Business Context and Reporting Period
This Form 8-K, filed on June 25, 2008, by Exterran Holdings, Inc. (noting the user metadata reference to Archrock, Inc., which is not present in the source text), reports the entry into a Material Definitive Agreement. The filing details a Contribution, Conveyance, and Assumption Agreement involving Exterran and its subsidiaries, including Exterran Partners, L.P. (the Partnership).
Key Financial Metrics and Transaction Details
- Debt Assumption: EXLP Operating will assume and repay approximately $175.3 million of Exterran's debt.
- Equity Issuance: The Partnership will issue 2,413,672 Common Units to MLP LP LLC and 49,259 General Partner Units to GP.
- Asset Transfer: Compression services customer contracts and related equipment will be conveyed from various Exterran subsidiaries to EXLP Operating and EXLP Leasing.
- Ownership Structure: Exterran holds an indirect 49% limited partner interest and a 2% general partner interest in the Partnership.
Material Changes and Contract Amendments
The transaction requires an amendment to the First Amended and Restated Omnibus Agreement, resulting in the following material changes to cost caps:
- Selling, General, and Administrative (SG&A) Costs: The quarterly cap allocable from Exterran to the Partnership increases from $4.75 million to $6.0 million.
- Operating Costs: The cap increases from $18.00 per horsepower per quarter to $21.75 per horsepower per quarter.
- Term Extension: The caps on SG&A and operating costs are extended for an additional year, terminating on December 31, 2009.
Outlook, Risks, and Contingencies
The transaction is expected to close in July 2008, subject to standard closing conditions. Key contingencies include:
- Expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
- Successful amendment of the Omnibus Agreement.
- Regulatory review outcomes.
The filing includes forward-looking statements regarding the ability to complete the transaction and timing, noting that actual results may differ due to factors outside Exterran's control. The filing text does not provide specific revenue, profit, or cash flow figures for the reporting period.
Investor Verification Checklist
- Verify the final closing date of the transaction in July 2008.
- Confirm the successful execution of the Omnibus Agreement amendment regarding cost caps.
- Monitor regulatory approvals under the Hart-Scott-Rodino Act.
- Review the full Contribution Agreement (Exhibit 2.1) for detailed asset valuations and terms.
- Check subsequent filings for the actual issuance of Common Units and General Partner Units.