##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
     Form 10-K/A
 (Amendment No. 1)
  (Mark One)þ

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the transition period
    from          to   Commission file
    nos.:
    001-15843 333-48279
 Universal Compression Holdings,
    Inc.
 Universal Compression,
    Inc.
 (Exact name of Registrants as
    Specified in Their Charters)
  Delaware

13-3989167Texas

74-1282680(States or Other Jurisdictions
    of Incorporation or Organization)

(I.R.S. Employer Identification
    Nos.)4444 Brittmoore Road, Houston,
    Texas

77041-8004(Address of Principal Executive
    Offices)

(Zip Code)   (713) 335-7000
 (Registrants telephone
    number, including area code)
      Securities of Universal
    Compression Holdings, Inc. Registered Pursuant to
    Section 12(b) of the Act:Title of Each Class

Name of Each Exchange on Which
    RegisteredCommon Stock, $.01 par value

New York Stock Exchange, IncSecurities of Universal
    Compression Holdings, Inc. Registered Pursuant to
    Section 12(g) of the Act:Title of Each ClassNoneSecurities of Universal
    Compression, Inc. Registered Pursuant to Section 12(b) of
    the Act:Title of Each Class

Name of Each Exchange on Which
    RegisteredNone

N/ASecurities of Universal
    Compression, Inc. Registered Pursuant to Section 12(g) of
    the Act:Title of Each ClassNone      FORM 10-K FORM 10-K/A
    Yes þ     No o     (Universal
    Compression Holdings, Inc.)
  Yes o     No þ
    (Universal Compression, Inc.)
    Yes o     No þ
    (Universal Compression Holdings, Inc.)
  Yes o     No þ
    (Universal Compression, Inc.)
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated filer
    þ    Accelerated
    filer  o  Non-accelerated
    filer o (Universal
    Compression Holdings, Inc.)
  Large accelerated
    filer o     Accelerated
    filer o    Non-accelerated
    filer þ (Universal
    Compression, Inc.)
  Rule 12b-2 o þ
     Documents
    Incorporated by Reference
     Form 10-K Form 10-K
  Form 10-K




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##### 



Table of
    Contents
  Part IIIItem 10.

Directors,
    Executive Officers and Corporate Governance


2Item 11.

Executive
    Compensation


6Item 12.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


25Item 13.

Certain
    Relationships and Related Transactions, and Director
    Independence


26Item 14.

Principal
    Accountant Fees and Services


30Part IVItem 15.

Exhibits and
    Financial Statement Schedules


32Rule 13a-14(a) Certifications of CEORule 13a-14(a) Certifications of CFORule 15d-14(a) Certifications of CEORule 15d-14(a) Certifications of CFOCertificationCertification




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##### Table of Contents



PART III  ITEM 10.
    Directors,
    Executive Officers and Corporate Governance  Board of
    Directors
  Directors
    Holding Office until the 2007 Annual Meeting
    (Class A)
  Thomas C. Case
      Janet F. Clark
      Uriel E. Dutton
      Directors
    Holding Office until the 2008 Annual Meeting
    (Class B)
  Ernie L. Danner
     2




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Lisa W. Rodriguez
      Stephen A. Snider
      Directors
    Holding Office until the 2009 Annual Meeting
    (Class C)
  William M. Pruellage
      J.W.G. Will Honeybourne
     3




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##### Table of Contents



Audit
    Committee
    
    integrity of Universals financial statements;
    Universals compliance with legal and regulatory
    requirements;
    Universals independent registered public accounting
    firms qualifications;
    performance of the independent auditors and Universals
    internal audit function; and
    Universals systems of disclosure controls and procedures,
    and internal control over financial reporting.  Executive
    Officers
    Name

Age

PositionStephen A. Snider


59


President, Chief Executive Officer
    and ChairmanErnie L. Danner


52


Executive Vice President, Chief
    Operating Officer and DirectorJ. Michael Anderson


44


Senior Vice President and Chief
    Financial OfficerKirk E. Townsend


49


Senior Vice PresidentD. Bradley Childers


43


Senior Vice PresidentRichard Leong


57


Senior Vice PresidentDonald C. Wayne


40


Vice President, General Counsel
    and SecretaryKenneth R. Bickett


45


Vice President, Accounting and
    Corporate Controller     J. Michael Anderson.
  Kirk E. Townsend.
 4




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##### Table of Contents



D. Bradley Childers.
  Richard Leong.
  Donald C. Wayne.
  Kenneth R. Bickett.
  Information
    about Universals Corporate Governance
  Corporate
    Governance
  Independence.
  Corporate Governance Guidelines. www.universalcompression.com
  Code of Business Conduct and Ethics. www.universalcompression.com
 5




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##### Table of Contents



Executive Sessions of the Board of Directors and Presiding
    Director.
  Communication with Board Members. non-management
  Section 16(a)
    Beneficial Ownership Reporting Compliance
      ITEM 11.
    Executive
    Compensation  Compensation
    Discussion and Analysis
  Compensation
    Committee Structure and Responsibilities
      1.
    In consultation with senior management, establish
    Universals general compensation philosophy and oversee the
    development and implementation of compensation programs.2.
    Review and approve corporate goals and objectives relevant to
    the compensation of the CEO, evaluate the performance of the CEO
    in light of those goals and objectives, and set the CEOs
    compensation level based on this evaluation. In determining the
    long-term incentive component of CEO compensation, the Committee
    shall consider, among other factors, Universals
    performance and relative shareholder return, the value of
    similar incentive awards to CEOs at comparable companies and
    awards given to the CEO in past years.3.
    Review and approve compensation programs applicable to executive
    officers other than the CEO.4.
    Make recommendations to the board of directors with respect to
    Universals incentive compensation plans and equity-based
    plans, including Universals incentive stock option plan,
    restricted stock plan, directors stock plan, employee
    stock purchase plan, employees supplemental savings plan
    and 401(k) Retirement and Savings Plan, oversee the activities
    of the individuals and committees responsible for administering
    these plans, including Universals Investment Committee in
    respect 6




