NGL Energy Partners LP Announces Fourth Quarter and Fiscal 2017 Financial Results
-
Net income for the fourth quarter and Fiscal 2017 was $26.5 million
and $143.9 million, respectively, compared to a net loss of $207.0
million and $187.1 million, respectively, for the fourth quarter and
Fiscal 2016
-
Adjusted EBITDA for the fourth quarter of Fiscal 2017 was $121.0
million and $380.8 million for all of Fiscal 2017, compared to $154.0
million for the fourth quarter of Fiscal 2016 and $424.1 million for
Fiscal 2016
-
Distributable Cash Flow for the fourth quarter of Fiscal 2017 was
$84.0 million and totaled $234.8 million for the year
-
Growth capital expenditures and other investments totaled
approximately $84 million during the fourth quarter, the majority of
which was related to the acquisition of the natural gas liquid
terminals from Murphy Energy Corporation
-
Fiscal 2018 Adjusted EBITDA guidance of approximately $500 million
to $525 million and expected distribution coverage of approximately
1.3x
NGL Energy Partners LP (NYSE:NGL) (“NGL” or the “Partnership”) today
reported net income for the quarter ended March 31, 2017 of $26.5
million, compared to a net loss for the quarter ended March 31, 2016 of
$207.0 million. Adjusted EBITDA was $121.0 million for the quarter ended
March 31, 2017, a 21% year over year decrease when compared to Adjusted
EBITDA of $154.0 million for the quarter ended March 31, 2016.
Distributable Cash Flow was $84.0 million for the quarter ended
March 31, 2017, compared to $122.5 million for the quarter ended
March 31, 2016. Net income for the fiscal year ended March 31, 2017 was
$143.9 million with Adjusted EBITDA for the year of $380.8 million
compared to a net loss and Adjusted EBITDA of $187.1 million and $424.1
million, respectively, for the year ended March 31, 2016.
“Our fourth quarter results were adversely impacted by one of the
warmest winters in the United States for the past 100 years negatively
impacting both Retail Propane and Liquids as well as a decrease in
Refined Products' results due to lower than historical line space
values. While neither of these items change our core business
strategies, we did adjust our expectations for the upcoming fiscal year
for the refined products and propane businesses to account for the
potential effects of similar events occurring in the upcoming year,”
stated Mike Krimbill, CEO of the Partnership. “We had many positive
accomplishments during fiscal 2017, including the scheduled startup of
Grand Mesa Pipeline, continued expansion of the Retail Propane, Water
and Liquids businesses and a restructuring of our balance sheet. We look
forward to fiscal 2018 and the continued growth of our Partnership.”
Quarterly Results of Operations
The following table summarizes operating income (loss) by operating
segment for the three months ended March 31, 2017 and March 31, 2016 (in
thousands):
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2017
|
|
March 31, 2016
|
Crude Oil Logistics
|
|
$
|
11,352
|
|
|
$
|
(53,434
|
)
|
Refined Products and Renewables
|
|
|
53,181
|
|
|
|
167,473
|
|
Liquids
|
|
|
10,160
|
|
|
|
23,353
|
|
Retail Propane
|
|
|
38,702
|
|
|
|
32,111
|
|
Water Solutions
|
|
|
(18,549
|
)
|
|
|
(357,973
|
)
|
Corporate and Other
|
|
|
(20,392
|
)
|
|
|
(15,775
|
)
|
Total operating income (loss)
|
|
$
|
74,454
|
|
|
$
|
(204,245
|
)
|
|
|
|
|
|
|
|
|
|
The tables included in this release reconcile operating income (loss) to
Adjusted EBITDA for each of our operating segments.
Crude Oil Logistics
The Partnership’s Crude Oil Logistics segment generated Adjusted EBITDA
of $29.5 million during the quarter ended March 31, 2017, compared to
Adjusted EBITDA of $16.9 million during the quarter ended March 31,
2016. The Partnership’s Grand Mesa Pipeline project commenced commercial
operations on November 1, 2016 and contributed Adjusted EBITDA of
approximately $26.6 million during the fourth quarter. For fiscal 2018,
the Partnership anticipates Adjusted EBITDA related to this project to
be approximately $130 million based on current contracts and expected
walk-up volumes. The average contract term on the pipeline is
approximately nine years and all contracts are fee-based with volume
commitments, which step up in the second and third years of operations.
The Crude Oil Logistics segment continued to be impacted by increased
competition due to lower production in the majority of the basins across
the United States. The Partnership’s quarterly results were also
impacted by the flattening of the contango curve for crude oil during
the quarter.
Refined Products and Renewables
The Partnership’s Refined Products and Renewables segment generated
Adjusted EBITDA of $12.2 million during the quarter ended March 31,
2017, compared to Adjusted EBITDA of $52.3 million during the quarter
ended March 31, 2016. The results for the quarter ended March 31, 2017
were negatively impacted by decreased demand for diesel fuel, lower than
expected results for biodiesel and an extended decline in gasoline line
space values on the Colonial Pipeline.
