Exterran Holdings and Exterran Partners Report
Third Quarter 2009 Results
HOUSTON, November 5, 2009 – Exterran Holdings, Inc. (NYSE: EXH) and Exterran Partners, L.P. (NASDAQ: EXLP) today reported financial results for the third quarter 2009.
Exterran Holdings, Inc. Financial Results
Exterran Holdings reported net income attributable to Exterran stockholders for the third quarter 2009 of $18.2 million, or $0.30 per diluted share, compared to a net loss attributable to Exterran stockholders for the second quarter 2009 of $530.8 million, or $8.66 per diluted share, and net income attributable to Exterran stockholders for the third quarter 2008 of $37.0 million, or $0.57 per diluted share.
Net income from continuing operations attributable to Exterran stockholders for the third quarter 2009 was $24.8 million, or $0.38 per diluted share, excluding pretax charges that totaled $3.6 million, including a $2.6 million restructuring charge related to the consolidation of our fabrication facilities in North America and a $1.0 million charge related to our investments in non-consolidated affiliates in Venezuela. Due to the expropriation of our assets and operations in Venezuela, our Venezuelan contract operations and aftermarket services businesses are reflected as discontinued operations in our current and prior period financial results.
Net income from continuing operations for the second quarter 2009 attributable to Exterran stockholders, excluding charges, was $24.4 million, or $0.39 per diluted share, and net income from continuing operations for the third quarter 2008 attributable to Exterran stockholders, excluding charges, was $24.0 million, or $0.37 per diluted share.
Revenue was $679.7 million for the third quarter 2009, compared to $678.0 million for the second quarter 2009 and $756.3 million for the third quarter 2008. EBITDA, as adjusted (as defined below), was $161.1 million for the third quarter 2009, compared to $151.4 million for the second quarter 2009 and $172.4 million for the third quarter 2008.
Ernie L. Danner, Exterran Holdings’ President and Chief Executive Officer, said, “I am pleased with our overall performance in the third quarter despite challenging industry conditions. With solid execution by our operating and support groups, we generated a strong level of cash flow and reduced our debt balances by $124 million. We also commenced the operation of two new contract operations projects in the Eastern Hemisphere in early October, and have a significant backlog of international contract operations projects scheduled to begin operations through mid-2010.
“Although we are encouraged by the recent increase in North American natural gas prices, we expect continuing overall weak market conditions and, in particular, declining activity levels for our North America contract operations business into 2010. We expect our net capital expenditures to be $200 million to $300 million in 2010, down from approximately $375 million to $400 million in 2009. Building on our third quarter success, we expect to generate positive cash flow after capital expenditures in the fourth quarter of 2009 and in 2010.”
Exterran Partners, L.P. Financial Results
Exterran Partners reported revenue of $41.3 million for the third quarter 2009, compared to $45.1 million for the second quarter 2009 and $44.4 million for the third quarter 2008. Net income was $2.0 million, or $0.09 per diluted limited partner unit, for the third quarter 2009, compared to $2.7 million, or $0.13 per diluted limited partner unit, for the second quarter 2009 and $9.4 million, or $0.49 per diluted limited partner unit, for the third quarter 2008. Net income for the second quarter 2009 was $5.7 million, or $0.28 per diluted limited partner unit, excluding a $3.0 million non-cash fleet impairment charge.
Exterran Partners’ EBITDA, as further adjusted (as defined below), totaled $18.4 million for the third quarter 2009, compared to $21.1 million for the second quarter 2009 and $22.7 million for the third quarter 2008. Distributable cash flow (as defined below) totaled $10.6 million for the third quarter 2009, compared to $12.7 million for the second quarter 2009 and $14.8 million for the third quarter 2008.
“In October, Exterran Partners agreed to acquire contracts and equipment representing approximately 273,000 horsepower of compression from Exterran Holdings for approximately $143 million, excluding transaction costs, to be financed with approximately $57 million of borrowings under its new $150 million asset-backed securitization facility and existing revolving credit facility and the issuance of approximately 4.7 million common units and approximately 97,000 general partner units to Exterran Holdings. The acquisition, anticipated to close in mid-November, is expected to strengthen Exterran Partners’ market position in the United States and enhance its distributable cash flow,” commented Mr. Danner, President and Chief Executive Officer of Exterran Partners’ managing general partner.
On October 30, 2009, Exterran Partners announced a cash distribution of $0.4625 per limited partner unit for the third quarter 2009, the same level as in the second quarter 2009 and the third quarter 2008.
