8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 7, 2007

UNIVERSAL COMPRESSION HOLDINGS, INC.
UNIVERSAL COMPRESSION, INC.

(Exact name of registrants as specified in their charters)

Delaware
Texas
(State or other jurisdiction
of incorporation) 001-15843
333-48279
(Commission File Number) 13-3989167
74-1282680
(IRS Employer
Identification No.)

4444 Brittmoore Road Houston, Texas	77041
(Address of principal executive offices)	(Zip Code)

Registrants’ telephone number, including area code: (713) 335-7000

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02          RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     On August 7, 2007, Universal Compression Holdings, Inc. (“Holdings”) issued a press release announcing earnings for the quarter ended June 30, 2007. A copy of the press release is furnished as Exhibit 99.1 hereto, and the information relating to Holdings contained in Exhibit 99.1 is incorporated herein by reference. Information relating to the financial results of Holdings’ subsidiary, Universal Compression Partners, L.P., is not incorporated herein by reference.

     The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

ITEM 9.01          FINANCIAL STATEMENTS AND EXHIBITS.

(d)          Exhibits

Exhibit No.	Exhibit
99.1	Press release of Universal Compression Holdings, Inc. dated August 7, 2007.

2

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

	UNIVERSAL COMPRESSION HOLDINGS, INC. UNIVERSAL COMPRESSION, INC. (Registrants)
Date: August 7, 2007	By:	/s/ J. Michael Anderson
		J. Michael Anderson
		Senior Vice President and Chief Financial Officer

3

EXHIBIT INDEX

EXHIBIT
NUMBER	EXHIBIT DESCRIPTION
99.1	Press release of Universal Compression Holdings, Inc. dated August 7, 2007.

4

EX-99.1

EXHIBIT 99.1

Universal Compression
4444 Brittmoore Road
Houston, Texas 77041

Contact:
David Oatman
Vice President, Investor Relations
713-335-7460

FOR IMMEDIATE RELEASE

Universal Compression Holdings and Universal Compression Partners
Report Second Quarter 2007 Results

Houston, August 7, 2007 — Universal Compression Holdings, Inc. (NYSE: UCO) and Universal Compression Partners, L.P. (NASDAQ: UCLP) today reported earnings for the second quarter of 2007.

Universal Compression Holdings, Inc. Financial Results

Universal Compression Holdings reported net income of $25.2 million, or $0.81 per diluted share, in the three months ended June 30, 2007, including a charge of $4.8 million on a pretax basis for merger-related expenses. Excluding this charge, earnings per diluted share would have been $0.91 in the second quarter. Net income was $14.3 million, or $0.46 per diluted share, in the three months ended March 31, 2007, including a charge of $1.4 million on a pretax basis for merger-related expenses. Excluding this charge, earnings per diluted share would have been $0.49 in the first quarter. Net income was $21.8 million, or $0.70 per diluted share, in the comparable period of the prior year.

Revenue was $334.6 million in the three months ended June 30, 2007, compared to $239.4 million in the three months ended March 31, 2007 and $218.7 million in the prior year period. EBITDA, as adjusted (as defined below), was $93.3 million in the three months ended June 30, 2007, as compared to $72.3 million in the three months ended March 31, 2007 and $75.2 million in the comparable period of the prior year.

“We are pleased with our second quarter results which included record levels of revenue, EBITDA, as adjusted, and earnings per share. With continuing robust worldwide demand for our products and services, each of our business segments recorded strong sequential growth in revenue and profitability,” commented Stephen A. Snider, Universal Compression Holdings’ Chairman, President and Chief Executive Officer. “Our business outlook remains optimistic due to favorable market conditions and company activity levels and the expected benefits from our proposed merger with Hanover Compressor Company.”