Refined product barrels sold during the quarter ended March 31, 2017
totaled approximately 37.1 million barrels, and increased by
approximately 9.3 million barrels compared to the same period in the
prior year, as a result of the increase in pipeline capacity rights
purchased over the previous year and an expansion of our refined
products operations. Renewable barrels sold during the quarter ended
March 31, 2017 were approximately 1.9 million, compared to approximately
1.7 million during the quarter ended March 31, 2016.
Liquids
The Partnership’s Liquids segment generated Adjusted EBITDA of $16.2
million during the quarter ended March 31, 2017, compared to Adjusted
EBITDA of $37.9 million during the quarter ended March 31, 2016. The
significantly warmer than normal winter resulted in lower margin and
lower wholesale demand from retailers and our butane business continues
to be negatively impacted by lower margins, railcar costs and lower
storage utilization. Total product margin per gallon was $0.033 for the
quarter ended March 31, 2017, compared to $0.071 for the quarter ended
March 31, 2016. Propane volumes increased by approximately 29.2 million
gallons, or 6.9%, during the quarter ended March 31, 2017 when compared
to the quarter ended March 31, 2016; however, these volumes were lower
than budgeted based on weather-related decreases to demand. Butane
volumes decreased by approximately 2.0 million gallons, or 1.8%, during
the quarter ended March 31, 2017 when compared to the quarter ended
March 31, 2016. Other Liquids volumes increased by 3.7 million gallons,
or 4.4%, during the quarter ended March 31, 2017 when compared to the
same period in the prior year.
Retail Propane
The Partnership’s Retail Propane segment generated Adjusted EBITDA of
$48.9 million during the quarter ended March 31, 2017, compared to
Adjusted EBITDA of $40.8 million during the quarter ended March 31,
2016. Propane sold during the quarter ended March 31, 2017 increased by
approximately 9.4 million gallons, or 15%, when compared to the quarter
ended March 31, 2016, primarily due increased demand in the pacific
northwest and to acquisitions made during previous quarters. Distillates
sold during the quarter ended March 31, 2017 decreased by approximately
0.4 million gallons when compared to the quarter ended March 31, 2016.
Total product margin per gallon was $0.957 for the quarter ended
March 31, 2017, compared to $0.905 for the quarter ended March 31, 2016.
Water Solutions
The Partnership’s Water Solutions segment generated Adjusted EBITDA of
$18.1 million during the quarter ended March 31, 2017, compared to
Adjusted EBITDA of $11.6 million during the quarter ended March 31,
2016. The Partnership processed approximately 536,000 barrels of water
per day during the quarter ended March 31, 2017, compared to
approximately 479,000 barrels of water per day during the quarter ended
March 31, 2016. The segment continued to benefit from the increased rig
counts in the basins in which it operates, particularly in the Permian
and DJ Basins. Revenues from recovered hydrocarbons totaled $11.8
million for the quarter ended March 31, 2017, an increase of $5.7
million over the prior year period related to increased crude oil prices
and volumes.
Corporate and Other
Adjusted EBITDA for Corporate and Other was a loss of $3.9 million
during the quarter ended March 31, 2017, compared to a loss of $5.5
million during the quarter ended March 31, 2016. General and
administrative expenses for the quarter ended March 31, 2017 benefited
from lower compensation expense and a reduction in insurance costs.
Capitalization and Liquidity
In February 2017, the Partnership issued $500.0 million of 6.125% Senior
Notes due 2025 and received net proceeds from the issuance of $491.3
million, which were used to reduce the outstanding balance on its
revolving credit facility. Also in February 2017, the Partnership issued
10,120,000 common units and received net proceeds from the issuance of
$222.5 million, which were also used to reduce the outstanding balance
on its revolving credit facility. The Partnership amended and restated
its revolving credit facility during the quarter, which included
extending the maturity to October 2021. Total liquidity (cash plus
available capacity on the revolving credit facility) was approximately
$874 million as of March 31, 2017.
Total long-term debt outstanding, excluding working capital borrowings,
was $2,149.0 million at March 31, 2017 compared to $2,341.0 million at
December 31, 2016, a decrease of $192.0 million. Working capital
borrowings totaled $814.5 million at March 31, 2017 compared to $875.5
million at December 31, 2016, a decrease of $61.0 million driven
primarily by a reduction in inventories during the quarter. Working
capital borrowings, which are fully secured by the Partnership’s net
working capital, are subject to a borrowing base and are excluded from
the Partnership’s debt compliance ratios.
Fiscal Year 2018 Guidance
For fiscal 2018, the Partnership expects to generate Adjusted EBITDA of
approximately $500 million to $525 million, which includes Adjusted
EBITDA for Grand Mesa Pipeline of approximately $130 million.
Distributable Cash Flow is expected to be between $300 million and $325
million and would generate over $100 million, or about 1.3x, distribution
coverage at our current annualized distribution rate, including
distributions on the Class A Preferred Units. The Partnership currently
expects to spend approximately $150 million to $200 million on growth
capital expenditures during fiscal 2018.