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##### Table of Contents



of the 401(k) Retirement and Savings Plan, and discharge any
    responsibilities imposed on the Committee by any of these plans.  5.
    In consultation with management, oversee regulatory compliance
    with respect to compensation matters, including overseeing
    Universals policies on structuring compensation programs
    to preserve tax deductibility and, as required, establishing
    performance goals and certifying that performance goals have
    been attained for purposes of Section 162(m) of the
    Internal Revenue Code.6.
    Review and approve any severance or similar termination payments
    proposed to be made to any current or former executive officers
    of Universal.7.
    In connection with Universals proxy statement for the
    annual meeting of its stockholders, annual report on
    Form 10-K
    or other applicable SEC filing:  (a)
    Review and discuss with management the CD&A required by SEC
    Regulation S-K,
    Item 402. Based on such review and discussion, determine
    whether to recommend to the board of directors that the CD&A
    in the form prepared by management be included in the proxy
    statement, annual report on
    Form 10-K
    or other applicable SEC filing.  (b)
    Prepare the Compensation Committee Report in accordance with all
    applicable rules and regulations of the SEC for inclusion above
    the names of the members of the Committee in the proxy statement
    or annual report on
    Form 10-K.
    This report shall state whether (i) the Committee reviewed
    and discussed with management the CD&A and (ii) based
    on such review and discussion, the Committee recommended to the
    board of directors that the CD&A be included in the proxy
    statement, annual report on
    Form 10-K
    or other applicable SEC filing.  8.
    Review and reassess the adequacy of the Compensation
    Committees Charter annually. If any revisions to the
    charter are deemed necessary or appropriate, submit such
    recommended changes to the board of directors for its
    consideration and approval.9.
    Prepare and issue the evaluations and reports described above.10.
    Any other duties or responsibilities expressly delegated to the
    Committee by the board of directors from time to time relating
    to Universals compensation programs.  www.universalcompression.com
  Rule 16b-3
   7




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##### Table of Contents



Compensation
    Committee Activity
          
    analyses of executive officer compensation as provided by
    Hewitt, including analyses of data involving similarly sized
    oilfield service companies, as well as compensation information
    from other third party sources;
    each executives performance compared to the goals and
    objectives established for the executive;
    the nature, scope and level of the executives
    responsibilities;
    each executives contribution to Universals financial
    results and effectiveness in exemplifying and promulgating
    Universals core values  safety, service and
    integrity; and
    incentive bonus compensation recommendations for executive
    officers.  Overall
    Compensation Philosophy and Policies
   8




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##### Table of Contents



Compensation
    Policy Components
    
    base salary;
    short-term incentives (bonus);
    long-term incentives (stock option, restricted stock and unit
    appreciation rights (UARs)); and
    other compensation programs.   9




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Base Salary.
  
    level of responsibility;
    individual skills;
    experience in current role and internal equity among other
    Universal executives;
    performance; and
    external factors involving competitive positioning and general
    economic conditions.      Short-Term Incentives.
    2006 BonusExecutive Officer:

Title:

Target %Mr. Snider

President & Chief
    Executive Officer


100
%Mr. Anderson

Senior Vice President &
    Chief Financial Officer


70
%Mr. Danner

Executive Vice
    President & Chief Operating Officer


80
%Mr. Childers

Senior Vice President


70
%Mr. Townsend

Senior Vice President


70
%     Corporate EPS

N. America Division EBT

International EBT

TRIR$
2.04


$71.50 Million

$
13.28 Million



1.25    10




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##### Table of Contents




    The weight of the objective financial measures, corporate EPS
    and division EBT, decreased from 45% of the total award
    formula each to 30% each (or a decrease from 90% to 60% in
    aggregate); and
    Individual performance goals, or Key Business Activities
    (KBAs), were added to the factors Universals
    Compensation Committee will consider.    Long-Term Incentives  Overview.
    Long-Term Incentives  Stock Option
    Grants.
 11




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Long-Term Incentives  Restricted Stock
    Grants.
  Long-Term Incentives  Unit Appreciation
    Rights.
  Universal Compression Partners Long-Term
    Incentives.
    Other Compensation Programs.
 12




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Chief
    Executive Officer Compensation
      Accounting
    Implications and Compensation Deductions
    Limitation
  SFAS No. 123R.
  IRC Section 162(m).
 13




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Potential
    Payments Upon Change of Control
    Equity
    Ownership Requirements
    Conclusion
    
    appropriate in amount;
    appropriately applied to Universals executive
    officers; and
    necessary to retain the executive officers who are essential to
    the continued development and success of Universal, to
    compensate those executive officers for their contributions and
    to enhance stockholders value.  Compensation
    Committee Report
  Regulation S-K
  The Compensation Committee
      14




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##### Table of Contents



Executive
    Officer Compensation
  Summary
    Compensation Table
    (4)(2)


(3)


Non-Equity


(5)(1)





