Exterran Holdings and Exterran Partners Report Third Quarter 2009 Results

November 5, 2009

HOUSTON--(BUSINESS WIRE)--Nov. 5, 2009-- Exterran Holdings, Inc. (NYSE:EXH) and Exterran Partners, L.P. (NASDAQ:EXLP) today reported financial results for the third quarter 2009.

Exterran Holdings, Inc. Financial Results

Exterran Holdings reported net income attributable to Exterran stockholders for the third quarter 2009 of $18.2 million, or $0.30 per diluted share, compared to a net loss attributable to Exterran stockholders for the second quarter 2009 of $530.8 million, or $8.66 per diluted share, and net income attributable to Exterran stockholders for the third quarter 2008 of $37.0 million, or $0.57 per diluted share.

Net income from continuing operations attributable to Exterran stockholders for the third quarter 2009 was $24.8 million, or $0.38 per diluted share, excluding pretax charges that totaled $3.6 million, including a $2.6 million restructuring charge related to the consolidation of our fabrication facilities in North America and a $1.0 million charge related to our investments in non-consolidated affiliates in Venezuela. Due to the expropriation of our assets and operations in Venezuela, our Venezuelan contract operations and aftermarket services businesses are reflected as discontinued operations in our current and prior period financial results.

Net income from continuing operations for the second quarter 2009 attributable to Exterran stockholders, excluding charges, was $24.4 million, or $0.39 per diluted share, and net income from continuing operations for the third quarter 2008 attributable to Exterran stockholders, excluding charges, was $24.0 million, or $0.37 per diluted share.

Revenue was $679.7 million for the third quarter 2009, compared to $678.0 million for the second quarter 2009 and $756.3 million for the third quarter 2008. EBITDA, as adjusted (as defined below), was $161.1 million for the third quarter 2009, compared to $151.4 million for the second quarter 2009 and $172.4 million for the third quarter 2008.

Ernie L. Danner, Exterran Holdings’ President and Chief Executive Officer, said, “I am pleased with our overall performance in the third quarter despite challenging industry conditions. With solid execution by our operating and support groups, we generated a strong level of cash flow and reduced our debt balances by $124 million. We also commenced the operation of two new contract operations projects in the Eastern Hemisphere in early October, and have a significant backlog of international contract operations projects scheduled to begin operations through mid-2010.

“Although we are encouraged by the recent increase in North American natural gas prices, we expect continuing overall weak market conditions and, in particular, declining activity levels for our North America contract operations business into 2010. We expect our net capital expenditures to be $200 million to $300 million in 2010, down from approximately $375 million to $400 million in 2009. Building on our third quarter success, we expect to generate positive cash flow after capital expenditures in the fourth quarter of 2009 and in 2010.”

Exterran Partners, L.P. Financial Results

Exterran Partners reported revenue of $41.3 million for the third quarter 2009, compared to $45.1 million for the second quarter 2009 and $44.4 million for the third quarter 2008. Net income was $2.0 million, or $0.09 per diluted limited partner unit, for the third quarter 2009, compared to $2.7 million, or $0.13 per diluted limited partner unit, for the second quarter 2009 and $9.4 million, or $0.49 per diluted limited partner unit, for the third quarter 2008. Net income for the second quarter 2009 was $5.7 million, or $0.28 per diluted limited partner unit, excluding a $3.0 million non-cash fleet impairment charge.

Exterran Partners’ EBITDA, as further adjusted (as defined below), totaled $18.4 million for the third quarter 2009, compared to $21.1 million for the second quarter 2009 and $22.7 million for the third quarter 2008. Distributable cash flow (as defined below) totaled $10.6 million for the third quarter 2009, compared to $12.7 million for the second quarter 2009 and $14.8 million for the third quarter 2008.

