Exterran Holdings, Inc. Financial Results
The merger of Hanover Compressor Company with Universal
Compression Holdings, Inc. into the new combined company, Exterran
Holdings, was completed on August 20, 2007. Hanover was the acquirer
for accounting purposes and, as a result, Exterran Holdings' financial
statements include Universal's results for only the last 42 days of
the quarter. Periods prior to the merger reflect only Hanover's
results.
Exterran Holdings reported revenue and other income of $753.5
million in the third quarter 2007, compared to $515.7 million in the
second quarter 2007 and $423.8 million in the third quarter 2006. Net
loss for the third quarter 2007 was $75.4 million, or a $1.55 loss per
share, including pretax charges related to merger, integration and
refinancing activities and asset impairments that totaled $179.9
million, or $2.37 per share. Net income was $26.1 million, or $0.71
per share, in the second quarter 2007, including a charge for merger
and integration expense of $3.1 million, or $0.05 per share. Net
income was $12.3 million, or $0.37 per share, in the third quarter
2006. All share and per share amounts have been retroactively adjusted
to reflect the merger conversion ratio of 0.325 shares of Exterran
Holdings common stock for each share of Hanover common stock for all
periods discussed or presented.
EBITDA, as adjusted (as defined below), was $161.2 million in the
third quarter 2007 compared to $125.2 million in the second quarter
2007 and $97.8 million in the third quarter 2006.
Merger, integration and asset impairment charges in the third
quarter include $34.0 million for merger and integration expense,
$77.3 million in charges related to the refinancing of much of
Hanover's and Universal's outstanding debt, $61.9 million for fleet
asset impairment charges and $6.7 million in impairment of an
investment in a non-consolidated affiliate. Exterran Holdings
continues to expect to achieve cost synergies of approximately $50
million on an annualized run rate basis when the integration is
completed, which is expected to occur by the end of 2008. Exterran
Holdings also expects ongoing interest expense savings of
approximately $25 million based upon the completion of the debt
refinancing and interest rate hedging activities in late September
2007.
Exterran Holdings repurchased 641,300 shares of its common stock
during the third quarter, at an average price of $77.94 per share.
This share repurchase of approximately $50 million was completed under
the $200 million share repurchase program previously authorized by
Exterran Holdings' Board of Directors.
"We are excited that we have begun to operate as a combined
company and are extremely pleased with the reception of our new
company by customers, employees and the financial community. We
believe the merger has positioned Exterran well to meet the
compression and surface production needs of our customers around the
world," said Stephen A. Snider, Exterran Holdings' President and CEO.
"I again want to thank all Exterran employees for their hard work and
dedication, which was essential to the successful completion of the
merger, for working energetically to commence our integration efforts,
for their commitment to achieve our synergy goals, and for working to
implement our business strategies to meet attractive market
opportunities," added Mr. Snider.
Exterran Partners, L.P. Financial Results
Exterran Partners was renamed from Universal Compression Partners
upon the completion of the merger of Hanover and Universal.
Exterran Partners reported revenue of $34.7 million and net income
of $7.5 million in the third quarter 2007, compared to revenue of
$18.8 million and net income of $2.3 million in the second quarter
2007. EBITDA, as further adjusted (as defined below), totaled $19.1
million in the third quarter 2007 compared to $10.4 million in the
second quarter 2007. Distributable cash flow (as defined below)
totaled $13.5 million in the third quarter 2007 compared to $6.9
million in the second quarter 2007.
In early July, Exterran Partners completed its previously
announced acquisition of a fleet of compressor units and associated
customer contracts from Exterran Holdings. The majority of the
increase in Exterran Partners' results for the third quarter was a
result of that acquisition. On October 30, 2007, Exterran Partners
announced a cash distribution for the third quarter of $0.40 per unit,
compared to a cash distribution for the second quarter of $0.35 per
unit announced on July 30, 2007. This distribution increase is
Exterran Partners' first since its initial public offering in October
2006. The distributable cash flow generated in the third quarter is
approximately 2.0 times the amount of the cash distribution to
unitholders, reflecting the strong performance of Exterran Partners in
the quarter.
"Exterran Partners had a strong performance in the third quarter,
driven by favorable market conditions and the completion of its
previously announced acquisition of approximately 282,000 horsepower.
As a result, we increased cash distributions for the third quarter by
14.3% as compared to the second quarter distribution," commented Mr.
