February 9, 2018 - 8:53 AM EST
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NGL Energy Partners LP Announces Third Quarter Fiscal 2018 Financial Results

TULSA, Okla.

NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” or the “Partnership”) today reported net income for the quarter ended December 31, 2017, of $56.8 million, including the gain on the sale of our 50% interest in Glass Mountain Pipeline, LLC, which totaled $108.6 million, compared to net income of $1.3 million for the quarter ended December 31, 2016.

Highlights for the quarter include:

  • Adjusted EBITDA for the third quarter of Fiscal 2018 was $122.6 million, compared to $120.7 million for the third quarter of Fiscal 2017
  • Completion of the sale of the Partnership’s 50% interest in Glass Mountain Pipeline, LLC for total gross consideration of $300 million, the proceeds from which were used to pay down outstanding debt, including all of the Partnership’s outstanding Senior Secured Notes
  • Announcement of a definitive agreement to sell a portion of the Partnership’s Retail Propane segment for $200 million, which is expected to close by March 31, 2018, the proceeds from which will be used to further reduce indebtedness
  • Growth capital expenditures, including acquisitions and other investments, totaled approximately $53.9 million during the third quarter, the majority of which was related to investments in the Crude Oil Logistics, Water Solutions and Retail Propane segments
  • Fiscal 2018 Adjusted EBITDA target is updated to a range of $440 million to $450 million to reflect the announced asset sales, improved results in Water Solutions and under-performance in Refined Products and Renewables

“We continue to see improvements in our Crude Oil Logistics, Water and Propane businesses, evidenced by strong results from these businesses in the third quarter and tailwinds heading into our fourth quarter and beyond,” stated CEO Mike Krimbill. “We announced two significant asset sales with expected proceeds of over $500 million and a blended multiple of over 12 times EBITDA. We closed the Glass Mountain sale prior to December 31, 2017, and used those proceeds to reduce senior secured and unsecured debt, and we expect to further de-lever upon the closing of the Retail Propane transaction at the end of March. Our challenges in the Refined Products business are being addressed through changes in strategies, contracting and personnel. There are market factors that continue to impact that portion of our business, many of which are outside of our control; however, we will continue to actively manage this business to achieve the improved results expected by our stakeholders and our management team.”

Quarterly Results of Operations

The following table summarizes operating income (loss) and Adjusted EBITDA by operating segment for the periods indicated:

  Quarter Ended
December 31, 2017   December 31, 2016
Operating Income (Loss)   Adjusted EBITDA Operating Income (Loss)   Adjusted EBITDA
(in thousands)
Crude Oil Logistics $ 106,279 $ 30,320 $ (9,163 ) $ 16,606
Refined Products and Renewables (4,791 ) 9,194 8,209 29,807
Liquids 22,290 19,957 24,765 26,098
Retail Propane 23,972 35,122 21,772 32,414
Water Solutions (1,373 ) 34,886 (11,898 ) 16,988
Corporate and Other   (21,846 )   (6,831 )   (11,128 )   (1,165 )
Total $ 124,531   $ 122,648   $ 22,557   $ 120,748  
 

The tables included in this release reconcile operating income (loss) to Adjusted EBITDA, a non-GAAP financial measure, for each of our operating segments.

Crude Oil Logistics

The Partnership’s Crude Oil Logistics segment generated Adjusted EBITDA of $30.3 million during the quarter ended December 31, 2017, compared to $16.6 million during the quarter ended December 31, 2016. The Partnership’s Grand Mesa Pipeline contributed Adjusted EBITDA of approximately $43.2 million during the third quarter of Fiscal 2018 as physical volumes averaged approximately 100,000 barrels per day and financial volumes averaged approximately 106,000 barrels per day for the quarter. The Partnership’s Grand Mesa Pipeline contributed Adjusted EBITDA of approximately $16.6 million during the same quarter of last year. Volumes have continued to increase throughout the current year as production in the DJ Basin grows. The average remaining contract term on the pipeline is approximately eight years.

The remaining divisions of our Crude Oil Logistics segment continued to be impacted by competition and low margins in the majority of the basins across the United States. The Partnership continues to market crude volumes in these basins to support its various pipeline, terminal and transportation assets, at near break-even levels. Additionally, the Crude Oil Logistics segment bears the cost of certain minimum volume commitments on third-party crude oil pipelines in various basins which are currently not profitable.

Refined Products and Renewables

The Partnership’s Refined Products and Renewables segment generated Adjusted EBITDA of $9.2 million during the quarter ended December 31, 2017, compared to Adjusted EBITDA of $29.8 million during the quarter ended December 31, 2016.

Total product loss per gallon was $0.004 for the quarter ended December 31, 2017, compared to total product margin per gallon of $0.005 for the quarter ended December 31, 2016. The decrease in margin was primarily due to a reduction in gasoline values at our terminals relative to New York Harbor, low line space value on Colonial Pipeline, and backwardated gasoline and diesel forward curves. The average value of line space was approximately $0.006 per gallon for the three months ended December 31, 2017, compared to an average value of approximately $0.032 per gallon for the three months ended December 31, 2016.

Refined product barrels sold during the quarter ended December 31, 2017, totaled approximately 37.9 million barrels, an increase of approximately 2.5 million barrels compared to the same period in the prior year as a result of the purchase of line space on Colonial Pipeline when it is trading at a negative value. Renewable barrels sold during the quarter ended December 31, 2017, totaled approximately 1.4 million, a decrease of approximately 0.5 million barrels compared to the same period in the prior year.

