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

Exterran Holdings, Inc. Financial Results

Exterran Holdings reported net income attributable to Exterran stockholders for the second quarter 2010 of $17.5 million, or $0.28 per diluted share, compared to net income attributable to Exterran stockholders for the first quarter 2010 of $16.7 million, or $0.27 per diluted share, and a net loss attributable to Exterran stockholders for the second quarter 2009 of $530.8 million, or $8.66 per diluted share.

Net loss from continuing operations attributable to Exterran stockholders for the second quarter 2010 was $20.6 million, or $0.33 per diluted share, excluding after-tax impairment charges of $0.8 million. Net income attributable to Exterran stockholders from discontinued operations during the quarter was $39.0 million, primarily related to the sale of equipment for which the accounting basis had been written down due to the expropriation of our business in Venezuela during 2009. Net loss from continuing operations for the first quarter 2010 attributable to Exterran stockholders, excluding charges, was $1.5 million, or $0.02 per diluted share, and 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.

Revenue was $643.8 million for the second quarter 2010, compared to $576.3 million for the first quarter 2010 and $678.0 million for the second quarter 2009. EBITDA, as adjusted (as defined below), was $117.8 million for the second quarter 2010, compared to $123.9 million for the first quarter 2010 and $151.4 million for the second quarter 2009.

Ernie L. Danner, Exterran Holdings’ President and Chief Executive Officer, said, “We are encouraged by positive trends in our North America contract operations business and believe our operating horsepower levels will increase in the second half of the year. In our international contract operations business during the second quarter, key events included the startup of two projects in Brazil and the early termination of another project that accelerated approximately $19 million of revenue and approximately $6 million in pretax income. In our fabrication segment, however, we are unsatisfied with our operating results which were negatively impacted by project delays and execution issues on two projects.

We continue to focus on improving customer service and maintaining strong capital discipline. We believe that we are making the appropriate investments in our service infrastructure in order to continue to enhance our customer service levels and support worldwide growth initiatives. We generated significant cash flow and reduced our outstanding debt balance by $63 million in the second quarter. We expect net capital expenditures in 2010 of $225 million to $250 million, as compared to previous guidance of $250 million to $300 million, and the generation of positive operating cash flow after capital expenditures will continue to be a key priority.”

Exterran Partners, L.P. Financial Results

Exterran Partners reported revenue of $53.8 million for the second quarter 2010, compared to $52.7 million for the first quarter 2010 and $45.1 million for the second quarter 2009. Net loss was $1.3 million, or $0.07 per diluted limited partner unit, compared to net income of $1.4 million, or $0.05 per diluted limited partner unit, for the first quarter 2010, and net income of $2.7 million, or $0.13 per diluted limited partner unit, for the second quarter 2009.

Exterran Partners’ EBITDA, as further adjusted (as defined below), totaled $22.9 million for the second quarter 2010, compared to $22.4 million for the first quarter 2010 and $21.1 million for the second quarter 2009. Distributable cash flow (as defined below) totaled $12.8 million for the second quarter 2010, compared to $14.4 million for the first quarter 2010 and $12.7 million for the second quarter 2009.

“Exterran Partners is beginning to benefit from the positive trends in the North American contract compression market as evidenced during the second quarter by an increase of 32,000 operating horsepower from March 31, 2010 levels,” commented Mr. Danner, Chairman, President and Chief Executive Officer of Exterran Partners’ managing general partner. “In July 2010, Exterran Partners agreed to acquire contracts and compressor units currently totaling approximately 254,000 horsepower from Exterran Holdings for consideration valued at approximately $214 million. This consideration will consist entirely of Exterran Partners’ equity, comprised of approximately 8.21 million common units and approximately 167,000 general partner units. The acquisition, anticipated to close in mid-August, is expected to strengthen Exterran Partners’ financial position by increasing distributable cash flow and improving its credit profile.”