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Merger Update

Universal Compression Holdings and Hanover have scheduled annual stockholder meetings for August 16, 2007 for their respective stockholders to vote on, among other things, the proposed merger of the two companies. A joint proxy statement/prospectus was mailed to stockholders on or about July 13, 2007. Universal Compression Holdings and Hanover expect the merger to close on or about August 20, 2007, if both companies’ shareholders have approved the merger and the other closing conditions are satisfied as of that date. Subject to and effective upon the closing of this merger, the combined new company will be named Exterran Holdings, Inc. (expected trading symbol NYSE: EXH) and Universal Compression Partners, L.P. will be renamed Exterran Partners, L.P. (expected trading symbol NASDAQ: EXLP).

Universal Compression Partners, L.P. Financial Results

Universal Compression Partners reported revenue of $18.8 million and net income of $2.3 million in the three months ended June 30, 2007, compared to revenue of $17.6 million and net income of $2.3 million in the three months ended March 31, 2007. EBITDA, as further adjusted (as defined below), totaled $10.4 million in the three months ended June 30, 2007 compared to $9.5 million in the three months ended March 31, 2007. Distributable cash flow (as defined below) totaled $6.9 million in the three months ended June 30, 2007 compared to $6.0 million in the three months ended March 31, 2007. Universal Compression Partners commenced operations in October 2006 upon the contribution of certain contract compression assets in the United States from Universal Compression Holdings in connection with the initial public offering of Universal Compression Partners.

On July 30, 2007, Universal Compression Partners announced a cash distribution of $0.35 per unit, which reflected the partnership’s minimum quarterly distribution. The distributable cash flow generated in the second quarter is approximately 1.2 times the amount of the cash distribution to unitholders, including distributions owed to new units issued in early July to finance the acquisition from Universal Compression Holdings described below. Excluding the distributions owed for these new units, distributable cash flow generated in the second quarter would have been approximately 1.5 times the amount of cash distribution to unitholders.

“Universal Compression Partners experienced a strong second quarter and generated significant distributable cash flow as a result. Additionally, Universal Compression Partners completed its previously announced acquisition from Universal Compression Holdings of a fleet of compressor units totaling approximately 280,000 horsepower and associated customer contracts for approximately $233 million in early July. As a result of this acquisition, management expects to recommend to the board of directors that it raise cash distributions for the third quarter by approximately $0.0375 to $0.05 per unit, or approximately $0.15 to $0.20 per unit on an annualized basis,” commented Mr. Snider, Chairman, President and Chief Executive Officer of Universal Compression Partners’general partner. “The proposed merger of Hanover and Universal Compression Holdings will result in a combined company with a larger pool of contract compression assets in the United States that can be offered for sale over time to the partnership, further enhancing our growth prospects. Hanover reported that it had approximately 2.4 million horsepower of compression in the United States at June 30, 2007.”

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Conference Call

Universal Compression Holdings and Universal Compression Partners will host a joint conference call today, August 7, 2007, at 10:00 a.m. Central Time, 11:00 a.m. Eastern Time, to discuss the quarter’s results and certain other corporate matters. The conference call will be broadcast live over the Internet to provide interested persons the opportunity to listen. The call will also be archived for approximately 90 days to provide an opportunity to those unable to listen to the live broadcast. Both the live broadcast and replay of the archived version are free of charge to the user.

Persons wishing to listen to the conference call live may do so by logging onto www.universalcompression.com (click UCO or UCLP “Investor Information” section) at least 15 minutes prior to the start of the call. The replay of the call will be available at the website www.universalcompression.com.

With respect to Universal Compression Holdings, EBITDA, as adjusted, a non-GAAP measure, is defined as net income plus income taxes, interest expense (including debt extinguishment costs and gain on termination of interest rate swaps), depreciation and amortization expense, foreign currency gains or losses, merger related expenses, minority interest, excluding non-recurring items (including facility consolidation costs), and extraordinary gains or losses.