Snider, Chairman, President and CEO of Exterran Partners' general
partner. "With the completion of the merger of Hanover and Universal,
the fleet of additional compression assets in the United States that
can be offered for sale over time to Exterran Partners from Exterran
Holdings increased by approximately 2.2 million horsepower, enhancing
our outlook for future growth."
Conference Call Details
Exterran Holdings, Inc. (NYSE:EXH) and Exterran Partners, L.P.
(NASDAQ:EXLP) announce the following schedule and teleconference
information for its third quarter 2007 earnings release:
-- Teleconference: Friday, November 2, 2007 at 11:00 a.m. Eastern
Time (10:00 a.m. Central Time). To access the call, United
States and Canadian participants should dial 800-811-8824.
International participants should dial 913-981-4903 at least
10 minutes before the scheduled start time. Please reference
Exterran conference call number 5224782.
-- Live Webcast: The webcast will be available in listen-only
mode via the Company's website: www.exterran.com.
-- Webcast Replay: For those unable to participate, a replay will
be available from 1:30 p.m. Eastern Time on Friday, November
2, until 1:30 p.m. Eastern Time Friday, November 9, 2007. To
listen to the replay, please dial 888-203-1112 in the U.S. and
Canada, or 719-457-0820 internationally and enter access code
5224782.
With respect to Exterran Holdings, EBITDA, as adjusted, a non-GAAP
measure, is defined as net income plus income taxes, interest expense
(including debt extinguishment costs and gain or loss on termination
of interest rate swaps), depreciation and amortization expense,
foreign currency gains or losses, impairment charges, merger and
integration expenses, minority interest, excluding non-recurring
items, and extraordinary gains or losses.
With respect to Exterran Partners, distributable cash flow, a
non-GAAP measure, is defined as net income plus income taxes,
depreciation and amortization expense, non-cash selling, general and
administrative expenses, interest expense and any amounts by which
cost of sales and selling, general and administrative costs are
reduced as a result of caps on these costs contained in the omnibus
agreement to which Exterran Holdings and Exterran Partners are parties
(the "Omnibus Agreement"), which amounts are treated as capital
contributions from Exterran Holdings for accounting purposes, less
cash interest expense and maintenance capital expenditures, and
excluding non-recurring items.
With respect to Exterran Partners, EBITDA, as further adjusted, a
non-GAAP measure, is defined as net income plus income taxes, interest
expense, depreciation and amortization expense, non-cash selling,
general and administrative expenses and any amounts by which cost of
sales and selling, general and administrative costs are reduced as a
result of caps on these costs contained in the Omnibus Agreement,
which amounts are treated as capital contributions from Exterran
Holdings for accounting purposes, and excluding non-recurring items.
With respect to Exterran Holdings, Gross Margin, a non-GAAP
measure, is defined as total revenue less cost of sales (excluding
depreciation and amortization expense).
With respect to Exterran Partners, Gross Margin, as adjusted, a
non-GAAP measure, is defined as total revenue less cost of sales
(excluding depreciation and amortization expense) plus any amounts by
which cost of sales are reduced as a result of caps on these costs
contained in the Omnibus Agreement, which amounts are treated as
capital contributions from Exterran Holdings for accounting purposes.
About Exterran
Exterran Holdings, Inc. is the global market leader in full
service natural gas compression and a premier provider of sales,
operations, maintenance, fabrication, service and equipment for oil
and gas production, processing and transportation applications.
Exterran Holdings serves customers across the energy spectrum--from
producers to transporters to processors to storage owners.
Headquartered in Houston, Texas, Exterran and its 11,000 employees
have operations in over 30 countries worldwide.
Exterran Partners was formed by Exterran Holdings to provide
natural gas contract compression services to customers throughout the
United States. Exterran Holdings owns approximately 51% of Exterran
Partners.
For more information, visit www.exterran.com.
Forward Looking Statements
All statements in this release (and oral statements made regarding
the subjects of this release) other than historical facts are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements rely on a number of assumptions concerning future events
and are subject to a number of uncertainties and factors that could
cause actual results to differ materially from such statements, many
of which are outside the control of Exterran Holdings, Inc. and
Exterran Partners, L.P. (the "Companies"). Forward-looking information
includes, but is not limited to: statements regarding the value and
effect of the merger, including operating efficiencies, cost savings
and synergies, and the Companies' ability to realize that value;
Exterran Holdings' intentions with respect to its share repurchase
program and its ability to effectuate that program; the Companies'
operational and financial strategies, and the Companies' ability to
successfully effect those strategies; the Companies' financial and
operational outlook and ability to fulfill that outlook; the expected
ongoing interest expense savings as a result of the debt refinancing;
and the intent and ability of Exterran Holdings to drop-down
additional assets into Exterran Partners.
