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Exterran Holdings and Exterran Partners Report Fourth Quarter and Full Year 2010 Results

February 24, 2011
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HOUSTON, Feb 24, 2011 (BUSINESS WIRE) --

Exterran Holdings, Inc. (NYSE:EXH) and Exterran Partners, L.P. (NASDAQ:EXLP) today reported financial results for the fourth quarter and full year 2010.

Exterran Holdings, Inc. Financial Results

Exterran Holdings reported a net loss attributable to Exterran stockholders for the fourth quarter 2010 of $118.0 million, or $1.90 per diluted share, compared to net loss attributable to Exterran stockholders for the third quarter 2010 of $18.0 million, or $0.29 per diluted share, and net income attributable to Exterran stockholders for the fourth quarter 2009 of $22.6 million, or $0.37 per diluted share.

Net loss from continuing operations attributable to Exterran stockholders for the fourth quarter 2010 was $32.0 million, or $0.51 per diluted share, excluding non-cash pretax charges that totaled $142.5 million, including a $142.2 million impairment charge related primarily to idle compressor units that were previously part of our North America contract operations business. The impairment charge did not impact our cash flows, liquidity position, or compliance with debt covenants. Net loss from continuing operations attributable to Exterran stockholders, excluding charges, was $15.2 million, or $0.25 per diluted share, for the third quarter 2010 and $16.9 million, or $0.27 per diluted share, for the fourth quarter 2009.

Revenue was $615.8 million for the fourth quarter 2010, compared to $625.6 million for the third quarter 2010 and $654.7 million for the fourth quarter 2009. EBITDA, as adjusted (as defined below), was $103.8 million for the fourth quarter 2010, compared to $109.7 million for the third quarter 2010 and $139.6 million for the fourth quarter 2009.

Ernie L. Danner, Exterran Holdings' President and Chief Executive Officer, said, "Fourth quarter highlights included a modest improvement in the operating performance of our North America contract operations business and the generation of significant cash flow and further reduction of our debt balances. We are cautiously optimistic about a continuing gradual improvement in the demand for our oil and gas production-related products and services in 2011 in North America, where relatively low natural gas prices have resulted in a shift in our growth activities to areas with a natural gas liquids component. Internationally, overall inquiry levels are solid although we have not yet seen a return to the higher level of bookings for contract operations and fabrication projects that we have experienced historically and expect in the future. Overall for 2011, our goal is to achieve an increase of 5% or more over 2010 levels in both revenue and EBITDA, as adjusted, as we pursue growth opportunities primarily associated with North America shale plays and international energy infrastructure development.

"We own a majority interest of Exterran Partners including the general partner interest, and over time we intend to offer the remainder of Exterran Holdings' U.S. contract operations business to Exterran Partners. In 2011, we expect to use the proceeds from these transactions and operating cash flow to fund investments in growth projects and fleet assets and expect that cash flow in excess of our needs will allow us to reduce Exterran Holdings' debt balances (exclusive of Exterran Partners' debt) by $250 million to $300 million during the year."

Exterran Partners, L.P. Financial Results

Exterran Partners reported revenue of $68.4 million for the fourth quarter 2010, compared to $62.7 million for the third quarter 2010 and $47.1 million for the fourth quarter 2009. Net loss was $23.5 million for the fourth quarter 2010, or $0.73 per diluted limited partner unit, compared to net income of $0.1 million, or a loss of $0.01 per diluted limited partner unit, for the third quarter 2010, and net income of $3.3 million, or $0.13 per diluted limited partner unit, for the fourth quarter 2009.

Net income for the fourth quarter 2010 was $1.2 million, or $0.02 per diluted limited partner unit, excluding a $24.7 million non-cash fleet impairment charge. The impairment charge did not impact Exterran Partners' cash flows, liquidity position, or compliance with debt covenants.

