- Organic growth of 93,000 operating
horsepower for the quarter
- Distribution coverage, excluding the
benefit of cost caps, of 1.41x for the quarter
Exterran Partners, L.P. (NASDAQ: EXLP) today reported EBITDA, as
further adjusted (as defined below), of $80.5 million for the
fourth quarter 2014, compared to $75.1 million for the third
quarter 2014 and $59.0 million for the fourth quarter 2013.
Distributable cash flow (as defined below) was $53.4 million for
the fourth quarter 2014, compared to $45.7 million for the third
quarter 2014 and $37.8 million for the fourth quarter 2013.
Revenue was $161.1 million for the fourth quarter 2014, compared
to $153.2 million for the third quarter 2014 and $118.9 million for
the fourth quarter 2013.
Net income was $18.9 million, or $0.27 per diluted limited
partner unit, for the fourth quarter 2014, compared to $18.1
million, or $0.26 per diluted limited partner unit, for the third
quarter 2014, and $11.4 million, or $0.19 per diluted limited
partner unit, for the fourth quarter 2013.
Net income, excluding items, for the fourth quarter 2014 was
$23.8 million, or $0.36 per diluted limited partner unit, excluding
pretax charges of $4.8 million due primarily to non-cash long-lived
asset impairment charges related to our fleet. Net income,
excluding items, was $22.7 million, or $0.34 per diluted limited
partner unit, for the third quarter 2014, compared to $13.7
million, or $0.23 per diluted limited partner unit, for the fourth
quarter 2013.
EBITDA, as further adjusted, was $280.2 million for 2014,
compared to $238.8 million for 2013. Distributable cash flow
totaled $177.6 million for 2014, compared to $153.0 million in
2013.
Revenue was $581.0 million for 2014, compared to $466.2 million
for 2013. Net income was $61.7 million, or $0.89 per diluted
limited partner unit, for 2014, compared to $64.0 million, or $1.18
per diluted limited partner unit, for 2013. Net income, excluding
items, for 2014 was $77.7 million, or $1.18 per diluted limited
partner unit, excluding pretax charges of $16.0 million due
primarily to non-cash long-lived asset impairment charges related
to our fleet of $12.8 million and expensed acquisition costs of
$2.5 million. Net income, excluding items, was $70.2 million, or
$1.30 per diluted limited partner unit, for 2013.
“Fourth-quarter highlights included a solid level of organic
horsepower growth and a record quarterly level of distributable
cash flow,” said Brad Childers, Chairman, President and Chief
Executive Officer of Exterran Partners’ managing general partner.
“In 2014, Exterran Partners increased operating horsepower by
776,000, or 34 percent, over prior-year levels due to third-party
acquisitions and organic growth.”
“For 2015, the energy industry has entered into a reduced
commodity price cycle. We believe that Exterran Partners is well
positioned to manage through industry cycles as our fee-based
business, tied to the production and flow of hydrocarbons, provides
relatively stable cash flows.”
For the fourth quarter 2014, Exterran Partners’ quarterly cash
distribution was $0.5575 per limited partner unit, or $2.23 per
limited partner unit on an annualized basis. The fourth-quarter
2014 distribution is $0.005 higher than the third-quarter 2014
distribution of $0.5525 per limited partner unit and $0.025 higher
than the fourth-quarter 2013 distribution of $0.5325 per limited
partner unit.
Conference Call Details
Exterran Partners and Exterran Holdings, Inc. will host a joint
conference call on Thursday, Feb. 26, 2015, to discuss their
fourth-quarter 2014 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 38981516.
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 38981516#.
EBITDA, as further adjusted, a non-GAAP measure, is defined as
net income (loss) (a) 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, restructuring charges, expensed
acquisition costs, other items and non-cash selling, general and
administrative (“SG&A”) costs (b) plus the amounts reimbursed
to us by Exterran Holdings as a result of caps on cost of sales and
SG&A costs provided 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.
In the first quarter of 2014, we revised our definition of
EBITDA, as further adjusted, to add back expensed acquisition
costs. This adjustment was made because management uses the
resulting EBITDA, as further adjusted, as a supplemental measure to
review current period operating performance. EBITDA, as further
adjusted, for all periods presented have been restated to exclude
these amounts for comparison purposes.
Distributable cash flow, a non-GAAP measure, is defined as net
income (loss) (a) plus depreciation and amortization expense,
impairment charges, restructuring charges, expensed acquisition
costs, non-cash SG&A costs, interest expense and any amounts
reimbursed to us by Exterran Holdings as a result of the caps on
cost of sales and SG&A costs provided in the Omnibus Agreement,
which amounts are treated as capital contributions from Exterran
Holdings for accounting purposes, (b) 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 (c) excluding
gains/losses on asset sales and other items.
