Units and Performance Units for Common Stock (Details) - Restricted stock, restricted stock units and performance units for common stock shares in Thousands	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Shares
Non-vested awards at the beginning of the period (in shares) | shares	1,165
Granted (in shares) | shares	558
Vested (in shares) | shares	(444)
Cancelled (in shares) | shares	(75)
Non-vested awards at the end of the period (in shares) | shares	1,204
Weighted Average Grant-Date Fair Value Per Share
Non-vested awards at the beginning of the period (in dollars per share) | $ / shares	$ 23.93
Granted (in dollars per share) | $ / shares	26.25
Vested (in dollars per share) | $ / shares	23.24
Cancelled (in dollars per share) | $ / shares	25.36
Non-vested awards at the end of the period (in dollars per share) | $ / shares	$ 25.17

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Net Income (Loss) Per Common Share - Reconciliation of Basic and Diluted Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator for basic and diluted net income per common share:
Income (loss) from continuing operations	$ (1,469)	$ 3,170	$ 2,469	$ (9,153)
Income from discontinued operations, net of tax	1,544	374	2,943	33,018
Less: Net income attributable to participating securities	0	(102)	(143)	0
Net income — used in basic and diluted net income per common share	$ 75	$ 3,442	$ 5,269	$ 23,865
Weighted average common shares outstanding including participating securities
Weighted average common shares outstanding including participating securities (in shares)	36,447	36,057	36,340	35,967
Less: Weighted average participating securities outstanding (in shares)	(992)	(1,039)	(964)	(1,054)
Weighted average common shares outstanding — used in basic net income per common share (in shares)	35,455	35,018	35,376	34,913
Net dilutive potential common shares issuable:
On exercise of options and vesting of restricted stock units (in shares)		76	70
Weighted average common shares outstanding — used in diluted net income per common share (in shares)	35,455	35,094	35,446	34,913
Net income per common share:
Basic (in dollars per share)	$ 0.00	$ 0.10	$ 0.15	$ 0.68
Diluted (in dollars per share)	$ 0.00	$ 0.10	$ 0.15	$ 0.68

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Net Income (Loss) Per Common Share - Schedule of Antidilutive Shares Excluded from Computation of Net Income Per Common Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net dilutive potential common shares issuable (in shares)	101	48	35	135
On exercise of options where exercise price is greater than average market value
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net dilutive potential common shares issuable (in shares)	35	48	35	49
On exercise of options and vesting of restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net dilutive potential common shares issuable (in shares)	66	0	0	86

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Commitments and Contingencies - Contingencies (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Business acquisition, contingent consideration
Cash transferred to Archrock	$ 0	$ 44,720,000
Amount accrued for the outcomes of non-income-based tax audits	2,700,000		$ 2,800,000
EESLP
Business acquisition, contingent consideration
Maximum payments to be received by Archrock's subsidiary	125,800,000
Aggregate amount of all reimbursable expenses incurred	150,000,000.0
Remaining principal amount due from PDVSA Gas	17,000,000
Archrock
Business acquisition, contingent consideration
Cash transferred to Archrock		$ 19,700,000
Joint Ventures
Business acquisition, contingent consideration
Remaining principal amount due from PDVSA Gas	$ 4,000,000

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Commitments and Contingencies - Indemnifications (Narrative) (Details)	6 Months Ended
	Jun. 30, 2018
Tax Attributable to Business after Spin-off
Loss Contingencies [Line Items]
Liability for certain taxes not clearly attributable to the business (as a percent)	50.00%

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Reportable Segments - Narrative (Details)	6 Months Ended
	Jun. 30, 2018 segment
Segment Reporting [Abstract]
Number of reportable segments	3

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Reportable Segments - Schedule of Revenues and Other Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information [Line Items]
Revenue	$ 343,471	$ 317,701	$ 693,854	$ 563,126
Gross margin	95,631	87,707	191,396	166,185
Contract Operations
Segment Reporting Information [Line Items]
Revenue	91,487	95,341	187,980	187,386
Gross margin	59,115	60,650	120,223	121,897
Aftermarket Services
Segment Reporting Information [Line Items]
Revenue	32,267	24,244	58,638	46,768
Gross margin	8,561	6,966	16,035	12,878
Product Sales
Segment Reporting Information [Line Items]
Revenue	219,717	198,116	447,236	328,972
Gross margin	$ 27,955	$ 20,091	$ 55,138	$ 31,410