Exterran Partners' EBITDA, as further adjusted (as defined below), totaled $31.4 million for the fourth quarter 2010, compared to $28.0 million for the third quarter 2010 and $21.6 million for the fourth quarter 2009. Distributable cash flow (as defined below) totaled $20.4 million for the fourth quarter 2010, compared to $19.3 million for the third quarter 2010 and $13.2 million for the fourth quarter 2009.

"Fourth quarter performance benefitted from increased operating horsepower during the quarter as a result of increased demand for contract operations services and a full quarter contribution from the August 2010 acquisition of assets representing an additional 255,000 horsepower of compression capacity from Exterran Holdings," commented Mr. Danner, Chairman, President and Chief Executive Officer of Exterran Partners' managing general partner. "We are committed to our growth strategies and continuing to increase distributions to unitholders over time."

For the fourth quarter of 2010, Exterran Partners' quarterly cash distribution was $0.4725 per limited partner unit, or $1.89 per limited partner unit on an annualized basis. The fourth quarter 2010 distribution was $0.005 higher than the third quarter 2010 distribution of $0.4675 per limited partner unit and $0.01 higher than the fourth quarter 2009 distribution of $0.4625 per limited partner unit.

The cash distribution received by Exterran Holdings based upon its common unit ownership and general partner interest in Exterran Partners was approximately $9.5 million for the fourth quarter 2010.

Conference Call Details

Exterran Holdings, Inc. (NYSE: EXH) and Exterran Partners, L.P. (NASDAQ: EXLP) announce the following schedule and teleconference information for their fourth quarter 2010 earnings release:

  • Teleconference: Thursday, February 24, 2011 at 11:00 a.m. Eastern Time, 10:00 a.m. Central Time. To access the call, United States and Canadian participants should dial 800-446-1671. International participants should dial 847-413-3362 at least 10 minutes before the scheduled start time. Please reference Exterran conference call number 29103326.
  • 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, February 24, 2011, until 2:00 p.m. Eastern Time on Thursday, March 3, 2011. To listen to the replay, please dial 888-843-7419 in the United States and Canada, or 630-652-3042 internationally, and enter access code 29103326.

*****

With respect to Exterran Holdings, EBITDA, as adjusted, a non-GAAP measure, is defined as net income (loss) plus income (loss) from discontinued operations (net of tax), cumulative effect of accounting changes (net of tax), 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 and other charges.

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, other charges, and non-cash selling, general and administrative ("SG&A") costs 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.

With respect to Exterran Partners, distributable cash flow, a non-GAAP measure, is defined as net income (loss) plus depreciation and amortization expense, impairment charges, non-cash SG&A costs, 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 (excluding amortization of deferred financing fees and costs incurred to early terminate interest rate swaps) and maintenance capital expenditures, and excluding gains/losses on asset sales and other charges.

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 has over 10,000 employees and operates in approximately 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 Section 21E of the Securities Exchange Act of 1934, as amended. 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 Companies' expectations regarding future economic and market conditions; the Companies' financial and operational outlook, including projections regarding revenue, EBITDA, as adjusted, debt reduction and cash flow, and ability to fulfill that outlook; Exterran Holdings' intention to continue to offer the balance of its U.S. contract operations business to Exterran Partners; and Exterran Partners' commitment to growing and increasing distributions.