On July 30, 2010, Exterran Partners announced a cash distribution of $0.4625 per limited partner unit for the second quarter 2010, the same level as in the first quarter 2010 and the second quarter 2009. This distribution will be paid on August 13, 2010 to unitholders of record as of the close of business on August 10, 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 second quarter 2010 earnings release:
  • Teleconference: Thursday, August 5, 2010 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 27590910.
  • 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, August 5, 2010, until 2:00 p.m. Eastern Time on Thursday, August 12, 2010. 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 27590910.

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”) 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, and excluding non-recurring items.

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 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 has over 10,000 employees and operates in more than 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 and ability to fulfill that outlook; the ability of the Companies to complete their proposed transaction and the expected timing of the closing of the transaction; and the expected benefits of the transaction to Exterran Holdings and 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 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; and the failure to satisfy the conditions to the closing of the pending transaction between the Companies.

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
June 30, March 31, June 30,
  2010     2010     2009  
Revenues:
North America contract operations $ 152,048 $ 152,627 $ 178,455
International contract operations 131,087 109,740 95,448
Aftermarket services 83,363 70,323 78,504
Fabrication   277,324     243,618     325,561  
  643,822     576,308     677,968  
 
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):
North America contract operations 74,811 71,375 74,420
International contract operations 42,873 40,855 37,897
Aftermarket services 70,290 56,612 61,778
Fabrication 246,398 196,873 275,561
Selling, general and administrative 94,166 84,051 86,380
Depreciation and amortization 106,188 91,775 85,903
Long-lived asset impairment 745 1,707 86,684
Restructuring charges - - 8,076
Goodwill impairment - - 150,778
Interest expense 32,608 32,934 29,163
Equity in loss of non-consolidated affiliates 348 - 567
Other (income) expense, net   (2,485 )   (2,183 )   (9,433 )
  665,942     573,999     887,774  
 
Income (loss) before income taxes (22,120 ) 2,309 (209,806 )
Provision for (benefit from) income taxes   184     (3,999 )   (23,177 )
Income (loss) from continuing operations (22,304 ) 6,308 (186,629 )
Income (loss) from discontinued operations, net of tax   38,957     10,425     (343,323 )
Net income (loss) 16,653 16,733 (529,952 )
Less: net (income) loss attributable to the noncontrolling interest   873     (71 )   (818 )
Net income (loss) attributable to Exterran stockholders $ 17,526   $ 16,662   $ (530,770 )
 
Basic income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders $ (0.35 ) $ 0.10 $ (3.06 )
Income (loss) from discontinued operations attributable to Exterran stockholders   0.63     0.17     (5.60 )
Net income (loss) attributable to Exterran stockholders $ 0.28   $ 0.27   $ (8.66 )
 
Diluted income (loss) per common share:
Income (loss) from continuing operations attributable to Exterran stockholders $ (0.35 ) $ 0.10 $ (3.06 )
Income (loss) from discontinued operations attributable to Exterran stockholders   0.63     0.17     (5.60 )
Net income (loss) attributable to Exterran stockholders $ 0.28   $ 0.27   $ (8.66 )
 
Weighted average common and equivalent shares outstanding:
Basic   62,044     61,836     61,277  
Diluted   62,044     62,546     61,277  
 
Income (loss) attributable to Exterran stockholders:
Income (loss) from continuing operations $ (21,431 ) $ 6,237 $ (187,447 )
Income (loss) from discontinued operations, net of tax   38,957     10,425     (343,323 )
Net income (loss) attributable to Exterran stockholders $ 17,526   $ 16,662   $ (530,770 )
EXTERRAN HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION

(In thousands, except percentages)
       
 
Three Months Ended
June 30, March 31, June 30,
  2010     2010     2009  
Revenues:
North America contract operations $ 152,048 $ 152,627 $ 178,455
International contract operations 131,087 109,740 95,448
Aftermarket services 83,363 70,323 78,504
Fabrication   277,324     243,618     325,561  
Total $ 643,822   $ 576,308   $ 677,968  
 