Fourth Quarter Conference Call Information
A conference call to discuss NGL’s results of operations is scheduled
for 11:00 am Eastern Time (10:00 am Central Time) on Thursday, May 25,
2017. Analysts, investors, and other interested parties may access the
conference call by dialing (800) 291-4083 and providing access code
22563375. An archived audio replay of the conference call will be
available for 7 days beginning at 2:00 pm Eastern Time (1:00 pm Central
Time) on May 25, 2017, which can be accessed by dialing (855) 859-2056
and providing access code 22563375.
Non-GAAP Financial Measures
NGL defines EBITDA as net income (loss) attributable to NGL Energy
Partners LP, plus interest expense, income tax expense (benefit), and
depreciation and amortization expense. NGL defines Adjusted EBITDA as
EBITDA excluding net unrealized gains and losses on derivatives, lower
of cost or market adjustments, gains and losses on disposal or
impairment of assets, gain on early extinguishment of liabilities,
revaluation of investments, equity-based compensation expense,
acquisition expense and other. We also include in Adjusted EBITDA
certain inventory valuation adjustments related to our Refined Products
and Renewables segment, as discussed below. EBITDA and Adjusted EBITDA
should not be considered alternatives to net income, income before
income taxes, cash flows from operating activities, or any other measure
of financial performance calculated in accordance with GAAP, as those
items are used to measure operating performance, liquidity or the
ability to service debt obligations. NGL believes that EBITDA provides
additional information to investors for evaluating NGL’s ability to make
quarterly distributions to NGL’s unitholders, and it is presented solely
as a supplemental measure. NGL believes that Adjusted EBITDA provides
additional information to investors for evaluating NGL’s financial
performance without regard to NGL’s financing methods, capital structure
and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL
defines them, may not be comparable to EBITDA, Adjusted EBITDA, or
similarly titled measures used by other entities.
Other than for NGL’s Refined Products and Renewables segment, for
purposes of the Adjusted EBITDA calculation, NGL makes a distinction
between realized and unrealized gains and losses on derivatives. During
the period when a derivative contract is open, NGL records changes in
the fair value of the derivative as an unrealized gain or loss. When a
derivative contract matures or is settled, NGL reverses the previously
recorded unrealized gain or loss and records a realized gain or loss.
NGL does not draw such a distinction between realized and unrealized
gains and losses on derivatives of NGL’s Refined Products and Renewables
segment. The primary hedging strategy of NGL’s Refined Products and
Renewables segment is to hedge against the risk of declines in the value
of inventory over the course of the contract cycle, and many of the
hedges are six months to one year in duration at inception. The
“inventory valuation adjustment” row in the reconciliation table
reflects the difference between the market value of the inventory of
NGL’s Refined Products and Renewables segment at the balance sheet date
and its cost. We include this in Adjusted EBITDA because the unrealized
gains and losses associated with derivative contracts associated with
the inventory of this segment, which are intended primarily to hedge
inventory holding risk and are included in net income, also affect
Adjusted EBITDA.
Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance
capital expenditures, cash income taxes and cash interest expense.
Maintenance capital expenditures represent capital expenditures
necessary to maintain the Partnership’s operating capacity.
Distributable Cash Flow is a performance metric used by senior
management to compare cash flows generated by the Partnership (excluding
growth capital expenditures and prior to the establishment of any
retained cash reserves by the Board of Directors) to the cash
distributions expected to be paid to unitholders. Using this metric,
management can quickly compute the coverage ratio of estimated cash
flows to planned cash distributions. This financial measure also is
important to investors as an indicator of whether the Partnership is
generating cash flow at a level that can sustain, or support an increase
in, quarterly distribution rates. Actual distribution amounts are set by
the Board of Directors.
Forward Looking Statements
This press release includes “forward-looking statements.” All statements
other than statements of historical facts included or incorporated
herein may constitute forward-looking statements. Actual results could
vary significantly from those expressed or implied in such statements
and are subject to a number of risks and uncertainties. While NGL
believes such forward-looking statements are reasonable, NGL cannot
assure they will prove to be correct. The forward-looking statements
involve risks and uncertainties that affect operations, financial
performance, and other factors as discussed in filings with the
Securities and Exchange Commission. Other factors that could impact any
forward-looking statements are those risks described in NGL’s Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public
filings. You are urged to carefully review and consider the cautionary
statements and other disclosures made in those filings, specifically
those under the heading “Risk Factors.” NGL undertakes no obligation to
publicly update or revise any forward-looking statements except as
required by law.
NGL provides Adjusted EBITDA guidance that does not include certain
charges and costs, which in future periods are generally expected to be
similar to the kinds of charges and costs excluded from Adjusted EBITDA
in prior periods, such as income taxes, interest and other non-operating
items, depreciation and amortization, net unrealized gains and losses on
derivatives, lower of cost or market adjustments, gains and losses on
disposal or impairment of assets, equity-based compensation,
acquisition-related expense, revaluation of liabilities and items that
are unusual in nature or infrequently occurring. The exclusion of these
charges and costs in future periods will have a significant impact on
the Partnership’s Adjusted EBITDA, and the Partnership is not able to
provide a reconciliation of its Adjusted EBITDA guidance to net income
(loss) without unreasonable efforts due to the uncertainty and
variability of the nature and amount of these future charges and costs
and the Partnership believes that such reconciliation, if possible,
would imply a degree of precision that would be potentially confusing or
misleading to investors.
