HOUSTON--(BUSINESS WIRE)--Exterran Partners, L.P. (NASDAQ: EXLP) today reported financial results for the third quarter 2012.
EBITDA, as further adjusted (as defined below), was $46.2 million for the third quarter 2012, compared to $45.0 million for the second quarter 2012 and $38.6 million for the third quarter 2011. Distributable cash flow (as defined below) totaled $29.5 million for the third quarter 2012, compared to $27.3 million for the second quarter 2012 and $25.7 million for the third quarter 2011.
Revenue was $99.3 million for the third quarter 2012, compared to $97.2 million for the second quarter 2012 and $84.4 million for the third quarter 2011.
Net income was $10.4 million for the third quarter 2012, or $0.21 per diluted limited partner unit, compared to a net loss of $19.1 million, or $0.47 per diluted limited partner unit, for the second quarter 2012, and net income of $3.3 million, or $0.06 per diluted limited partner unit, for the third quarter 2011.
“Exterran Partners reported improved activity levels during the third quarter 2012 as operating horsepower increased by 33,000,” said Brad Childers, Chairman, President and Chief Executive Officer of Exterran Partners’ managing general partner. “Our growth strategies are enhanced by attractive investment opportunities in liquids rich and shale plays and encouraging long-term natural gas market trends in the United States.”
For the third quarter 2012, Exterran Partners’ quarterly cash distribution was $0.5075 per limited partner unit, or $2.03 per limited partner unit on an annualized basis. The third-quarter 2012 distribution was $0.005 per limited partner unit higher than the second-quarter 2012 distribution of $0.5025 per limited partner unit and $0.02 per limited partner unit higher than the third-quarter 2011 distribution of $0.4875 per limited partner unit.
Conference Call Details
Exterran Partners and Exterran Holdings will host a joint conference call regarding third-quarter results:
- Teleconference: Thursday, Nov. 1, 2012 at 11:00 a.m. Eastern Time, 10:00 a.m. Central Time. To access the call, United States and Canadian participants should dial 800-446-2782. International participants should dial +1-847-413-3235 at least 10 minutes before the scheduled start time. Please reference Exterran conference call number 33535569.
- Live Webcast: The webcast will be available in listen-only mode via the companies’ website: www.exterran.com.
- Webcast Replay: For those unable to participate, a replay will be available from 2:00 p.m. Eastern Time on Thursday, Nov. 1, 2012, until 2:00 p.m. Eastern Time on Thursday, Nov. 8, 2012. To listen to the replay, please dial 888-843-7419 in the United States and Canada, or +1-630-652-3042 internationally, and enter access code 33535569#.
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 and costs incurred to terminate interest rate swaps early) and maintenance capital expenditures, and excluding gains/losses on asset sales and other charges.
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 contained in the Omnibus Agreement, which amounts are treated as capital contributions from Exterran Holdings for accounting purposes.
About Exterran Partners
Exterran Partners, L.P. is a 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’ operational and financial 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, 2011 and those set forth from time to time in Exterran Partners’ filings with the Securities and Exchange Commission, which are currently 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.
(Tables Follow)
| EXTERRAN PARTNERS, L.P. | ||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (In thousands, except per unit amounts) | ||||||||||||
| Three Months Ended | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||
| 2012 | 2012 | 2011 | ||||||||||
| Revenue | $ | 99,324 | $ | 97,171 | $ | 84,437 | ||||||
| Costs and expenses: | ||||||||||||
| Cost of sales (excluding depreciation and amortization) | 48,652 | 45,446 | 43,355 | |||||||||
| Depreciation and amortization | 21,930 | 22,788 | 19,087 | |||||||||
| Long-lived asset impairment | - | 28,122 | 384 | |||||||||
| Selling, general and administrative | 11,762 | 13,450 | 10,594 | |||||||||
| Interest expense | 6,465 | 6,399 | 7,860 | |||||||||
| Other (income) expense, net | (137 | ) | (261 | ) | (338 | ) | ||||||
| Total costs and expenses | 88,672 | 115,944 | 80,942 | |||||||||
