Exh 2014 hw conf final

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Exh 2014 hw conf final

  1. 1. © Exterran Holdings, Inc. All rights reserved. www.exterran.com© Exterran Holdings, Inc. All rights reserved. www.exterran.com HOWARD WEIL ENERGY CONFERENCE MARCH 25-26, 2014 Bill Austin Executive Vice President and Chief Financial Officer Brad Childers President and Chief Executive Officer
  2. 2. © Exterran Holdings, Inc. All rights reserved. www.exterran.com FORWARD-LOOKING STATEMENTS All statements in this presentation (and oral statements made regarding the subjects of this presentation) 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. (together, the “Companies”). Forward-looking information includes, but is not limited to: the industry fundamentals, including the attractiveness of returns and valuation, stability of cash flows, demand dynamics and overall outlook, and the Companies’ abilities to realize the benefits thereof; the Companies’ expectations regarding future economic and market conditions and trends; the Companies’ operational and financial strategies, including planned capital expenditures and growth activities, the Companies’ abilities to successfully effect those strategies and the expected results therefrom; the Companies’ financial and operational outlook, including additional payments expected to be received from Venezuela, and ability to fulfill that outlook; demand and growth opportunities for the Companies’ products and services; statements related to performance, profitability, structural and process improvement initiatives, the expected timing thereof, the Companies’ abilities to successfully effect those initiatives and the expected results therefrom; the operational and financial synergies provided by the Companies’ size; Exterran Holdings’ expectations with respect to its dividend program; and statements relating to eliminating the need for cost cap payments to Exterran Partners; strategies for building Exterran Partners’ value; and Exterran Holdings’ intention to continue to offer the balance of its U.S. contract operations business to 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. The factors that could cause results to differ materially from those indicated by such forward-looking statements include, but are not limited to: changes in the capital and financial markets that impact the effect of the sale of additional assets to Exterran Partners; changes in tax laws that impact master limited partnerships; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for oil and natural gas and the impact on the price of oil and natural gas; Exterran Holdings’ ability to timely and cost-effectively execute larger projects; changes in political or economic conditions in key operating markets, including international markets; any non-performance by third parties of their contractual obligations; changes in safety, health, environmental and other regulations; and, as to each of the Companies, the performance of the other entity. These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in the Companies’ Annual Reports on Form 10-K for the year ended December 31, 2013, 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. 1
  3. 3. © Exterran Holdings, Inc. All rights reserved. www.exterran.com INVESTMENT MERITS 2 Leveraged to favorable industry trends as a global leader in compression and well-established position in production and processing equipment Solid capital position and demonstrated performance improvement capability Executing on next set of structural and process changes to our core operations Announced MidCon acquisition, and aggressively pursuing opportunities for growth and maximizing the value of our businesses, including Exterran Partners Announced dividend program in February 2014 Initial dividend to be paid in March 2014
  4. 4. © Exterran Holdings, Inc. All rights reserved. www.exterran.com FUNDAMENTALS 3
