Exterran Partners Reports Fourth-Quarter And Full-Year 2013 Results

Exterran Partners, L.P. (NASDAQ: EXLP) today reported EBITDA, as further adjusted (as defined below), of $58.8 million for the fourth quarter 2013, compared to $55.7 million for the third quarter 2013 and $48.9 million for the fourth quarter 2012. Distributable cash flow (as defined below) was $37.8 million for the fourth quarter 2013, compared to $33.3 million for the third quarter 2013 and $34.2 million for the fourth quarter 2012.

Revenue was $118.9 million for the fourth quarter 2013, compared to $115.8 million for the third quarter 2013 and $102.3 million for the fourth quarter 2012.

Net income was $11.4 million, or $0.19 per diluted limited partner unit, for the fourth quarter 2013, compared to net income of $10.0 million, or $0.16 per diluted limited partner unit, for the third quarter 2013, and net income of $14.7 million, or $0.31 per diluted limited partner unit, for the fourth quarter 2012.

EBITDA, as further adjusted, was $238.0 million for 2013, compared to $180.0 million for 2012. Distributable cash flow totaled $153.0 million for 2013, compared to $118.0 million in 2012.

Revenue was $466.2 million for 2013, compared to $387.5 million for 2012. Net income for 2013 was $64.0 million, or $1.18 per diluted limited partner unit, compared to net income of $10.5 million, or $0.14 per diluted limited partner unit, for 2012.

“Fourth quarter highlights included a solid level of organic growth, as operating horsepower increased by 43,000. Distributable cash flow increased by 14% as compared to third quarter 2013,” said Brad Childers, Chairman, President and Chief Executive Officer of Exterran Partners’ managing general partner. “Looking ahead, we are excited about opportunities to leverage our leading market position in our fee-based business to take advantage of the continued development of natural gas infrastructure in the United States.”

“In 2014, we will continue implementing our strategy to increase distributable cash flow at the Partnership through investment in new fleet units to modernize and position our fleet for growth, the implementation of performance improvement initiatives, and acquisitions including our drop-down strategy with Exterran Holdings,” said Mr. Childers.

For the fourth quarter 2013, Exterran Partners’ quarterly cash distribution was $0.5325 per limited partner unit, or $2.13 per limited partner unit on an annualized basis. The fourth-quarter 2013 distribution was $0.005 higher than the third-quarter 2013 distribution of $0.5275 per limited partner unit and $0.02 higher than the fourth-quarter 2012 distribution of $0.5125 per limited partner unit.

Conference Call Details

Exterran Partners and Exterran Holdings, Inc. will host a joint conference call on Tuesday, Feb. 25, 2014, to discuss their fourth-quarter 2013 financial results. The call will begin at 11:00 a.m. Eastern Time.

To listen to the call via a live webcast, please visit Exterran’s website at www.exterran.com. The call will also be available by dialing 800-446-2782 in the United States and Canada, or +1-847-413-3235 for international calls. Please call approximately 15 minutes prior to the scheduled start time and reference Exterran conference call number 36425002.

A replay of the conference call will be available on Exterran’s website for approximately seven days. Also, a replay may be accessed by dialing 888-843-7419 in the United States and Canada, or +1-630-652-3042 for international calls. The access code is 36425002#.

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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 (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, 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.

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.

About Exterran Partners

Exterran Partners, L.P. is the leading provider of natural gas contract operations services to customers throughout the United States. Exterran Holdings, Inc. (NYSE: EXH) owns an equity interest in Exterran Partners, including all of the general partner interest. For more information, visit www.exterran.com.

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 Section 21E of the Securities Exchange Act of 1934, as amended. 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 Exterran Partners’ control, which could cause actual results to differ materially from such statements. Forward-looking information includes, but is not limited to: Exterran Partners’ financial and operational strategies and ability to successfully effect those strategies; Exterran Partners’ expectations regarding future economic and market conditions; Exterran Partners’ financial and operational outlook and ability to fulfill that outlook; and demand for Exterran Partners’ services and growth opportunities for those services.