| Income (loss) before income taxes | 10,652 | (18,773 | ) | 3,495 | ||||||||
| Income tax expense | 272 | 277 | 242 | |||||||||
| Net income (loss) | $ | 10,380 | $ | (19,050 | ) | $ | 3,253 | |||||
| General partner interest in net income (loss) | $ | 1,343 | $ | 692 | $ | 837 | ||||||
| Limited partner interest in net income (loss) | $ | 9,037 | $ | (19,742 | ) | $ | 2,416 | |||||
| Weighted average limited partners' units outstanding: | ||||||||||||
| Basic | 42,264 | 42,264 | 37,261 | |||||||||
| Diluted | 42,280 | 42,264 | 37,278 | |||||||||
| Earnings (loss) per limited partner unit: | ||||||||||||
| Basic | $ | 0.21 | $ | (0.47 | ) | $ | 0.06 | |||||
| Diluted | $ | 0.21 | $ | (0.47 | ) | $ | 0.06 | |||||
| EXTERRAN PARTNERS, L.P. | ||||||||||||
| UNAUDITED SUPPLEMENTAL INFORMATION | ||||||||||||
| (In thousands, except per unit amounts and percentages) | ||||||||||||
| Three Months Ended | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||
| 2012 | 2012 | 2011 | ||||||||||
| Revenue | $ | 99,324 | $ | 97,171 | $ | 84,437 | ||||||
| Gross Margin, as adjusted (1) | $ | 56,513 | $ | 55,236 | $ | 47,275 | ||||||
| EBITDA, as further adjusted (1) | $ | 46,150 | $ | 44,997 | $ | 38,614 | ||||||
| % of Revenue | 46 | % | 46 | % | 46 | % | ||||||
| Capital Expenditures | $ | 40,243 | $ | 17,422 | $ | 9,324 | ||||||
| Less: Proceeds from Sale of Compression Equipment | (603 | ) | (568 | ) | (1,040 | ) | ||||||
| Net Capital Expenditures | $ | 39,640 | $ | 16,854 | $ | 8,284 | ||||||
| Gross Margin percentage, as adjusted | 57 | % | 57 | % | 56 | % | ||||||
| Distributable cash flow (2) | $ | 29,501 | $ | 27,342 | $ | 25,720 | ||||||
| Distributions Declared for the period per Limited Partner Unit | $ | 0.5075 | $ | 0.5025 | $ | 0.4875 | ||||||
| Distribution Declared to All Unitholders for the period, | ||||||||||||
| including Incentive Distributions | $ | 23,044 | $ | 22,762 | $ | 19,322 | ||||||
| Distributable Cash Flow Coverage | 1.28x | 1.20x | 1.33x | |||||||||
| September 30, | June 30, | September 30, | ||||||||||
| 2012 | 2012 | 2011 | ||||||||||
| Debt | $ | 664,500 | $ | 643,500 | $ | 544,000 | ||||||
| Total Partners' Capital | $ | 452,419 | $ | 460,770 | $ | 434,518 | ||||||
| Total Debt to Capitalization | 59 | % | 58 | % | 56 | % | ||||||
| (1) Management believes disclosure of EBITDA, as further adjusted, and Gross Margin, as adjusted, both non-GAAP measures, provides useful information to investors because these 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) Distributable cash flow, a non-GAAP measure, is a significant liquidity metric used by management 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 per unit amounts) | ||||||||||||
| Three Months Ended | ||||||||||||
| September 30, | June 30, | September 30, | ||||||||||
| 2012 | 2012 | 2011 | ||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Information: | ||||||||||||
| Net income (loss) | $ | 10,380 | $ | (19,050 | ) | $ | 3,253 | |||||
| Income tax expense | 272 | 277 | 242 | |||||||||
| Depreciation and amortization | 21,930 | 22,788 | 19,087 | |||||||||
| Long-lived asset impairment | - | 28,122 | 384 | |||||||||
| Cap on operating and selling, general and administrative | ||||||||||||
| costs provided by Exterran Holdings ("EXH") | 6,931 | 6,321 | 7,995 | |||||||||
| Non-cash selling, general and administrative costs | 172 | 140 | (207 | ) | ||||||||
| Interest expense | 6,465 | 6,399 | 7,860 | |||||||||
| EBITDA, as further adjusted (1) | 46,150 | 44,997 | 38,614 | |||||||||
| Cash selling, general and administrative costs | 11,590 | 13,310 | 10,801 | |||||||||
| Less: cap on selling, general and administrative costs provided by EXH | (1,090 | ) | (2,810 | ) | (1,802 | ) | ||||||
| Less: other (income) expense, net | (137 | ) | (261 | ) | (338 | ) | ||||||
| Gross Margin, as adjusted (1) | $ | 56,513 | $ | 55,236 | $ | 47,275 | ||||||
| Other income (expense), net | 137 | 261 | 338 | |||||||||
| Less: Gain on sale of compression equipment (in Other (income) expense, net) | (127 | ) | (244 | ) | (319 | ) | ||||||
| Less: Cash interest expense | (5,905 | ) | (5,718 | ) | (4,951 | ) | ||||||
| Less: Cash selling, general and administrative, as adjusted for | ||||||||||||
| cost caps provided by EXH | (10,500 | ) | (10,500 | ) | (8,999 | ) | ||||||
| Less: Income tax expense | (272 | ) | (277 | ) | (242 | ) | ||||||