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., a master limited partnership, is the
leading provider of natural gas contract compression 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; the failure of any third party to perform its
contractual obligations; 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, 2013 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,
2014 2014 2013 2014 2013 Revenue $ 161,133 $ 153,163
$ 118,870 $ 581,036 $
466,193
Costs and expenses: Cost of sales (excluding depreciation
and amortization) 63,148 61,852 52,706 238,038
202,045
Depreciation and amortization 34,969 33,598 26,817 128,196
103,711
Long-lived asset impairment 4,775 3,558 2,101 12,810
5,350
Restructuring charges - 125 - 702
-
Selling, general and administrative 21,364 20,734 17,213 80,521
61,971
Interest expense 17,225 16,141 9,610 57,811
37,068
Other (income) expense, net (162 ) (649 )
(1,165 ) (74 )
(9,481
)
Total costs and expenses 141,319 135,359
107,282 518,004
400,664
Income before income taxes 19,814 17,804 11,588 63,032
65,529
Provision for (benefit from) income
taxes
889 (299 ) 229 1,313
1,506
Net income $ 18,925 $ 18,103 $ 11,359 $
61,719 $
64,023
General partner interest in net income $ 3,915
$ 3,631 $ 2,175 $ 13,240 $
7,969
Limited partner interest in net income $ 15,010
$ 14,472 $ 9,184 $ 48,479 $
56,054
Weighted average common units outstanding used in
earnings per limited partner unit (1): Basic 55,661
55,661 49,411 54,107
47,651
Diluted 55,664 55,663
49,435 54,109
47,667
Earnings per limited partner unit (1): Basic $ 0.27
$ 0.26 $ 0.19 $ 0.89 $
1.18
Diluted $ 0.27 $ 0.26 $ 0.19 $
0.89 $
1.18
(1) Basic and diluted earnings per limited partner
unit is computed using the two-class method. Under the two-class
method, basic and diluted earnings per limited partner unit is
determined by dividing earnings allocated to the limited partner
units after deducting the amounts allocated to our general partner
(including distributions to our general partner on its incentive
distribution rights) and participating securities (phantom units
with nonforfeitable tandem distribution equivalent rights to
receive cash distributions), by the weighted average number of
outstanding limited partner units excluding the weighted average
number of outstanding participating securities during the period.
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, 2014 2014
2013 2014 2013 Revenue $ 161,133 $ 153,163 $ 118,870 $
581,036 $ 466,193 Gross margin (1) $ 97,985 $ 91,311 $
66,164 $ 342,998 $ 264,148 Gross margin percentage 61 % 60 % 56 %
59 % 57 % EBITDA, as further adjusted (1) $ 80,508 $ 75,125
$ 59,013 $ 280,248 $ 238,833 % of revenue 50 % 49 % 50 % 48 % 51 %
Capital expenditures $ 94,566 $ 77,465 $ 53,247 $ 303,952 $
168,036 Less: Proceeds from sale of property, plant and equipment
(440 ) (4,221 ) (10,885 ) (6,331 )
(61,452 ) Net capital expenditures $ 94,126 $ 73,244
$ 42,362 $ 297,621 $ 106,584
Distributable cash flow (2) $ 53,410 $ 45,682 $ 37,849 $ 177,628 $
152,976 Distributions declared for the period per limited
partner unit $ 0.5575 $ 0.5525 $ 0.5325 $ 2.1900 $ 2.1000
Distributions declared to all unitholders
for the period, including incentive distribution rights
$ 35,323 $ 34,764 $ 28,840 $ 136,829 $ 112,705 Distributable cash
flow coverage (3) 1.51x 1.31x 1.31x 1.30x 1.36x Distributable cash
flow coverage (without the benefit of the cost caps) (4) 1.41x
1.24x 1.02x 1.20x 1.13x December 31, September 30, December
31, December 31, December 31, 2014 2014 2013 2014 2013 Debt
$ 1,300,295 $ 1,220,013 $ 757,955 $ 1,300,295 $ 757,955 Total
partners' capital 683,341 703,028 591,755 683,341 591,755
(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 supplemental performance and liquidity measure. Using this
metric, management can quickly compute the coverage ratio of
estimated cash flows to planned cash distributions. (3)
Defined as distributable cash flow for the period divided by
distributions declared to all unitholders for the period, including
incentive distribution rights. (4) Defined as distributable
cash flow excluding the benefit of the cost caps for the period
divided by distributions declared to all unitholders for the
period, including incentive distribution rights. The benefit
received from the cost caps on operating and selling, general and
administrative costs provided by Exterran Holdings were $3.6
million, $2.7 million and $8.4 million for the three months ended
December 31, 2014, September 30, 2014 and December 31, 2013,
respectively, and $13.9 million and $25.2 million for the years
ended December 31, 2014 and 2013, respectively.
