Exterran Holdings and Exterran Partners Report First Quarter 2009 Results

May 7, 2009

HOUSTON--(BUSINESS WIRE)--May. 7, 2009-- Exterran Holdings, Inc. (NYSE:EXH) and Exterran Partners, L.P. (NASDAQ:EXLP) today reported financial results for the first quarter 2009.

Exterran Holdings, Inc. Financial Results

Exterran Holdings reported a net loss attributable to Exterran stockholders for the first quarter 2009 of $59.4 million, or $0.97 per diluted share, compared to a net loss attributable to Exterran stockholders for the fourth quarter 2008 of $1,055.4 million, or $16.70 per diluted share, and net income attributable to Exterran stockholders for the first quarter 2008 of $49.4 million, or $0.73 per diluted share.

As previously disclosed, first quarter 2009 results included pretax charges that totaled $103.9 million, including a $96.6 million non-cash charge related to our investments in non-consolidated affiliates in Venezuela and a $7.3 million charge for manufacturing facility consolidation and impairment related expenses. Excluding these charges, net income attributable to Exterran stockholders for the first quarter 2009 was $33.4 million, or $0.53 per diluted share. The charge related to our investments in non-consolidated affiliates did not impact our cash flows, liquidity position, or compliance with debt covenants.

Net income attributable to Exterran stockholders, excluding charges was $55.8 million, or $0.85 per diluted share for the fourth quarter 2008 and net income attributable to Exterran stockholders, excluding charges was $53.1 million, or $0.79 per diluted share for the first quarter 2008.

Revenue was $737.9 million for the first quarter 2009 compared to $830.4 million for the fourth quarter 2008 and $740.1 million for the first quarter 2008. EBITDA, as adjusted (as defined below), was $182.6 million for the first quarter 2009 compared to $219.0 million for the fourth quarter 2008 and $211.2 million for the first quarter 2008.

Commenting on the results, Stephen A. Snider, Exterran Holdings’ Chief Executive Officer, said, “The global economic slowdown has resulted in a reduced level of energy demand. Our customers have scaled back activity levels, as reflected by reduced capital expenditure levels and lower drilling rig counts, particularly in North America. We expect that business conditions will continue to be challenging until natural gas supply and demand are more in balance.”

Ernie L. Danner, Exterran Holdings’ President and Chief Operating Officer, said, “As a result of our expectations for continued weakness in the North America natural gas market over the remainder of 2009 and our concern regarding our Venezuelan operations, we are working diligently to ensure that our costs are in line with our business activity levels. Earlier this year, we disclosed our plans to consolidate our fabrication operations in North America, which include the closure of one major facility and the discontinuation of compressor fabrication activities at another. Today, we are announcing that we will reduce operating and general and administrative costs, including headcount reductions, in all facets of our business. We believe, however, that the longer-term growth prospects for our company are strong given our leading market positions in our focus areas, and we intend to continue to execute our business strategies including the expansion of our international contract operations business through the successful execution of our backlog of new projects.”

Exterran Partners, L.P. Financial Results

Exterran Partners reported revenue of $48.2 million for the first quarter 2009 compared to $49.1 million for the fourth quarter 2008 and $35.3 million for the first quarter 2008. Net income was $6.7 million, or $0.33 per diluted limited partner unit, for the first quarter 2009 compared to $7.8 million, or $0.39 per diluted limited partner unit, for the fourth quarter 2008 and $6.5 million, or $0.38 per diluted limited partner unit, for the first quarter 2008.

EBITDA, as further adjusted (as defined below), totaled $22.8 million for the first quarter 2009 compared to $23.8 million for the fourth quarter 2008 and $19.2 million for the first quarter 2008. Distributable cash flow (as defined below) totaled $13.2 million for the first quarter 2009 compared to $14.1 million for the fourth quarter 2008 and $14.0 million for the first quarter 2008.

“Exterran Partners had another solid performance in the first quarter in light of the significant decline in U.S. drilling activity, driven by the relatively stable and recurring nature of our production-related activities,” commented Mr. Danner, President and Chief Operating Officer of Exterran Partners’ managing general partner.

On April 30, 2009, Exterran Partners announced a cash distribution of $0.4625 per limited partner unit for the first quarter 2009, compared to $0.4625 per limited partner unit for the fourth quarter 2008 and $0.425 per limited partner unit for the first quarter 2008.