While the Companies believe that the assumptions concerning future
events are reasonable, they caution that there are inherent
difficulties in predicting certain important factors that could impact
the accuracy of the forward-looking information. Among the factors
that could cause results to differ materially from those indicated by
such forward-looking statements include: changes in Exterran Holdings'
credit rating and the factors that impact its credit rating; the
failure to realize anticipated synergies from the merger; changes in
master limited partnership equity markets and overall financial
markets that impact the effect of the drop-down of additional assets
from Exterran Holdings to Exterran Partners; changes in tax laws that
impact master limited partnerships, including drop-downs of additional
assets in Exterran Partners; conditions in the oil and gas industry,
including a sustained decrease in the level of supply or demand for
natural gas and the impact on the price of natural gas; Exterran
Holdings' ability to timely and cost-effectively obtain components
necessary to conduct the Companies' business; changes in political or
economic conditions in key operating markets, including international
markets; the Companies' ability to timely and cost-effectively
integrate their enterprise resource planning systems; changes in
safety and environmental regulations pertaining to the production and
transportation of natural gas; and as to each of the Companies, the
performance of the other entity.
These forward-looking statements are also affected by the risk
factors, forward-looking statements and challenges and uncertainties
described in Universal Compression Holdings' Annual Report on Form
10-K for the year ended December 31, 2006, as amended by Amendment No.
1 thereto, Universal Compression Partners' Annual Report on Form 10-K
for the year ended December 31, 2006, Hanover Compressor Company's
Annual Report on Form 10-K for the year ended December 31, 2006, as
amended by Amendment No. 1 thereto, and those set forth from time to
time in Exterran Holdings' and Exterran Partners' filings with the
Securities and Exchange Commission ("SEC"), which are currently
available at www.exterran.com. Except as required by law, the
Companies expressly disclaim any intention or obligation to revise or
update any forward-looking statements whether as a result of new
information, future events or otherwise.
EXTERRAN HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Three Months Ended
----------------------------------------
September 30, June 30, September 30,
2007 2007 2006
------------- ---------- -------------
Revenues and other income:
U.S. contract operations $ 145,913 $ 99,562 $ 98,030
International contract
operations 91,530 69,645 63,792
Aftermarket services 150,202 72,664 47,951
Compressor and accessory
fabrication 174,235 139,508 90,141
Production and processing
equipment fabrication 191,649 122,595 115,890
Equity in income (loss) of
non-consolidated affiliates
(1) (5,005) 6,279 6,313
Gain on sale of business and
other income 5,006 5,465 1,667
------------- ---------- -------------
753,530 515,718 423,784
------------- ---------- -------------
Costs and expenses:
Cost of sales (excluding
depreciation and
amortization expense):
U.S. contract operations 62,184 40,258 39,557
International contract
operations 36,731 27,675 25,528
Aftermarket services 127,519 56,036 37,894
Compressor and accessory
fabrication 134,916 106,016 74,371
Production and
processing equipment
fabrication 164,661 104,336 97,675
Selling, general and
administrative 73,025 56,240 50,913
Merger and integration
expenses 34,008 3,065 -
Depreciation and
amortization 67,133 52,772 45,307
Fleet impairment 61,945 - -
Interest expense (2) 37,483 26,775 28,802
Foreign currency translation (4,673) 319 905
Debt extinguishment costs 70,255 - -
------------- ---------- -------------
Total costs and expenses 865,187 473,492 400,952
------------- ---------- -------------
Income (loss) from continuing
operations before income
taxes and minority interest (111,657) 42,226 22,832
Provision (benefit) for
income taxes (38,692) 16,162 11,216
------------- ---------- -------------
Income (loss) from continuing
operations before minority
interest (72,965) 26,064 11,616
Minority interest, net of
taxes (2,426) - 93
------------- ---------- -------------
Income (loss) from continuing
operations (75,391) 26,064 11,709
Income from discontinued
operations, net of tax - - 570
------------- ---------- -------------
Net income (loss) $ (75,391) $ 26,064 $ 12,279
============= ========== =============
Basic income (loss) per
common share:
Income (loss) from
continuing operations $ (1.55) $ 0.76 $ 0.37
Income from discontinued
operations, net of tax - - -
------------- ---------- -------------
Net income (loss) $ (1.55) $ 0.76 $ 0.37
============= ========== =============
Diluted income (loss) per
common share:
Income (loss) from
continuing operations (3) $ (1.55) $ 0.71 $ 0.34
Income from discontinued
operations, net of tax - - 0.03
------------- ---------- -------------
Net income (loss) $ (1.55) $ 0.71 $ 0.37
============= ========== =============
Weighted average common and
eqivalent shares outstanding
(4):
Basic 48,771 34,414 32,948
------------- ---------- -------------
Diluted 48,771 38,368 33,605
------------- ---------- -------------
(1) Includes impairment of investment in non-consolidated affiliate of
$6.7 million in the third quarter of 2007.