  5. 5. © Exterran Holdings, Inc. All rights reserved. www.exterran.com Main Line Transmission Processing Focus of Exterran Operations SURFACE PRODUCTION SOLUTIONS Gathering System Wellhead Production Power Generation Storage Industrial Residential Chemical Feed-stocks and Fuels 4
  6. 6. © Exterran Holdings, Inc. All rights reserved. www.exterran.com EXTERRAN PRODUCT LINES Contract operations services provided with Exterran-owned fleet • Leader in the U.S. and Latin America • Recent growth in the Eastern Hemisphere Aftermarket services for customer- owned equipment • Provider of parts and services in U.S. and international markets • New business opportunities associated with compression units installed in growth plays 5 Seven facilities in North America and four in international locations Sell compression, production and processing equipment • For U.S. and international markets • Provide integrated design, engineering, fabrication and installation capabilities Our Belleli Energy operations produce critical process equipment for refinery and petrochemical facilities and fabricate tank farms and equipment for desalination plants Contract Services Product Sales
  7. 7. © Exterran Holdings, Inc. All rights reserved. www.exterran.com U.S. SHALE PLAYS Expect to add approximately 200,000 horsepower of new units to our fleet in 20141 Source: Energy Information Administration 1Excludes pending acquisition of compression assets from MidCon Compression, LLC (“MidCon Compression”) 6
  8. 8. © Exterran Holdings, Inc. All rights reserved. www.exterran.com CONTRACT SERVICES - STABLE CASH FLOWS 7 Services Revenue and Natural Gas Prices Note: In December 2013, we abandoned our contract water treatment business. All periods except 2008 exclude results from our contract water treatment business. $0 $2 $4 $6 $8 $10 $12 $14 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2008 2009 2010 2011 2012 2013 HenryHubSpotPrice Revenue($millions) North America Contract Operations International Contract Operations Aftermarket Services Henry Hub Price
  9. 9. © Exterran Holdings, Inc. All rights reserved. www.exterran.com LEADER IN U.S. CONTRACT OPERATIONS SERVICES EXLP is the largest contract compression provider in the U.S. with 2.7 million operating horsepower. U.S. contract compression is a stable business with significant economies of scale. Gas compression is an essential service utilized several times in the production cycle to transport gas to the end user. We are proud of the quality of our service, delivering an average runtime of over 99%. 1Management estimates and industry as December 31, 2013, pro forma to reflect pending acquisition of compression assets from MidCon Compression U.S. Outsourced Compression Competitors1 Exterran’s size provides significant operational and financial synergies 8 2,704 620 3,324 1,070 1,005 710 510 440 277 110 100 - 500 1,000 1,500 2,000 2,500 3,000 3,500 Exterran USA Compression Regency/CDM Compressor Systems J-W Operating Valerus Compression Natural Gas Services Enerflex Systems Natural Gas Compression Services OperatingHP(000s) EXH
  10. 10. © Exterran Holdings, Inc. All rights reserved. www.exterran.com PRODUCT SALES – BACKLOG TRENDS 9 Fabrication Backlog at Period Ends Despite an increase in bookings in 2H 2013, backlog levels are not expected to return to 2012 levels due to increased throughput of our fabrication facilities and a shift in product mix away from long lead time products $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2008 2009 2010 2011 2012 2013 ($millions) North America International $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2008 2009 2010 2011 2012 2013 ($millions) Compression Production & Processing Installation Belleli
  11. 11. © Exterran Holdings, Inc. All rights reserved. www.exterran.com Regional Headquarters Engineering and Manufacturing Centers Other Major International Locations GLOBAL PRESENCE 10 1Twelve months ended December 31, 2013 2See Addendum I for information on gross margin Revenue Mix1 Gross Margin Mix1,2 North America 60% Latin America 17% Eastern Hemisphere 23% North America 59% Latin America 24% Eastern Hemisphere 17%