Gross Margin (1):
North America contract operations $ 77,237 $ 81,252 $ 104,035
International contract operations 88,214 68,885 57,551
Aftermarket services 13,073 13,711 16,726
Fabrication   30,926     46,745     50,000  
Total $ 209,450   $ 210,593   $ 228,312  
 
Selling, General and Administrative $ 94,166 $ 84,051 $ 86,380
% of Revenues 15 % 15 % 13 %
 
EBITDA, as adjusted (1) $ 117,769 $ 123,862 $ 151,365
% of Revenues 18 % 21 % 22 %
 
Capital Expenditures $ 61,538 $ 47,861 $ 106,075
Less: Proceeds from Sale of PP&E   (13,018 )   (5,386 )   (10,256 )
Net Capital Expenditures $ 48,520   $ 42,475   $ 95,819  
 
Gross Margin Percentage:
North America contract operations 51 % 53 % 58 %
International contract operations 67 % 63 % 60 %
Aftermarket services 16 % 19 % 21 %
Fabrication 11 % 19 % 15 %
Total 33 % 37 % 34 %
 
Total Available Horsepower (at period end):
North America contract operations 4,306 4,293 4,340
International contract operations   1,263     1,232     1,214  
Total   5,569     5,525     5,554  
 
Total Operating Horsepower (at period end):
North America contract operations 2,816 2,838 3,125
International contract operations   1,060     1,022     1,037  
Total   3,876     3,860     4,162  
 
Total Operating Horsepower (average):
North America contract operations 2,819 2,855 3,207
International contract operations   1,041     1,026     1,037  
Total   3,860     3,881     4,244  
 
Horsepower Utilization (at period end):
North America contract operations 65 % 66 % 72 %
International contract operations 84 % 83 % 85 %
Total 70 % 70 % 75 %
 
Fabrication Backlog:
Compression & accessory $ 222,303 $ 276,966 $ 291,633
Production & processing equipment   527,363     488,204     652,772  
Total $ 749,666   $ 765,170   $ 944,405  
 
Debt to Capitalization:
Debt $ 2,081,333 $ 2,143,945 $ 2,509,777
Exterran stockholders' equity   1,665,379     1,654,724     1,570,256  
Capitalization $ 3,746,712 $ 3,798,669 $ 4,080,033
Total Debt to Capitalization 55.6 % 56.4 % 61.5 %
 

(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
June 30, March 31, June 30,
  2010     2010     2009  
 
Reconciliation of GAAP to Non-GAAP Financial Information:
 
Income (loss) from continuing operations $ (22,304 ) $ 6,308 $ (186,629 )
Depreciation and amortization 106,188 91,775 85,903
Long-lived asset impairment 745 1,707 86,684
Restructuring charges - - 8,076
Investment in non-consolidated affiliates impairment 348 - 567
Goodwill impairment - - 150,778
Interest expense 32,608 32,934 29,163
Gain on sale of a loan and our interest in an entity related to the Cawthorne Channel Project - (4,863 ) -
Provision for (benefit from) income taxes   184     (3,999 )   (23,177 )
EBITDA, as adjusted (1) 117,769 123,862 151,365
Selling, general and administrative 94,166 84,051 86,380
Equity in loss of non-consolidated affiliates 348 - 567
Investment in non-consolidated affiliates impairment (348 ) - (567 )
Gain on sale of a loan and our interest in an entity related to the Cawthorne Channel Project - 4,863 -
Other (income) expense, net   (2,485 )   (2,183 )   (9,433 )
Gross Margin (1) $ 209,450   $ 210,593   $ 228,312  
 
 
Net income (loss) attributable to Exterran stockholders $ 17,526 $ 16,662 $ (530,770 )
(Income) loss from discontinued operations (38,957 ) (10,425 ) 343,323
Charges, after-tax:
Long-lived asset impairment 469 1,075 55,153
Restructuring charges - - 5,344
Investment in non-consolidated affiliates impairment 348 - 567
Goodwill impairment - - 150,778
Gain on sale of a loan and our interest in an entity related to the Cawthorne Channel Project   -     (8,807 )   -  
Net income (loss) from continuing operations attributable to Exterran stockholders, excluding charges $ (20,614 ) $ (1,495 ) $ 24,395  
 