Stock


Option


Incentive Plan


All Other


(6)Salary


Bonus


Awards


Awards


Compensation


Compensation


TotalName and Position

Year


($)


($)


($)


($)


($)


($)


($)Stephen A. Snider


2006


$
525,000


$



$
240,120


$
1,018,793


$
285,000


$
39,080


$
2,107,993


President and ChiefExecutive Officer

































J. Michael Anderson


2006



302,500







242,807



347,654



115,000



16,080



1,024,041Senior Vice President andChief Financial OfficerErnie L. Danner


2006



337,500







270,353



392,118



147,000



25,486



1,172,457Executive Vice Presidentand Chief Operating OfficerD. Bradley Childers


2006



287,500







210,687



312,135



115,000



18,505



943,827Senior Vice President

































Kirk E. Townsend


2006



307,500







180,235



309,485



95,000



25,881



918,101Senior Vice President     (1)
    
    The amounts included in the Salary column represent
    the amounts paid in salary for the twelve months ended
    December 31, 2006.(2)
    
    The amounts included in the Stock Awards column
    represent the compensation cost recognized for the twelve months
    ended December 31, 2006 related to non-option stock awards,
    as described in Statement of Financial Accounting Standards
    No. 123R. For a discussion of valuation assumptions, see
    Note 8 to Universals consolidated financial
    statements in Universals
    Form 10-K
    for the twelve months ended December 31, 2006. Please see
    the Grants of Plan-Based Awards Table for more
    information regarding the stock awards granted by Universal
    and the Universal Partnership in 2006.(3)
    
    The amounts included in the Option Awards column
    represent the compensation cost recognized for the twelve months
    ended December 31, 2006 related to option awards, as
    described in Statement of Financial Accounting Standards
    No. 123R. For a discussion of valuation assumptions, see
    Note 8 to Universals consolidated financial
    statements in Universals
    Form 10-K
    for the twelve months ended December 31, 2006. Please see
    the Grants of Plan-Based Awards Table for more
    information regarding the option awards granted by Universal and
    the Universal Partnership in 2006.(4)
    
    The amount included in the Non-Equity Incentive Plan
    Compensation column represents the awards paid in 2007
    under the 2006 OIP, which covered the nine-month compensation
    measurement and performance review period beginning
    April 1, 2006 and ending December 31, 2006.(5)
    
    The amounts shown in the All Other Compensation
    column are attributable to the following, which did exceed
    $10,000 in the aggregate:  
    Mr. Snider: $7,005 for 2006 contribution for
    executive medical coverage under Universals Medical
    Expense Reimbursement Plan (MERP); $9,450 for
    matching contributions to his contributions under the Universal
    401(k) Retirement and Savings Plan; $14,175 for matching
    contributions under the Universal employees supplemental
    savings plan; and $8,450 for tax assistance and executive
    wellness.
    Mr. Anderson: $7,005 for 2006 contribution for
    executive medical coverage under MERP; $6,300 for matching
    contributions to his contributions under the Universal 401(k)
    Retirement and Savings Plan; and $2,775 for matching
    contributions under the Universal employees supplemental
    savings plan.
    Mr. Danner: $7,005 for 2006 contribution for
    executive medical coverage under MERP; $9,450 for matching
    contributions to his contributions under the Universal 401(k)
    Retirement and Savings Plan; 15




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##### Table of Contents



$5,011 for matching contributions under the Universal
    employees supplemental savings plan; and $4,020 for tax
    assistance and executive wellness.  
    Mr. Childers: $7,005 for 2006 contribution for
    executive medical coverage under MERP; $6,300 for matching
    contributions to his contributions under the Universal 401(k)
    Retirement and Savings Plan; $2,325 for matching contributions
    under the Universal employees supplemental savings plan;
    and $2,875 for tax assistance and executive wellness.
    Mr. Townsend: $7,005 for 2006 contribution for
    executive medical coverage under MERP; $9,450 for matching
    contributions to his contributions under the Universal 401(k)
    Retirement and Savings Plan; $4,388 for matching contributions
    under the Universal employees supplemental savings plan;
    and $5,038 for tax assistance and club dues.  (6)
    
    The amount included in the Total compensation column
    represents the sum of all the other Summary Compensation Table
    columns. 16




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##### Table of Contents



Grants
    of Plan-Based Awards Table
    (2)


(3)All Other


All OtherStock


OptionAwards:


Awards:


Exercise or


(4)Number


Number of


Base


Grant Date(1)


of Shares


Securities


Price of


Fair ValueEstimated Future Payouts Under Non-Equity Incentive Plan
    Awards


of Stock


Underlying


Option


of  StockThreshold


Target


Max.


or Units


Options


Awards


and OptionName

Grant Date


($)


($)


($)


(#)


(#)


($/Sh)


AwardsStephen A. Snider





$
110,000


$
550,000


$
1,100,000


















President and Chief


3/3/2006



















130,000


$
43.39


$
2,338,700Executive Officer


12/13/2006



















85,714



25.94



154,088


12/13/2006



















85,714



25.94



154,088$
2,646,876J. Michael Anderson





$
43,400


$
217,000


$
434,000Sr. Vice President and


3/3/2006



















20,000


$
43.39


$
359,800Chief Financial Officer


3/3/2006















9,000











390,33012/13/2006



















64,286



25.94



115,56712/13/2006



















64,286



25.94



115,567$
981,264Ernie L. Danner





$
56,800


$
284,000


$
568,000Executive Vice President


3/3/2006



















25,000


$
43.39


$
449,750and Chief Operating Officer


3/3/2006















15,000











650,55012/13/2006



















64,286



25.94



115,56712/13/2006



















64,286



25.94



115,567$
1,331,434D. Bradley Childers





$
42,000


$
210,000


$
420,000Senior Vice President


3/3/2006



















20,000


$
43.39


$
359,800


3/3/2006















9,000











390,33012/13/2006



















42,857



25.94



77,04412/13/2006



















42,857



25.94



77,044$
904,218Kirk E. Townsend





$
44,100


$
220,500


$
441,000Senior Vice President


3/3/2006



















20,000


$
43.39


$
359,800


3/3/2006















10,000











433,70012/13/2006



















42,857



25.94



77,04412/13/2006



















42,857



25.94



77,044$
947,588     (1)
    