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 execute larger projects; changes in political or economic conditions in key operating markets, including international markets; changes in safety, health, environmental and other regulations; 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, 2009, Exterran Partners' Annual Report on Form 10-K for the year ended December 31, 2009, 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 Years Ended
December 31,
2010 		September 30,
2010 		December 31,
2009 		December 31,
2010 		December 31,
2009
Revenues:
North America contract operations $ 151,383 $ 152,007 $ 154,900 $ 608,065 $ 695,315
International contract operations 112,438 111,879 109,448 465,144 391,995
Aftermarket services 86,063 82,348 79,312 322,097 308,873
Fabrication 265,896 279,389 311,055 1,066,227 1,319,418
615,780 625,623 654,715 2,461,533 2,715,601
Costs and Expenses:
Cost of sales (excluding depreciation and amortization expense):
North America contract operations 76,219 78,281 66,033 300,686 298,714
International contract operations 44,693 46,936 40,701 175,357 149,253
Aftermarket services 75,688 73,717 64,994 276,307 245,886
Fabrication 229,735 231,716 265,855 904,722 1,106,166
Selling, general and administrative 91,809 88,229 84,529 358,255 337,620
Depreciation and amortization 105,012 98,503 97,028 401,478 352,785
Long-lived asset impairment 142,205 2,246 4,704 146,903 96,988
Restructuring charges - - 1,933 - 14,329
Goodwill impairment - - - - 150,778
Interest expense 37,557 33,050 33,577 136,149 122,845
Equity in (income) loss of non-consolidated affiliates 261 - (1,541 ) 609 91,154
Other (income) expense, net (6,154 ) (2,941 ) (27,797 ) (13,763 ) (53,360 )
797,025 649,737 630,016 2,686,703 2,913,158
Income (loss) before income taxes (181,245 ) (24,114 ) 24,699 (225,170 ) (197,557 )
Provision for (benefit from) income taxes (55,708 ) (7,083 ) 50,190 (66,606 ) 51,667
Loss from continuing operations (125,537 ) (17,031 ) (25,491 ) (158,564 ) (249,224 )
Income (loss) from discontinued operations, net of tax (2,734 ) (1,325 ) 49,112 45,323 (296,239 )
Net income (loss) (128,271 ) (18,356 ) 23,621 (113,241 ) (545,463 )
Less: net (income) loss attributable to the noncontrolling interest 10,243 371 (1,036 ) 11,416 (3,944 )
Net income (loss) attributable to Exterran stockholders $ (118,028 ) $ (17,985 ) $ 22,585 $ (101,825 ) $ (549,407 )
Basic income (loss) per common share
Loss from continuing operations attributable to Exterran stockholders $ (1.85 ) $ (0.27 ) $ (0.43 ) $ (2.37 ) $ (4.12 )
Income (loss) from discontinued operations attributable to Exterran stockholders (0.05 ) (0.02 ) 0.80 0.73 (4.83 )
Net income (loss) attributable to Exterran stockholders $ (1.90 ) $ (0.29 ) $ 0.37 $ (1.64 ) $ (8.95 )
Diluted income (loss) per common share
Loss from continuing operations attributable to Exterran stockholders $ (1.85 ) $ (0.27 ) $ (0.43 ) $ (2.37 ) $ (4.12 )
Income (loss) from discontinued operations attributable to Exterran stockholders (0.05 ) (0.02 ) 0.80 0.73 (4.83 )
Net income (loss) attributable to Exterran stockholders $ (1.90 ) $ (0.29 ) $ 0.37 $ (1.64 ) $ (8.95 )
Weighted average common and equivalent shares outstanding:
Basic 62,164 62,111 61,651 61,995 61,406
Diluted 62,164 62,111 61,651 61,995 61,406
Income (loss) attributable to Exterran stockholders:
Loss from continuing operations $ (115,294 ) $ (16,660 ) $ (26,527 ) $ (147,148 ) $ (253,168 )
Income (loss) from discontinued operations, net of tax (2,734 ) (1,325 ) 49,112 45,323 (296,239 )
Net income (loss) attributable to Exterran stockholders $ (118,028 ) $ (17,985 ) $ 22,585 $ (101,825 ) $ (549,407 )
EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except percentages)
Three Months Ended Years Ended
December 31,
2010 		September 30,
2010 		December 31,
2009 		December 31,
2010 		December 31,
2009
Revenues:
North America contract operations $ 151,383 $ 152,007 $ 154,900 $ 608,065 $ 695,315
International contract operations 112,438 111,879 109,448 465,144 391,995
Aftermarket services 86,063 82,348 79,312 322,097 308,873
Fabrication 265,896 279,389 311,055 1,066,227 1,319,418
Total $ 615,780 $ 625,623 $