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Reportable Segments - Reconciliation of Income (Loss) Before Income Taxes to Total Gross Margin (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting [Abstract]
Income before income taxes	$ 8,153	$ 2,530	$ 17,583	$ 2,097
Selling, general and administrative	44,382	44,564	88,624	88,975
Depreciation and amortization	30,184	26,348	61,213	51,100
Long-lived asset impairment	0	0	1,804	0
Restatement related charges (recoveries), net	(597)	(1,158)	24	1,014
Restructuring and other charges	1,422	310	1,422	2,618
Interest expense	6,883	12,382	14,102	19,469
Other (income) expense, net	5,204	2,731	6,624	912
Total gross margin	$ 95,631	$ 87,707	$ 191,396	$ 166,185

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Supplemental Guarantor Financial Information - Narrative (Details) - USD ($)	Jun. 30, 2018	Apr. 30, 2017
8.125% senior unsecured notes due 2025 | Senior Notes | EESLP And EES Finance Corp.
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Debt instrument, face amount	$ 375,000,000
Subsidiaries | 8.125% senior unsecured notes due 2025 | Senior Notes | EESLP And EES Finance Corp.
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Debt instrument, face amount		$ 375,000,000.000000
EESLP And EES Finance Corp. | Subsidiaries
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership percentage by parent		100.00%