(2) Includes termination of interest rate swaps charges of $7.0
million in the third quarter of 2007 related to the refinancing.
(3) Net income for the diluted earnings per share calculation for the
three-month period ending June 30, 2007 is adjusted to add back
interest expense and amortization of financing costs, net of tax,
relating to the Company's convertible senior notes due 2014 and
convertible senior notes due 2029 totaling $1.2 million.
(4) Adjusted for the Hanover common share conversion ratio in the
merger of Hanover and Universal for the periods ended June 30, 2007
and September 30, 2006.
EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands)
Three Months Ended
--------------------------------------
September 30, June 30, September 30,
2007 2007 2006
------------- ---------- -------------
Revenues:
U.S. contract
operations $ 145,913 $ 99,562 $ 98,030
International
contract operations 91,530 69,645 63,792
Aftermarket services 150,202 72,664 47,951
Compressor and
accessory
fabrication 174,235 139,508 90,141
Production and
processing
equipment
fabrication (1) 191,649 122,595 115,890
------------- ---------- -------------
Total $ 753,529 $ 503,974 $ 415,804
============= ========== =============
Gross Margin (2):
U.S. contract
operations $ 83,729 $ 59,304 $ 58,473
International
contract operations 54,799 41,970 38,264
Aftermarket services 22,683 16,628 10,057
Compressor and
accessory
fabrication 39,319 33,492 15,770
Production and
processing
equipment
fabrication (1) 26,988 18,259 18,215
------------- ---------- -------------
Total $ 227,518 $ 169,653 $ 140,779
============= ========== =============
Selling, General and
Administrative $ 73,025 $ 56,240 $ 50,913
% of Revenues 10% 11% 12%
EBITDA, as adjusted (2) $ 161,237 $ 125,157 $ 97,846
% of Revenues 21% 25% 24%
Capital Expenditures $ 90,713 $ 69,451 $ 53,883
Proceeds from Sale of PP&E 8,591 9,425 3,852
------------- ---------- -------------
Net Capital Expenditures $ 82,122 $ 60,026 $ 50,031
============= ========== =============
Gross Margin Percentage:
U.S. contract
operations 57% 60% 60%
International
contract operations 60% 60% 60%
Aftermarket services 15% 23% 21%
Compressor and
accessory
fabrication 23% 24% 17%
Production and
processing
equipment
fabrication 14% 15% 16%
Total 30% 34% 34%
Reconciliation of GAAP to Non-
GAAP Financial Information:
Income from
continuing
operations $ (75,391) $ 26,064 $ 11,709
Depreciation and
amortization 67,133 52,772 45,307
Fleet impairment 61,945 - -
Impairment of
investment in non-
consolidated
affiliate 6,743 - -
Interest expense 37,483 26,775 28,802
Debt extinguishment
costs 70,255 - -
Foreign currency
translation (4,673) 319 905
Merger and
integration
expenses 34,008 3,065 -
Minority interest 2,426 - (93)
Provision (benefit)
for income taxes (38,692) 16,162 11,216
------------- ---------- -------------
EBITDA, as adjusted
(2) 161,237 125,157 97,846
Selling, general and
administrative 73,025 56,240 50,913
Equity in (income)
loss of non-
consolidated
affiliates 5,005 (6,279) (6,313)
Less: Impairment of
investment in non-
consolidated
affiliate (6,743) - -
Gain on sale of
business and other
income (5,006) (5,465) (1,667)
------------- ---------- -------------
Gross Margin (2) $ 227,518 $ 169,653 $ 140,779
============= ========== =============
September 30, June 30, September 30,
2007 2007 2006
------------- ---------- -------------
Debt $ 2,246,063 $1,338,479 $ 1,426,885
Stockholders' Equity $ 3,151,359 $1,159,863 $ 974,881
Total Debt to Capitalization 41.6% 53.6% 59.4%
-------------------------------
(1) Our subsidiary, Belleli Energy S.r.l. ("Belleli"), had revenues of
$76.2 million, $81.0 million and $65.1 million and gross margin of
$3.3 million, $6.3 million and $7.7 million in the third quarter of
2007, second quarter of 2007 and third quarter of 2006, respectively.