| Less: Maintenance capital expenditures | (10,345 | ) | (11,416 | ) | (7,382 | ) | ||||||
| Distributable cash flow (2) | $ | 29,501 | $ | 27,342 | $ | 25,720 | ||||||
| Cash flows from operating activities | $ | 33,294 | $ | 25,309 | $ | 21,600 | ||||||
| (Provision for) benefit from doubtful accounts | 145 | (143 | ) | (239 | ) | |||||||
| Cap on operating and selling, general and administrative costs provided by EXH | 6,931 | 6,321 | 7,995 | |||||||||
| Maintenance capital expenditures | (10,345 | ) | (11,416 | ) | (7,382 | ) | ||||||
| Change in assets and liabilities | (524 | ) | 7,271 | 3,746 | ||||||||
| Distributable cash flow (2) | $ | 29,501 | $ | 27,342 | $ | 25,720 | ||||||
| Net income (loss) | $ | 10,380 | $ | (19,050 | ) | $ | 3,253 | |||||
| Long-lived asset impairment | - | 28,122 | 384 | |||||||||
| Net income, excluding charge | $ | 10,380 | $ | 9,072 | $ | 3,637 | ||||||
| Diluted earnings (loss) per limited partner unit | $ | 0.21 | $ | (0.47 | ) | $ | 0.06 | |||||
| Adjustment for charge per limited partner unit (3) | - | 0.65 | 0.01 | |||||||||
| Diluted earnings per limited partner unit, excluding charge (1) (3) | $ | 0.21 | $ | 0.18 | $ | 0.07 | ||||||
| (1) Management believes disclosure of EBITDA, as further adjusted, Diluted earnings (loss) per limited partner unit, excluding charge, and Gross Margin, as adjusted, non-GAAP measures, provides useful information to investors because these 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) Distributable cash flow, a non-GAAP measure, is a significant liquidity metric used by management 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) In calculating diluted earnings per limited partner unit, excluding charge, for the three months ended June 30, 2012, weighted average limited partners' units outstanding was adjusted to include 9,000 phantom units that were dilutive. |
| EXTERRAN PARTNERS, L.P. | |||||||||
| UNAUDITED SUPPLEMENTAL INFORMATION | |||||||||
| (In thousands, except percentages) | |||||||||
| Three Months Ended | |||||||||
| September 30, | June 30, | September 30, | |||||||
| 2012 | 2012 | 2011 | |||||||
| Total Available Horsepower (at period end) (1) (2) | 2,022 | 2,026 | 1,885 | ||||||
| Total Operating Horsepower (at period end) (1) | 1,941 | 1,908 | 1,703 | ||||||
| Average Operating Horsepower | 1,924 | 1,916 | 1,691 | ||||||
| Horsepower Utilization: | |||||||||
| Spot (at period end) (2) | 96 | % | 94 | % | 90 | % | |||
| Average | 95 | % | 91 | % | 89 | % | |||
| Combined U.S. Contract Operations Horsepower of Exterran Holdings | |||||||||
| and Exterran Partners covered by contracts converted to service | |||||||||
|
agreements (at period end) |
2,296 | 2,223 | 2,123 | ||||||
| Available Horsepower: | |||||||||
| Total Available U.S. Contract Operations Horsepower of Exterran Holdings | |||||||||
| and Exterran Partners (at period end) (2) (3) | 3,341 | 3,285 | 3,565 | ||||||
| % of U.S. Contract Operations Available Horsepower of Exterran | |||||||||
| Holdings and Exterran Partners covered by contracts converted | |||||||||
| to service agreements (at period end) | 69 | % | 68 | % | 60 | % | |||
| Operating Horsepower: | |||||||||
| Total Operating U.S. Contract Operations Horsepower of Exterran Holdings | |||||||||
| and Exterran Partners (at period end) | 2,849 | 2,811 | 2,784 | ||||||
| % of U.S. Contract Operations Operating Horsepower of Exterran | |||||||||
| Holdings and Exterran Partners covered by contracts converted | |||||||||
| to service agreements (at period end) | 81 | % | 79 | % | 76 | % | |||
| (1) Includes compressor units leased from Exterran Holdings with an aggregate horsepower of approximately 161,000, 158,000 and 252,000 at September 30, 2012, June 30, 2012 and September 30, 2011, respectively. Excludes compressor units leased to Exterran Holdings with an aggregate horsepower of approximately 9,000, 20,000 and 29,000 at September 30, 2012, June 30, 2012 and September 30, 2011, respectively. |
| (2) Amount for the period ended June 30, 2012 excludes approximately 67,000 horsepower of idle compressor units that were removed from the compressor fleet as a result of the June 2012 impairment review. |
| (3) Amount for the period ended June 30, 2012 excludes approximately 232,000 horsepower of Exterran Holdings' idle compressor units that were removed from the compressor fleet as a result of the June 2012 impairment review. |