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Supplemental Guarantor Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 18,192	$ 49,145	$ 49,145
Restricted cash	546	546	546
Accounts receivable, net	261,914	261,251	266,052
Inventory, net	161,208	107,785	107,909
Contract assets	72,374	50,824	0
Costs and estimated earnings in excess of billings on uncompleted contracts	0	0	40,695
Intercompany receivables	0		0
Other current assets	30,104	38,528	38,707
Current assets held for sale	0	15,761	15,761
Current assets associated with discontinued operations	15,029	23,751	23,751
Total current assets	559,367	547,591	542,566
Property, plant and equipment, net	838,055	820,250	822,279
Investment in affiliates	0		0
Deferred income taxes	12,477	10,954	10,550
Intangible and other assets, net	100,958	95,253	76,980
Long-term assets held for sale	0	4,732	4,732
Long-term assets associated with discontinued operations	2,577	3,700	3,700
Total assets	1,513,434	1,482,480	1,460,807
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable, trade	190,613	148,744	148,744
Accrued liabilities	112,512	130,380	114,336
Contract liabilities	105,298	112,244	0
Deferred revenue	0	0	23,902
Billings on uncompleted contracts in excess of costs and estimated earnings	0	0	89,565
Intercompany payables	0		0
Current liabilities associated with discontinued operations	20,705	31,971	31,971
Total current liabilities	429,128	423,339	408,518
Long-term debt	401,119	368,472	368,472
Deferred income taxes	6,206	7,838	9,746
Long-term contract liabilities	85,062	89,004	0
Long-term deferred revenue	0	0	92,485
Other long-term liabilities	39,073	42,534	20,272
Long-term liabilities associated with discontinued operations	5,895	6,528	6,528
Total liabilities	966,483	937,715	906,021
Total Equity	546,951	544,765	554,786
Total liabilities and equity	1,513,434	$ 1,482,480	1,460,807
Reportable Legal Entities | Parent Guarantor
ASSETS
Cash and cash equivalents	84		397
Restricted cash	0		0
Accounts receivable, net	0		0
Inventory, net	0		0
Contract assets	0
Costs and estimated earnings in excess of billings on uncompleted contracts			0
Intercompany receivables	0		0
Other current assets	0		0
Current assets held for sale			0
Current assets associated with discontinued operations	0		0
Total current assets	84		397
Property, plant and equipment, net	0		0
Investment in affiliates	548,122		555,735
Deferred income taxes	0		0
Intangible and other assets, net	0		0
Long-term assets held for sale			0
Long-term assets associated with discontinued operations	0		0
Total assets	548,206		556,132
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable, trade	0		0
Accrued liabilities	0		57
Contract liabilities	0
Deferred revenue			0
Billings on uncompleted contracts in excess of costs and estimated earnings			0
Intercompany payables	1,255		1,289
Current liabilities associated with discontinued operations	0		0
Total current liabilities	1,255		1,346
Long-term debt	0		0
Deferred income taxes	0		0
Long-term contract liabilities	0
Long-term deferred revenue			0
Other long-term liabilities	0		0
Long-term liabilities associated with discontinued operations	0		0
Total liabilities	1,255		1,346
Total Equity	546,951		554,786
Total liabilities and equity	548,206		556,132
Reportable Legal Entities | Issuers
ASSETS
Cash and cash equivalents	808		24,195
Restricted cash	0		0
Accounts receivable, net	114,909		123,362
Inventory, net	100,524		50,528
Contract assets	44,327
Costs and estimated earnings in excess of billings on uncompleted contracts			33,439
Intercompany receivables	185,531		158,296
Other current assets	7,860		6,095
Current assets held for sale			15,761
Current assets associated with discontinued operations	0		0
Total current assets	453,959		411,676
Property, plant and equipment, net	268,484		288,670
Investment in affiliates	829,223		831,097
Deferred income taxes	5,488		5,452
Intangible and other assets, net	27,214		12,218