(2) Management believes disclosure of EBITDA, as adjusted, and Gross
Margin, non-GAAP measures, provide useful information to investors
because, when viewed with our GAAP results and accompanying
reconciliations, they provide a more complete understanding of our
performance than GAAP results alone. Management uses EBITDA, as
adjusted, and Gross Margin as supplemental measures to review current
period operating performance, comparability measures and performance
measures for period to period comparisons. In addition, EBITDA, as
adjusted, is used by management as a valuation measure.
EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Horsepower in thousands; dollars in millions)
September 30,
2007
-------------
Total Available Horsepower:
U.S. contract operations 4,365
International contract
operations 1,550
------------
Total 5,915
============
Horsepower Utilization:
U.S. contract operations 83%
International contract
operations 89%
Total 85%
September 30, June 30, September 30,
2007 2007 2006
------------- ------------ -------------
Fabrication Backlog:
Compression & accessory $ 395 $ 299 $ 192
Production & processing (1) 720 732 496
------------- ------------ -------------
Total $ 1,115 $ 1,031 $ 689
============= ============ =============
(1) Includes Belleli's backlog of $518 million, $569 million and $454
million at September 30, 2007, June 30, 2007 and September 30, 2006,
respectively.
EXTERRAN PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit amounts)
Three Months Ended
-------------------------
September 30, June 30,
2007 2007
------------- ---------
Revenue and other income:
Revenue $ 34,711 $ 18,804
Interest income 9 3
------------- ---------
34,720 18,807
------------- ---------
Costs and expenses:
Cost of sales (excluding depreciation) 14,986 8,062
Depreciation 5,160 2,968
Selling, general and administrative 3,400 3,426
Interest expense 3,560 2,093
------------- ---------
Total costs and expenses 27,106 16,549
------------- ---------
Income before income taxes 7,614 2,258
Income tax (benefit) expense 132 (6)
------------- ---------
Net income $ 7,482 $ 2,264
============= =========
General partner interest in net income $ 150 $ 45
------------- ---------
Limited partner interest in net income $ 7,332 $ 2,219
============= =========
Weighted average limited partners' units
outstanding:
Basic 16,285 12,650
------------- ---------
Diluted 16,334 12,709
------------- ---------
Earnings per limited partner unit:
Basic $ 0.45 $ 0.18
============= =========
Diluted $ 0.45 $ 0.17
============= =========
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands, except per unit amounts)
Three Months Ended
----------------------------
September 30, June 30,
2007 2007
-------------- -----------
Revenue $ 34,711 $ 18,804
Gross Margin, as adjusted (1) $ 22,572 $ 12,911
EBITDA, as further adjusted (1) $ 19,116 $ 10,411
% of Revenue 55% 55%
Capital Expenditures $ 7,627 $ 10,071
Proceeds from Sale of PP&E - -
-------------- -----------
Net Capital Expenditures $ 7,627 $ 10,071
============== ===========
Gross Margin percentage, as adjusted 65% 69%
Distributable cash flow (2) $ 13,496 $ 6,894
Distributions per Unit $ 0.40 $ 0.35
Distribution to All Unitholders $ 6,808 $ 5,957
Distributable Cash Flow Coverage 1.98x 1.16x
September 30, June 30,
2007 2007
-------------- -----------
Debt $ 220,000 $ 121,000
Total Partners' Capital $ 147,769 $ 74,861
Total Debt to Capitalization 59.8% 61.8%
Total Debt to Annualized EBITDA, as
further adjusted (1) 2.9x 2.9x
EBITDA, as further adjusted (1) to
Interest Expense 5.4x 5.0x
-----------------------------------------
(1) Management believes disclosure of EBITDA, as further adjusted, and
Gross Margin, as adjusted, non-GAAP measures, provide useful
information to investors because, when viewed with our GAAP results
and accompanying reconciliations, they provide a more complete
understanding of our performance than GAAP results alone. Management
uses EBITDA, as further adjusted, and Gross Margin, as adjusted, as
supplemental measures to review current period operating performance,
comparability measures and performance measures for period to period
comparisons. In addition, EBITDA, as further adjusted, is used by
management as a valuation measure.