    The amounts shown reflect Universals 2006 OIP range of
    payouts. Universals Compensation Committee established
    target OIP awards, expressed as a percentage of the
    executives 2006 base salary, and individual and company
    performance measures for the purpose of determining the amount
    paid out under the 2006 OIP for each executive officer for the
    twelve months ended December 31, 2006. The amount shown in
    the target column represents the target percentage
    of each executive officers 2006 base salary. For 2006, the
    target percentages were: 100% for Mr. Snider; 80% for
    Mr. Danner and 70% for Messrs. Anderson, Childers and
    Townsend. The amount shown in the maximum column
    represents the maximum amount payable under the 2006 OIP, which
    is 200% of the target amount shown. The amount shown in the
    threshold column represents the amount payable under
    the 2006 OIP if only the minimum level of company performance of
    the 2006 OIP is attained, which is 20% of the target amount
    shown. See Compensation Discussion and Analysis for
    more information regarding Universals OIP. 17




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##### Table of Contents



(2)
    
    Includes long-term incentive awards under the Universal
    restricted stock plan. See the table titled Outstanding
    Equity Awards at Fiscal Year-End for additional
    information on equity awards.(3)
    
    Includes long-term incentive awards under the Universal
    incentive stock option plan and Universal Partnerships
    Long-Term Incentive Plan, and awards of UARs. See the table
    titled Outstanding Equity Awards at Fiscal Year-End
    for additional information on equity awards.(4)
    
    Represents the full grant date fair value of the awards computed
    in accordance with Statement of Financial Accounting Standards
    No. 123R.  Outstanding
    Equity Awards at Fiscal Year-End Table
    Stock Awards(1)Option Awards





Market ValueNumber of


Number of








Number of


of SharesSecurities


Securities








Shares or


or UnitsUnderlying


Underlying


Option





Units of Stock


of StockUnexercised


Unexercised


Exercise


Option


That Have Not


That HaveOptions


Options


Price


Expiration


Vested


Not VestedName

(#) Exercisable


(#) Unexercisable


($)


Date


(#)


($)Stephen A. Snider


90,523






$
31.65



12/11/2010



11,250
(2)

$
698,738


President and Chief Executive


97,024







33.60



4/20/2011



20,000
(3)


1,242,200Officer


145,306







21.30



2/19/2012










29,015







16.71



3/10/201323,333
(4)


11,667
(4)


30.07



4/30/201410,000
(5)


20,000
(5)


38.15



3/9/2015



130,000
(6)


43.39



3/3/201685,714
(7)


25.94



3/15/201085,714
(8)


25.94



3/15/2010395,201



333,095J. Michael Anderson


67,660






$
17.30



3/31/2013



10,000
(9)

$
621,100Senior Vice President and


17,340







17.30



3/31/2013



6,000
(2)


372,660Chief Financial Officer


13,333
(4)


6,667
(4)


30.07



4/30/2014



8,000
(3)


496,8805,666
(5)


11,334
(5)


38.15



3/9/2015



9,000
(10)


558,990



20,000
(6)


43.39



3/3/201664,286
(7)


25.94



3/15/201064,286
(8)


25.94



3/15/2010103,999



166,573Ernie L. Danner


50,523






$
31.65



12/11/2010



9,000
(2)

$
558,990Executive Vice President and


17,024







33.60



4/20/2011



12,000
(3)


745,320Chief Operating Officer


20,306







21.30



2/19/2012



15,000
(10)


931,65016,666
(4)


8,334
(4)


30.07



4/30/20147,333
(5)


14,667
(5)


38.15



3/9/2015



25,000
(6)


43.39



3/3/201664,286
(7)


25.94



3/15/201064,286
(8)


25.94



3/15/2010111,852



176,573 18




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##### Table of Contents



Stock Awards(1)Option Awards





Market ValueNumber of


Number of








Number of


of SharesSecurities


Securities








Shares or


or UnitsUnderlying


Underlying


Option





Units of Stock


of StockUnexercised


Unexercised


Exercise


Option


That Have Not


That HaveOptions


Options


Price


Expiration


Vested


Not VestedName

(#) Exercisable


(#) Unexercisable


($)


Date


(#)


($)D. Bradley Childers


38,420






$
19.03



9/3/2012



2,500
(11)

$
155,275


Senior Vice President


25,000







16.71



3/10/2013



6,000
(2)


372,66013,333
(4)


6,667
(4)


30.07



4/30/2014



8,000
(3)


496,8805,666
(5)


11,334
(5)


38.15



3/9/2015



9,000
(10)


558,990



20,000
(6)


43.39



3/3/201642,857
(7)


25.94



3/15/201042,857
(8)


25.94



3/15/201082,419



123,715Kirk E. Townsend


15,000






$
22.00



5/23/2010



6,000(2
)