Conference Call Details

Exterran Holdings, Inc. (NYSE:EXH) and Exterran Partners, L.P. (NASDAQ:EXLP) announce the following schedule and teleconference information for their first quarter 2009 earnings release:

  • Teleconference: Thursday, May 7, 2009 at 11:00 a.m. Eastern Time, 10:00 a.m. Central Time. To access the call, United States and Canadian participants should dial 888-599-8691. International participants should dial 913-312-6684 at least 10 minutes before the scheduled start time. Please reference Exterran conference call number 1083744.
  • Live Webcast: The webcast will be available in listen-only mode via the companies’ website: www.exterran.com.
  • Webcast Replay: For those unable to participate, a replay will be available from 2:00 p.m. Eastern Time on Thursday, May 7, 2009, until 2:00 p.m. Eastern Time on Thursday, May 14, 2009. To listen to the replay, please dial 888-203-1112 in the United States and Canada, or 719-457-0820 internationally, and enter access code 1083744.

With respect to Exterran Holdings, EBITDA, as adjusted, a non-GAAP measure, is defined as net income (loss) plus income taxes, interest expense (including debt extinguishment costs and gain or loss on termination of interest rate swaps), depreciation and amortization expense, impairment charges, merger and integration expenses, excluding non-recurring items, and extraordinary gains or losses.

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 (“SG&A”) 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 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, and excluding non-recurring items.

With respect to Exterran Partners, distributable cash flow, a non-GAAP measure, is defined as net income plus depreciation and amortization expense, non-cash SG&A 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, which amounts are treated as capital contributions from Exterran Holdings for accounting purposes, less cash interest expense and maintenance capital expenditures, and excluding gains/losses on asset sales and 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 Holdings and Exterran Partners

Exterran Holdings, Inc. is a global market leader in full service natural gas compression and a premier provider of operations, maintenance, 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 over 10,000 employees have operations in over 30 countries.

Exterran Partners, L.P. provides natural gas contract operations services to customers throughout the United States. Exterran Holdings indirectly owns a majority interest in 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, many of which are outside the control of Exterran Holdings and Exterran Partners (the “Companies”), which could cause actual results to differ materially from such statements. Forward-looking information includes, but is not limited to: Exterran Holdings’ expectations with respect to the impact of the global economic slowdown and reduced level of energy demand, including their impact on the political and economic conditions in the countries in which we operate; the stable and recurring nature of Exterran Partners’ production-related activities; the Companies’ operational and financial strategies and ability to successfully effect those strategies, including Exterran Holdings’ ability to reduce costs and execute on its backlog of international contract operations projects; and the Companies’ financial and operational outlook and ability to fulfill that outlook.

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 future performance or results of their business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: local, regional, national and international economic conditions and the impact they may have on the Companies and their customers; changes in tax laws that impact master limited partnerships; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for oil and natural gas and the impact on the price of oil and 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; changes in safety and environmental regulations pertaining to the production and transportation of oil and 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 Exterran Holdings’ Annual Report on Form 10-K for the year ended December 31, 2008, Exterran Partners’ Annual Report on Form 10-K for the year ended December 31, 2008, and those set forth from time to time in the Companies’ filings with the Securities and Exchange Commission, 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
(in thousands, except per share amounts)
       
Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
Revenues:
North America contract operations $ 194,393 $ 198,964 $ 199,076
International contract operations 123,012 135,992 119,892
Aftermarket services 77,879 101,464 84,172
Fabrication   342,609     393,971     336,949  
  737,893     830,391     740,089  
 
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):
North America contract operations 83,705 82,834 88,288
International contract operations 45,301 49,899 39,385
Aftermarket services 61,200 82,516 66,927
Fabrication 286,714 308,051 263,743
Selling, general and administrative 91,518 95,178 89,687
Merger and integration expenses - 1,765 4,439
Depreciation and amortization 92,939 96,452 90,449
Fleet impairment - 21,659 1,450
Manufacturing facility consolidation and impairment 7,304 - -
Goodwill impairment - 1,148,371 -
Interest expense 26,565 33,034 33,220
Equity in (income) loss of non-consolidated affiliates 91,117 (4,262 ) (6,093 )
Other (income) expense, net   (7,661 )   (2,838 )   (12,999 )
  778,702     1,912,659     658,496  
 