  12. 12. © Exterran Holdings, Inc. All rights reserved. www.exterran.com $628 $476 $396 $1,661 Fabrication: 52% Aftermarket Services: 13% International Contract Operations: 15% North America Contract Operations: 20% $345 $279 $86 $252 Fabrication: 26% Aftermarket Services: 9% International Contract Operations: 29% North America Contract Operations: 36% BUSINESS MIX ServicesSales Revenue Mix1 ($ millions) 1Twelve months ended December 31, 2013 2See Addendum I for information on gross margin $963 11 ServicesSales $3,160 Gross Margin Mix1,2 ($ millions)
  13. 13. © Exterran Holdings, Inc. All rights reserved. www.exterran.com Market Equity1: $2.7 Billion North America Contract Operations 3.9 MM HP2 U.S. Contract Operations (~74% of Total U.S. Business) 2.9 MM HP2 Market Equity1: $1.4 Billion 39% LP1 2% GP1 EXTERRAN ORGANIZATIONAL STRUCTURE Exterran intends to offer the remainder of its U.S. contract operations business to Exterran Partners over time 1As of March 21, 2014; based on EXH shares and EXLP common units outstanding as of February 18, 2014 2Available horsepower as of December 31, 2013, pro forma to reflect pending acquisition of compression assets from MidCon Compression 3See Addendum III 12 Estimated current value of EXH’s ownership in EXLP of ~$770 million3
  14. 14. © Exterran Holdings, Inc. All rights reserved. www.exterran.com FAVORABLE INDUSTRY MARKET TRENDS 13
  15. 15. © Exterran Holdings, Inc. All rights reserved. www.exterran.com U.S. NATURAL GAS MARKET 14 Source: Energy Information Administration U.S. Production of Natural Gas Liquids by TypeU.S. Natural Gas Production by Source (trillioncubicfeet) (millionsofbarrelsperday) Optimistic outlook driven by growth in U.S. shale gas and NGL production
  16. 16. © Exterran Holdings, Inc. All rights reserved. www.exterran.com $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ($billions) U.S. International GLOBAL INDUSTRY CAPITAL SPENDING 15 Source: Spears & Associates We believe that the oil and gas infrastructure build-out in global markets will provide opportunities for growth Global Drilling and Production Capital Spending Projected to Increase 6% CAGR from 2013 through 2019
  17. 17. © Exterran Holdings, Inc. All rights reserved. www.exterran.com PERFORMANCE INITIATIVES & GROWTH ACTIVITIES 16
  18. 18. © Exterran Holdings, Inc. All rights reserved. www.exterran.com PERFORMANCE INITIATIVES Multi-year plan to deliver better return to investors Achieved improved profitability over the last two years Several process-driven initiatives being rolled out this year to improve performance of our Contract Operations business and our materials management systems, especially within our Fabrication businesses 17 Expect to drive further improvement in performance in 2014
  19. 19. © Exterran Holdings, Inc. All rights reserved. www.exterran.com North America Contract Ops Investing in new North America contract operations fleet units for gathering and gas lift applications, the majority to be funded by EXLP GROWTH ACTIVITIES International Contract Ops Recent bookings include contract extensions and expansion projects in Argentina, Brazil, Mexico, Indonesia & Oman; optimistic about growth opportunities, especially in Latin America Product Sales Outlook for projects in the Eastern Hemisphere remains robust Booked a $120 million tank farm project in Abu Dhabi within our Belleli Energy business AMS Leveraging new field systems and distribution network in this business 18
  20. 20. © Exterran Holdings, Inc. All rights reserved. www.exterran.com MIDCON COMPRESSION ASSET ACQUISITION Exterran Partners has agreed to acquire compression assets from MidCon Compression for approximately $360 million1 • Assets include 334 compression units, with a total horsepower of ~440,000 • Compression units are highly standardized and have an average age of ~5 years • Majority of units operate in liquids-rich plays and shale basins > Permian, Eagle Ford, Barnett, Anadarko, Mississippi Lime, Granite Wash, Woodford, Haynesville and Niobrara Basins • Increases EXLP operating horsepower by approximately 19% Exterran Partners also entered into a 7-year contract operations services agreement with Access Midstream Expected to close in the second quarter 2014 19 Transaction expected to be accretive to Distributable Cash Flow 1EXLP to direct MidCon Compression to sell $9.4 million of assets to EXH at closing of transaction