$
372,660


Senior Vice President


35,000







31.65



12/11/2010



8,000(3
)


496,8802,976







33.60



4/20/2011



10,000(10
)


621,1004,694







21.30



2/19/201213,333
(4)


6,667
(4)


30.07



4/30/20145,666
(5)


11,334
(5)


38.15



3/9/2015



20,000
(6)


43.39



3/3/201642,857
(7)


25.94



3/15/201042,857
(8)


25.94



3/15/201076,669



123,715     (1)
    
    Based on the closing price of Universal common stock as of
    December 29, 2006 ($62.11).(2)
    
    Remainder of unvested portion of April 30, 2004 restricted
    stock grant vests ratably on April 30, 2007, April 30,
    2008, and April 30, 2009.(3)
    
    March 9, 2005 restricted stock grant vests ratably on
    March 9, 2007, March 9, 2008, March 9, 2009 and
    March 9, 2010.(4)
    
    Options vest ratably and become exercisable on the first three
    anniversaries of the grant date and are fully vested on
    April 30, 2007.(5)
    
    Options vest ratably and become exercisable on the first three
    anniversaries of the grant date and are fully vested on
    March 9, 2008.(6)
    
    Options vest ratably and become exercisable on the first three
    anniversaries of the grant date and are fully vested on
    March 3, 2009.(7)
    
    Unit Option grant under the Universal Partnerships
    Long-Term Incentive Plan vests on January 1, 2009.(8)
    
    UAR grant vests on January 1, 2009.(9)
    
    Remainder of unvested portion of March 31, 2003 restricted
    stock grant vests ratably on March 31, 2007 and
    March 31, 2008.(10)
    
    March 3, 2006 restricted stock grant vests ratably on
    March 3, 2008, March 3, 2009, March 3, 2010 and
    March 3, 2011.(11)
    
    Unvested portion of September 3, 2002 restricted stock
    grant vests on September 3, 2007.  Option
    Exercises and Stock Vested Table
    19




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##### Table of Contents



Option Awards


Stock AwardsNumber of


(1)


Number of


(2)Shares Acquired


Value Realized


Shares Acquired


Value Realizedon Exercise


on Exercise


on Vesting


on VestingName

(#)


($)


(#)


($)Stephen A. Snider


111,384


$
4,726,073



11,250
(3)

$
518,025
(3)

President and Chief Executive
    OfficerJ. Michael Anderson










7,000
(4)


365,150
(4)Senior Vice President and Chief
    Financial OfficerErnie L. Danner


158,695



6,747,651



8,000
(5)


373,300
(5)Executive Vice President and Chief
    Operating OfficerD. Bradley Childers


1,580



70,120



4,500
(6)


251,550
(6)

Senior Vice PresidentKirk E. Townsend


53,998



2,090,751



4,500
(7)


214,600
(7)

Senior Vice President     (1)
    
    Amount in Value Realized on Exercise column
    represents the aggregate dollar value realized upon the exercise
    of options to purchase Universal common stock.(2)
    
    Amount in Value Realized on Vesting column
    represents the number of shares vested multiplied by the market
    price of a share of Universal common stock on the date of
    vesting.(3)
    
    The number of vested shares of Universal common stock reported
    for Mr. Snider is attributable to vesting of the following
    awards:    (4)
    
    The number of vested shares of Universal common stock reported
    for Mr. Anderson is attributable to vesting of the
    following awards:    (5)
    
    The number of vested shares of Universal common stock reported
    for Mr. Danner is attributable to vesting of the following
    awards:    (6)
    
    The amount of shares of Universal common stock reported for
    Mr. Childers is attributable to vesting of the following
    awards:    (7)
    
    The number of vested shares of Universal common stock reported
    for Mr. Townsend is attributable to vesting of the
    following awards:   20




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##### Table of Contents



Nonqualified
    Deferred Compensation Table
    (2)


(3)


(4)(1)


Registrant


Aggregate


AggregateExecutive


Contributions


Earnings


Balance atContributions in


in Last


in Last


Last FiscalLast Fiscal Year


Fiscal Year


Fiscal Year


Year-EndName

($)


($)


($)


($)Stephen A. Snider

$
541,452


$
14,175


$
208,271


$
2,176,653


President and Chief Executive
    OfficerJ. Michael Anderson


12,836



2,775



24,957



145,307Senior Vice President and Chief
    Financial OfficerErnie L. Danner


59,654



5,011



222,824



1,617,893Executive Vice President and Chief
    Operating OfficerD. Bradley Childers


16,265



2,325



12,248



77,747


Senior Vice PresidentKirk E. Townsend


17,969



4,388



21,806



129,248


Senior Vice President     (1)
    
    Amounts shown represent contributions made by each Named
    Executive Officer to Universals non-qualified deferred
    compensation plan, the Universal employees supplemental
    savings plan, during calendar year 2006. In addition,
    Mr. Snider elected to defer $429,629 of his incentive
    awarded in 2006 with respect to the 2005 compensation
    measurement and performance review period.(2)
    
    Amounts shown represent matching contributions made by Universal
    to each Named Executive Officers employees
    supplemental savings plan accounts.(3)
    
    Amounts shown represent earnings under the Universal
    employees supplemental savings plan considering historical
    balances, and Named Executive Officer and Universals
    contributions during 2006.(4)
    
    Amounts shown represent the aggregate employees
    supplemental savings plan balance for each Universal Named
    Executive Officer at December 31, 2006.  Employment
    Contracts, Termination of Employment and
    Change-in-Control
    Arrangements
    
