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EXLP > SEC Filings for EXLP > Form 8-K on 18-Mar-2013All Recent SEC Filings

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Form 8-K for EXTERRAN PARTNERS, L.P.


18-Mar-2013

Regulation FD Disclosure, Other Events, Financial Statements and Exhibits


Item 7.01 Regulation FD Disclosure.

On March 18, 2013, Exterran Partners, L.P. ("we") commenced a private offering to eligible purchasers, subject to market and other conditions, of $300.0 million principal amount of senior notes due 2021 (the "Notes Offering"), as described further in Item 8.01 below. In connection with the Notes Offering, we are disclosing the following:

Credit Agreement Amendment

Upon completion of the Notes Offering, we expect to amend our senior secured credit agreement (the "Credit Agreement"). The amendment provides for, among other things, a reduction in the borrowing capacity under the revolving credit facility by $100 million to $650 million and an extension of the maturity date of the term loan and revolving credit facilities provided for under the Credit Agreement to May 15, 2018. Following the effectiveness of the amendment upon the issuance of the notes, the maximum allowed ratio of Total Debt (as defined in the Credit Agreement) to EBITDA (as defined in the Credit Agreement) will increase to 5.25 to 1.0 (subject to a temporary increase to 5.5 to 1.0 for any quarter during which an acquisition meeting certain thresholds is completed and for the following two quarters after the acquisition closes), and we will be required to maintain, on a consolidated basis, a ratio of Senior Secured Debt (as defined in the Credit Agreement) to EBITDA of not greater than 4.0 to 1.0. Any commitments of the lenders and the effectiveness of the amendment are subject to the satisfaction of various closing conditions.

Summary Consolidated Historical and Pro Forma Financial Data

The following table shows summary consolidated historical financial data as of and for the periods indicated. The historical financial data for the years ended December 31, 2010, 2011 and 2012 and the historical balance sheet data as of December 31, 2011 and 2012 have been derived from our audited consolidated historical financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated by reference herein. The historical balance sheet data as of December 31, 2010 has been derived from our audited consolidated historical financial statements not included or incorporated by reference herein. The summary consolidated historical financial data should be read in conjunction with our consolidated historical financial statements and with ''Management's Discussion and Analysis of Financial Condition and Results of Operations,'' included in our Annual Report on Form 10-K for the year ended December 31, 2012.

The following table also shows unaudited pro forma financial data as of and for the periods indicated. The pro forma financial data for the year ended December 31, 2012 has been derived from our unaudited pro forma financial statements included in our Current Report on Form 8-K/A filed on March 15, 2013. The pro forma balance sheet data gives effect to the proposed acquisition of compression assets from Exterran Holdings, Inc. ("Exterran Holdings") we announced in our Current Report on Form 8-K, filed on March 8, 2013 (the "Proposed 2013 Contract Operations Acquisition"), as if it had occurred on December 31, 2012. The pro forma statement of operations data and pro forma EBITDA, as further adjusted, give effect to our March 2012 acquisition of compression and processing assets from Exterran Holdings, announced in our Current Report on Form 8-K filed on February 24, 2012, and the Proposed 2013 Contract Operations Acquisition as if they had occurred on January 1, 2012. The unaudited pro forma financial data is provided for illustrative purposes only and is not intended to represent or be indicative of our consolidated results of operations or financial position that would have been recorded had the transactions been completed as of the dates presented, and should not be taken as representative of future results of operations or financial position. The unaudited pro forma financial data should be read in conjunction with our consolidated financial statements, our unaudited pro forma financial statements, and ''Management's Discussion and Analysis of Financial Condition and Results of Operations'' included in our Annual Report on Form 10-K for the year ended December 31, 2012.