With respect to Universal Compression Partners, distributable cash flow, a non-GAAP measure, is defined as net income plus income taxes, depreciation and amortization expense, non-cash selling, general and administrative expenses, interest expense and any amounts by which cost of sales and selling, general and administrative costs are reduced as a result of caps on these costs contained in the omnibus agreement to which Universal Compression Holdings and Universal Compression Partners are parties (the “Omnibus Agreement”), which amounts are treated as capital contributions from Universal Compression Holdings for accounting purposes, less cash interest expense and maintenance capital expenditures.

With respect to Universal Compression Partners, EBITDA, as further adjusted, a non-GAAP measure, is defined as net income plus income taxes, interest expense, depreciation and amortization expense, non-cash selling, general and administrative expenses and any amounts by which cost of sales and selling, general and administrative costs are reduced as a result of caps on these costs contained in the Omnibus Agreement, which amounts are treated as capital contributions from Universal Compression Holdings for accounting purposes.

With respect to Universal Compression Holdings, Gross Margin, a non-GAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization expense).

With respect to Universal Compression 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

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contained in the Omnibus Agreement, which amounts are treated as capital contributions from Universal Compression Holdings for accounting purposes.

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 Universal Compression Holdings and Universal Compression Partners (the “Companies”), which could cause the Companies’ actual results to differ materially from such statements. Forward-looking information includes, but is not limited to, statements regarding: the belief that the Companies will be able to continue to take advantage of strong market conditions; the Companies’ optimism regarding business outlook; the existence of growth opportunities for Universal Compression Partners’ and the basis for those opportunities; the expectation that Universal Compression Holdings or Exterran will contribute assets to Universal Compression Partners in the future; the ability of Universal Compression Holdings and Hanover to complete their proposed merger; the expected timing of the closing of the merger; and the expectation that Universal Compression Partners’ management will recommend to its board of directors that cash distributions for the third quarter be raised by approximately $0.0375 to $0.05 per unit, or approximately $0.15 to $0.20 per unit on an annualized basis. 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 or Exterran’s business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: the failure to receive the approval of the merger by the shareholders of Universal Compression Holdings and Hanover and satisfaction of various other conditions to the closing of the merger contemplated by their merger agreement; the failure to realize anticipated synergies from the proposed merger; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for natural gas and the impact on the price of natural gas; employment workforce factors, including Universal Compression Holdings’ ability to hire, train and retain key employees; Universal Compression 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; the Companies’ ability to timely and cost-effectively implement their enterprise resource planning systems; changes in safety and environmental regulations pertaining to the production and transportation of 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 Universal Compression Holdings’ Annual Report on Form 10-K for the year ended December 31, 2006, as amended by Amendment No. 1 thereto, and Universal Compression Partners’ Annual Report on Form 10-K for the year ended December 31, 2006 and those set forth from time to time in the Companies’ filings with the Securities and Exchange Commission (“SEC”), which are available through www.universalcompression.com. Except as required by law, the Companies expressly disclaim

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any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events, or otherwise.

Universal Compression Holdings, headquartered in Houston, Texas, is a leading natural gas compression services company, providing a full range of contract compression, sales, operations, maintenance and fabrication services to the domestic and international natural gas industry.

Universal Compression Partners was formed by Universal Compression Holdings to provide natural gas contract compression services to customers throughout the United States. Universal Compression Holdings owns approximately 51% of Universal Compression Partners.

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UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)

	Three Months Ended
	June 30,			March 31,			June 30,
	2007			2007			2006
Revenue:
Domestic contract compression	$	103,596		$	102,034		$	101,460
International contract compression		40,014			38,534			35,010
Fabrication		134,988			54,616			38,528
Aftermarket services		55,989			44,179			43,718
Total revenue		334,587			239,363			218,716
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense):
Domestic contract compression		40,543			41,056			35,792
International contract compression		10,637			10,315			8,430
Fabrication		112,602			47,237			33,797
Aftermarket services		41,262			34,436			36,359
Depreciation and amortization		35,792			34,863			30,013
Selling, general and administrative		36,802			35,741			29,461
Interest expense, net		14,063			14,039			14,605
Merger-related expenses		4,792			1,373			—
Foreign currency (gain) loss		(962	)		(693	)		299
Minority interest		1,642			1,324			—
Other (income) expense, net		(518	)		(1,731	)		(360	)
Total costs and expenses		296,655			217,960			188,396
Income before income taxes		37,932			21,403			30,320
Income tax expense		12,765			7,079			8,504
Net income	$	25,167		$	14,324		$	21,816
Weighted average common and common equivalent shares outstanding:
Basic		30,003			29,820			29,891
Diluted		31,182			30,881			31,040
Earnings per share:
Basic	$	0.84		$	0.48		$	0.73
Diluted	$	0.81		$	0.46		$	0.70