    An amount equal to the executives annual base salary
    through the date of termination and a pro rated annual bonus
    based upon the greater of the annual bonus that would be payable
    to the executive for that year or the executives highest
    annual bonus over the preceding three years;
    An amount equal to two times the executives current annual
    base salary and two times the greater of the annual bonus that
    would be payable to the executive for that year or the
    executives highest annual bonus over the preceding three
    years; 21




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##### Table of Contents




    For a period of two years following the executives date of
    termination, Universal will provide company medical and welfare
    benefits to the executive or the executives family equal
    to those benefits which would have been provided to such
    executive in accordance with the benefits if the
    executives employment had not been terminated;
    Universal will pay the executive an amount equal to the amount
    forfeited by the executive under its deferred compensation plan,
    401(k) Retirement and Savings Plan or any similar plan;
    All stock options, restricted stock, restricted stock units or
    other stock-based awards held by the executive that are not
    vested, will vest; and
    In the event that any payment or distribution made by Universal
    to or for the benefit of the executive would be subject to a
    federal excise tax, then the executive is entitled to receive an
    additional
    gross-up
    payment.    
    the assignment to the executive officer of any duties
    inconsistent with his or her position, authority, duties or
    responsibilities during the
    ninety-day
    period prior to the change of control, or any material
    diminution in his or her position, authority, duties or
    responsibilities;
    the requirement that the executive officer be based at any
    location other than that required during the
    ninety-day
    period prior to the change of control, or any substantially
    increased business travel relative to that required during the
    ninety-day
    period prior to the change of control; or
    any purported termination of the executive officers
    employment, other than as expressly permitted by the applicable
    change of control agreement.    
    the willful and continued failure of the executive officer to
    perform substantially his or her duties (other than as a result
    of incapacity due to physical or mental illness), after a
    written demand for substantial performance has been delivered to
    the executive officer by the board of directors or the Chief
    Executive Officer of Universal or its successor; or
    the willful engaging by the executive officer in illegal conduct
    or gross misconduct which is materially and demonstrably
    injurious to Universal or its successor.       22




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##### Table of Contents



Release of


Early








UniversalRestricted


Universal








PartnershipCash


Universal


Option


Medical


Excise Tax


UnitName

Severance


Stock


Vesting


Coverage


Reimbursement


Options


Other(1)


TotalStephen A. Snider

$
2,818,500


$
1,940,938


$
3,286,611


$
23,944


$
22,906


$
77,143


$
47,250


$
8,217,292J. Michael Anderson


1,329,740



2,049,630



859,573



23,944



8,798



57,857



31,509



4,361,051Ernie L. Danner


1,427,024



2,235,960



1,086,443



23,944



14,020



57,857



28,922



4,874,170D. Bradley Childers


1,167,106



1,583,805



859,573



23,944



8,362



38,571



31,097



3,712,458Kirk E. Townsend


1,386,000



1,490,640



859,573



23,944



13,416



38,571



27,675



3,839,819     (1)
    
    Amounts shown represent each Universals Named Executive
    Officers unvested account balance and Universals
    matching contributions under each of Universals 401(k)
    Retirement and Savings Plan and employees supplemental
    savings plan.  Compensation
    Committee Interlocks and Insider Participation
    Director
    Compensation
    
    an annual retainer of $30,000;
    an annual retainer fee for the chairs of the Audit Committee,
    Compensation Committee and Nominating and Corporate Governance
    Committee of $10,000, $5,000 and $5,000, respectively;
    a fee per board of directors meeting of $1,000 if attended in
    person or $500 if attended telephonically;
    a fee per committee meeting for each committee member who is a
    chairperson of $1,500, whether attended in person or
    telephonically; and
    a fee per committee meeting for each committee member who is a
    non-chairperson of $1,000 if attended in person or $500 if
    attended telephonically.      out-of-pocket
 23




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##### Table of Contents



(1)Fees Earned or


(2)Name

Paid in Cash


Option Awards


TotalJanet F. Clark

$
60,500


$
133,463


$
193,963Thomas C. Case


46,000



133,463



179,463Uriel E. Dutton


48,500



133,463



181,963J.W.G. Honeybourne


36,250



148,287



184,537William M. Pruellage


41,000



133,463



174,463Lisa W. Rodriguez


43,500



133,463



176,963Bernard J. Duroc-Danner(3)


13,250



21,025



34,275Samuel Urcis(3)


12,000



21,025



33,025     (1)
    
    Amounts shown represent cash paid to directors during the twelve
    months ended December 31, 2006.(2)
    
    Amounts shown represent the compensation costs Universal
    recognized during the twelve months ended December 31, 2006
    related to option awards, as described in Statement of Financial
    Accounting Standards No. 123R. For a discussion of
    valuation assumptions, see Note 8 to Universals
    consolidated financial statements in Universals
    Form 10-K
    for the twelve months ended December 31, 2006.(3)
    
    Messrs. Duroc-Danner and Urcis did not seek board
    reelection during 2006.    Number of


Number ofSecurities


SecuritiesUnderlying


UnderlyingUnexercised


UnexercisedOptions


OptionsName

(Exercisable)


(Unexercisable)Janet F. Clark


25,000



7,500Thomas C. Case


40,000



7,500Uriel E. Dutton


40,000



7,500J.W.G. Honeybourne






10,000William M. Pruellage


40,000



7,500Lisa W. Rodriguez


15,000



7,500Bernard J. Duroc-Danner






Samuel Urcis






160,000



47,500  24




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##### Table of Contents



ITEM 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters      Amount andNatureof Beneficial