(2) Distributable cash flow, a non-GAAP measure, is a significant
liquidity metric used by management to compare basic cash flows
generated by us to the cash distributions we expect to pay our
partners. Using this metric, management can quickly compute the
coverage ratio of estimated cash flows to planned cash distributions.
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands)
Three Months Ended
------------------------
September 30, June 30,
2007 2007
------------- ---------
Reconciliation of GAAP to Non-GAAP Financial
Information:
Net income $ 7,482 $ 2,264
Income tax (benefit) expense 132 (6)
Depreciation 5,160 2,968
Cap on operating and selling, general and
administrative costs provided by Exterran
Holdings ("EXH") 2,847 1,789
Non-cash selling, general and administrative
costs 792 1,303
Non-recurring cash selling, general and
administrative reimbursement (1) (848) -
Interest expense, net of interest income 3,551 2,093
------------- ---------
EBITDA, as further adjusted (2) 19,116 10,411
Cash selling, general and administrative
costs (see note 1 below) 2,608 2,612
Less: cap on selling, general and
administrative costs provided by EXH - (112)
Plus: Non-recurring cash selling, general
and administrative reimbursement (1) 848 -
------------- ---------
Gross Margin, as adjusted for operating cost
caps provided by EXH (2) $ 22,572 $ 12,911
Less: Cash interest expense (3,501) (2,085)
Less: Cash selling, general and
administrative, as adjusted for cost caps
provided by EXH (2,608) (2,500)
Less: Income tax (expense) benefit (132) 6
Less: Maintenance capital expenditures (1,987) (1,438)
Less: Non-recurring cash selling, general
and administrative reimbursement (1) (848) -
------------- ---------
Distributable cash flow (3) $ 13,496 $ 6,894
============= =========
Cash flows from operating activities $ 11,305 $ 5,658
Amortization of debt issuance cost (59) (56)
Cap on operating and selling, general and
administrative costs provided by EXH 2,847 1,789
Interest expense, net of interest income 3,551 2,093
Cash interest expense (3,501) (2,085)
Maintenance capital expenditures (1,987) (1,438)
Change in current assets/liabilities 2,314 807
Change in non-current assets/liabilities (126) 126
Less: Non-recurring cash selling, general
and administrative reimbursement (1) (848) -
------------- ---------
Distributable cash flow (3) $ 13,496 $ 6,894
============= =========
(1) Consists of a cash reimbursement from Exterran Holdings of non-
cash merger-related expenses incurred by Exterran Partners.
(2) Management believes disclosure of EBITDA, as further adjusted, and
Gross Margin, as adjusted, non-GAAP measures, provide useful
information to investors because, when viewed with our GAAP results
and accompanying reconciliations, they provide a more complete
understanding of our performance than GAAP results alone. Management
uses EBITDA, as further adjusted, and Gross Margin, as adjusted, as
supplemental measures to review current period operating performance,
comparability measures and performance measures for period to period
comparisons. In addition, EBITDA, as further adjusted, is used by
management as a valuation measure.
(3) Distributable cash flow, a non-GAAP measure, is a significant
liquidity metric used by management to compare basic cash flows
generated by us to the cash distributions we expect to pay our
partners. Using this metric, management can quickly compute the
coverage ratio of estimated cash flows to planned cash distributions.
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(Horsepower in thousands)
Three Months Ended
------------------------
September 30, June 30,
2007 2007
------------- ----------
Total Available Horsepower (at period end) 703 387
============= ==========
Average Operating Horsepower 632 348
============= ==========
Horsepower Utilization:
Spot (at period end) 94.5% 92.7%
Average 94.9% 93.1%
Combined U.S. Contract Operations Horsepower
of Exterran Holdings and Exterran Partners
covered by contracts converted to service
agreements (at period end) (1) 1,201 1,194
Total Available U.S. Contract Operations
Horsepower of Exterran Holdings and Exterran
Partners (at period end) (1) 4,365 2,147
% of U.S. Contract Operations Horsepower of
Exterran Holdings and Exterran Partners
under Converted Contract Form (at period
end) (1) 27.5% 55.6%
(1) Includes only horsepower of Universal Compression, Inc. at June
30, 2007.
SOURCE:
Exterran Holdings, Inc.
Exterran Holdings, Inc.
David Oatman, 713-335-7460 (Investors)
Rick Goins, 832-554-4918 (Media)