“In October, Exterran Partners agreed to acquire contracts and equipment representing approximately 273,000 horsepower of compression from Exterran Holdings for approximately $143 million, excluding transaction costs, to be financed with approximately $57 million of borrowings under its new $150 million asset-backed securitization facility and existing revolving credit facility and the issuance of approximately 4.7 million common units and approximately 97,000 general partner units to Exterran Holdings. The acquisition, anticipated to close in mid-November, is expected to strengthen Exterran Partners’ market position in the United States and enhance its distributable cash flow,” commented Mr. Danner, President and Chief Executive Officer of Exterran Partners’ managing general partner.

On October 30, 2009, Exterran Partners announced a cash distribution of $0.4625 per limited partner unit for the third quarter 2009, the same level as in the second quarter 2009 and the third 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 third quarter 2009 earnings release:

  • Teleconference: Thursday, November 5, 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 888-895-5271. International participants should dial 847-619-6547 at least 10 minutes before the scheduled start time. Please reference Exterran conference call number 25723798.
  • 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, November 5, 2009, until 2:00 p.m. Eastern Time on Thursday, November 12, 2009. To listen to the replay, please dial 888-843-8996 in the United States and Canada, or 630-652-3044 internationally, and enter access code 25723798.

With respect to Exterran Holdings, EBITDA, as adjusted, a non-GAAP measure, is defined as income (loss) from continuing operations 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, restructuring charges, 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 (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, non-cash selling, general and administrative (“SG&A”) expenses and any amounts by which cost of sales and SG&A 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, impairment charges, non-cash SG&A expenses, interest expense and any amounts by which cost of sales and SG&A 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: the Companies’ operational and financial strategies and ability to successfully effect those strategies; the Companies’ expected future capital expenditures; the ability of the Companies to complete their proposed transaction and the expected timing of the closing of the transaction; the expected benefits of the transaction to Exterran Partners; Exterran Holdings’ ability to execute on its backlog of international contract operations projects and the ability of those projects to begin generating revenues through mid-2010; the Companies’ expectations regarding future economic and market conditions; and the Companies’ financial and operational outlook, including expected levels of cash flows, 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
September 30, June 30, September 30,
  2009     2009     2008  
Revenues:
North America contract operations $ 167,567 $ 178,455 $ 197,926
International contract operations 96,420 95,448 99,680
Aftermarket services 75,526 78,504 94,044
Fabrication   340,193     325,561     364,608  
  679,706     677,968     756,258  
 
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):
North America contract operations 74,556 74,420 84,440

International contract operations

37,850 37,897 40,504
Aftermarket services 59,360 61,778 75,193
Fabrication 278,036 275,561 292,978
Selling, general and administrative 81,600 86,380 89,564
Merger and integration expenses - - 3,728
Depreciation and amortization 87,781 85,903 83,029
Fleet impairment - 86,684 1,000
Restructuring charges 2,616 8,076 -
Goodwill impairment - 150,778 -
Interest expense 33,371 29,163 33,401
Equity in (income) loss of non-consolidated affiliates 1,011 567 (6,657 )
Other (income) expense, net   (12,768 )   (9,433 )   7,835  
  643,413     887,774     705,015  
 
Income (loss) before income taxes 36,293 (209,806 ) 51,243
Provision for (benefit from) income taxes   13,691     (23,177 )   27,252  
Income (loss) from continuing operations 22,602 (186,629 ) 23,991
Income (loss) from discontinued operations, net of tax   (3,834 )   (343,323 )   16,070  
Net income (loss) 18,768 (529,952 ) 40,061
Less: net income attributable to the noncontrolling interest   (576 )   (818 )   (3,028 )
Net income (loss) attributable to Exterran stockholders $ 18,192   $ (530,770 ) $ 37,033  
 
Basic income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders $ 0.36 $ (3.06 ) $ 0.32
Income (loss) from discontinued operations attributable to Exterran stockholders   (0.06 )   (5.60 )   0.25  
Net income (loss) attributable to Exterran stockholders $ 0.30   $ (8.66 ) $ 0.57  
 