Conference Call Details
Exterran Holdings, Inc. (NYSE: EXH) and Exterran Partners, L.P. (NASDAQ: EXLP) announce the following schedule and teleconference information for their third quarter 2009 earnings release:
| · | Teleconference: Thursday, November 5, 2009 at 11:00 a.m. Eastern Time, 10:00 a.m. Central Time. To access the call, United States and Canadian participants should dial 888-895-5271. International participants should dial 847-619-6547 at least 10 minutes before the scheduled start time. Please reference Exterran conference call number 25723798. |
| · | Live Webcast: The webcast will be available in listen-only mode via the companies’ website: www.exterran.com. |
| · | Webcast Replay: For those unable to participate, a replay will be available from 2:00 p.m. Eastern Time on Thursday, November 5, 2009, until 2:00 p.m. Eastern Time on Thursday, November 12, 2009. To listen to the replay, please dial 888-843-8996 in the United States and Canada, or 630-652-3044 internationally, and enter access code 25723798. |
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With respect to Exterran Holdings, EBITDA, as adjusted, a non-GAAP measure, is defined as income (loss) from continuing operations plus income taxes, interest expense (including debt extinguishment costs and gain or loss on termination of interest rate swaps), depreciation and amortization expense, impairment charges, merger and integration expenses, restructuring charges, excluding non-recurring items, and extraordinary gains or losses.
With respect to Exterran Partners, EBITDA, as further adjusted, a non-GAAP measure, is defined as net income (loss) plus income taxes, interest expense (including debt extinguishment costs and gain or loss on termination of interest rate swaps), depreciation and amortization expense, impairment charges, non-cash selling, general and administrative (“SG&A”) expenses and any amounts by which cost of sales and SG&A costs are reduced as a result of caps on these costs contained in the omnibus agreement to which Exterran Holdings and Exterran Partners are parties (the “Omnibus Agreement”), which amounts are treated as capital contributions from Exterran Holdings for accounting purposes, and excluding non-recurring items.
With respect to Exterran Partners, distributable cash flow, a non-GAAP measure, is defined as net income plus depreciation and amortization expense, impairment charges, non-cash SG&A expenses, interest expense and any amounts by which cost of sales and SG&A costs are reduced as a result of caps on these costs contained in the Omnibus Agreement, which amounts are treated as capital contributions from Exterran Holdings for accounting purposes, less cash interest expense and maintenance capital expenditures, and excluding gains/losses on asset sales and non-recurring items.
With respect to Exterran Holdings, Gross Margin, a non-GAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization expense).
With respect to Exterran Partners, Gross Margin, as adjusted, a non-GAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization expense) plus any amounts by which cost of sales are reduced as a result of caps on these costs contained in the Omnibus Agreement, which amounts are treated as capital contributions from Exterran Holdings for accounting purposes.
About Exterran Holdings and Exterran Partners
Exterran Holdings, Inc. is a global market leader in full service natural gas compression and a premier provider of operations, maintenance, service and equipment for oil and gas production, processing and transportation applications. Exterran Holdings serves customers across the energy spectrum—from producers to transporters to processors to storage owners. Headquartered in Houston, Texas, Exterran and its over 10,000 employees have operations in over 30 countries.
Exterran Partners, L.P. provides natural gas contract operations services to customers throughout the United States. Exterran Holdings indirectly owns a majority interest in Exterran Partners.
For more information, visit www.exterran.com.
Forward-Looking Statements
All statements in this release (and oral statements made regarding the subjects of this release) other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of Exterran Holdings and Exterran Partners (the “Companies”), which could cause actual results to differ materially from such statements. Forward-looking information includes, but is not limited to: the Companies’ operational and financial strategies and ability to successfully effect those strategies; the Companies’ expected future capital expenditures; the ability of the Companies to complete their proposed transaction and the expected timing of the closing of the transaction; the expected benefits of the transaction to Exterran Partners; Exterran Holdings’ ability to execute on its backlog of international contract operations projects and the ability of those projects to begin generating revenues through mid-2010; the Companies’ expectations regarding future economic and market conditions; and the Companies’ financial and operational outlook, including expected levels of cash flows, and ability to fulfill that outlook.
While the Companies believe that the assumptions concerning future events are reasonable, they caution that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of their business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: local, regional, national and international economic conditions and the impact they may have on the Companies and their customers; changes in tax laws that impact master limited partnerships; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for oil and natural gas and the impact on the price of oil and natural gas; Exterran Holdings’ ability to timely and cost-effectively obtain components necessary to conduct the Companies’ business; changes in political or economic conditions in key operating markets, including international markets; changes in safety and environmental regulations pertaining to the production and transportation of oil and natural gas; and, as to each of the Companies, the performance of the other entity.
These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Exterran Holdings’ Annual Report on Form 10-K for the year ended December 31, 2008, Exterran Partners’ Annual Report on Form 10-K for the year ended December 31, 2008, and those set forth from time to time in the Companies’ filings with the Securities and Exchange Commission, which are currently available at www.exterran.com. Except as required by law, the Companies expressly disclaim any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.
Exterran Contact Information:
Investors: David Oatman (281) 836-7035
Media: Susan Nelson (281) 836-7297
SOURCE: Exterran Holdings, Inc. and Exterran Partners, L.P.
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