Percent ofName and Address of Beneficial Owner

Ownership


Class(1)FMR Corp.(2)


3,666,800



12.1
%82 Devonshire StreetBoston, MA 02109Magnetar Financial L.L.C.,
    Magnetar Capital Partners


2,329,275



7.7
%LP, Supernova Management LLC and
    Alec N. Litowitz(2)1603 Orrington Avenue,
    13th FloorEvanston, IL 60201Dimensional Fund Advisors
    LP(2)


2,327,763



7.7
%1299 Ocean Avenue,
    11th FloorSanta Monica, CA 90401TPG-Axon GP, LLC, TPG-Axon
    Partners GP, LP, TPG-Axon Partners, LP, TPG-Axon Capital
    Management, LP, TPG-Axon Partners (Offshore), Ltd. and Dinakar
    Singh(2)


2,000,000



6.6
%888 Seventh Avenue,
    38th FloorNew York, New York 10019TimesSquare Capital Management,
    LLC(2)


1,853,961



6.1
%1177 Avenue of the
    Americas 
    39th FloorNew York, New York 10036Thomas C. Case(3)


47,834




*Janet F. Clark(4)


33,477




*Uriel E. Dutton(3)


48,201




*William M. Pruellage(3)


47,808




*Lisa W. Rodriguez(5)


22,500




*J.W.G. Honeybourne(6)


12,800




*Stephen A. Snider(7)


535,281



1.8
%Ernie L. Danner(8)


195,767




*Kirk E. Townsend(9)


114,044




*J. Michael Anderson(10)


167,788




*D. Bradley Childers(11)


131,602




*All directors and executive
    officers as a group (14 persons)(12)


1,488,566



4.9
%  25




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##### Table of Contents



*
    
    Less than 1% of our issued and outstanding shares of common
    stock.(1)
    
    Reflects the shares beneficially owned as a percentage of common
    stock outstanding (30,226,203 shares, excluding 3,023,210
    treasury shares) plus the beneficial owners shares of
    common stock subject to options that are or will become fully
    vested within 60 days, if any.(2)
    
    This information is based solely on the most recent filings made
    by such beneficial owners with the SEC on Schedule 13G or 13G/A.(3)
    
    Includes 47,500 shares of common stock subject to options.(4)
    
    Includes 32,500 shares of common stock subject to options.(5)
    
    Includes 22,500 shares of common stock subject to options.(6)
    
    Includes 10,000 shares of common stock subject to options.(7)
    
    Includes 460,201 shares of common stock subject to options.(8)
    
    Includes 135,852 shares of common stock subject to options.(9)
    
    Includes 82,034 shares of common stock subject to options.(10)
    
    Includes 122,999 shares of common stock subject to options.(11)
    
    Includes 101,419 shares of common stock subject to options.(12)
    
    Includes an aggregate of 1,202,170 shares of common stock
    subject to options. Also includes 131,465 shares of common
    stock owned by other executive officers not listed in the above
    table, of which 92,165 are shares of common stock subject to
    options.  Securities
    Authorized for Issuance under Equity Compensation
    Plans
    Number of SecuritiesRemaining Available forNumber of Securities to be





Future Issuance UnderIssued Upon Exercise of


Weighted-Average Exercise


Equity Compensation PlansOutstanding Options,


Price of Outstanding Options


(Excluding SecuritiesWarrants and Rights


Warrants and Rights


Reflected in Column (a))Plan
    category(1)

(a)


(b)


(c)Equity compensation plans approved
    by security holders:


1,902,952


$
29.97



3,446,681
(1)Equity compensation plans not
    approved by security holders:


Not applicable



Not applicable



Not applicableTotal


1,902,952


$
29.97



3,446,681     (1)
    
    Includes 2,276,643, 16,229, 290,051, 852,713 and
    11,145 shares available for issuance pursuant to the
    Universal incentive stock option plan, employees
    supplemental savings plan, employee stock purchase plan,
    restricted stock plan and directors stock plan,
    respectively.  ITEM 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  Transactions
    with the Universal Partnership
  Distributions
    and Payments to the Universal Partnership
   26




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##### Table of Contents



Formation
    Stage
  The consideration received by Universal and its subsidiaries
    for the contribution of the assets and liabilities to Universal
    Partnership on October 20, 2006
    
     825,000 common units of Universal Partnership, which
    were later redeemed by Universal Partnership using a portion of
    the aggregate net proceeds from the initial offering; 6,325,000 subordinated units of Universal
    Partnership; 258,163 general partner units of Universal
    Partnership; Universal Partnerships general partners
    incentive distribution rights; and Universal Partnerships assumption of
    $228.4 million of Universals indebtedness.  Operational
    Stage
  Distributions of available cash to Universal
    Partnerships general partner and its affiliates
    
    Universal Partnership will generally make cash distributions 98%
    to its unitholders on a pro rata basis, including Universal, as
    the holder of 6,325,000 subordinated units and 2% to Universal
    Partnerships general partner. In addition, if
    distributions exceed the minimum quarterly distribution and
    other higher target distribution levels, then Universal is
    entitled to increasing percentages of the distributions, up to
    50% of the distributions above the highest target distribution
    level.Assuming Universal Partnership has sufficient available cash to
    pay the full minimum quarterly distribution on all of
    Universals outstanding units for four quarters, Universal
    would receive an annual distribution of approximately
    $0.4 million on its general partner units and
    $8.9 million on its subordinated units. On
    February 14, 2007, Universal Partnership paid a prorated
    quarterly distribution on all its outstanding units with respect
    to the period from October 20, 2006 to December 31,
    2006, including the following to Universal: approximately
    $0.1 million on Universals general partner units and
    $1.8 million on its subordinated units.Payments to Universal Partnerships general partner and
    its affiliates
    