About NGL Energy Partners LP
NGL Energy Partners LP is a Delaware limited partnership. NGL owns and
operates a vertically integrated energy business with five primary
businesses: Crude Oil Logistics, Water Solutions, Liquids, Retail
Propane and Refined Products and Renewables. NGL completed its initial
public offering in May 2011. For further information, visit the
Partnership’s website at www.nglenergypartners.com.
|
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Consolidated Balance Sheets
(in Thousands, except unit amounts)
(Unaudited)
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
12,264
|
|
|
$
|
28,927
|
|
Accounts receivable-trade, net of allowance for doubtful accounts of
$5,234 and $5,578, respectively
|
|
|
800,607
|
|
|
|
765,290
|
|
Accounts receivable-affiliates
|
|
|
6,711
|
|
|
|
20,008
|
|
Inventories
|
|
|
561,432
|
|
|
|
613,993
|
|
Prepaid expenses and other current assets
|
|
|
103,193
|
|
|
|
134,485
|
|
Total current assets
|
|
|
1,484,207
|
|
|
|
1,562,703
|
|
|
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of
$375,594 and $348,136, respectively
|
|
|
1,790,273
|
|
|
|
1,746,925
|
|
GOODWILL
|
|
|
1,451,716
|
|
|
|
1,462,116
|
|
INTANGIBLE ASSETS, net of accumulated amortization of $414,605 and
$388,517, respectively
|
|
|
1,163,956
|
|
|
|
1,164,749
|
|
INVESTMENTS IN UNCONSOLIDATED ENTITIES
|
|
|
187,423
|
|
|
|
187,514
|
|
LOAN RECEIVABLE-AFFILIATE
|
|
|
3,200
|
|
|
|
2,700
|
|
OTHER NONCURRENT ASSETS
|
|
|
239,604
|
|
|
|
251,369
|
|
Total assets
|
|
$
|
6,320,379
|
|
|
$
|
6,378,076
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
Accounts payable-trade
|
|
$
|
658,021
|
|
|
$
|
650,886
|
|
Accounts payable-affiliates
|
|
|
7,918
|
|
|
|
22,917
|
|
Accrued expenses and other payables
|
|
|
207,125
|
|
|
|
196,033
|
|
Advance payments received from customers
|
|
|
35,944
|
|
|
|
63,509
|
|
Current maturities of long-term debt
|
|
|
29,590
|
|
|
|
33,501
|
|
Total current liabilities
|
|
|
938,598
|
|
|
|
966,846
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT, net of debt issuance costs of $33,458 and $24,574,
respectively, and current maturities
|
|
|
2,963,483
|
|
|
|
3,216,505
|
|
OTHER NONCURRENT LIABILITIES
|
|
|
184,534
|
|
|
|
186,280
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
CLASS A 10.75% CONVERTIBLE PREFERRED UNITS, 19,942,169 and
19,942,169 preferred units issued and outstanding, respectively
|
|
|
63,890
|
|
|
|
61,170
|
|
REDEEMABLE NONCONTROLLING INTEREST
|
|
|
3,072
|
|
|
|
—
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
General partner, representing a 0.1% interest, 120,300 and 109,201
notional units, respectively
|
|
|
(50,529
|
)
|
|
|
(50,785
|
)
|
Limited partners, representing a 99.9% interest, 120,179,407 and
109,091,710 common units issued and outstanding, respectively
|
|
|
2,192,413
|
|
|
|
1,969,113
|
|
Accumulated other comprehensive loss
|
|
|
(1,828
|
)
|
|
|
(97
|
)
|
Noncontrolling interests
|
|
|
26,746
|
|
|
|
29,044
|
|
Total equity
|
|
|
2,166,802
|
|
|
|
1,947,275
|
|
Total liabilities and equity
|
|
$
|
6,320,379
|
|
|
$
|
6,378,076
|
|
|
|
|
|
|
|
|
|
|
|
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Consolidated Statements of Operations
(in Thousands, except unit and per unit amounts)
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
Crude Oil Logistics
|
|
$
|
505,142
|
|
|
$
|
362,292
|
|
|
$
|
1,666,884
|
|
|
$
|
3,217,079
|
|
Water Solutions
|
|
|
43,756
|
|
|
|
37,776
|
|
|
|
159,601
|
|
|
|
185,001
|
|
Liquids
|
|
|
529,504
|
|
|
|
332,975
|
|
|
|
1,439,088
|
|
|
|
1,194,479
|
|
Retail Propane
|
|
|
172,978
|
|
|
|
135,179
|
|
|
|
413,109
|
|
|
|
352,977
|
|