  21. 21. © Exterran Holdings, Inc. All rights reserved. www.exterran.com FINANCIAL REVIEW 20
  22. 22. © Exterran Holdings, Inc. All rights reserved. www.exterran.com IMPROVED FINANCIAL PERFORMANCE Exterran Holdings EBITDA, as adjusted1 Exterran Partners EBITDA, as further adjusted1 1See Addendum I for information on EBITDA, as adjusted, and EBITDA, as further adjusted 21 Our financial results have benefitted from the implementation of performance improvement initiatives $434 $388 $461 $634 $0 $100 $200 $300 $400 $500 $600 $700 2010 2011 2012 2013 ($millions) EXH $25 $32 $25 $25 $105 $139 $180 $238 $0 $50 $100 $150 $200 $250 2010 2011 2012 2013 ($millions) Cost Caps provided by EXH
  23. 23. © Exterran Holdings, Inc. All rights reserved. www.exterran.com ENHANCED CREDIT PROFILE 22 1As defined in Exterran Holdings’ credit agreement Improved capital position provides increased financial flexibility Total Debt Outstanding Exterran Holdings Debt to Adjusted EBITDA1 1,448 1,227 884 744 449 546 681 758 $1,897 $1,773 $1,565 $1,502 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 12/31/10 12/31/11 12/31/12 12/31/13 ($millions) Exterran Holdings EXLP 3.9x 4.3x 2.4x 1.6x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x 12/31/10 12/31/11 12/31/12 12/31/13 Debt-to-EBITDA
  24. 24. © Exterran Holdings, Inc. All rights reserved. www.exterran.com INITIATING DIVIDEND Focus on improved profitability, cash generation and debt reduction has allowed us to return cash to stockholders Announced the company’s first dividend program in February 2014 • Initial quarterly dividend of $0.15 per common share of stock, a rate of $0.60 per share on an annualized basis • First dividend to be paid on March 28, 2014 Intend to pay regular quarterly dividends going forward 23 Evaluating alternatives to maximize shareholder value going forward
  25. 25. © Exterran Holdings, Inc. All rights reserved. www.exterran.com MAIN DRIVERS FOR ENHANCING VALUATION 24 Capital Management Growth Development Operational Excellence •Allocate capital to maximize Exterran Parent’s profitability & free cash flow •Increase the value of EXLP and the value of our GP interest •Continue to modernize compression fleet •Continue to implement performance initiatives •Goal to become a low cost service provider •Enhance effectiveness of new business development •Seek accretive third- party acquisitions Venezuela payments as of February 2014 total $352 million, with an additional $205 million expected over the next two and a half years
  26. 26. © Exterran Holdings, Inc. All rights reserved. www.exterran.com EXLP DISTRIBUTIONS DECLARED TO EXH 25 Goal to eliminate the need for cost cap payments to EXLP $1 $1 $2 $2 $5 $6 $9 $12 $18 $22 $32 $24 $25 $41 $13 $19 $24 $34 $29 $31 $50 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 2007 2008 2009 2010 2011 2012 2013 ($millions) GP Interest LP Interest
  27. 27. © Exterran Holdings, Inc. All rights reserved. www.exterran.com INVESTMENT MERITS 26 Leveraged to favorable industry trends as a global leader in compression and well-established position in production and processing equipment Solid capital position and demonstrated performance improvement capability Executing on next set of structural and process changes to our core operations Announced MidCon acquisition, and aggressively pursuing opportunities for growth and maximizing the value of our businesses, including Exterran Partners Announced dividend program in February 2014 Initial dividend to be paid in March 2014
  28. 28. © Exterran Holdings, Inc. All rights reserved. www.exterran.com APPENDIX 27