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, 2014 2014 2013 2014 2013
Reconciliation of GAAP to Non-GAAP Financial Information:
Net income $ 18,925 $ 18,103 $ 11,359 $ 61,719 $ 64,023
Depreciation and amortization 34,969 33,598 26,817 128,196 103,711
Long-lived asset impairment 4,775 3,558 2,101 12,810 5,350
Restructuring charges - 125 - 702 - Selling, general and
administrative 21,364 20,734 17,213 80,521 61,971 Interest expense
17,225 16,141 9,610 57,811 37,068 Other (income) expense, net (162
) (649 ) (1,165 ) (74 ) (9,481 ) Provision for (benefit from)
income taxes 889 (299 ) 229
1,313 1,506 Gross margin (1) 97,985
91,311 66,164 342,998 264,148 Cap on operating costs provided by
Exterran Holdings ("EXH") - - 3,938 2,536 12,382 Cap on selling,
general and administrative costs provided by EXH 3,610 2,685 4,412
11,314 12,798 Expensed acquisition costs (in Other (income)
expense, net) 61 866 246 2,471 821 Non-cash selling, general and
administrative costs 54 348 301 1,376 1,174 Less: Selling, general
and administrative (21,364 ) (20,734 ) (17,213 ) (80,521 ) (61,971
) Less: Other income (expense), net 162 649
1,165 74 9,481
EBITDA, as further adjusted (1) 80,508 75,125 59,013 280,248
238,833 Less: (Provision for) benefit from income taxes (889 ) 299
(229 ) (1,313 ) (1,506 ) Less: Gain on sale of property, plant and
equipment (in Other (income) expense, net) (209 ) (1,414 ) (1,342 )
(2,466 ) (10,140 ) Less: Cash interest expense (16,162 ) (14,962 )
(8,774 ) (53,525 ) (32,810 ) Less: Maintenance capital expenditures
(9,838 ) (13,366 ) (10,819 ) (45,316 )
(41,401 ) Distributable cash flow (2) $ 53,410 $
45,682 $ 37,849 $ 177,628 $ 152,976
Cash flows from operating activities $ 48,599 $
52,980 $ 30,031 $ 185,764 $ 158,286 (Provision for) benefit from
doubtful accounts (480 ) (145 ) (149 ) (1,060 ) 25 Cap on operating
costs provided by EXH - - 3,938 2,536 12,382 Cap on selling,
general and administrative costs provided by EXH 3,610 2,685 4,412
11,314 12,798 Expensed acquisition costs 61 866 246 2,471 821
Restructuring charges - 125 - 702 - Payments for settlement of
interest rate swaps that include financing elements (949 ) (950 )
(936 ) (3,793 ) (2,207 ) Maintenance capital expenditures (9,838 )
(13,366 ) (10,819 ) (45,316 ) (41,401 ) Change in assets and
liabilities 12,407 3,487 11,126
25,010 12,272 Distributable cash
flow (2) $ 53,410 $ 45,682 $ 37,849 $ 177,628
$ 152,976 Net income $ 18,925 $ 18,103 $
11,359 $ 61,719 $ 64,023 Items: Long-lived asset impairment 4,775
3,558 2,101 12,810 5,350 Restructuring charges - 125 - 702 -
Expensed acquisition costs 61 866
246 2,471 821 Net income,
excluding items $ 23,761 $ 22,652 $ 13,706 $
77,702 $ 70,194 Diluted earnings per limited
partner unit $ 0.27 $ 0.26 $ 0.19 $ 0.89 $ 1.18 Adjustment for
items per limited partner unit 0.09 0.08
0.04 0.29 0.12
Diluted earnings per limited partner unit, excluding items (1) $
0.36 $ 0.34 $ 0.23 $ 1.18 $ 1.30
(1) Management believes EBITDA, as further adjusted, diluted
earnings per limited partner unit, excluding items, 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 supplemental performance and liquidity measure. 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, 2014 2014 2013 2014 2013 Total available
horsepower (at period end) (1) 3,139 3,052 2,417
3,139 2,417 Total operating horsepower
(at period end) (1) 3,040 2,947 2,264 3,040
2,264 Average operating horsepower 2,985
2,877 2,242 2,710 2,155
Horsepower Utilization: Spot (at period end) 97 % 97 % 94 % 97 % 94
% Average 96 % 96 % 93 % 95 % 94 %
Total available U.S. contract operations
horsepower of Exterran Holdings and Exterran Partners (at period
end)
4,209 4,125 3,429 4,209 3,429
Total operating U.S. contract operations
horsepower of Exterran Holdings and Exterran Partners (at period
end)
3,700 3,588 2,884 3,700 2,884 (1) Includes compressor units
leased from Exterran Holdings with an aggregate horsepower of
approximately 79,000, 64,000 and 109,000 at December 31, 2014,
September 30, 2014 and December 31, 2013, respectively. Excludes
compressor units leased to Exterran Holdings with an aggregate
horsepower of approximately 100, 1,000 and 8,000 at December 31,
2014, September 30, 2014 and December 31, 2013, respectively.
Exterran Partners, L.P.Media:Susan Moore,
281-836-7398Investors:David Oatman, 281-836-7035David Miller,
281-836-7895
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