Refined Products and Renewables
|
|
|
2,596,534
|
|
|
|
1,456,756
|
|
|
|
9,342,702
|
|
|
|
6,792,112
|
|
Other
|
|
|
165
|
|
|
|
462
|
|
|
|
844
|
|
|
|
462
|
|
Total Revenues
|
|
|
3,848,079
|
|
|
|
2,325,440
|
|
|
|
13,022,228
|
|
|
|
11,742,110
|
|
COST OF SALES:
|
|
|
|
|
|
|
|
|
Crude Oil Logistics
|
|
|
464,428
|
|
|
|
341,477
|
|
|
|
1,572,015
|
|
|
|
3,111,717
|
|
Water Solutions
|
|
|
197
|
|
|
|
752
|
|
|
|
4,068
|
|
|
|
(7,336
|
)
|
Liquids
|
|
|
502,895
|
|
|
|
282,961
|
|
|
|
1,334,116
|
|
|
|
1,037,118
|
|
Retail Propane
|
|
|
85,570
|
|
|
|
60,340
|
|
|
|
191,589
|
|
|
|
156,757
|
|
Refined Products and Renewables
|
|
|
2,545,527
|
|
|
|
1,391,448
|
|
|
|
9,219,721
|
|
|
|
6,540,599
|
|
Other
|
|
|
100
|
|
|
|
182
|
|
|
|
400
|
|
|
|
182
|
|
Total Cost of Sales
|
|
|
3,598,717
|
|
|
|
2,077,160
|
|
|
|
12,321,909
|
|
|
|
10,839,037
|
|
OPERATING COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
Operating
|
|
|
82,517
|
|
|
|
93,177
|
|
|
|
307,925
|
|
|
|
401,118
|
|
General and administrative
|
|
|
28,489
|
|
|
|
24,727
|
|
|
|
116,566
|
|
|
|
139,541
|
|
Depreciation and amortization
|
|
|
62,929
|
|
|
|
53,152
|
|
|
|
223,205
|
|
|
|
228,924
|
|
Loss (gain) on disposal or impairment of assets, net
|
|
|
(5,744
|
)
|
|
|
317,726
|
|
|
|
(209,177
|
)
|
|
|
320,766
|
|
Revaluation of liabilities
|
|
|
6,717
|
|
|
|
(36,257
|
)
|
|
|
6,717
|
|
|
|
(82,673
|
)
|
Operating Income (Loss)
|
|
|
74,454
|
|
|
|
(204,245
|
)
|
|
|
255,083
|
|
|
|
(104,603
|
)
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
|
1,358
|
|
|
|
2,113
|
|
|
|
3,084
|
|
|
|
16,121
|
|
Revaluation of investments
|
|
|
—
|
|
|
|
—
|
|
|
|
(14,365
|
)
|
|
|
—
|
|
Interest expense
|
|
|
(45,162
|
)
|
|
|
(34,540
|
)
|
|
|
(150,478
|
)
|
|
|
(133,089
|
)
|
Gain (loss) on early extinguishment of liabilities, net
|
|
|
(6,163
|
)
|
|
|
28,532
|
|
|
|
24,727
|
|
|
|
28,532
|
|
Other income, net
|
|
|
1,902
|
|
|
|
2,634
|
|
|
|
27,762
|
|
|
|
5,575
|
|
Income (Loss) Before Income Taxes
|
|
|
26,389
|
|
|
|
(205,506
|
)
|
|
|
145,813
|
|
|
|
(187,464
|
)
|
INCOME TAX BENEFIT (EXPENSE)
|
|
|
97
|
|
|
|
(1,479
|
)
|
|
|
(1,939
|
)
|
|
|
367
|
|
Net Income (Loss)
|
|
|
26,486
|
|
|
|
(206,985
|
)
|
|
|
143,874
|
|
|
|
(187,097
|
)
|
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
|
|
(741
|
)
|
|
|
2,853
|
|
|
|
(6,832
|
)
|
|
|
(11,832
|
)
|
NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP
|
|
|
25,745
|
|
|
|
(204,132
|
)
|
|
|
137,042
|
|
|
|
(198,929
|
)
|
LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS
|
|
|
(9,184
|
)
|
|
|
—
|
|
|
|
(30,142
|
)
|
|
|
—
|
|
LESS: NET (INCOME) LOSS ALLOCATED TO GENERAL PARTNER
|
|
|
(52
|
)
|
|
|
178
|
|
|
|
(232
|
)
|
|
|
(47,620
|
)
|
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS
|
|
$
|
16,509
|
|
|
$
|
(203,954
|
)
|
|
$
|
106,668
|
|
|
$
|
(246,549
|
)
|
BASIC INCOME (LOSS) PER COMMON UNIT
|
|
$
|
0.14
|
|
|
$
|
(1.94
|
)
|
|
$
|
0.99
|
|
|
$
|
(2.35
|
)
|
DILUTED INCOME (LOSS) PER COMMON UNIT
|
|
$
|
0.14
|
|
|
$
|
(1.94
|
)
|
|
$
|
0.95
|
|
|
$
|
(2.35
|
)
|
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
|
|
|
114,131,764
|
|
|
|
104,930,260
|
|
|
|
108,091,486
|
|
|
|
104,838,886
|
|
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
|
|
|
120,198,802
|
|
|
|
104,930,260
|
|
|
|
111,850,621
|
|
|
|
104,838,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION
(Unaudited)
The following table reconciles NGL’s net income (loss) to NGL’s
EBITDA, Adjusted EBITDA and Distributable Cash Flow:
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(in thousands)
|
Net income (loss)
|
|
$
|
26,486
|
|
|
$
|
(206,985
|
)
|
|
$
|
143,874
|
|
|
$
|
(187,097
