Archrock (AROC) 8-K Results of Operations and Financial Condition

Exhibit 99.1

EXTERRAN

Exterran Holdings and Exterran Partners Report

First Quarter 2008 Results

HOUSTON, May 7, 2008 – Exterran Holdings, Inc. (NYSE: EXH) and Exterran Partners, L.P. (NASDAQ: EXLP) today reported financial results for the first quarter 2008.

Exterran Holdings, Inc. Financial Results

Exterran Holdings reported net income for the first quarter 2008 of $49.4 million, or $0.73 per share, compared to $58.5 million, or $0.87 per share, for the fourth quarter 2007 and $25.4 million, or $0.71 per share, for the first quarter 2007.

Merger and integration pretax charges related to the merger of Hanover Compressor Company and Universal Compression Holdings, Inc. into Exterran Holdings totaled $4.4 million, or $0.05 per share, in the first quarter 2008 compared to $9.3 million, or $0.08 per share, in the fourth quarter 2007 and $0.3 million in the first quarter 2007.

Revenue was $740.1 million for the first quarter 2008 compared to $853.4 million for the fourth quarter 2007 and $448.0 million for the first quarter 2007.  EBITDA, as adjusted (as defined below), was $211.2 million for the first quarter 2008 compared to $212.5 million for the fourth quarter 2007 and $117.9 million for the first quarter 2007.  

The merger of Hanover and Universal was completed on August 20, 2007, and periods prior to the merger reflect only Hanover’s results.  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.

Stephen A. Snider, Exterran Holdings’ President and CEO said, “We are excited about the start of our first full year of operations as Exterran and are very encouraged about the progress of our international and total solutions businesses.  Although merger integration and operational challenges have slowed the performance of our North American business, we are addressing these issues and expect to deliver improvements in revenues and margins in this business by the last half of 2008.  We recently transferred key management team members to our North American organization, bringing valuable additional resources and experience to help us complete our merger integration, further our service excellence initiative, and resume growth in our North American business.”

Exterran Partners, L.P. Financial Results

Exterran Partners reported revenue of $35.3 million in the first quarter 2008 compared to $36.6 million in the fourth quarter 2007 and $17.6 million in the first quarter 2007.  Net income was $6.5 million in the first quarter 2008 compared to $7.3 million in the fourth quarter 2007 and $2.3 million in the first quarter 2007.  EBITDA, as further adjusted (as defined below), totaled $19.2 million in the first quarter 2008 compared to $20.1 million in the fourth quarter 2007 and $9.5 million in the first quarter 2007.  Distributable cash flow (as defined below) totaled $14.0 million in the first quarter 2008 compared to $14.1 million in the fourth quarter 2007 and $6.0 million in the first quarter 2007.

On April 28, 2008, Exterran Partners announced a cash distribution of $0.425 per limited partner unit for the first quarter 2008 compared to $0.425 per limited partner unit for the fourth quarter 2007 and $0.35 per limited partner unit for the first quarter 2007.

“We are pleased with another solid performance by Exterran Partners in the first quarter, which included a distribution 21% higher than the prior year period’s distribution.   Exterran Partners continues to work toward a possible acquisition of certain contract operations assets and contracts from Exterran Holdings in a drop-down transaction and recently obtained financing commitments to expand its existing senior secured debt facility in contemplation of the proposed drop-down transaction,” commented Mr. Snider, Chairman, President and CEO of Exterran Partners’ general partner. “We believe the large pool of U.S. contract compression assets that can be offered for sale by Exterran Holdings to Exterran Partners over time and attractive ongoing market opportunities continue to enhance our outlook.”

Conference Call Details

Exterran Holdings, Inc. (NYSE: EXH) and Exterran Partners, L.P. (NASDAQ: EXLP) announce the following schedule and teleconference information for their first quarter 2008 earnings release:

·   Teleconference: Wednesday, May 7, 2008 at 11:00 a.m. Eastern Time (10:00 a.m. Central Time).  To access the call, United States and Canadian participants should dial 888-727-7721. International participants should dial 913-312-0381 at least 10 minutes before the scheduled start time. Please reference Exterran conference call number 4019182.