Income (loss) before income taxes (40,809 ) (1,082,268 ) 81,593
Provision for (benefit from) income taxes   17,091     (30,214 )   29,977  
Income (loss) from continuing operations (57,900 ) (1,052,054 ) 51,616
Income from discontinued operations, net of tax   -     -     398  
Net income (loss) (57,900 ) (1,052,054 ) 52,014
Less: net income attributable to the noncontrolling interest   (1,514 )   (3,359 )   (2,643 )
Net income (loss) attributable to Exterran stockholders $ (59,414 ) $ (1,055,413 ) $ 49,371  
 
Basic income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders $ (0.97 ) $ (16.70 ) $ 0.75
Income from discontinued operations attributable to Exterran stockholders   -     -     0.01  
Net income (loss) attributable to Exterran stockholders $ (0.97 ) $ (16.70 ) $ 0.76  
 
Diluted income (loss) per common share(1):
Income (loss) from continuing operations attributable to Exterran stockholders $ (0.97 ) $ (16.70 ) $ 0.73
Income from discontinued operations attributable to Exterran stockholders   -     -     -  
Net income (loss) attributable to Exterran stockholders $ (0.97 ) $ (16.70 ) $ 0.73  
 
Weighted average common and equivalent shares outstanding:
Basic   61,209     63,191     65,065  
Diluted   61,209     63,191     68,831  
 
Income (loss) attributable to Exterran stockholders:
Income (loss) from continuing operations $ (59,414 ) $ (1,055,413 ) $ 48,973
Gain from sales of discontinued operations, net of tax   -     -     398  
Net income (loss) attributable to Exterran stockholders $ (59,414 ) $ (1,055,413 ) $ 49,371  
 
(1) Net income (loss) for the diluted earnings (loss) per share calculation for the three-month period ending March 31, 2008 is adjusted to add back interest expense and amortization of financing costs, net of tax, relating to the Company's convertible senior notes totaling $1.2 million.
 
EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except percentages)
       
Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
Revenues:
North America contract operations $ 194,393 $ 198,964 $ 199,076
International contract operations 123,012 135,992 119,892
Aftermarket services 77,879 101,464 84,172
Fabrication   342,609     393,971     336,949  
Total $ 737,893   $ 830,391   $ 740,089  
 
Gross Margin (1):
North America contract operations $ 110,688 $ 116,130 $ 110,788
International contract operations 77,711 86,093 80,507
Aftermarket services 16,679 18,948 17,245
Fabrication   55,895     85,920     73,206  
Total $ 260,973   $ 307,091   $ 281,746  
 
Selling, General and Administrative $ 91,518 $ 95,178 $ 89,687
% of Revenues 12 % 11 % 12 %
 
EBITDA, as adjusted (1) $ 182,555 $ 219,013 $ 211,151
% of Revenues 25 % 26 % 29 %
 
Capital Expenditures $ 123,111 $ 133,200 $ 102,575
Less: Proceeds from Sale of PP&E   (3,194 )   (11,905 )   (2,527 )
Net Capital Expenditures $ 119,917   $ 121,295   $ 100,048  
 
Gross Margin Percentage:
North America contract operations 57 % 58 % 56 %
International contract operations 63 % 63 % 67 %
Aftermarket services 21 % 19 % 20 %
Fabrication 16 % 22 % 22 %
Total 35 % 37 % 38 %
 
Total Available Horsepower (at period end):
North America contract operations 4,576 4,570 4,476
International contract operations   1,508     1,504     1,461  
Total   6,084     6,074     5,937  
 
Total Operating Horsepower (at period end):
North America contract operations 3,308 3,455 3,535
International contract operations   1,311     1,372     1,350  
Total   4,619     4,827     4,885  
 
Total Operating Horsepower (average):
North America contract operations 3,389 3,454 3,585
International contract operations   1,345     1,368     1,317  
Total   4,734     4,822     4,902  
 
Horsepower Utilization (at period end):
North America contract operations 72 % 76 % 79 %
International contract operations 87 % 91 % 92 %
Total 76 % 79 % 82 %
 
Fabrication Backlog:
Compression & accessory $ 354,816 $ 395,472 $ 354,073
Production & processing equipment   695,792     732,715     919,173  
Total $ 1,050,608   $ 1,128,187   $ 1,273,246  
 
Debt to Capitalization:
Debt $ 2,553,908 $ 2,512,429 $ 2,326,104
Exterran stockholders' equity   1,980,704     2,043,786     3,186,342  
Capitalization $ 4,534,612 $ 4,556,215 $ 5,512,446
Total Debt to Capitalization 56.3 % 55.1 % 42.2 %
 