|
)
|
Less: Net (income) loss attributable to noncontrolling interests
|
|
|
(741
|
)
|
|
|
2,853
|
|
|
|
(6,832
|
)
|
|
|
(11,832
|
)
|
Net income (loss) attributable to NGL Energy Partners LP
|
|
|
25,745
|
|
|
|
(204,132
|
)
|
|
|
137,042
|
|
|
|
(198,929
|
)
|
Interest expense
|
|
|
45,221
|
|
|
|
33,606
|
|
|
|
150,504
|
|
|
|
126,514
|
|
Income tax (benefit) expense
|
|
|
(97
|
)
|
|
|
1,480
|
|
|
|
1,939
|
|
|
|
(420
|
)
|
Depreciation and amortization
|
|
|
66,837
|
|
|
|
55,165
|
|
|
|
238,583
|
|
|
|
217,893
|
|
EBITDA
|
|
|
137,706
|
|
|
|
(113,881
|
)
|
|
|
528,068
|
|
|
|
145,058
|
|
Net unrealized (gains) losses on derivatives
|
|
|
(2,601
|
)
|
|
|
5,749
|
|
|
|
(3,338
|
)
|
|
|
1,255
|
|
Inventory valuation adjustment (1)
|
|
|
(33,184
|
)
|
|
|
21,559
|
|
|
|
7,368
|
|
|
|
24,390
|
|
Lower of cost or market adjustments
|
|
|
(2,122
|
)
|
|
|
(13,257
|
)
|
|
|
(1,283
|
)
|
|
|
(5,932
|
)
|
(Gain) loss on disposal or impairment of assets, net
|
|
|
(5,744
|
)
|
|
|
317,727
|
|
|
|
(209,213
|
)
|
|
|
320,783
|
|
Loss (gain) on early extinguishment of liabilities, net
|
|
|
6,163
|
|
|
|
(28,532
|
)
|
|
|
(24,727
|
)
|
|
|
(28,532
|
)
|
Revaluation of investments
|
|
|
—
|
|
|
|
—
|
|
|
|
14,365
|
|
|
|
—
|
|
Equity-based compensation expense (2)
|
|
|
13,243
|
|
|
|
6,104
|
|
|
|
53,102
|
|
|
|
58,816
|
|
Acquisition expense (3)
|
|
|
232
|
|
|
|
1,131
|
|
|
|
1,771
|
|
|
|
2,002
|
|
Other (4)
|
|
|
7,306
|
|
|
|
(42,559
|
)
|
|
|
14,687
|
|
|
|
(93,725
|
)
|
Adjusted EBITDA
|
|
|
120,999
|
|
|
|
154,041
|
|
|
|
380,800
|
|
|
|
424,115
|
|
Less: Cash interest expense
|
|
|
28,810
|
|
|
|
28,419
|
|
|
|
117,912
|
|
|
|
117,185
|
|
Less: Cash income taxes
|
|
|
37
|
|
|
|
522
|
|
|
|
2,022
|
|
|
|
2,300
|
|
Less: Maintenance capital expenditures (5)
|
|
|
8,172
|
|
|
|
2,629
|
|
|
|
26,073
|
|
|
|
30,422
|
|
Distributable Cash Flow
|
|
$
|
83,980
|
|
|
$
|
122,471
|
|
|
$
|
234,793
|
|
|
$
|
274,208
|
|
____________
|
|
|
|
|
|
|
|
|
(1) Amount reflects the difference between the market value of the
inventory of NGL’s Refined Products and Renewables segment at the
balance sheet date and its cost. See “Non-GAAP Financial Measures”
section above for a further discussion.
(2) Equity-based compensation expense in the table above may differ from
equity-based compensation expense reported in the footnotes to our
consolidated financial statements included in our Annual Report on
Form 10-K. Amounts reported in the table above include expense accruals
for bonuses expected to be paid in common units, whereas the amounts
reported in the footnotes to our consolidated financial statements only
include expenses associated with equity-based awards that have been
formally granted.
(3) During the quarters and years ended March 31, 2017 and 2016, we
incurred expenses related to legal and advisory costs associated with
acquisitions.
(4) The amount for the quarter ended March 31, 2017 represents non-cash
operating expenses related to our Grand Mesa Pipeline project. The
amount for the year ended March 31, 2017 represents non-cash operating
expenses related to our Grand Mesa Pipeline project and also includes
adjustments related to noncontrolling interests. Amounts for the quarter
and year ended March 31, 2016 represent the non-cash valuation
adjustment of contingent consideration liabilities, offset by the cash
payments, related to royalty agreements acquired as part of acquisitions
in our Water Solutions segment, and amounts attributable to
noncontrolling interests.
(5) Excludes TLP maintenance capital expenditures of $0.2 million and
$11.6 million during the quarter and year ended March 31, 2016,
respectively.