  29. 29. Exterran Holdings, Inc.: EBITDA, as adjusted, a non-GAAP measure, is defined as net income (loss) excluding income (loss) from discontinued operations (net of tax), cumulative effect of accounting changes (net of tax), income taxes, interest expense (including debt extinguishment costs and gain or loss on termination of interest rate swaps), depreciation and amortization expense, impairment charges, merger and integration expenses, restructuring charges, non-cash gains or losses from foreign currency exchange rate changes recorded on intercompany obligations and other charges. EBITDA, as adjusted, excludes the benefit of the two previously announced sales of Exterran Holdings’ Venezuelan assets. Gross margin, a non-GAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization expense). Gross margin percentage is defined as gross margin divided by revenue. Exterran Partners, L.P.: EBITDA, as further adjusted, a non-GAAP measure, is defined as net income (loss) excluding income taxes, interest expense (including debt extinguishment costs and gain or loss on termination of interest rate swaps), depreciation and amortization expense, impairment charges, other charges, 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 (as amended, the “Omnibus Agreement”), which amounts are treated as capital contributions from Exterran Holdings for accounting purposes. Distributable cash flow, a non-GAAP measure, is defined as net income (loss) plus depreciation and amortization expense, impairment charges, non-cash SG&A costs, interest expense and any amounts by which cost of sales and SG&A costs are reduced as a result of caps on these costs contained in the Omnibus Agreement, which amounts are treated as capital contributions from Exterran Holdings for accounting purposes, less cash interest expense (excluding amortization of deferred financing fees and amortization of debt discount and non-cash transactions related to interest rate swaps) and maintenance capital expenditures, and excluding gains/losses on asset sales and other charges. Addendum I-A NON-GAAP FINANCIAL MEASURES 28
  30. 30. 1Our assets and operations in Venezuela were expropriated in 2009. All periods exclude results from our Venezuelan international contract operations business. 2In June 2012, we committed to a plan to sell our contract operations and aftermarket services businesses in Canada. The sale was completed in July 2013. All periods exclude results from our Canadian contract operations and aftermarket services businesses. 3In December 2013, we abandoned our contract water treatment business. All periods exclude results from our contract water treatment business. 4See Addendum I-A for information on gross margin and gross margin percentage. Addendum I-B EXTERRAN HOLDINGS, INC. – FINANCIAL RESULTS SUMMARY1,2,3 29 ($ in millions) Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Revenues North America Contract Operations $142.1 $142.1 $143.1 $143.4 $147.3 $146.4 $149.5 $152.8 $158.0 $162.2 $152.6 $155.1 International Contract Operations 105.7 110.9 113.8 114.7 112.8 112.6 110.6 127.9 109.6 117.9 117.5 131.0 Aftermarket Services 74.3 84.8 95.7 116.5 89.6 101.9 95.9 98.5 83.6 99.4 102.2 110.5 Fabrication 280.0 301.7 332.7 311.0 262.2 267.6 360.7 457.9 458.8 456.5 403.3 342.5 Total $602.2 $639.6 $685.2 $685.6 $611.9 $628.6 $716.7 $837.1 $809.9 $835.9 $775.6 $739.0 Expenses North America Contract Operations $76.1 $71.7 $73.4 $72.6 $72.8 $69.4 $74.2 $68.3 $71.1 $70.5 $70.9 $70.0 International Contract Operations 41.0 49.8 48.2 45.4 43.9 47.1 46.3 47.4 46.2 50.0 50.6 50.1 Aftermarket Services 64.7 77.6 75.8 93.6 71.7 77.5 75.8 78.5 65.4 77.9 80.8 85.2 Fabrication 239.3 269.4 303.3 290.3 235.6 241.4 310.8 404.2 402.4 381.6 328.4 296.2 Total $421.0 $468.5 $500.7 $502.0 $424.0 $435.4 $507.1 $598.4 $585.2 $580.0 $530.7 $501.6 Gross Margin4 North America Contract Operations $66.1 $70.4 $69.7 $70.8 $74.5 $77.0 $75.3 $84.5 $86.8 $91.7 $81.8 $85.1 International Contract Operations 64.7 61.2 65.5 69.2 68.9 65.5 64.4 80.5 63.4 67.9 66.9 80.9 Aftermarket Services 9.7 7.2 19.9 22.8 17.9 24.4 20.1 19.9 18.2 21.4 21.4 25.2 Fabrication 40.8 32.4 29.4 20.7 26.6 26.3 49.9 53.6 56.4 74.9 74.9 46.3 Total $181.2 $171.1 $184.5 $183.6 $187.9 $193.2 $209.6 $238.6 $224.7 $255.9 $244.9 $237.5 Gross Margin Percentage4 North America Contract Operations 46% 50% 49% 49% 51% 53% 50% 55% 55% 57% 54% 55% International Contract Operations 61% 55% 58% 60% 61% 58% 58% 63% 58% 58% 57% 62% Aftermarket Services 13% 8% 21% 20% 20% 24% 21% 20% 22% 22% 21% 23% Fabrication 15% 11% 9% 7% 10% 10% 14% 12% 12% 16% 19% 14% Total 30% 27% 27% 27% 31% 31% 29% 29% 28% 31% 32% 32%