(1) Management believes disclosure of EBITDA, as adjusted, and Gross Margin, both non-GAAP measures, provides 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
(In thousands, except per share amounts)
       
Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
 
Reconciliation of GAAP to Non-GAAP Financial Information:
 
Income (loss) from continuing operations $ (57,900 ) $ (1,052,054 ) $ 51,616
Depreciation and amortization 92,939 96,452 90,449
Fleet impairment - 21,659 1,450
Manufacturing facility consolidation and impairment 7,304 - -
Investment in non-consolidated affiliates impairment 96,556 - -
Goodwill impairment - 1,148,371 -
Interest expense 26,565 33,034 33,220
Merger and integration expenses - 1,765 4,439
Provision for (benefit from) income taxes   17,091     (30,214 )   29,977  
EBITDA, as adjusted (1) 182,555 219,013 211,151
Selling, general and administrative 91,518 95,178 89,687
Equity in (income) loss of non-consolidated affiliates 91,117 (4,262 ) (6,093 )
Investment in non-consolidated affiliates impairment (96,556 ) - -
Other (income) expense, net   (7,661 )   (2,838 )   (12,999 )
Gross Margin (1) $ 260,973   $ 307,091   $ 281,746  
 
 
Net income (loss) attributable to Exterran stockholders $ (59,414 ) $ (1,055,413 ) $ 49,371
Charges, after-tax:
Fleet impairment - 14,728 914
Manufacturing facility consolidation and impairment 4,675 - -
Investment in non-consolidated affiliates impairment 88,156 - -
Goodwill impairment - 1,095,428 -
Merger and integration expenses   -     1,094     2,796  
Net income attributable to Exterran stockholders, excluding charges $ 33,417   $ 55,837   $ 53,081  
 
Diluted net income (loss) attributable to Exterran stockholders per common share $ (0.97 ) $ (16.70 ) $ 0.73
Adjustment for charges, after-tax, per common share   1.50     17.55     0.06  
Diluted net income attributable to Exterran stockholders per common share, excluding charges $ 0.53   $ 0.85   $ 0.79  
 
(1) Management believes disclosure of EBITDA, as adjusted, diluted income (loss) attributable to Exterran stockholders per common share, excluding charges, and Gross Margin, non-GAAP measures, provides 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, diluted income per common share from continuing operations, excluding charges, 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 PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit amounts)
           
Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
 
 
Revenue $ 48,233 $ 49,056 $ 35,267
 
Costs and expenses:
Cost of sales (excluding depreciation and amortization) 22,182 21,583 16,143
Depreciation and amortization 8,334 8,026 5,674
Selling, general and administrative 6,001 5,916 3,001
Interest expense 4,819 5,826 3,801
Other (income) expense, net   27   (291 )   (10 )
Total costs and expenses   41,363   41,060     28,609  
Income before income taxes 6,870 7,996 6,658
Income tax expense   149   186     111  
Net income $ 6,721 $ 7,810   $ 6,547  
 
General partner interest in net income $ 383 $ 401   $ 187  
 
Limited partner interest in net income $ 6,338 $ 7,409   $ 6,360  
 
Weighted average limited partners' units outstanding:
Basic   19,101   19,092     16,679  
 
Diluted   19,103   19,097     16,791  
 
Earnings per limited partner unit:
Basic $ 0.33 $ 0.39   $ 0.38  
 
Diluted $ 0.33 $ 0.39   $ 0.38  
 
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per unit amounts)
           
Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
 
Revenue $ 48,233 $ 49,056 $ 35,267
 
Gross Margin, as adjusted (1) $ 28,704 $ 29,307 $ 22,698
 
EBITDA, as further adjusted (1) $ 22,766 $ 23,838 $ 19,161
% of Revenue 47 % 49 % 54 %
 
Capital Expenditures $ 7,201 $ 7,072 $ 4,469
Proceeds from Sale of Compression Equipment   -     (3,284 )   -  
Net Capital Expenditures $ 7,201   $ 3,788   $ 4,469  
 
Gross Margin percentage, as adjusted 60 % 60 % 64 %
 
Distributable cash flow (2) $ 13,226 $ 14,140 $ 14,020
 
Distributions per Limited Partner Unit $ 0.4625 $ 0.4625 $ 0.4250
Distribution to All Unitholders, including Incentive Distributions $ 9,271 $ 9,264 $ 7,290
Distributable Cash Flow Coverage