Diluted Income (loss) from continuing operations attributable to Exterran stockholders $ (0.35 ) $ 0.10 $ (3.06 )
Adjustment for charges, after-tax, per common share   0.02     (0.12 )   3.45  
Diluted net income (loss) from continuing operations attributable to Exterran stockholders per common share,
excluding charges (1) $ (0.33 ) $ (0.02 ) $ 0.39  
 
(1) Management believes disclosure of EBITDA, as adjusted, diluted income (loss) attributable to Exterran stockholders per common share, excluding charges, and Gross Margin, non-GAAP measures, provides useful information to investors because, when viewed with our GAAP results and accompanying reconciliations, they provide a more complete understanding of our performance than GAAP results alone. Management uses EBITDA, as adjusted, diluted income (loss) per common share from continuing operations, excluding charges, and Gross Margin as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, EBITDA, as adjusted, is used by management as a valuation measure.
EXTERRAN PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit amounts)
     
 
 
Three Months Ended
June 30, March 31, June 30,
  2010     2010     2009
 
 
Revenue $ 53,790 $ 52,710 $ 45,077
 
Costs and expenses:
Cost of sales (excluding depreciation and amortization) 29,126 25,851 20,176
Depreciation and amortization 11,763 11,878 8,678
Long-lived asset impairment - 231 2,995
Selling, general and administrative 8,519 7,695 5,551
Interest expense 5,724 5,692 4,805
Other (income) expense, net   (170 )   (236 )   -
Total costs and expenses   54,962     51,111     42,205
Income (loss) before income taxes (1,172 ) 1,599 2,872
Income tax expense   173     173     134
Net income (loss) $ (1,345 ) $ 1,426   $ 2,738
 
General partner interest in net income (loss) $ 285   $ 340   $ 304
 
Limited partner interest in net income (loss) $ (1,630 ) $ 1,086   $ 2,434
 
Weighted average limited partners' units outstanding:
Basic   23,885     23,871     19,107
 
Diluted   23,885     23,876     19,113
 
Earnings (loss) per limited partner unit:
Basic $ (0.07 ) $ 0.05   $ 0.13
 
Diluted $ (0.07 ) $ 0.05   $ 0.13
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION

(In thousands, except per unit amounts and percentages)
     
 
 
Three Months Ended
June 30, March 31, June 30,
2010 2010 2009
 
Revenue $ 53,790 $ 52,710 $ 45,077
 
Gross Margin, as adjusted (1) $ 30,379 $ 29,653 $ 26,353
 
EBITDA, as further adjusted (1) $ 22,949 $ 22,384 $ 21,077
% of Revenue 43 % 42 % 47 %
 
Capital Expenditures $ 14,971 $ 2,570 $ 4,152
Proceeds from Sale of Compression Equipment   263     530     -  
Net Capital Expenditures $ 14,708   $ 2,040   $ 4,152  
 
Gross Margin percentage, as adjusted 56 % 56 % 58 %
 
Distributable cash flow (2) $ 12,790 $ 14,397 $ 12,714
 
Distributions per Limited Partner Unit $ 0.4625 $ 0.4625 $ 0.4625
Distribution to All Unitholders, including Incentive Distributions $ 11,589 $ 11,589 $ 9,277
Distributable Cash Flow Coverage

1.10

x

1.24

x

1.37

x
 
June 30, March 31, June 30,
2010 2010 2009
 
Debt $ 430,500 $ 430,500 $ 387,750
Total Partners' Capital $ 247,404 $ 253,057 $ 175,205
Total Debt to Capitalization 64 % 63 % 69 %
EBITDA, as further adjusted (1) to Interest Expense