Diluted income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders $ 0.35 $ (3.06 ) $ 0.32
Income (loss) from discontinued operations attributable to Exterran stockholders   (0.05 )   (5.60 )   0.25  
Net income (loss) attributable to Exterran stockholders $ 0.30   $ (8.66 ) $ 0.57  
 
Weighted average common and equivalent shares outstanding:
Basic   61,579     61,277     64,940  
Diluted   77,509     61,277     65,423  
 
Income (loss) attributable to Exterran stockholders:
Income (loss) from continuing operations $ 22,026 $ (187,447 ) $ 20,963
Income (loss) from discontinued operations, net of tax   (3,834 )   (343,323 )   16,070  
Net income (loss) attributable to Exterran stockholders $ 18,192   $ (530,770 ) $ 37,033  
 
EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except percentages)
       
Three Months Ended
September 30, June 30, September 30,
2009 2009 2008
Revenues:
North America contract operations $ 167,567 $ 178,455 $ 197,926
International contract operations 96,420 95,448 99,680
Aftermarket services 75,526 78,504 94,044
Fabrication   340,193     325,561     364,608  
Total $ 679,706   $ 677,968   $ 756,258  
 
Gross Margin (1):
North America contract operations $ 93,011 $ 104,035 $ 113,486
International contract operations 58,570 57,551 59,176
Aftermarket services 16,166 16,726 18,851
Fabrication   62,157     50,000     71,630  
Total $ 229,904   $ 228,312   $ 263,143  
 
Selling, General and Administrative $ 81,600 $ 86,380 $ 89,564
% of Revenues 12 % 13 % 12 %
 
EBITDA, as adjusted (1) $ 161,072 $ 151,365 $ 172,401
% of Revenues 24 % 22 % 23 %
 
Capital Expenditures $ 74,983 $ 106,075 $ 112,831
Less: Proceeds from Sale of PP&E   (4,060 )   (10,256 )   (18,418 )
Net Capital Expenditures $ 70,923   $ 95,819   $ 94,413  
 
Gross Margin Percentage:
North America contract operations 56 % 58 % 57 %
International contract operations 61 % 60 % 59 %
Aftermarket services 21 % 21 % 20 %
Fabrication 18 % 15 % 20 %
Total 34 % 34 % 35 %
 
Total Available Horsepower (at period end):
North America contract operations 4,339 4,340 4,540
International contract operations   1,220     1,214     1,151  
Total   5,559     5,554     5,691  
 
Total Operating Horsepower (at period end):
North America contract operations 2,983 3,125 3,452
International contract operations   1,015     1,037     1,046  
Total   3,998     4,162     4,498  
 
Total Operating Horsepower (average):
North America contract operations 3,052 3,207 3,456
International contract operations   1,025     1,037     1,049  
Total   4,077     4,244     4,505  
 
Horsepower Utilization (at period end):
North America contract operations 69 % 72 % 76 %
International contract operations 83 % 85 % 91 %
Total 72 % 75 % 79 %
 
Fabrication Backlog:
Compression & accessory $ 211,012 $ 291,633 $ 359,392
Production & processing equipment   570,751     652,772     731,874  
Total $ 781,763   $ 944,405   $ 1,091,266  
 
Debt to Capitalization:
Debt $ 2,385,748 $ 2,509,777 $ 2,467,773
Exterran stockholders' equity   1,606,444     1,570,256     3,239,237  
Capitalization $ 3,992,192 $ 4,080,033 $ 5,707,010
Total Debt to Capitalization 59.8 % 61.5 % 43.2 %
 
(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
September 30, June 30, September 30,
  2009     2009     2008  
 
Reconciliation of GAAP to Non-GAAP Financial Information:
 
