The US taxation rules are based on Citizen Based Taxation or CBT. So the answer to this question is "Yes, a US Citizen has to file US Tax Returns even if living out of the country". One can take the Foreign Earned Income Exclusion or FEIE via Form 2555 which is $100,800 for 2015. The Form 2555 needs to be filed with your Form 1040. Any income that went over the FEIE will still be subject to US taxes, a Foreign Tax Credit can be claimed on that part of your income if paying taxes in the country of residence. the definition of "Earned Income" is in the instructions to Form 2555. Certain foreign self-employment income may also be excluded but you will still be subject to the SE Tax on the self-employment income.
In addition to the FEIE, you may be eligible to deduct certain foreign housing amounts.

In order to qualify for the exclusion , you must meet either the Physical Presence test or the Bona Fide Residences. The first requires that you be physically present in a foreign country for 330 days in a 12-month period. The other requires that yo be a bona fide resident of the country in which you live. Earned income is basically wages or salaries and earning from self-employment. It does not include investment income such as gains on the sale of stocks or dividends and interest. Also excluded are passive income such as rental gains.