                                                                               Pro Forma
                                                  Historical                   Year Ended
                                           Year Ended December 31,            December 31,
                                      2010(1)      2011(1)      2012(1)           2012
                                                (in thousands, excluding ratios)
Statement of Operations Data:
Revenue                              $ 237,636    $ 308,274    $  387,493    $      442,774
Gross margin(2)                        113,394      145,349       204,333           242,565
Depreciation and amortization           52,518       67,930        88,298           103,954
Long-lived asset impairment(3)          24,976        1,060        29,560            29,560
Selling, general and
administrative expense -
affiliates                              34,830       39,380        49,889            55,794
Interest expense                        24,037       30,400        25,167            25,954
Other (income) expense, net               (314 )       (392 )         (35 )             (35 )
Income tax provision                       680          918           945             1,544
Net income (loss)                      (23,333 )      6,053        10,509            25,794
Balance Sheet Data (at period
end):
Cash and cash equivalents            $      50    $       5    $      142    $          142
Working capital(4)                      14,751       21,121         1,661             1,661
Total assets                           813,345      991,005     1,163,536         1,328,034
Long-term debt                         449,000      545,500       680,500           680,500
Partners' capital                      350,737      423,766       439,000           603,498
Cash Flow Data:
Net cash flows provided by (used
in):
Operating activities                 $  43,682    $  80,090    $  125,217
Investing activities                   (29,042 )   (106,463 )    (228,940 )
Financing activities                   (14,793 )     26,328       103,860
Other Financial Data:
EBITDA, as further adjusted(2)       $ 104,807    $ 139,290    $  180,034    $      212,009
Ratio of earnings to fixed
charges(5)                                   -        1.22x         1.44x



(1) In August 2010, June 2011 and March 2012 we acquired from Exterran Holdings, contract operations customer service agreements and a fleet of compressor units used to provide compression services under those agreements. In June 2011 and March 2012, we also acquired from Exterran Holdings natural gas processing plants. An acquisition of a business from an entity under common control is generally accounted for under GAAP by the acquirer with retroactive application as if the acquisition date was the beginning of the earliest period included in the financial statements. Retroactive effect of these acquisitions was impracticable because such retroactive application would have required significant assumptions in a prior period that cannot be substantiated. Accordingly, our financial statements include the assets acquired, liabilities assumed, revenues and direct operating expenses associated with the acquisitions beginning on the date of each such acquisition.

(2) Gross margin and EBITDA, as further adjusted, are non-GAAP financial measures and are defined, reconciled to net income (loss) and discussed further in ''- Non-GAAP Financial Measures'' below.

(3) During 2012, we evaluated the future deployment of our idle fleet and determined to retire and either sell or re-utilize the key components of approximately 260 idle compressor units, representing approximately 71,000 horsepower, that we previously used to provide services. The fair value of each unit was estimated based on the expected net sale proceeds compared to other fleet units we recently sold, as well as our review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use. The net book value of these assets exceeded the fair value by $22.2 million for the year ended December 31, 2012 and was recorded as a long-lived asset impairment.

In connection with our review of our fleet in 2012, we evaluated for impairment idle units that had been culled from our fleet in prior periods and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for most of the remaining units and increased the weighted average disposal period for the units from the assumptions used in prior periods. This resulted in an additional impairment of $7.4 million to reduce the book value of each unit to its estimated fair value.

During 2011 and 2010, we reviewed our idle compression fleet for units that were not of the type, configuration, make or model that are cost effective to maintain and operate. We performed a cash flow analysis of the expected proceeds . . .



Item 8.01 Other Information.

Private Offering of Senior Notes due 2021

On March 18, 2013, we commenced a private offering to eligible purchasers, subject to market and other conditions, of $300.0 million principal amount of senior notes due 2021. We intend to use the net proceeds of the Notes Offering to repay amounts outstanding under our senior secured credit facility. A copy of the press release announcing the Notes Offering is filed as Exhibit 99.1 to this Current Report on Form 8-K.

The notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes will be offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act. The information contained in this Current Report on Form 8-K, including the exhibits, shall not constitute an offer to sell or the solicitation of an offer to buy the notes nor shall there be any sale of the notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.




Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No. Description

99.1 Press release of Exterran Partners, L.P., dated March 18, 2013


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