Income (loss) from continuing operations $ 22,602 $ (186,629 ) $ 23,991
Depreciation and amortization 87,781 85,903 83,029
Fleet impairment - 86,684 1,000
Restructuring charges 2,616 8,076 -
Investment in non-consolidated affiliates impairment 1,011 567 -
Goodwill impairment - 150,778 -
Interest expense 33,371 29,163 33,401
Merger and integration expenses - - 3,728
Provision for (benefit from) income taxes   13,691     (23,177 )   27,252  
EBITDA, as adjusted (1) 161,072 151,365 172,401
Selling, general and administrative 81,600 86,380 89,564
Equity in (income) loss of non-consolidated affiliates 1,011 567 (6,657 )
Investment in non-consolidated affiliates impairment (1,011 ) (567 ) -
Other (income) expense, net   (12,768 )   (9,433 )   7,835  
Gross Margin (1) $ 229,904   $ 228,312   $ 263,143  
 
 
Net income (loss) attributable to Exterran stockholders $ 18,192 $ (530,770 ) $ 37,033
(Income) loss from discontinued operations 3,834 343,323 (16,070 )
Charges, after-tax:
Fleet impairment - 55,153 640
Restructuring charges 1,731 5,344 -
Investment in non-consolidated affiliates impairment 1,011 567 -
Goodwill impairment - 150,778 -
Merger and integration expenses   -     -     2,349  
Net income from continuing operations attributable to Exterran stockholders, excluding charges $ 24,768   $ 24,395   $ 23,952  
 
Diluted Income (loss) from continuing operations attributable to Exterran stockholders $ 0.35 $ (3.06 ) $ 0.32
Adjustment for charges, after-tax, per common share   0.03     3.45     0.05  

Diluted net income from continuing operations attributable to Exterran stockholders per common share, excluding charges (1)

$ 0.38   $ 0.39   $ 0.37  
 
(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
September 30, June 30, September 30,
2009 2009 2008
 
 
Revenue $ 41,317 $ 45,077 $ 44,390
 
Costs and expenses:
Cost of sales (excluding depreciation and amortization) 19,802 20,176 19,900
Depreciation and amortization 9,042 8,678 7,542
Fleet impairment - 2,995 -
Selling, general and administrative 4,961 5,551 2,423
Interest expense 5,039 4,805 4,967
Other (income) expense, net   324   -   -
Total costs and expenses   39,168   42,205   34,832
Income before income taxes 2,149 2,872 9,558
Income tax expense   141   134   147
Net income $ 2,008 $ 2,738 $ 9,411
 
General partner interest in net income $ 289 $ 304 $ 432
 
Limited partner interest in net income $ 1,719 $ 2,434 $ 8,979
 
Weighted average limited partners' units outstanding:
Basic   19,125   19,107   18,305
 
Diluted   19,148   19,113   18,320
 
Earnings per limited partner unit:
Basic $ 0.09 $ 0.13 $ 0.49
 
Diluted $ 0.09 $ 0.13 $ 0.49
 
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per unit amounts)
             
Three Months Ended  
September 30, June 30, September 30,
2009   2009   2008  
 
Revenue $ 41,317 $ 45,077 $ 44,390
 
Gross Margin, as adjusted (1) $ 23,500 $ 26,353 $ 28,063
 
EBITDA, as further adjusted (1) $ 18,405 $ 21,077 $ 22,694
% of Revenue 45 % 47 % 51 %
 
Capital Expenditures $ 3,341 $ 4,152 $ 4,390
Proceeds from Sale of Compression Equipment   -     -     -  
Net Capital Expenditures $ 3,341   $ 4,152   $ 4,390  
 
Gross Margin percentage, as adjusted 57 % 58 % 63 %
 
Distributable cash flow (2) $ 10,633 $ 12,714 $ 14,798
 
Distributions per Limited Partner Unit $ 0.4625 $ 0.4625 $ 0.4625
Distribution to All Unitholders, including Incentive Distributions $ 9,277 $ 9,277 $ 9,264
Distributable Cash Flow Coverage