654,715

$ 2,461,533 $ 2,715,601
Gross Margin (1):
North America contract operations $ 75,164 $ 73,726 $ 88,867 $ 307,379 $ 396,601
International contract operations 67,745 64,943 68,747 289,787 242,742
Aftermarket services 10,375 8,631 14,318 45,790 62,987
Fabrication 36,161 47,673 45,200 161,505 213,252
Total $ 189,445 $ 194,973 $ 217,132 $ 804,461 $ 915,582
Selling, General and Administrative $ 91,809 $ 88,229 $ 84,529 $ 358,255 $ 337,620
% of Revenues 15 % 14 % 13 % 15 % 12 %
EBITDA, as adjusted (1) $ 103,790 $ 109,685 $ 139,594 $ 455,106 $ 615,955
% of Revenues 17 % 18 % 21 % 18 % 23 %
Capital Expenditures $ 67,528 $ 59,063 $ 65,341 $ 235,990 $ 368,901
Less: Proceeds from Sale of PP&E (5,695 ) (7,096 ) (51,587 ) (31,195 ) (69,097 )
Net Capital Expenditures $ 61,833 $ 51,967 $ 13,754 $ 204,795 $ 299,804
Gross Margin Percentage:
North America contract operations 50 % 49 % 57 % 51 % 57 %
International contract operations 60 % 58 % 63 % 62 % 62 %
Aftermarket services 12 % 10 % 18 % 14 % 20 %
Fabrication 14 % 17 % 15 % 15 % 16 %
Total 31 % 31 % 33 % 33 % 34 %
Total Available Horsepower (at period end):
North America contract operations 3,701 4,272 4,321 3,701 4,321
International contract operations 1,200 1,281 1,234 1,200 1,234
Total 4,901 5,553 5,555 4,901 5,555
Total Operating Horsepower (at period end):
North America contract operations 2,837 2,827 2,867 2,837 2,867
International contract operations 981 1,020 1,032 981 1,032
Total 3,818 3,847 3,899 3,818 3,899
Total Operating Horsepower (average):
North America contract operations 2,826 2,822 2,920 2,832 3,143
International contract operations 1,007 1,032 1,022 1,024 1,033
Total 3,833 3,854 3,942 3,856 4,176
Horsepower Utilization (at period end):
North America contract operations 77 % 66 % 66 % 77 % 66 %
International contract operations 82 % 80 % 84 % 82 % 84 %
Total 78 % 69 % 70 % 78 % 70 %
Fabrication Backlog:
Compression & accessory fabrication $ 220,254 $ 229,483 $ 296,850 $ 220,254 $ 296,850
Production & processing equipment fabrication 483,275 461,433 515,607 483,275 515,607
Total $ 703,529 $ 690,916 $ 812,457 $ 703,529 $ 812,457
Debt to Capitalization:
Debt $ 1,897,147 $ 1,971,309 $ 2,260,936 $ 1,897,147 $ 2,260,936
Exterran stockholders' Equity 1,609,448 1,713,583 1,639,997 1,609,448 1,639,997
Capitalization $ 3,506,595 $ 3,684,892 $ 3,900,933 $ 3,506,595 $ 3,900,933
Total 54.1 % 53.5 % 58.0 % 54.1 % 58.0 %
(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 Years Ended
December 31,
2010 		September 30,
2010 		December 31,
2009 		December 31,
2010 		December 31,
2009

Reconciliation of GAAP to Non-GAAP Financial Information:

