Exterran Holdings and Exterran Partners Report Third Quarter 2007 Results



    HOUSTON, November 2 /CNW/ - Exterran Holdings, Inc. (NYSE:  EXH) and
Exterran Partners, L.P. (NASDAQ:  EXLP) today reported financial results for the
quarter ended September 30, 2007.

    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.
    




For further information:

For further information: Exterran Holdings, Inc. David Oatman,
713-335-7460 (Investors) Rick Goins, 832-554-4918 (Media)

Organization Profile

EXTERRAN HOLDINGS, INC.

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