1.15

x

1.37

x

1.60

x

 
September 30, June 30, September 30,
2009   2009   2008  
 
Debt $ 384,500 $ 387,750 $ 399,750
Total Partners' Capital $ 173,809 $ 175,205 $ 175,151
Total Debt to Capitalization 69 % 69 % 70 %

EBITDA, as further adjusted (1) to Interest Expense

3.7

x

4.4

x

4.6

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
September 30, June 30, September 30,
  2009     2009     2008  
 
Reconciliation of GAAP to Non-GAAP Financial Information:
 
Net income $ 2,008 $ 2,738 $ 9,411
Income tax expense 141 134 147
Depreciation and amortization 9,042 8,678 7,542
Fleet impairment - 2,995 -

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

1,985 1,452 3,589
Non-cash selling, general and administrative costs 190 275 (2,962 )
Interest expense, net of interest income   5,039     4,805     4,967  
EBITDA, as further adjusted (1) 18,405 21,077 22,694
Cash selling, general and administrative costs 4,771 5,276 5,385
Less: cap on selling, general and administrative costs provided by EXH - - (16 )
Less: other (income) expense, net   324     -     -  
Gross Margin, as adjusted for operating cost caps provided by EXH (1) $ 23,500 $ 26,353 $ 28,063
Other income (expense), net (324 ) - -
Expensed acquisition costs 324 - -
Less: Cash interest expense (4,915 ) (4,677 ) (4,835 )

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

(4,771 ) (5,276 ) (5,369 )
Less: Income tax expense (141 ) (134 ) (147 )
Less: Maintenance capital expenditures   (3,040 )   (3,552 )   (2,914 )
Distributable cash flow (2) $ 10,633   $ 12,714   $ 14,798  
 
 
Cash flows from operating activities $ 16,182 $ 22,773 $ 10,311
Amortization of debt issuance cost (87 ) (91 ) (94 )
Amortization of fair value of acquired interest rate swaps (37 ) (37 ) (38 )
Cap on operating and selling, general and administrative costs provided by EXH 1,985 1,452 3,589
Interest expense, net of interest income 5,039 4,805 4,967
Expensed acquisition costs 324 - -
Cash interest expense (4,915 ) (4,677 ) (4,835 )
Maintenance capital expenditures (3,040 ) (3,552 ) (2,914 )
Change in current assets/liabilities   (4,818 )   (7,959 )   3,812  
Distributable cash flow (2) $ 10,633   $ 12,714   $ 14,798  
 
Net income $ 2,008 $ 2,738 $ 9,411
Fleet impairment   -     2,995     -  
Net income, excluding charge $ 2,008   $ 5,733   $ 9,411  
 
Diluted earnings per limited partner unit $ 0.09 $ 0.13 $ 0.49
Adjustment for charge per limited partner unit   -     0.15     -  
Diluted earnings per limited partner unit, excluding charge (1) $ 0.09   $ 0.28   $ 0.49  
 
(1) Management believes disclosure of EBITDA, as further adjusted, diluted earnings per limited partner unit, excluding charge, and Gross Margin, as adjusted, 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, diluted earnings per limited partner unit, excluding charge, 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
September 30, June 30, September 30,
2009 2009 2008
 
Total Available Horsepower (at period end) 1,039   1,034   1,017  
 
Total Operating Horsepower (at period end) 808   840   909  
 
Average Operating Horsepower 819   859   829  
 
Horsepower Utilization:
Spot (at period end) 78 % 81 % 89 %
Average 79 % 83 % 89 %
 

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

1,861 1,917 1,716
 
Available Horsepower:
 

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

4,233 4,234 4,428
 

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

45 % 45 % 39 %
 
Operating Horsepower:
 

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

2,927 3,066 3,384
 

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

 

65 % 63 % 51 %

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

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