Net income (loss) $ (128,271 ) $ (18,356 ) $ 23,621 $ (113,241 ) $ (545,463 )
Income (loss) from discontinued operations, net of tax (2,734 ) (1,325 ) 49,112 45,323 (296,239 )
Loss from continuing operations (125,537 ) (17,031 ) (25,491 ) (158,564 ) (249,224 )
Depreciation and amortization 105,012 98,503 97,028 401,478 352,785
Long-lived asset impairment 142,205 2,246 4,704 146,903 96,988
Restructuring charges - - 1,933 - 14,329
Investment in non-consolidated affiliates (income) impairment 261 - (1,541 ) 609 96,593
Goodwill impairment - - - - 150,778
Interest expense 37,557 33,050 33,577 136,149 122,845

Gain on sale of our investment in the subsidiary that owns the barge mounted processing plant and other related assets used on the Cawthorne Channel Project

- - (20,806 ) (4,863 ) (20,806 )
Provision for (benefit from) income taxes (55,708 ) (7,083 ) 50,190 (66,606 ) 51,667
EBITDA, as adjusted (1) 103,790 109,685 139,594 455,106 615,955
Selling, general and administrative 91,809 88,229 84,529 358,255 337,620
Equity in (income) loss of non-consolidated affiliates 261 - (1,541 ) 609 91,154
Investment in non-consolidated affiliates income (impairment) (261 ) - 1,541 (609 ) (96,593 )

Gain on sale of our investment in the subsidiary that owns the barge mounted processing plant and other related assets used on the Cawthorne Channel Project

- - 20,806 4,863 20,806
Other (income) expense, net (6,154 ) (2,941 ) (27,797 ) (13,763 ) (53,360 )
Gross Margin (1) $ 189,445 $ 194,973 $ 217,132 $ 804,461 $ 915,582
Net income (loss) attributable to Exterran stockholders $ (118,028 ) $ (17,985 ) $ 22,585 $ (101,825 ) $ (549,407 )
(Income) loss from discontinued operations 2,734 1,325 (49,112 ) (45,323 ) 296,239
Charges, after-tax:
Long-lived asset impairment (including the impact on minority interest) 83,080 1,415 2,975 85,940 57,586
Restructuring charges - - 1,276 - 13,153
Investment in non-consolidated affiliates (income) impairment 261 - (1,541 ) 609 88,193
Goodwill impairment - - - - 150,778

Gain on sale of our investment in the subsidiary that owns the barge mounted processing plant and other related assets used on the Cawthorne Channel Project

- - (12,067 ) (8,807 ) (12,067 )
Tax provision related to legal entity restructuring and foreign tax assessment for prior period - - 18,959 - 18,959
Net income (loss) from continuing operations attributable to Exterran stockholders, excluding charges $ (31,953 ) $ (15,245 ) $ (16,925 ) $ (69,406 ) $ 63,434
Diluted loss from continuing operations attributable to Exterran stockholders $ (1.85 ) $ (0.27 ) $ (0.43 ) $ (2.37 ) $ (4.12 )
Adjustment for charges, after-tax, per common share 1.34 0.02 0.16 1.25 5.14