  31. 31. Addendum I-C 1Our assets and operations in Venezuela were expropriated in 2009. All periods exclude results from our Venezuelan international contract operations business. 2In June 2012, we committed to a plan to sell our contract operations and aftermarket services businesses in Canada. The sale was completed in July 2013. All periods exclude results from our Canadian contract operations and aftermarket services businesses. 3In December 2013, we abandoned our contract water treatment business. All periods exclude results from our contract water treatment business. 4See Addendum I-A for information on EBITDA, as adjusted and gross margin. NON-GAAP FINANCIAL MEASURES (CONT.)1,2,3 – EXTERRAN HOLDINGS, INC. 30 2010 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 ($ millions) Net income (loss) (113.2) (30.4) (30.2) (214.5) (64.4) 7.3 (166.9) 119.3 3.1 58.8 24.5 45.3 27.2 (Income) loss from discontinued operations, net of tax (44.9) 2.3 2.3 (1.1) 4.4 1.6 42.2 (110.9) 31.1 (33.5) 1.1 (15.1) (16.5) Income (loss) from continuining operations (158.2) (28.1) (27.9) (215.6) (60.0) 8.9 (124.7) 8.4 34.2 25.3 25.6 30.1 10.7 Depreciation and amortization 387.6 87.2 89.4 87.7 88.5 84.1 87.9 84.2 90.1 82.6 80.8 81.3 82.8 Long-lived asset impairment 143.9 - 2.1 1.8 2.2 4.1 128.5 3.2 0.8 3.6 16.6 4.6 3.9 Restructuring charges (0.0) - - 2.9 8.7 2.9 1.3 1.5 0.8 - - - - Investment in non-consolidated affiliates impairment 0.6 - - 0.3 0.2 0.2 - - - - - - - Proceeds from sale of joint venture assets - - - - - (37.6) (4.7) (4.8) (4.6) (4.7) (4.7) (4.8) (4.8) Goodwill impairment - - - 196.1 0.7 - - - (0.0) - - - - Interest expense 136.1 37.2 34.6 38.7 39.0 38.0 37.0 31.7 27.7 27.9 30.3 28.9 28.7 (Gain) loss on currency exchange rate remeasurement of intercompany balances (6.2) 2.0 (3.0) 14.1 1.1 (4.9) 10.0 (0.2) 2.4 (3.6) 4.0 0.4 3.4 Gain on sale of our investment in the subsidiary that owns the barge mounted processing plant and other related assets used on the Cawthorne Channel Project (4.9) - - - - - - - - - - - - Provision for (benefit from) income taxes (64.6) (4.2) (14.6) (29.2) 36.2 (1.3) (34.8) 1.4 (11.0) 15.0 23.6 16.7 29.4 EBITDA, as adjusted4 434.4 94.0 80.6 96.9 116.5 94.4 100.5 125.5 140.3 146.1 176.1 157.3 154.2 Selling, general and administrative 350.7 89.3 90.4 89.0 83.5 94.7 94.0 85.4 101.6 84.9 91.0 93.6 88.7 Equity in (income) loss of non-consolidated affiliates 0.6 - - 0.3 0.2 (37.3) (4.7) (4.8) (4.6) (4.7) (4.7) (4.8) (4.8) Investment in non-consolidated affiliates impairment (0.6) - - (0.3) (0.2) (0.2) - - - - - - - Proceeds from sale of joint venture assets - - - - - 37.6 4.7 4.8 4.6 4.7 4.7 4.8 4.8 (Gain) loss on currency exchange rate remeasurement of intercompany balances 6.2 (2.0) 3.0 (14.1) (1.1) 4.9 (10.0) 0.2 (2.4) 3.6 (4.0) (0.4) (3.4) Gain on sale of our investment in the subsidiary that owns the barge mounted processing plant and other related assets used on the Cawthorne Channel Project 4.9 - - - - - - - - - - - - Other (income) expense, net (11.5) (0.1) (2.9) 12.8 (15.4) (6.1) 8.8 (1.4) (0.8) (9.8) (7.2) (5.5) (2.0) Gross margin4 784.7 181.2 171.1 184.5 183.6 187.9 193.2 209.6 238.6 224.7 255.9 244.9 237.5