1.43

x

1.53

x

1.92

x

 
March 31, December 31, March 31,
2009 2008 2008
 
Debt $ 400,250 $ 398,750 $ 217,000
Total Partners' Capital $ 177,513 $ 175,468 $ 139,926
Total Debt to Capitalization 69 % 69 % 61 %
EBITDA, as further adjusted (1) to Interest Expense

4.7

x

4.1

x

5.0

x

 
(1) Management believes disclosure of EBITDA, as further adjusted, and Gross Margin, as adjusted, both non-GAAP measures, provides 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
(In thousands)
                   
Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
 
Reconciliation of GAAP to Non-GAAP Financial Information:
 
Net income $ 6,721 $ 7,810 $ 6,547
Income tax expense 149 186 111
Depreciation and amortization 8,334 8,026 5,674

Cap on operating and selling, general and administrative costs provided by Exterran Holdings ("EXH")

2,653 1,938 3,574
Non-cash selling, general and administrative costs 90 52 (546 )
Interest expense, net of interest income   4,819     5,826     3,801  
EBITDA, as further adjusted (1) 22,766 23,838 19,161
Cash selling, general and administrative costs 5,911 5,864 3,547
Less: cap on selling, general and administrative costs provided by EXH - (104 ) -
Less: other income, expense, net   27     (291 )   (10 )
Gross Margin, as adjusted for operating cost caps provided by EXH (1) $ 28,704 $ 29,307 $ 22,698
Other (income), expense, net (27 ) 291 10
Less: Gain on sale of compression equipment - (316 ) -
Less: Cash interest expense (4,686 ) (5,750 ) (3,696 )

Less: Cash selling, general and administrative, as adjusted for cost caps provided by EXH

(5,911 ) (5,760 ) (3,547 )
Less: Income tax expense (149 ) (186 ) (111 )
Less: Maintenance capital expenditures   (4,705 )   (3,446 )   (1,334 )
Distributable cash flow (2) $ 13,226   $ 14,140   $ 14,020  
 
 
Cash flows from operating activities $ 11,222 $ 17,142 $ 3,991
Amortization of debt issuance cost (95 ) (39 ) (64 )
Amortization of fair value of acquired interest rate swaps (38 ) (37 ) (41 )
Cap on operating and selling, general and administrative costs provided by EXH 2,653 1,938 3,574
Interest expense, net of interest income 4,819 5,826 3,801
Cash interest expense (4,686 ) (5,750 ) (3,696 )
Maintenance capital expenditures (4,705 ) (3,446 ) (1,334 )
Change in current assets/liabilities   4,056     (1,494 )   7,789  
Distributable cash flow (2) $ 13,226   $ 14,140   $ 14,020  
 
(1) Management believes disclosure of EBITDA, as further adjusted, and Gross Margin, as adjusted, both non-GAAP measures, provides 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
(In thousands, except percentages)
                 
 
Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
 
Total Available Horsepower (at period end) 1,041   1,026   720  
 
Total Operating Horsepower (at period end) 887   909   652  
 
Average Operating Horsepower 900   908   659  
 
Horsepower Utilization:
Spot (at period end) 85 % 89 % 91 %
Average 87 % 89 % 91 %
 

Combined U.S. Contract Operations Horsepower of Exterran Holdings and Exterran Partners covered by contracts converted to service agreements (at period end)

1,812 1,730 1,274
 
Available Horsepower:
 

Total Available U.S. Contract Operations Horsepower of Exterran Holdings and Exterran Partners (at period end)

4,464 4,459 4,365
 

% of U.S. Contract Operations Available Horsepower of Exterran Holdings and Exterran Partners covered by contracts converted to service agreements (at period end)

41 % 39 % 29 %
 
Operating Horsepower:
 

Total Operating U.S. Contract Operations Horsepower of Exterran Holdings and Exterran Partners (at period end)

3,247 3,390 3,462
 

% of U.S. Contract Operations Operating Horsepower of Exterran Holdings and Exterran Partners covered by contracts converted to service agreements (at period end)

56 % 51 % 37 %

Source: Exterran Holdings, Inc. and Exterran Partners, L.P.

Exterran
David Oatman, 281-836-7035 (Investors)
Susan Nelson, 281-836-7297 (Media)