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

$ (0.51 ) $ (0.25 ) $ (0.27 ) $ (1.12 ) $ 1.02
(1) Management believes disclosure of EBITDA, as adjusted, diluted net income (loss) from continuing operations 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 net income (loss) from continuing operations attributable to Exterran stockholders per common share, 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 Years Ended
December 31,
2010 		September 30,
2010 		December 31,
2009 		December 31,
2010 		December 31,
2009
Revenue $ 68,415 $ 62,721 $ 47,102 $ 237,636 $ 181,729
Costs and expenses:
Cost of sales (excluding depreciation and amortization) 35,446 33,819 21,320 124,242 83,480
Depreciation and amortization 15,180 13,697 10,398 52,518 36,452
Long-lived asset impairment 24,652 93 156 24,976 3,151
Selling, general and administrative 10,112 8,504 7,713 34,830 24,226
Interest expense 6,601 6,020 5,640 24,037 20,303
Other (income) expense, net (241 ) 333 (1,559 ) (314 ) (1,208 )
Total costs and expenses 91,750 62,466 43,668 260,289 166,404
Income (loss) before income taxes (23,335 ) 255 3,434 (22,653 ) 15,325
Income tax expense 162 172 117 680 541
Net income (loss) $ (23,497 ) $ 83 $ 3,317 $ (23,333 ) $ 14,784
General partner interest in net income (loss) $ 49 $ 420 $ 377 $ 1,091 $ 1,354
Limited partner interest in net income (loss) $ (23,546 ) $ (337 ) $ 2,940 $ (24,424 ) $ 13,430
Weighted average limited partners' units outstanding:
Basic 32,091 28,434 21,798 27,091 19,786
Diluted 32,091 28,434 21,830 27,091 19,802
Earnings (loss) per limited partner unit:
Basic $ (0.73 ) $ (0.01 ) $ 0.13 $ (0.90 ) $ 0.68
Diluted $ (0.73 ) $ (0.01 ) $ 0.13 $ (0.90 ) $ 0.68
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per unit amounts and percentages)
Three Months Ended Years Ended
December 31,
2010 		September 30,
2010 		December 31,
2009 		December 31,
2010 		December 31,
2009
Revenue $ 68,415 $ 62,721 $ 47,102 $ 237,636 $ 181,729
Gross Margin, as adjusted (1) $ 38,786 $ 35,980 $ 26,938 $ 134,798 $ 105,495
EBITDA, as further adjusted (1) $ 31,427 $ 28,047 $ 21,592 $ 104,807 $ 83,840
% of Revenue 46 % 45 % 46 % 44 % 46 %
Capital Expenditures $ 6,535 $ 4,037 $ 3,199 $ 28,113 $ 17,893
Less: Proceeds from Sale of Compression Equipment (547 ) (30 ) (4,457 ) (1,370 ) (4,457 )
Net Capital Expenditures $ 5,988 $ 4,007 $ (1,258 ) $ 26,743 $ 13,436
Gross Margin percentage, as adjusted 57 % 57 % 57 % 57 % 58 %
Distributable cash flow (2) $ 20,372 $ 19,272 $ 13,207 $ 66,831 $ 49,809
Distributions per Limited Partner Unit $ 0.4725 $ 0.4675 $ 0.4625 $ 1.87 $ 1.85
Distribution to All Unitholders, including Incentive Distributions $ 16,003 $ 15,732 $ 11,580 $ 54,913 $ 39,404

Distributable Cash Flow Coverage

1.27

x

1.23

x

1.14

x

1.22

x

1.26

x

December 31,
2010 		September 30,
2010 		December 31,
2009 		December 31,
2010 		December 31,
2009
Debt $ 449,000 $ 435,500 $ 432,500 $ 449,000 $ 432,500
Total Partners' Capital $ 350,737 $ 375,941 $ 258,308 $ 350,737 $ 258,308
Total Debt to Capitalization 56 % 54 % 63 % 56 % 63 %

EBITDA, as further adjusted (1) to Interest Expense

4.8

x

4.7

x

3.8

x

4.4

x

4.1

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, except per unit amounts)
Three Months Ended Years Ended
December 31,
2010 		September 30,
2010 		December 31,
2009 		December 31,
2010 		December 31,
2009
Reconciliation of GAAP to Non-GAAP Financial Information:
Net income (loss) $ (23,497 ) $ 83 $ 3,317 $ (23,333 ) $ 14,784
Income tax expense 162 172 117 680 541
Depreciation and amortization 15,180 13,697 10,398 52,518 36,452
Long-lived asset impairment 24,652 93 156 24,976 3,151