    Subject to certain caps, Universal Partnership reimburses
    Universal for the payment of all direct and indirect expenses
    incurred on Universal Partnerships behalf. For further
    information regarding the reimbursement of these expenses,
    please read  Omnibus Agreement below.Withdrawal or removal of Universal Partnerships general
    partner
    
    If Universal withdraws or is removed in its general partner
    capacity, Universals general partner interest and its
    incentive distribution rights will either be sold to the new
    general partner for cash or converted into 27




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##### Table of Contents



common units, in each case for an amount equal to the fair
    market value of those interests.  Liquidation
    Stage
  Liquidation
    
    Upon liquidation of Universal Partnership, the partners of
    Universal Partnership, including Universal in its general
    partner capacity, will be entitled to receive liquidating
    distributions according to their respective capital account
    balances.    Omnibus
    Agreement
    Non-competition
       28




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##### Table of Contents



Indemnification
    for Environmental and Related Liabilities
      Purchase
    of New Compression Equipment from Universal
    Transfer
    of Compression Equipment with Universal
          Reimbursement
    of Operating and Selling, General and Administrative
    Expense
   29




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##### Table of Contents



Transactions
    with Tide-Air
      ITEM 14.
    Principal
    Accountant Fees and Services  Audit and
    Other Fees
    Twelve Months


Nine MonthsEnded


EndedDecember 31,


December 31,2006


2005(In thousands)Audit fees(1)

$
2,810.5


$
675.4Audit-related fees(2)


106.0



117.2Tax fees(3)


103.5



149.5All other fees






Total fees:

$
3,020.0


$
942.1     (1)
    
    Audit fees consist of professional services rendered for the
    audit of Universals annual financial statements, the audit
    of the effectiveness of Universals internal control over
    financial reporting and the reviews of the quarterly financial
    statements. This category also includes fees for issuance of
    comfort letters, consents, assistance with 30




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##### Table of Contents



and review of documents filed with the SEC, statutory audit fees
    and work done by tax professionals in connection with the audit
    and quarterly reviews.(2)
    
    Audit-related fees primarily include fees for audits of
    Universals benefit plans, operating lease facilities and
    consultations concerning financial accounting and reporting
    matters.(3)
    
    Tax fees include fees primarily related to tax compliance, tax
    advice and tax planning.    Pre-Approval
    Policy
   31




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##### Table of Contents



PART IV  ITEM 15.
    Exhibits
    and Financial Statement Schedules    31
.1

Rule 13a-14(a)
    Certifications of the CEO.31
.2

Rule 13a-14(a)
    Certifications of the CFO.31
.3

Rule 15d-14(a)
    Certification of the CEO.31
.4

Rule 15d-14(a)
    Certification of the CFO.32
.1

Section 1350 Certifications.32
.2

Section 1350 Certifications.  32




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##### Table of Contents



SIGNATURES
      By:
    /s/  STEPHEN
    A. SNIDER   President and Chief Executive Officer
    Name

Title/s/  STEPHEN
    A. SNIDERStephen
    A. Snider

President, Chief Executive Officer
    and Director
    (Principal Executive Officer)/s/  J.
    MICHAEL
    ANDERSONJ.
    Michael Anderson

Senior Vice President and Chief
    Financial Officer
    (Principal Financial Officer)/s/  KENNETH
    R. BICKETTKenneth
    R. Bickett

Vice President, Accounting and
    Corporate Controller
    (Principal Accounting Officer)/s/  ERNIE
    L. DANNERErnie
    L. Danner

Executive Vice President and
    Director*Thomas
    C. Case

Director*Janet
    F. Clark

Director*Uriel
    E. Dutton

Director*Lisa
    W. Rodriguez

Director*William
    M. Pruellage

Director*J.W.G.
    Honeybourne

Director*By:

/s/  DONALD
    C.
    WAYNEDonald
    C. Wayne,
    attorney-in-fact  33




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##### Table of Contents



SIGNATURES
      By:
    /s/  STEPHEN
    A. SNIDER   President and Chief Executive Officer
    Name

Title/s/  STEPHEN
    A. SNIDERStephen
    A. Snider

President, Chief Executive Officer
    and Director
    (Principal Executive Officer)/s/  J.
    MICHAEL
    ANDERSONJ.
    Michael Anderson

Senior Vice President and Chief
    Financial Officer
    (Principal Financial Officer)/s/  KENNETH
    R. BICKETTKenneth
    R. Bickett

Vice President, Accounting and
    Corporate Controller
    (Principal Accounting Officer)/s/  ERNIE
    L. DANNERErnie
    L. Danner

Executive Vice President and
    Director  34




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##### Table of Contents



EXHIBIT
    INDEX
  31
.1

Rule 13a-14(a)
    Certifications of the CEO.31
.2

Rule 13a-14(a)
    Certifications of the CFO.31
.3

Rule 15d-14(a)
    Certification of the CEO.31
.4

Rule 15d-14(a)
    Certification of the CFO.32
.1

Section 1350 Certifications.32
.2

Section 1350 Certifications.