·   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 Wednesday, May 7, until 2:00 p.m. Eastern Time Wednesday, May 14, 2008. To listen to the replay, please dial 888-203-1112 in the United States and Canada, or 719-457-0820 internationally, and enter access code 4019182.

*****

With respect to Exterran Holdings, EBITDA, as adjusted, a non-GAAP measure, is defined as income 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, 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 depreciation 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 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 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 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 more than 30 countries.

Exterran Partners, L.P. was formed by Exterran Holdings to provide natural gas contract compression services to customers throughout the United States. Exterran Holdings owns 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: Exterran Holdings’ expectation to deliver improvements in revenue and margins in the North American business by the last half of 2008; 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; demand for the Companies’ products and services and growth opportunities for those products and services; the ability of Exterran Holdings and Exterran Partners to complete a possible transaction and the expected timing of the closing of such a transaction; the expected benefits of such a transaction; and Exterran Holdings’ intention to offer and sell other assets to Exterran Partners over time.

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 are:  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 into 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 the Companies’ Annual Reports on Form 10-K for the year ended December 31, 2007, 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 Contact Information:

Investors: David Oatman (281) 836-7035

Media: Pat (Patricia) Wente (713) 335-7011

Media: Rick Goins (832) 554-4918

 (Tables Follow)

EXTERRAN HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
	Three Months Ended
	March 31,			December 31,			March 31,
	2008			2007			2007
Revenues:
North America contract operations	$	199,076		$	202,956		$	99,635
International contract operations		119,892			111,414			67,291
Aftermarket services		84,172			102,307			47,301
Fabrication		336,949			436,698			233,751
		740,089			853,375			447,978
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):
North America contract operations		88,288			86,300			39,982
International contract operations		39,385			40,441			23,305
Aftermarket services		66,927			82,633			36,631
Fabrication		263,743			362,425			193,503
Selling, general and administrative		89,687			89,659			49,906
Merger and integration expenses		4,439			9,326			324
Depreciation and amortization		90,449			85,822			49,488
Fleet impairment		1,450			-			-
Interest expense		33,220			34,959			28,272
Equity in (income) loss of non-consolidated affiliates		(6,093	)		(5,541	)		(5,683	)
Other (income) expense, net		(12,999	)		(15,002	)		(7,597	)
		658,496			771,022			408,131
Income from continuing operations before income taxes
and minority interest		81,593			82,353			39,847
Provision for income taxes		29,977			19,979			14,445
Minority interest, net of taxes		2,643			3,880			-
Income from continuing operations		48,973			58,494			25,402
Income from discontinued operations, net of tax		398			-			-
Net income	$	49,371		$	58,494		$	25,402
Earnings per share - Basic(1):
Income from continuing operations	$	0.75		$	0.90		$	0.76
Income from discontinued operations, net of tax		0.01			-			-
Net income (loss)	$	0.76		$	0.90		$	0.76
Earnings per share - Diluted(1):
Income from continuing operations (2)	$	0.73		$	0.87		$	0.71
Income from discontinued operations, net of tax		-			-			-
Net income	$	0.73		$	0.87		$	0.71
Weighted average common and equivalent shares outstanding (1):
Basic		65,065			65,276			33,607
Diluted		68,831			68,715			38,226
(1) Adjusted for the Hanover common share conversion ratio in the merger of Hanover and Universal for the period ended March 31, 2007.
(2) Net income for the diluted earnings per share calculation for the three-month periods ending March 31, 2008, December 31, 2007 and March 31, 2007 is adjusted to add back interest expense and amortization of financing costs, net of tax, relating to the Company's convertible senior notes totaling $1.2 million, $1.2 million and $1.6 million, respectively.

EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands)
	Three Months Ended
	March 31,			December 31,			March 31,
	2008			2007			2007
Revenues:
North America contract operations	$	199,076		$	202,956		$	99,635
International contract operations		119,892			111,414			67,291
Aftermarket services		84,172			102,307			47,301
Fabrication		336,949			436,698			233,751
Total	$	740,089		$	853,375		$	447,978
Gross Margin (1):
North America contract operations	$	110,788		$	116,656		$	59,653
International contract operations		80,507			70,973			43,986
Aftermarket services		17,245			19,674			10,670
Fabrication		73,206			74,273			40,248
Total	$	281,746		$	281,576		$	154,557
Selling, General and Administrative	$	89,687		$	89,659		$	49,906
% of Revenues		12	%		11	%		11	%
EBITDA, as adjusted (1)	$	211,151		$	212,460		$	117,931
% of Revenues		29	%		25	%		26	%
Capital Expenditures	$	102,575		$	119,279		$	72,746
Less: Proceeds from Sale of PP&E		(2,527	)		(6,463	)		(11,798	)
Net Capital Expenditures	$	100,048		$	112,816		$	60,948
Gross Margin Percentage:
North America contract operations		56	%		57	%		60	%
International contract operations		67	%		64	%		65	%
Aftermarket services		20	%		19	%		23	%
Fabrication		22	%		17	%		17	%
Total		38	%		33	%		35	%
Reconciliation of GAAP to Non-GAAP Financial Information:
Income from continuing operations	$	48,973		$	58,494		$	25,402
Depreciation and amortization		90,449			85,822			49,488
Fleet impairment		1,450			-			-
Interest expense		33,220			34,959			28,272
Merger and integration expenses		4,439			9,326			324
Minority interest		2,643			3,880			-
Provision (benefit) for income taxes		29,977			19,979			14,445
EBITDA, as adjusted (1)		211,151			212,460			117,931
Selling, general and administrative		89,687			89,659			49,906
Equity in (income) loss of non-consolidated affiliates		(6,093	)		(5,541	)		(5,683	)
Other (income) expense		(12,999	)		(15,002	)		(7,597	)
Gross Margin (1)	$	281,746		$	281,576		$	154,557
	March 31,			December 31,			March 31,
	2008			2007			2007
Debt	$	2,326,104		$	2,333,924		$	1,365,669
Stockholders' Equity	$	3,186,342		$	3,162,260		$	1,088,695
Total Debt to Capitalization		42.2	%		42.5	%		55.6	%
(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
(Horsepower in thousands; dollars in millions)
	March 31,			December 31,
	2008			2007
Total Available Horsepower:
North America contract operations		4,476			4,514
International contract operations		1,461			1,447
Total		5,937			5,961
Total Operating Horsepower:
North America contract operations		3,535			3,632
International contract operations		1,350			1,306
Total		4,885			4,938
Horsepower Utilization:
North America contract operations		79	%		80	%
International contract operations		92	%		90	%
Total		82	%		83	%
	March 31,			December 31,			March 31,
	2008			2007			2007
Fabrication Backlog:
Compression & accessory	$	354		$	322		$                                            354
Production & processing		919			788		419
Total	$	1,273		$	1,110		$                                            773

EXTERRAN PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit amounts)
	Three Months Ended
	March 31,			December 31,			March 31,
	2008			2007			2007
Revenue	$	35,267		$	36,575		$	17,585
Costs and expenses:
Cost of sales (excluding depreciation)		16,143			15,511			7,507
Depreciation		5,674			5,660			2,782
Selling, general and administrative		3,001			4,134			2,770
Interest expense		3,801			3,872			2,133
Other (income) expense, net		(10	)		(4	)		(6	)
Total costs and expenses		28,609			29,173			15,186
Income before income taxes		6,658			7,402			2,399
Income tax (benefit) expense		111			90			56
Net income	$	6,547		$	7,312		$	2,343
General partner interest in net income	$	187		$	205		$	47
Limited partner interest in net income	$	6,360		$	7,107		$	2,296
Weighted average limited partners' units outstanding:
Basic		16,679			16,679			12,650
Diluted		16,791			16,753			12,671
Earnings per limited partner unit:
Basic	$	0.38		$	0.43		$	0.18
Diluted	$	0.38		$	0.42		$	0.18

EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands, except per unit amounts)
	Three Months Ended
	March 31,			December 31,			March 31,
	2008			2007			2007
Revenue	$	35,267		$	36,575		$	17,585
Gross Margin, as adjusted (1)	$	22,698		$	23,755		$	11,980
EBITDA, as further adjusted (1)	$	19,161		$	20,122		$	9,480
% of Revenue		54	%		55	%		54	%
Capital Expenditures	$	4,469		$	8,585		$	6,079
Proceeds from Sale of PP&E		-			-			-
Net Capital Expenditures	$	4,469		$	8,585		$	6,079
Gross Margin percentage, as adjusted		64	%		65	%		68	%
Distributable cash flow (2)	$	14,020		$	14,108		$	5,974
Distributions per Limited Partner Unit	$	0.425		$	0.425		$	0.278
Distribution to All Unitholders, including Incentive Distributions	$	7,290		$	7,292		$	3,585
Distributable Cash Flow Coverage		1.92	x		1.93	x		1.67	x
	March 31,			December 31,			March 31,
	2008			2007			2007
Debt	$	217,000		$	217,000		$	125,000
Total Partners' Capital	$	139,926		$	145,159		$	71,064
Total Debt to Capitalization		61	%		60	%		64	%
Total Debt to Annualized EBITDA, as further adjusted (1)		2.8	x		2.7	x		3.3	x
EBITDA, as further adjusted (1) to Interest Expense		5.0	x		5.2	x		4.4	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
(Dollars in thousands)
	Three Months Ended
	March 31,			December 31,			March 31,
	2008			2007			2007
Reconciliation of GAAP to Non-GAAP Financial Information:
Net income	$	6,547		$	7,312		$	2,343
Income tax (benefit) expense		111			90			56
Depreciation		5,674			5,660			2,782
Cap on operating and selling, general and administrative
costs provided by Exterran Holdings ("EXH")		3,574			2,687			1,578
Non-cash selling, general and administrative costs		(546	)		501			588
Interest expense, net of interest income		3,801			3,872			2,133
EBITDA, as further adjusted (1)		19,161			20,122			9,480
Cash selling, general and administrative costs (see note 1 below)		3,547			3,633			2,671
Less: cap on selling, general and administrative costs provided by EXH		-			-			(171	)
Less: other income, expense, net		(10	)		-			-
Gross Margin, as adjusted for operating cost caps provided by EXH (1)	$	22,698		$	23,755		$	11,980
Other income, expense, net		10			-			-
Less: Cash interest expense		(3,696	)		(3,643	)		(2,077	)
Less: Cash selling, general and administrative, as adjusted for
cost caps provided by EXH		(3,547	)		(3,633	)		(2,500	)
Less: Income tax (expense) benefit		(111	)		(90	)		(56	)
Less: Maintenance capital expenditures		(1,334	)		(2,281	)		(1,373	)
Distributable cash flow (2)	$	14,020		$	14,108		$	5,974
Cash flows from operating activities	$	3,991		$	9,635		$	7,921
Amortization of debt issuance cost		(64	)		(67	)		(56	)
Amortization of fair value of acquired interest rate swaps		(41	)		(162	)		-
Cap on operating and selling, general and administrative costs provided by EXH		3,574			2,687			1,578
Interest expense, net of interest income		3,801			3,872			2,133
Cash interest expense		(3,696	)		(3,643	)		(2,077	)
Maintenance capital expenditures		(1,334	)		(2,281	)		(1,373	)
Change in current assets/liabilities		7,789			4,067			(2,152	)
Distributable cash flow (2)	$	14,020		$	14,108		$	5,974
(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
(Horsepower in thousands)
	Three Months Ended
	March 31,			December 31,			March 31,
	2008			2007			2007
Total Available Horsepower (at period end)		720			723			358
Average Operating Horsepower		659			667			331
Horsepower Utilization:
Spot (at period end)		91	%		93	%		93	%
Average		91	%		94	%		95	%
Combined U.S. Contract Operations Horsepower of Exterran Holdings
and Exterran Partners covered by contracts converted to service
agreements (at period end)		1,274			1,294			1,154
Total Available U.S. Contract Operations Horsepower of Exterran Holdings
and Exterran Partners (at period end)		4,365			4,403			2,098
% of U.S. Contract Operations Horsepower of Exterran Holdings
and Exterran Partners under Converted Contract Form (at period end)		29.2	%		29.4	%		55.0	%