Long-term assets held for sale			4,732
Long-term assets associated with discontinued operations	0		0
Total assets	1,584,368		1,553,845
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable, trade	151,622		115,273
Accrued liabilities	38,453		54,724
Contract liabilities	65,707
Deferred revenue			2,162
Billings on uncompleted contracts in excess of costs and estimated earnings			89,002
Intercompany payables	362,879		359,766
Current liabilities associated with discontinued operations	0		0
Total current liabilities	618,661		620,927
Long-term debt	401,119		368,472
Deferred income taxes	0		0
Long-term contract liabilities	7,001
Long-term deferred revenue			629
Other long-term liabilities	9,465		8,082
Long-term liabilities associated with discontinued operations	0		0
Total liabilities	1,036,246		998,110
Total Equity	548,122		555,735
Total liabilities and equity	1,584,368		1,553,845
Reportable Legal Entities | Non- Guarantor Subsidiaries
ASSETS
Cash and cash equivalents	17,300		24,553
Restricted cash	546		546
Accounts receivable, net	147,005		142,690
Inventory, net	60,684		57,381
Contract assets	28,047
Costs and estimated earnings in excess of billings on uncompleted contracts			7,256
Intercompany receivables	362,879		359,766
Other current assets	22,244		32,612
Current assets held for sale			0
Current assets associated with discontinued operations	15,029		23,751
Total current assets	653,734		648,555
Property, plant and equipment, net	569,571		533,609
Investment in affiliates	(281,101)		(275,362)
Deferred income taxes	6,989		5,098
Intangible and other assets, net	73,744		64,762
Long-term assets held for sale			0
Long-term assets associated with discontinued operations	2,577		3,700
Total assets	1,025,514		980,362
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable, trade	38,991		33,471
Accrued liabilities	74,059		59,555
Contract liabilities	39,591
Deferred revenue			21,740
Billings on uncompleted contracts in excess of costs and estimated earnings			563
Intercompany payables	184,276		157,007
Current liabilities associated with discontinued operations	20,705		31,971
Total current liabilities	357,622		304,307
Long-term debt	0		0
Deferred income taxes	6,206		9,746
Long-term contract liabilities	78,061
Long-term deferred revenue			91,856
Other long-term liabilities	29,608		12,190
Long-term liabilities associated with discontinued operations	5,895		6,528
Total liabilities	477,392		424,627
Total Equity	548,122		555,735
Total liabilities and equity	1,025,514		980,362
Eliminations
ASSETS
Cash and cash equivalents	0		0
Restricted cash	0		0
Accounts receivable, net	0		0
Inventory, net	0		0
Contract assets	0
Costs and estimated earnings in excess of billings on uncompleted contracts			0
Intercompany receivables	(548,410)		(518,062)
Other current assets	0		0
Current assets held for sale			0
Current assets associated with discontinued operations	0		0
Total current assets	(548,410)		(518,062)
Property, plant and equipment, net	0		0
Investment in affiliates	(1,096,244)		(1,111,470)
Deferred income taxes	0		0
Intangible and other assets, net	0		0
Long-term assets held for sale			0
Long-term assets associated with discontinued operations	0		0
Total assets	(1,644,654)		(1,629,532)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable, trade	0		0
Accrued liabilities	0		0
Contract liabilities	0
Deferred revenue			0
Billings on uncompleted contracts in excess of costs and estimated earnings			0
Intercompany payables	(548,410)		(518,062)
Current liabilities associated with discontinued operations	0		0
Total current liabilities	(548,410)		(518,062)
Long-term debt	0		0
Deferred income taxes	0		0
Long-term contract liabilities	0
Long-term deferred revenue			0
Other long-term liabilities	0		0
Long-term liabilities associated with discontinued operations	0		0
Total liabilities	(548,410)		(518,062)
Total Equity	(1,096,244)		(1,111,470)
Total liabilities and equity	$ (1,644,654)		$ (1,629,532)