  32. 32. 1See Addendum I-A for information on EBITDA, as further adjusted, and distributable cash flow. 2Defined as distributable cash flow for the period divided by distributions declared to all unitholders for the period, including incentive distribution rights. Addendum I-D NON-GAAP FINANCIAL MEASURES (CONT.)– EXTERRAN PARTNERS, L.P. 31 ($ thousands) 2010 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Net Income (loss) (23,333)$ 223$ (1,938)$ 3,253$ 4,515$ 4,505$ (19,050)$ 10,380$ 14,674$ 14,733$ 27,896$ 10,035$ 11,359$ Provision for income taxes 680 235 256 242 185 281 277 272 115 407 561 309 229 Depreciation and amortization 52,518 14,149 15,459 19,087 19,235 20,362 22,788 21,930 23,218 22,706 27,030 27,158 26,817 Long-lived asset impairment 24,976 - 305 384 371 805 28,122 - 633 1,540 925 784 2,101 Cap on operating and selling, general and administrative costs 24,720 9,129 10,200 7,995 5,073 7,805 6,321 6,931 3,701 5,357 4,097 7,376 8,350 Non-cash selling, general, and administrative costs 1,209 364 153 (207) 222 345 140 172 140 253 335 285 301 Interest expense 24,037 7,075 7,553 7,860 7,912 5,882 6,399 6,465 6,421 7,424 10,299 9,735 9,610 EBITDA, as further adjusted1 104,807$ 31,175$ 31,988$ 38,614$ 37,513$ 39,985$ 44,997$ 46,150$ 48,902$ 52,420$ 71,143$ 55,682$ 58,767$ Add: Expensed acquisition costs 356 - 514 - - 695 - - - 575 - - - Add: Other expensed costs (in Other (income) expense, net) - - - - - - - - - - - - 246 Less: Gain on sale of property, plant and equipment (667) (212) (115) (319) (273) (174) (244) (127) (144) (935) (7,249) (614) (1,342) Less: Cash interest expense (21,087) (4,207) (4,652) (4,951) (5,012) (5,208) (5,718) (5,905) (5,930) (6,198) (9,036) (8,802) (8,774) Less: Maintenance capital expenditures (15,898) (5,457) (8,454) (7,382) (7,568) (8,117) (11,416) (10,345) (8,490) (8,349) (9,558) (12,675) (10,819) Less: Provision for income taxes (680) (235) (256) (242) (185) (281) (277) (272) (115) (407) (561) (309) (229) Distributable cash flow1 66,831$ 21,064$ 19,025$ 25,720$ 24,475$ 26,900$ 27,342$ 29,501$ 34,223$ 37,106$ 44,739$ 33,282$ 37,849$ Distributions Declared to All Unitholders for the period, including Incentive Distribution Rights 54,913$ 16,243$ 19,061$ 19,322$ 19,581$ 22,480$ 22,762$ 23,044$ 23,331$ 27,598$ 27,927$ 28,340$ 28,840$ Distributable Cash Flow Coverage2 1.22x 1.30x 1.00x 1.33x 1.25x 1.20x 1.20x 1.28x 1.47x 1.34x 1.60x 1.17x 1.31x
  33. 33. 1Approximately $106.1 million of letters of credit outstanding at December 31, 2013 2Amount presented net of approximately $11.3 million of unamortized discount at December 31, 2013 3Amount presented net of approximately $5.0 million of unamortized discount at December 31, 2013 4Not rated Debt Structure as of December 31, 2013 Type Funded Amount Size Maturity Rating Senior Secured Facility1 $49 $900 2016 BB+/NR4 7.25% Senior Notes 350 350 2018 BB/Ba3 4.25% Convertible Notes2 344 344 2014 BB-/NR4 EXLP Secured Revolver 263 650 2018 NR4 EXLP Secured Term Loan 150 150 2018 NR4 EXLP 6% Senior Notes3 345 345 2021 B-/B2 $1,501 $2,739 Addendum II EXLP debt is non-recourse to Exterran Holdings ($ millions) DEBT STRUCTURE 32
  34. 34. 1As of March 21, 2014 2Source: Wells Fargo Securities; median 2014E Price / distributable cash flow at 2/28/2014 for General Partner (C-Corp) peer group (Kinder Morgan Inc., ONEOK Inc., Plains GP Holdings LP, Targa Resources Corp., Williams Companies Inc. and Crosstex Energy Inc.) VALUE OF EXH OWNERSHIP POSITION IN EXLP Addendum III33 ($ millions) Q4 2013 EXLP LP Units Owned by EXH 19.6 EXLP Unit Price1 $28.45 LP Value $558.2 Annualized EXLP GP Cash Distributions $10.1 Peer Multiple2 21.3x GP Value $215.1 Total EXH Value Attributable to EXLP $773.3
  35. 35. In 2012, we sold our previously nationalized joint venture and wholly-owned assets in Venezuela for aggregate consideration of approximately $550 million As of February 2014, we have received approximately $352 million ($50 million of which was used to repay insurance proceeds) Due to receive the remaining approximately $205 million in quarterly cash payments through Q3 2016 VENEZUELA 34 Addendum IV For Exterran Holdings, EBITDA, as adjusted, excludes the benefit of the sales of our Venezuelan assets

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