ADJUSTED EBITDA RECONCILIATION BY SEGMENT
|
|
Three Months Ended March 31, 2017
|
|
|
Crude Oil Logistics
|
|
Water Solutions
|
|
Liquids
|
|
Retail Propane
|
|
Refined Products and Renewables
|
|
Corporate and Other
|
|
Consolidated
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
11,352
|
|
|
$
|
(18,549
|
)
|
|
$
|
10,160
|
|
|
$
|
38,702
|
|
|
$
|
53,181
|
|
|
$
|
(20,392
|
)
|
|
$
|
74,454
|
|
Depreciation and amortization
|
|
|
19,648
|
|
|
|
25,045
|
|
|
|
5,848
|
|
|
|
11,195
|
|
|
|
325
|
|
|
|
868
|
|
|
|
62,929
|
|
Amortization recorded to cost of sales
|
|
|
100
|
|
|
|
—
|
|
|
|
196
|
|
|
|
—
|
|
|
|
1,434
|
|
|
|
—
|
|
|
|
1,730
|
|
Net unrealized (gains) losses on derivatives
|
|
|
(2,464
|
)
|
|
|
50
|
|
|
|
(23
|
)
|
|
|
(164
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,601
|
)
|
Inventory valuation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(33,184
|
)
|
|
|
—
|
|
|
|
(33,184
|
)
|
Lower of cost or market adjustments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,122
|
)
|
|
|
—
|
|
|
|
(2,122
|
)
|
(Gain) loss on disposal or impairment of assets, net
|
|
|
(3,913
|
)
|
|
|
6,398
|
|
|
|
(17
|
)
|
|
|
(191
|
)
|
|
|
(8,024
|
)
|
|
|
3
|
|
|
|
(5,744
|
)
|
Equity-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,243
|
|
|
|
13,243
|
|
Acquisition expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
232
|
|
|
|
232
|
|
Other income (expense), net
|
|
|
177
|
|
|
|
(785
|
)
|
|
|
6
|
|
|
|
165
|
|
|
|
164
|
|
|
|
2,175
|
|
|
|
1,902
|
|
Adjusted EBITDA attributable to unconsolidated entities
|
|
|
3,938
|
|
|
|
115
|
|
|
|
—
|
|
|
|
(39
|
)
|
|
|
432
|
|
|
|
—
|
|
|
|
4,446
|
|
Adjusted EBITDA attributable to noncontrolling interest
|
|
|
—
|
|
|
|
(868
|
)
|
|
|
—
|
|
|
|
(799
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,667
|
)
|
Other
|
|
|
664
|
|
|
|
6,717
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,381
|
|
Adjusted EBITDA
|
|
$
|
29,502
|
|
|
$
|
18,123
|
|
|
$
|
16,170
|
|
|
$
|
48,869
|
|
|
$
|
12,206
|
|
|
$
|
(3,871
|
)
|
|
$
|
120,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
|
|
Crude Oil Logistics
|
|
Water Solutions
|
|
Liquids
|
|
Retail Propane
|
|
Refined Products and Renewables
|
|
Corporate and Other
|
|
Consolidated
|
|
|
(in thousands)
|
Operating (loss) income
|
|
$
|
(53,434
|
)
|
|
$
|
(357,973
|
)
|
|
$
|
23,353
|
|
|
$
|
32,111
|
|
|
$
|
167,473
|
|
|
$
|
(15,775
|
)
|
|
$
|
(204,245
|
)
|
Depreciation and amortization
|
|
|
9,267
|
|
|
|
24,779
|
|
|
|
4,356
|
|
|
|
9,281
|
|
|
|
4,041
|
|
|
|
1,428
|
|
|
|
53,152
|
|
Amortization recorded to cost of sales
|
|
|
63
|
|
|
|
—
|
|
|
|
261
|
|
|
|
—
|
|
|
|
1,274
|
|
|
|
—
|
|
|
|
1,598
|
|
Net unrealized losses (gains) on derivatives
|
|
|
5,337
|
|
|
|
1,922
|
|
|
|
(1,845
|
)
|
|
|
335
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,749
|
|
Inventory valuation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,559
|
|
|
|
—
|
|
|
|
21,559
|
|
Lower of cost or market adjustments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13,257
|
)
|
|
|
—
|
|
|
|
(13,257
|
)
|
Loss (gain) on disposal or impairment of assets, net
|
|
|
52,837
|
|
|
|
380,759
|
|
|
|
11,785
|
|
|
|
(245
|
)
|
|
|
(127,410
|
)
|
|
|
—
|
|
|
|
317,726
|
|
Equity-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15
|
|
|
|
5,786
|
|
|
|
5,801
|
|
Acquisition expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,131
|
|
|
|
1,131
|
|
Other (expense) income, net
|
|
|
(293
|
)
|
|
|
792
|
|
|
|
2
|
|
|
|
177
|
|
|
|
(1
|
)
|
|
|
1,957
|
|
|
|
2,634
|
|
Adjusted EBITDA attributable to unconsolidated entities
|
|
|
3,080
|
|
|
|
(90
|
)
|
|
|
—
|
|
|
|
(38
|
)
|
|
|
3,977
|
|
|
|
—
|
|
|
|
6,929
|
|