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UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands)

	Three Months Ended
	June 30,			March 31,			June 30,
	2007			2007			2006
Revenue:
Domestic contract compression	$	103,596		$	102,034		$	101,460
International contract compression		40,014			38,534			35,010
Fabrication		134,988			54,616			38,528
Aftermarket services		55,989			44,179			43,718
Total	$	334,587		$	239,363		$	218,716
Gross Margin:
Domestic contract compression	$	63,053		$	60,978		$	65,668
International contract compression		29,377			28,219			26,580
Fabrication		22,386			7,379			4,731
Aftermarket services		14,727			9,743			7,359
Total (1)	$	129,543		$	106,319		$	104,338
Selling, General and Administrative	$	36,802		$	35,741		$	29,461
% of Revenue		11	%		15	%		13	%
EBITDA, as adjusted (1)	$	93,259		$	72,309		$	75,237
% of Revenue		28	%		30	%		34	%
Capital Expenditures	$	72,019		$	59,560		$	59,402
Proceeds from Sale of PP&E		3,814			3,690			4,070
Net Capital Expenditures	$	68,205		$	55,870		$	55,332
Gross Margin Percentage:
Domestic contract compression		61	%		60	%		65	%
International contract compression		73	%		73	%		76	%
Fabrication		17	%		14	%		12	%
Aftermarket services		26	%		22	%		17	%
Total		39	%		44	%		48	%
Reconciliation of GAAP to Non-GAAP Financial Information:
Net income	$	25,167		$	14,324		$	21,816
Income tax expense		12,765			7,079			8,504
Depreciation and amortization		35,792			34,863			30,013
Interest expense, net		14,063			14,039			14,605
Foreign currency (gain) loss		(962	)		(693	)		299
Merger-related expenses		4,792			1,373			—
Minority interest		1,642			1,324			—
EBITDA, as adjusted (1)		93,259			72,309			75,237
Selling, general and administrative		36,802			35,741			29,461
Other (income) expense, net		(518	)		(1,731	)		(360	)
Gross Margin (1)	$	129,543		$	106,319		$	104,338

	June 30,			March 31,			June 30,
	2007			2007			2006
Debt and Capital Lease Obligations	$	872,997		$	856,582		$	898,855
Stockholders’ Equity	$	986,075		$	935,856		$	904,308
Total Debt to Capitalization		47.0	%		47.8	%		49.8	%

(1) Management believes disclosure of EBITDA, as adjusted, and Gross Margin, non-GAAP measures, provide 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.

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UNIVERSAL COMPRESSION HOLDINGS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
(Horsepower in thousands)

	Three Months Ended
	June 30, 2007			March 31, 2007			June 30, 2006
Total Available Horsepower (at period end):
Domestic contract compression		2,147			2,098			1,989
International contract compression		614			608			595
Total		2,761			2,706			2,584
Average Operating Horsepower:
Domestic contract compression		1,825			1,822			1,794
International contract compression		556			552			549
Total		2,381			2,374			2,343
Horsepower Utilization:
Spot (at period end)		87.1	%		87.7	%		90.2	%
Average		87.3	%		88.3	%		91.1	%
Fabrication Backlog (in millions)	$	223		$	280		$	275

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UNIVERSAL COMPRESSION PARTNERS, L.P.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)