While Exterran Partners believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: local, regional and national economic conditions and the impact they may have on Exterran Partners and its customers; 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 or natural gas or a sustained decrease in the price of oil or natural gas; changes in economic conditions in key operating markets; changes in safety, health, environmental and other regulations; and the performance of Exterran Holdings.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Exterran Partners’ Annual Report on Form 10-K for the year ended December 31, 2012 and those set forth from time to time in Exterran Partners’ filings with the Securities and Exchange Commission, which are available at www.exterran.com. Except as required by law, Exterran Partners expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

 
EXTERRAN PARTNERS, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit amounts)
             
 
Three Months Ended Years Ended
December 31, September 30, December 31, December 31, December 31,
2013 2013 2012 2013 2012
 
 
Revenue $ 118,870 $ 115,808 $ 102,301 $ 466,193 $ 387,493
 
Costs and expenses:
Cost of sales (excluding depreciation and amortization) 52,706 51,478 44,949 202,045 183,160
Depreciation and amortization 26,817 27,158 23,218 103,711 88,298
Long-lived asset impairment 2,101 784 633 5,350 29,560
Selling, general and administrative 17,213 16,948 12,455 61,971 49,889
Interest expense 9,610 9,735 6,421 37,068 25,167
Other (income) expense, net   (1,165)   (639)   (164)   (9,481)   (35)
Total costs and expenses   107,282   105,464   87,512   400,664   376,039
Income before income taxes 11,588 10,344 14,789 65,529 11,454
Provision for income taxes   229   309   115   1,506   945
Net income $ 11,359 $ 10,035 $ 14,674 $ 64,023 $ 10,509
 
General partner interest in net income $ 2,175 $ 1,911 $ 1,493 $ 7,969 $ 4,623
 
Limited partner interest in net income $ 9,184 $ 8,124 $ 13,181 $ 56,054 $ 5,886
 
Weighted average limited partners' units outstanding:
Basic   49,411   49,409   42,266   47,651   41,371
 
Diluted   49,435   49,429   42,280   47,667   41,382
 
Earnings per limited partner unit:
Basic $ 0.19 $ 0.16 $ 0.31 $ 1.18 $ 0.14
 
Diluted $ 0.19 $ 0.16 $ 0.31 $ 1.18 $ 0.14
 
 
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per unit amounts, percentages and ratios)
             
 
Three Months Ended Years Ended
December 31, September 30, December 31, December 31, December 31,
2013 2013 2012 2013 2012
 
Revenue $ 118,870 $ 115,808 $ 102,301 $ 466,193 $ 387,493
 
Gross margin (1) $ 66,164 $ 64,330 $ 57,352 $ 264,148 $ 204,333
Gross margin percentage 56% 56% 56% 57% 53%
 
EBITDA, as further adjusted (1) $ 58,767 $ 55,682 $ 48,902 $ 238,012 $ 180,034
% of revenue 49% 48% 48% 51% 46%
 
Capital expenditures $ 53,247 $ 40,303 $ 66,130 $ 168,036 $ 157,828
Less: Proceeds from sale of property, plant and equipment   (10,885)   (2,611)   (859)   (61,452)   (2,465)
Net capital expenditures $ 42,362 $ 37,692 $ 65,271 $ 106,584 $ 155,363
 
Distributable cash flow (2) $ 37,849 $ 33,282 $ 34,223 $ 152,976 $ 117,966
 
Distributions declared for the period per limited partner unit $ 0.5325 $ 0.5275 $ 0.5125 $ 2.1000 $ 2.0200

Distributions declared to all unitholders for the period, including incentive distribution rights
$ 28,840 $ 28,340 $ 23,331 $ 112,705 $ 91,617
Distributable cash flow coverage (3) 1.31x 1.17x 1.47x 1.36x 1.29x
 
December 31, September 30, December 31, December 31, December 31,
2013 2013 2012 2013 2012
 
Debt $ 757,955 $ 719,818 $ 680,500 $ 757,955 $ 680,500
Total partners' capital 591,755 601,424 439,000 591,755 439,000
 
(1) Management believes EBITDA, as further adjusted, and gross margin provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, management uses EBITDA, as further adjusted, as a valuation measure.
 
(2) Management uses distributable cash flow, a non-GAAP measure, as a significant liquidity metric to compare basic cash flows 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.
 
(3) Defined as distributable cash flow divided by distributions declared to all unitholders for the period, including incentive distribution rights.
 