Adjusted EBITDA attributable to noncontrolling interest
|
|
|
—
|
|
|
|
(867
|
)
|
|
|
—
|
|
|
|
(786
|
)
|
|
|
(5,328
|
)
|
|
|
—
|
|
|
|
(6,981
|
)
|
Other
|
|
|
—
|
|
|
|
(37,755
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(37,755
|
)
|
Adjusted EBITDA
|
|
$
|
16,857
|
|
|
$
|
11,567
|
|
|
$
|
37,912
|
|
|
$
|
40,835
|
|
|
$
|
52,343
|
|
|
$
|
(5,473
|
)
|
|
$
|
154,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONAL DATA
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(in thousands, except per day amounts)
|
Crude Oil Logistics:
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil sold (barrels)
|
|
9,374
|
|
|
11,300
|
|
|
34,212
|
|
|
67,211
|
Crude oil transported on owned pipelines (barrels)
|
|
4,755
|
|
|
—
|
|
|
6,365
|
|
|
—
|
Crude oil storage capacity - owned and leased (barrels) (1)
|
|
|
|
|
|
|
|
7,024
|
|
|
6,115
|
Crude oil inventory (barrels) (1)
|
|
|
|
|
|
|
|
2,844
|
|
|
2,123
|
|
|
|
|
|
|
|
|
|
|
|
|
Water Solutions:
|
|
|
|
|
|
|
|
|
|
|
|
Water processed (barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
Eagle Ford Basin
|
|
211,448
|
|
|
208,695
|
|
|
208,649
|
|
|
236,792
|
Permian Basin
|
|
192,456
|
|
|
147,950
|
|
|
184,702
|
|
|
179,413
|
DJ Basin
|
|
85,845
|
|
|
78,589
|
|
|
68,253
|
|
|
107,353
|
Other Basins
|
|
46,254
|
|
|
43,844
|
|
|
40,185
|
|
|
45,949
|
Total
|
|
536,003
|
|
|
479,078
|
|
|
501,789
|
|
|
569,507
|
Solids processed (barrels per day)
|
|
4,319
|
|
|
3,533
|
|
|
3,056
|
|
|
3,149
|
Skim oil sold (barrels per day)
|
|
2,827
|
|
|
2,557
|
|
|
1,989
|
|
|
2,935
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquids:
|
|
|
|
|
|
|
|
|
|
|
|
Propane sold (gallons)
|
|
453,586
|
|
|
424,402
|
|
|
1,267,076
|
|
|
1,244,529
|
Butane sold (gallons)
|
|
108,728
|
|
|
110,768
|
|
|
456,586
|
|
|
483,206
|
Other products sold (gallons)
|
|
86,914
|
|
|
83,245
|
|
|
343,365
|
|
|
360,716
|
Liquids storage capacity - leased and owned (gallons) (1)
|
|
|
|
|
|
|
|
358,537
|
|
|
292,110
|
Propane inventory (gallons) (1)
|
|
|
|
|
|
|
|
48,351
|
|
|
56,584
|
Butane inventory (gallons) (1)
|
|
|
|
|
|
|
|
9,438
|
|
|
14,629
|
Other products inventory (gallons) (1)
|
|
|
|
|
|
|
|
6,426
|
|
|
6,297
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Propane:
|
|
|
|
|
|
|
|
|
|
|
|
Propane sold (gallons)
|
|
71,666
|
|
|
62,300
|
|
|
177,599
|
|
|
152,238
|
Distillates sold (gallons)
|
|
12,496
|
|
|
12,929
|
|
|
30,001
|
|
|
30,674
|
Propane inventory (gallons) (1)
|
|
|
|
|
|
|
|
8,180
|
|
|
7,314
|
Distillates inventory (gallons) (1)
|
|
|
|
|
|
|
|
1,148
|
|
|
1,223
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined Products and Renewables:
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline sold (barrels)
|
|
25,727
|
|
|
16,114
|
|
|
91,004
|
|
|
58,650
|
Diesel sold (barrels)
|
|
11,402
|
|
|
11,665
|
|
|
49,817
|
|
|
40,338
|
Ethanol sold (barrels)
|
|
1,414
|
|
|
1,106
|
|
|
4,605
|
|
|
4,199
|
Biodiesel sold (barrels)
|
|
465
|
|
|
545
|
|
|
2,413
|
|
|
1,595
|
Refined Products and Renewables storage capacity - leased (barrels)
(1)
|
|
|
|
|
|
|
|
9,419
|
|
|
7,188
|
Gasoline inventory (barrels) (1)
|
|
|
|
|
|
|
|
2,993
|
|
|
1,602
|
Diesel inventory (barrels) (1)
|
|
|
|
|
|
|
|
1,464
|
|
|
2,059
|
Ethanol inventory (barrels) (1)
|
|
|
|
|
|
|
|
727
|
|
|
766
|
Biodiesel inventory (barrels) (1)
|
|
|
|
|
|
|
|
471
|
|
|
350
|
____________
|
|
|
|
|
|
|
|
|
|
|
|
(1) Information is presented as of March 31, 2017 or March 31, 2016 in
the year-to-date columns above.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170525005453/en/ Copyright Business Wire 2017
Source: Business Wire
(May 25, 2017 - 6:38 AM EDT)
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