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

7,780 7,770 1,708 24,720 7,798
Non-cash selling, general and administrative costs 549 212 256 1,209 811
Interest expense, net of interest income 6,601 6,020 5,640 24,037 20,303
EBITDA, as further adjusted (1) 31,427 28,047 21,592 104,807 83,840
Cash selling, general and administrative costs 9,563 8,292 7,457 33,621 23,415
Less: cap on selling, general and administrative costs provided by EXH (1,963 ) (692 ) (552 ) (3,316 ) (552 )
Less: other (income) expense, net (241 ) 333 (1,559 ) (314 ) (1,208 )
Gross Margin, as adjusted (1) 38,786 35,980 26,938 134,798 105,495
Other income, (expense), net 241 (333 ) 1,559 314 1,208
Expensed acquisition costs (in Other (income) expense, net) - 356 452 356 803
Less: Gain on sale of compression equipment (in Other (income) expense, net) (242 ) (8 ) (2,011 ) (667 ) (2,011 )
Less: Cash interest expense (4,469 ) (5,747 ) (5,420 ) (21,087 ) (19,697 )

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

(7,600 ) (7,600 ) (6,905 ) (30,305 ) (22,863 )
Less: Income tax expense (162 ) (172 ) (117 ) (680 ) (541 )
Less: Maintenance capital expenditures (6,182 ) (3,204 ) (1,289 ) (15,898 ) (12,585 )
Distributable cash flow (2) $ 20,372 $ 19,272 $ 13,207 $ 66,831 $ 49,809
Cash flows from operating activities $ 6,585 $ 11,075 $ 5,759 $ 43,682 $ 55,936
Provision for doubtful accounts (700 ) (560 ) (401 ) (1,292 ) (627 )
Cap on operating and selling, general and administrative costs provided by EXH 7,780 7,770 1,708 24,720 7,798
Expensed acquisition costs - 356 452 356 803
Maintenance capital expenditures (6,182 ) (3,204 ) (1,289 ) (15,898 ) (12,585 )
Change in assets and liabilities 12,889 3,835 6,978 15,263 (1,516 )
Distributable cash flow (2) $ 20,372 $ 19,272 $ 13,207 $ 66,831 $ 49,809
Net income (loss) $ (23,497 ) $ 83 $ 3,317 $ (23,333 ) $ 14,784
Long-lived asset impairment 24,652 93 156 24,976 3,151
Net income, excluding charge $ 1,155 $ 176 $ 3,473 $ 1,643 $ 17,935
Diluted earnings (loss) per limited partner unit $ (0.73 ) $ (0.01 ) $ 0.13 $ (0.90 ) $ 0.68
Adjustment for charge per limited partner unit 0.75 - 0.01 0.90 0.15
Diluted earnings (loss) per limited partner unit, excluding charge (1) $ 0.02 $ (0.01 ) $ 0.14 0.00 $ 0.83
(1) Management believes disclosure of EBITDA, as further adjusted, diluted earnings (loss) 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 (loss) 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 Years Ended
December 31,
2010 		September 30,
2010 		December 31,
2009 		December 31,
2010 		December 31,
2009
Total Available Horsepower (at period end) (1) 1,572 1,655 1,304 1,572 1,304
Total Operating Horsepower (at period end) (1) 1,384 1,362 1,050 1,384 1,050
Average Operating Horsepower 1,364 1,208 908 1,179 878
Horsepower Utilization:
Spot (at period end) 88% 82% 81% 88% 81%
Average 82% 81% 79% 81% 82%

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

1,944 1,894 1,764 1,944 1,764
Available Horsepower:

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

3,607 4,167 4,213 3,607 4,213

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

54% 45% 42% 54% 42%
Operating Horsepower:

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

2,779 2,773 2,813 2,779 2,813

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

70% 68% 63% 70% 63%
(1) Includes compressor units leased from Exterran Holdings with an aggregate horsepower (in thousands) of 278, 242 and 145 at December 31, 2010, September 30, 2010 and December 31, 2009, respectively. Excludes compressor units leased to Exterran Holdings with an aggregate horsepower (in thousands) of 18, 18 and 15 at December 31, 2010, September 30, 2010 and December 31, 2009, respectively.

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

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