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Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Condensed Income Statements, Captions [Line Items]
Revenues	$ 343,471	$ 317,701	$ 693,854	$ 563,126
Cost of sales (excluding depreciation and amortization expense)	247,840	229,994	502,458	396,941
Selling, general and administrative	44,382	44,564	88,624	88,975
Depreciation and amortization	30,184	26,348	61,213	51,100
Long-lived asset impairment	0	0	1,804	0
Restatement related charges (recoveries), net	(597)	(1,158)	24	1,014
Restructuring and other charges	1,422	310	1,422	2,618
Interest expense	6,883	12,382	14,102	19,469
Intercompany charges, net	0	0	0	0
Equity in (income) loss of affiliates	0	0	0	0
Other (income) expense, net	5,204	2,731	6,624	912
Income before income taxes	8,153	2,530	17,583	2,097
Provision for (benefit from) income taxes	9,622	(640)	15,114	11,250
Income (loss) from continuing operations	(1,469)	3,170	2,469	(9,153)
Income from discontinued operations, net of tax	1,544	374	2,943	33,018
Net income	75	3,544	5,412	23,865
Other comprehensive loss	(8,123)	(2,669)	(7,366)	(1,026)
Comprehensive income (loss)	(8,048)	875	(1,954)	22,839
Reportable Legal Entities | Parent Guarantor
Condensed Income Statements, Captions [Line Items]
Revenues	0	0	0	0
Cost of sales (excluding depreciation and amortization expense)	0	0	0	0
Selling, general and administrative	352	209	635	1,701
Depreciation and amortization	0	0	0	0
Long-lived asset impairment			0
Restatement related charges (recoveries), net	0	0	0	0
Restructuring and other charges	0	0	0	0
Interest expense	0	0	0	0
Intercompany charges, net	0	0	0	0
Equity in (income) loss of affiliates	(274)	(3,753)	(5,894)	(25,566)
Other (income) expense, net	(153)	0	(153)	0
Income before income taxes	75	3,544	5,412	23,865
Provision for (benefit from) income taxes	0	0	0	0
Income (loss) from continuing operations	75	3,544	5,412	23,865
Income from discontinued operations, net of tax	0	0	0	0
Net income	75	3,544	5,412	23,865
Other comprehensive loss	(8,123)	(2,669)	(7,366)	(1,026)
Comprehensive income (loss)	(8,048)	875	(1,954)	22,839
Reportable Legal Entities | Issuers
Condensed Income Statements, Captions [Line Items]
Revenues	240,333	227,755	498,649	378,112
Cost of sales (excluding depreciation and amortization expense)	198,589	193,938	416,753	321,106
Selling, general and administrative	21,152	21,910	42,117	43,393
Depreciation and amortization	8,688	8,940	18,015	16,740
Long-lived asset impairment			1,804
Restatement related charges (recoveries), net	(597)	(1,143)	24	1,029
Restructuring and other charges	0	(1,376)	0	1,679
Interest expense	5,284	10,061	12,497	17,272
Intercompany charges, net	1,348	1,521	3,073	3,653
Equity in (income) loss of affiliates	423	(3,678)	(9,631)	(61,469)
Other (income) expense, net	(1,320)	146	(1,369)	(2,007)
Income before income taxes	6,766	(2,564)	15,366	36,716
Provision for (benefit from) income taxes	(5,299)	1,017	(4,107)	3,161
Income (loss) from continuing operations	12,065	(3,581)	19,473	33,555
Income from discontinued operations, net of tax	0	0	0	0
Net income	12,065	(3,581)	19,473	33,555
Other comprehensive loss	(8,123)	(2,669)	(7,366)	(1,026)
Comprehensive income (loss)	3,942	(6,250)	12,107	32,529
Reportable Legal Entities | Non- Guarantor Subsidiaries
Condensed Income Statements, Captions [Line Items]
Revenues	123,301	124,597	239,692	241,665
Cost of sales (excluding depreciation and amortization expense)	69,414	70,707	130,192	132,486
Selling, general and administrative	22,878	22,445	45,872	43,881
Depreciation and amortization	21,496	17,408	43,198	34,360
Long-lived asset impairment			0
Restatement related charges (recoveries), net	0	(15)	0	(15)
Restructuring and other charges	1,422	1,686	1,422	939
Interest expense	1,599	2,321	1,605	2,197
Intercompany charges, net	(1,348)	(1,521)	(3,073)	(3,653)
Equity in (income) loss of affiliates	(12,488)	7,257	(9,842)	27,913
Other (income) expense, net	6,677	2,585	8,146	2,919
Income before income taxes	13,651	1,724	22,172	638
Provision for (benefit from) income taxes	3,130	5,676	5,642	100
Income (loss) from continuing operations	10,521	(3,952)	16,530	538
Income from discontinued operations, net of tax	1,544	374	2,943	33,018
Net income	12,065	(3,578)	19,473	33,556
Other comprehensive loss	(8,123)	(2,669)	(7,366)	(1,026)
Comprehensive income (loss)	3,942	(6,247)	12,107	32,530
Eliminations
Condensed Income Statements, Captions [Line Items]
Revenues	(20,163)	(34,651)	(44,487)	(56,651)
Cost of sales (excluding depreciation and amortization expense)	(20,163)	(34,651)	(44,487)	(56,651)
Selling, general and administrative	0	0	0	0
Depreciation and amortization	0	0	0	0
Long-lived asset impairment			0
Restatement related charges (recoveries), net	0	0	0	0
Restructuring and other charges	0	0	0	0
Interest expense	0	0	0	0
Intercompany charges, net	0	0	0	0
Equity in (income) loss of affiliates	12,339	174	25,367	59,122
Other (income) expense, net	0	0	0	0
Income before income taxes	(12,339)	(174)	(25,367)	(59,122)
Provision for (benefit from) income taxes	11,791	(7,333)	13,579	7,989
Income (loss) from continuing operations	(24,130)	7,159	(38,946)	(67,111)
Income from discontinued operations, net of tax	0	0	0	0
Net income	(24,130)	7,159	(38,946)	(67,111)
Other comprehensive loss	16,246	5,338	14,732	2,052
Comprehensive income (loss)	$ (7,884)	$ 12,497	$ (24,214)	$ (65,059)