	Three Months Ended
	June 30,			March 31,
	2007			2007
Revenue	$	18,804		$	17,585
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense)		7,573			7,018
Depreciation		2,968			2,782
Selling, general and administrative		3,915			3,259
Interest expense, net		2,093			2,133
Other (income) expense, net		(3	)		(6	)
Total costs and expenses		16,546			15,186
Income before income taxes		2,258			2,399
Income tax (benefit) expense		(6	)		56
Net income	$	2,264		$	2,343
General partner interest in net income	$	45		$	47
Limited partner interest in net income	$	2,219		$	2,296
Weighted average limited partners’ units outstanding:
Basic		12,650			12,650
Diluted		12,709			12,671
Earnings per limited partner unit:
Basic	$	0.18		$	0.18
Diluted	$	0.17		$	0.18

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UNIVERSAL COMPRESSION PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(Dollars in thousands, except per unit amounts)

	Three Months Ended
	June 30,			March 31,
	2007			2007
Revenue	$	18,804		$	17,585
Gross Margin, as adjusted (1)	$	12,908		$	11,974
EBITDA, as further adjusted (1)	$	10,411		$	9,480
% of Revenue		55	%		54	%
Capital Expenditures	$	10,071		$	6,079
Proceeds from Sale of PP&E		—			—
Net Capital Expenditures	$	10,071		$	6,079
Gross Margin percentage, as adjusted		69	%		68	%
Reconciliation of GAAP to Non-GAAP Financial Information:
Net income	$	2,264		$	2,343
Income tax (benefit) expense		(6	)		56
Depreciation		2,968			2,782
Cap on operating and selling, general and administrative costs provided by Universal Compression Holdings (“UCO”)		1,789			1,578
Non-cash selling, general and administrative costs		1,303			588
Interest expense, net		2,093			2,133
EBITDA, as further adjusted (1)		10,411			9,480
Cash selling, general and administrative costs		2,612			2,671
Less: cap on selling, general and administrative costs provided by UCO (1)		(112	)		(171	)
Other income, net		(3	)		(6	)
Gross Margin, as adjusted for operating cost caps provided by UCO (1)	$	12,908		$	11,974
Less: Cash interest expense		(2,085	)		(2,077	)
Less: Cash selling, general and administrative, as adjusted for cost caps provided by UCO (1)		(2,500	)		(2,500	)
Less: Maintenance capital expenditures		(1,438	)		(1,373	)
Distributable cash flow (2)	$	6,885		$	6,024
Distributions per Unit	$	0.35		$	0.35
Distribution to All Unitholders	$	5,957		$	4,518
Distributable Cash Flow Coverage		1.16x			1.33x

	June 30,			March 31,
	2007			2007
Debt	$	121,000		$	125,000
Total Partners’ Capital	$	74,861		$	71,064
Total Debt to Capitalization		61.8	%		63.8	%
Total Debt to Annualized EBITDA, as further adjusted UCO (1)		2.9x			3.3x
EBITDA, as further adjusted (1) to Interest Expense		5.0x			4.4x

(1)

Management believes disclosure of EBITDA, as further adjusted, and Gross Margin, as adjusted, non-GAAP measures, provide 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.

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UNIVERSAL COMPRESSION PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(Horsepower in thousands)

	Three Months Ended
	June 30,			March 31,
	2007			2007
Total Available Horsepower (at period end)		387			358
Average Operating Horsepower		348			331
Horsepower Utilization:
Spot (at period end)		92.7	%		93.4	%
Average		93.1	%		94.8	%
Combined Domestic Contract Compression Horsepower of Universal Compression Holdings and Universal Compression Partners covered by contracts converted to service agreements		1,194			1,154
Total Available Domestic Contract Compression Horsepower of Universal Compression Holdings and Universal Compression Partners (at period end):		2,147			2,098
% of Domestic Contract Compression Horsepower of Universal Compression Holdings and Universal Compression Partners under Converted Contract Form		55.6	%		55.0	%