Exterran Partners overview: Recent success and key trends (Part 3 of 6)
For 4Q13, Exterran Partners reported revenue of $119 million, compared to 3Q13 revenue of $116 million, and consensus revenue of $119 million. Gross margin was 56% in 4Q13, unchanged from 3Q13. EXLP’s 4Q13 adjusted EBITDA totaled $59 million, compared to 3Q13 EBITDA of $56 million, and consensus EBITDA of $56 million. Distributable cash flow for 4Q13 was $38 million, compared to 3Q13 DCF of $33 million. DCF coverage (DCF divided by cash distributions paid out) was 1.31x. 4Q13 quarterly distribution was $0.5325 per limited partner unit, up from $0.5275 per limited partner unit in 3Q13. 4Q13 capex totaled $53.2 million, including $42.4 million for growth capex and $10.8 million for maintenance capex. During 4Q13, EXLP increased its operating horsepower from 2,221,000 to 2,264,000.
For 2013 as a whole, Exterran Partners reported revenue of $466 million, compared to 2012 revenue of $388 million, and consensus revenue of $465 million. Gross margin was 57% in 2013, as compared to 53% in 2012. EXLP’s 2013 adjusted EBITDA totaled $238 million, compared to 2012 EBITDA of $180 million, and consensus EBITDA of $225 million. Distributable cash flow for 2013 was $153 million, compared to 2012 DCF of $118 million. DCF coverage (DCF divided by cash distributions paid out) was 1.36x. Total debt at December 31 increased by $38 million during the quarter to total $758 million. Debt comprised $263 million drawn on a $650 million credit facility, $150 million under a term loan, and $350 million of senior notes (excluding $5 million of unamortized discount). Leverage at year-end was 3.1x, compared to 3.0x at 3Q13, and 3.7x at YE2012.
Other important points
Management noted that through 2014, it expected to continue to invest in new natural gas compression equipment to “modernize and position [its] fleet for growth” and continue to make acquisitions including those from parent company Exterran Holdings (EXH).
EXLP stated that 2013 was marked by steady activity in certain shale plays, especially targeting oil and natural gas liquids. The strong activity in these plays has increased the overall amount of compression horsepower, though this has been somewhat offset by horsepower declines in more mature and dry gas plays.
EXLP’s 10-K notes that as a high level of activity targeting oil and natural gas liquids is expected, it expects to invest more growth capex in 2014 than in 2013. EXLP noted that it expects 2014 growth capex of $150 million to $175 million, and 2014 maintenance capex of $45 million to $50 million. For context, capex in 2013 totaled $168 million, including maintenance capex of $41 million.
During the 4Q13 earnings call, management also noted that after 2014, parent company Exterran Holdings (EXH) aims to stop making cost caps to EXLP due to improved performance. For more on cost caps, please read on to the next part of this series.
Exterran Partners represents a pure-play natural gas compression name that provides contract natural gas compression services and is the largest independent provider of compression in the U.S. EXLP has a special relationship with its general partner, Exterran Holdings (EXH). Several other midstream companies, such as Access Midstream (ACMP) and Regency Energy (RGP), perform natural gas compression among a suite of other services. Several other midstream companies, such as Access Midstream (ACMP) and Regency Energy (RGP), perform natural gas compression among a suite of other services. Exterran’s closest comp is USA Compression Partners (USAC), another pure-play natural gas compression company. These companies affect the Oppenheimer SteelPath MLP Funds Trust (AMLP).
Browse this series on Market Realist:
- Part 1 - MLP analysis: An investor’s guide to Exterran Partners (EXLP)
- Part 2 - An overview of natural gas compression companies like Exterran
- Part 4 - Why cost caps through its parent company help Exterran Partners
- Oil, Gas, & Consumable Fuels