4.0

x

3.9

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

(In thousands, except per unit amounts)
         
 
 
Three Months Ended
June 30, March 31, June 30,
2010 2010 2009
 
Reconciliation of GAAP to Non-GAAP Financial Information:
 
Net income (loss) $ (1,345) $ 1,426 $ 2,738
Income tax expense 173 173 134
Depreciation and amortization 11,763 11,878 8,678
Long-lived asset impairment - 231 2,995
Cap on operating and selling, general and administrative

costs provided by Exterran Holdings ("EXH")
6,376 2,794 1,452
Non-cash selling, general and administrative costs 258 190 275
Interest expense, net of interest income 5,724 5,692 4,805
EBITDA, as further adjusted (1) 22,949 22,384 21,077
Cash selling, general and administrative costs 8,261 7,505 5,276
Less: cap on selling, general and administrative costs provided by EXH (661) - -
Less: other (income), expense, net (170) (236) -
Gross Margin, as adjusted (1) $ 30,379 $ 29,653 $ 26,353
Other (income), expense, net 170 236 -
Less: Gain on sale of compression equipment (170) (247) -
Less: Cash interest expense (5,451) (5,420) (4,677)
Less: Cash selling, general and administrative, as adjusted for
cost caps provided by EXH (7,600) (7,505) (5,276)
Less: Income tax expense (173) (173) (134)
Less: Maintenance capital expenditures (4,365) (2,147) (3,552)
Distributable cash flow (2) $ 12,790 $ 14,397 $ 12,714
 
 
Cash flows from operating activities $ 10,249 $ 15,773 $ 22,773
Amortization of debt issuance cost (236) (235) (91)
Amortization of fair value of acquired interest rate swaps (37) (37) (37)
Provision for doubtful accounts (32) - (226)
Cap on operating and selling, general and administrative costs provided by EXH 6,376 2,794 1,452
Interest expense, net of interest income 5,724 5,692 4,805
Cash interest expense (5,451) (5,420) (4,677)
Maintenance capital expenditures (4,365) (2,147) (3,552)
Change in current assets/liabilities 562 (2,023) (7,733)
Distributable cash flow (2) $ 12,790 $ 14,397 $ 12,714
 
Net income (loss) $ (1,345) $ 1,426 $ 2,738
Charge, after-tax:
Long-lived asset impairment - 231 2,995
Net income (loss), excluding charge $ (1,345) $ 1,657 $ 5,733
 
Diluted earnings (loss) per limited partner unit $ (0.07) $ 0.05 $ 0.13
Adjustment for charge per limited partner unit - - 0.15
Diluted earnings (loss) per limited partner unit, excluding charge (1) $ (0.07) $ 0.05 $ 0.28
 
(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
June 30, March 31, June 30,
2010 2010 2009
 
Total Available Horsepower (at period end) 1,366 1,318 1,034
 
Total Operating Horsepower (at period end) 1,092 1,060 840
 
Average Operating Horsepower 1,076 1,060 859
 
Horsepower Utilization:
Spot (at period end) 80 % 80 % 81 %
Average 80 % 81 % 83 %
 
Combined U.S. Contract Operations Horsepower of Exterran Holdings
and Exterran Partners covered by contracts converted to service
agreements (at period end) 1,869 1,805 1,917
 
Available Horsepower:
 
Total Available U.S. Contract Operations Horsepower of Exterran Holdings
and Exterran Partners (at period end) 4,198 4,185 4,234
 
% of U.S. Contract Operations Available Horsepower of Exterran
Holdings and Exterran Partners covered by contracts converted
to service agreements (at period end) 45 % 43 % 45 %
 
Operating Horsepower:
 
Total Operating U.S. Contract Operations Horsepower of Exterran Holdings
and Exterran Partners (at period end) 2,761 2,785 3,066
 
% of U.S. Contract Operations Operating Horsepower of Exterran
Holdings and Exterran Partners covered by contracts converted
to service agreements (at period end) 68 % 65 % 63 %

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