 
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except per unit amounts)
             
 
Three Months Ended Years Ended
December 31, September 30, December 31, December 31, December 31,
2013 2013 2012 2013 2012
 
Reconciliation of GAAP to Non-GAAP Financial Information:
 
Net income $ 11,359 $ 10,035 $ 14,674 $ 64,023 $ 10,509
Depreciation and amortization 26,817 27,158 23,218 103,711 88,298
Long-lived asset impairment 2,101 784 633 5,350 29,560
Selling, general and administrative 17,213 16,948 12,455 61,971 49,889
Interest expense 9,610 9,735 6,421 37,068 25,167
Other (income) expense, net (1,165) (639) (164) (9,481) (35)
Provision for income taxes   229   309   115   1,506   945
Gross margin (1) 66,164 64,330 57,352 264,148 204,333
Cap on operating costs provided by Exterran Holdings ("EXH") 3,938 3,212 1,886 12,382 16,562
Cap on selling, general and administrative costs provided by EXH 4,412 4,164 1,815 12,798 8,196
Non-cash selling, general and administrative costs 301 285 140 1,174 797
Less: Selling, general and administrative (17,213) (16,948) (12,455) (61,971) (49,889)
Less: Other income (expense), net   1,165   639   164   9,481   35
EBITDA, as further adjusted (1) 58,767 55,682 48,902 238,012 180,034
Expensed acquisition costs (in Other (income) expense, net) - - - 575 695
Other expensed costs (in Other (income) expense, net) 246 - - 246 -
Less: Provision for income taxes (229) (309) (115) (1,506) (945)
Less: Gain on sale of property, plant and equipment (in Other (income) expense, net) (1,342) (614) (144) (10,140) (689)
Less: Cash interest expense (8,774) (8,802) (5,930) (32,810) (22,761)
Less: Maintenance capital expenditures   (10,819)   (12,675)   (8,490)   (41,401)   (38,368)
Distributable cash flow (2) $ 37,849 $ 33,282 $ 34,223 $ 152,976 $ 117,966
 
 
Cash flows from operating activities $ 30,031 $ 49,072 $ 45,607 $ 158,286 $ 125,217
(Provision for) benefit from doubtful accounts (149) (52) (94) 25 (494)
Cap on operating costs provided by EXH 3,938 3,212 1,886 12,382 16,562
Cap on selling, general and administrative costs provided by EXH 4,412 4,164 1,815 12,798 8,196
Expensed acquisition costs - - - 575 695
Other expensed costs (in Other (income) expense, net) 246 - - 246 -
Payments for settlement of interest rate swaps that include financing elements (936) (957) - (2,207) -
Maintenance capital expenditures (10,819) (12,675) (8,490) (41,401) (38,368)
Change in assets and liabilities   11,126   (9,482)   (6,501)   12,272   6,158
Distributable cash flow (2) $ 37,849 $ 33,282 $ 34,223 $ 152,976 $ 117,966
 
Net income $ 11,359 $ 10,035 $ 14,674 $ 64,023 $ 10,509
Long-lived asset impairment   2,101   784   633   5,350   29,560
Net income, excluding item $ 13,460 $ 10,819 $ 15,307 $ 69,373 $ 40,069
 
Diluted earnings per limited partner unit $ 0.19 $ 0.16 $ 0.31 $ 1.18 $ 0.14
Adjustment for item per limited partner unit   0.04   0.02   0.02   0.11   0.70
Diluted earnings per limited partner unit, excluding item (1) $ 0.23 $ 0.18 $ 0.33 $ 1.29 $ 0.84
 
(1) Management believes EBITDA, as further adjusted, diluted earnings (loss) per limited partner unit, excluding item, and gross margin provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, management uses EBITDA, as further adjusted, as a valuation measure.
 
(2) Management uses distributable cash flow, a non-GAAP measure, as a significant liquidity metric to compare basic cash flows 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.
 
 
EXTERRAN PARTNERS, L.P.
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except percentages)
             
 
Three Months Ended Years Ended
December 31, September 30, December 31, December 31, December 31,
2013 2013 2012 2013 2012
 
Total available horsepower (at period end) (1) 2,417 2,391 2,084 2,417 2,084
 
Total operating horsepower (at period end) (1) 2,264 2,221 1,991 2,264 1,991
 
Average operating horsepower 2,242 2,217 1,960 2,155 1,883
 
Horsepower Utilization:
Spot (at period end) 94% 93% 96% 94% 96%
Average 93% 93% 96% 94% 93%
 

Total available U.S. contract operations horsepower of Exterran Holdings and Exterran Partners (at period end)
3,429 3,423 3,376 3,429 3,376
 

Total operating U.S. contract operations horsepower of Exterran Holdings and Exterran Partners (at period end)
2,884 2,840 2,900 2,884 2,900
 
(1) Includes compressor units leased from Exterran Holdings with an aggregate horsepower of approximately 109,000, 96,000 and 163,000 at December 31, 2013, September 30, 2013 and December 31, 2012, respectively. Excludes compressor units leased to Exterran Holdings with an aggregate horsepower of approximately 8,000, 7,000 and 9,000 at December 31, 2013, September 30, 2013 and December 31, 2012, respectively.
 

Copyright Business Wire 2010

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