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Supplemental Guarantor Financial Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	$ 28,140	$ 55,604
Net cash provided by discontinued operations	881	2,498
Net cash provided by operating activities	29,021	58,102
Cash flows from investing activities:
Capital expenditures	(94,234)	(44,216)
Proceeds from sale of property, plant and equipment	2,372	6,427
Proceeds from sale of business	5,000	894
Intercompany transfers	0	0
Net cash used in continuing operations	(86,862)	(36,895)
Net cash provided by discontinued operations	66	19,164
Net cash used in investing activities	(86,796)	(17,731)
Cash flows from financing activities:
Proceeds from borrowings of debt	255,000	488,000
Repayments of debt	(222,758)	(463,877)
Intercompany transfers	0	0
Cash transfer to Archrock, Inc.	0	(44,720)
Payments for debt issuance costs	(47)	(7,606)
Proceeds from stock options exercised	563	684
Purchases of treasury stock	(3,481)	(3,124)
Net cash provided by (used in) financing activities	29,277	(30,643)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,455)	(42)
Net increase (decrease) in cash, cash equivalents and restricted cash	(30,953)	9,686
Cash, cash equivalents and restricted cash at beginning of period	49,691	36,349
Cash, cash equivalents and restricted cash at end of period	18,738	46,035
Reportable Legal Entities | Parent Guarantor
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	(279)	(286)
Net cash provided by discontinued operations	0	0
Net cash provided by operating activities	(279)	(286)
Cash flows from investing activities:
Capital expenditures	0	0
Proceeds from sale of property, plant and equipment	0	0
Proceeds from sale of business	0	0
Intercompany transfers	0	0
Net cash used in continuing operations	0	0
Net cash provided by discontinued operations	0	0
Net cash used in investing activities	0	0
Cash flows from financing activities:
Proceeds from borrowings of debt	0	0
Repayments of debt	0	0
Intercompany transfers	(34)	757
Cash transfer to Archrock, Inc.		0
Payments for debt issuance costs	0	0
Proceeds from stock options exercised	0	0
Purchases of treasury stock	0	0
Net cash provided by (used in) financing activities	(34)	757
Effect of exchange rate changes on cash, cash equivalents and restricted cash	0	0
Net increase (decrease) in cash, cash equivalents and restricted cash	(313)	471
Cash, cash equivalents and restricted cash at beginning of period	397	131
Cash, cash equivalents and restricted cash at end of period	84	602
Reportable Legal Entities | Issuers
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	(33,278)	18,091
Net cash provided by discontinued operations	0	0
Net cash provided by operating activities	(33,278)	18,091
Cash flows from investing activities:
Capital expenditures	(27,737)	(17,999)
Proceeds from sale of property, plant and equipment	45	1,930
Proceeds from sale of business	5,000	894
Intercompany transfers	34	(757)
Net cash used in continuing operations	(22,658)	(15,932)
Net cash provided by discontinued operations	0	0
Net cash used in investing activities	(22,658)	(15,932)
Cash flows from financing activities:
Proceeds from borrowings of debt	255,000	488,000
Repayments of debt	(222,758)	(463,877)
Intercompany transfers	3,272	36,494
Cash transfer to Archrock, Inc.		(44,720)
Payments for debt issuance costs	(47)	(7,606)
Proceeds from stock options exercised	563	684
Purchases of treasury stock	(3,481)	(3,124)
Net cash provided by (used in) financing activities	32,549	5,851
Effect of exchange rate changes on cash, cash equivalents and restricted cash	0	0
Net increase (decrease) in cash, cash equivalents and restricted cash	(23,387)	8,010
Cash, cash equivalents and restricted cash at beginning of period	24,195	16,645
Cash, cash equivalents and restricted cash at end of period	808	24,655
Reportable Legal Entities | Non- Guarantor Subsidiaries
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	61,697	37,799
Net cash provided by discontinued operations	881	2,498
Net cash provided by operating activities	62,578	40,297
Cash flows from investing activities:
Capital expenditures	(66,497)	(26,217)
Proceeds from sale of property, plant and equipment	2,327	4,497
Proceeds from sale of business	0	0
Intercompany transfers	(3,272)	(36,494)
Net cash used in continuing operations	(67,442)	(58,214)
Net cash provided by discontinued operations	66	19,164
Net cash used in investing activities	(67,376)	(39,050)
Cash flows from financing activities:
Proceeds from borrowings of debt	0	0
Repayments of debt	0	0
Intercompany transfers	0	0
Cash transfer to Archrock, Inc.		0
Payments for debt issuance costs	0	0
Proceeds from stock options exercised	0	0
Purchases of treasury stock	0	0
Net cash provided by (used in) financing activities	0	0
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,455)	(42)
Net increase (decrease) in cash, cash equivalents and restricted cash	(7,253)	1,205
Cash, cash equivalents and restricted cash at beginning of period	25,099	19,573
Cash, cash equivalents and restricted cash at end of period	17,846	20,778
Eliminations
Cash flows from operating activities:
Net cash provided by (used in) continuing operations	0	0
Net cash provided by discontinued operations	0	0
Net cash provided by operating activities	0	0
Cash flows from investing activities:
Capital expenditures	0	0
Proceeds from sale of property, plant and equipment	0	0
Proceeds from sale of business	0	0
Intercompany transfers	3,238	37,251
Net cash used in continuing operations	3,238	37,251
Net cash provided by discontinued operations	0	0
Net cash used in investing activities	3,238	37,251
Cash flows from financing activities:
Proceeds from borrowings of debt	0	0
Repayments of debt	0	0
Intercompany transfers	(3,238)	(37,251)
Cash transfer to Archrock, Inc.		0
Payments for debt issuance costs	0	0
Proceeds from stock options exercised	0	0
Purchases of treasury stock	0	0
Net cash provided by (used in) financing activities	(3,238)	(37,251)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	0	0
Net increase (decrease) in cash, cash equivalents and restricted cash	0	0
Cash, cash equivalents and restricted cash at beginning of period	0	0
Cash, cash equivalents and restricted cash at end of period	$ 0	$ 0