Liquids

The Partnership’s Liquids segment generated Adjusted EBITDA of $20.0 million during the quarter ended December 31, 2017, compared to Adjusted EBITDA of $26.1 million during the quarter ended December 31, 2016. Total product margin per gallon was $0.047 for the quarter ended December 31, 2017, compared to $0.054 for the quarter ended December 31, 2016. Propane margins were impacted by increased fixed-price contract deliveries against rising inventory values, while our butane margins were impacted by higher commodity costs and storage costs due to the oversupplied markets. Propane volumes increased by approximately 12.4 million gallons, or 3.2%, during the quarter ended December 31, 2017, compared to the quarter ended December 31, 2016. Butane volumes increased by approximately 42.1 million gallons, or 28.2%, during the quarter ended December 31, 2017, compared to the quarter ended December 31, 2016. Other Liquids volumes increased by approximately 14.2 million gallons, or 15.7%, during the quarter ended December 31, 2017, compared to the same period in the prior year. The increase in overall volumes is primarily attributable to a new long-term marketing agreement as well as the acquisition of certain natural gas liquid and condensate terminals from Murphy Energy Corporation. Our Liquids segment continues to be impacted by unrecovered railcar fleet costs and excess storage capacity.

Retail Propane

The Partnership’s Retail Propane segment generated Adjusted EBITDA of $35.1 million during the quarter ended December 31, 2017, compared to $32.4 million during the quarter ended December 31, 2016. Propane sold during the quarter ended December 31, 2017, increased by approximately 5.5 million gallons, or 9.7%, compared to the quarter ended December 31, 2016, primarily due to acquisitions made during the current year and previous year. Distillates sold during the quarter ended December 31, 2017, increased by approximately 0.2 million gallons compared to the quarter ended December 31, 2016. Total product margin per gallon was $0.890 for the quarter ended December 31, 2017, compared to $0.906 for the quarter ended December 31, 2016.

On November 7, 2017, we entered into a definitive agreement to sell a portion of our Retail Propane segment to DCC LPG, a division of DCC plc, for $200 million. The transaction is expected to close by March 31, 2018. As of December 31, 2017, the assets and liabilities related to this portion of the Retail Propane segment have been classified as assets and liabilities held for sale. As this transaction does not represent a strategic shift that will have a major effect on our operations or financial results, operations related to this portion of our Retail Propane segment have not been classified as discontinued operations.

Water Solutions

The Partnership’s Water Solutions segment generated Adjusted EBITDA of $34.9 million during the quarter ended December 31, 2017, compared to $17.0 million during the quarter ended December 31, 2016. The Partnership processed approximately 789,000 barrels of wastewater per day during the quarter ended December 31, 2017, a 52.9% increase, compared to approximately 516,000 barrels of wastewater per day during the quarter ended December 31, 2016. Processed water volumes have increased throughout the year as the segment continued to benefit from the increased rig counts in the basins in which it operates, particularly in the Permian Basin. Additional water pipelines brought online in the current quarter and the previous quarter also contributed to increased revenues. Revenues from recovered hydrocarbons totaled $17.0 million for the quarter ended December 31, 2017, an increase of $10.6 million over the prior year period, related to an increase in the volume of water processed, an increase of oil percentage in water processed and increased crude oil prices.

Corporate and Other

Adjusted EBITDA for Corporate and Other was $(6.8) million during the quarter ended December 31, 2017, compared to $(1.2) million during the quarter ended December 31, 2016. Prior year results included the benefit of the reversal of certain accruals that were ultimately covered by insurance.

Capitalization and Liquidity

Total long-term debt outstanding, excluding working capital borrowings, was $1.907 billion at December 31, 2017, compared to $2.149 billion at March 31, 2017, a decrease of $241.5 million. Working capital borrowings totaled $1.015 billion at December 31, 2017, compared to $814.5 million at March 31, 2017, an increase of $200.0 million driven primarily by increases in accounts receivable, inventory prices and inventory volumes 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 leverage ratio. Total liquidity (cash plus available capacity on our revolving credit facility) was approximately $471.8 million as of December 31, 2017.

Third 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 Friday, February 9, 2018. Analysts, investors, and other interested parties may access the conference call by dialing (800) 291-4083 and providing access code 1861928. 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 February 9, 2018, which can be accessed by dialing (855) 859-2056 and providing access code 1861928.

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, gains and losses on early extinguishment of liabilities, revaluation of investments, equity-based compensation expense, acquisition expense, revaluation of liabilities and other. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to NGL’s Refined Products and Renewables segment, as discussed below. EBITDA and Adjusted EBITDA should not be considered alternatives to net income (loss), income (loss) 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 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 record 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. NGL includes 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, income tax expense, cash interest expense and other. 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
Unaudited Condensed Consolidated Balance Sheets
(in Thousands, except unit amounts)
 
December 31, 2017 March 31, 2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 28,469 $ 12,264
Accounts receivable-trade, net of allowance for doubtful accounts of $5,561 and $5,234, respectively 1,063,907 800,607
Accounts receivable-affiliates 3,517 6,711
Inventories 645,100 561,432
Prepaid expenses and other current assets 97,395 103,193
Assets held for sale   131,591      
Total current assets 1,969,979 1,484,207
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $420,174 and $375,594, respectively 1,708,683 1,790,273
GOODWILL 1,313,317 1,451,716
INTANGIBLE ASSETS, net of accumulated amortization of $455,532 and $414,605, respectively 1,064,955 1,163,956
INVESTMENTS IN UNCONSOLIDATED ENTITIES 16,369 187,423
LOAN RECEIVABLE-AFFILIATE 318 3,200
OTHER NONCURRENT ASSETS   242,765     239,604  
Total assets $ 6,316,386   $ 6,320,379  
 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade $ 866,768 $ 658,021
Accounts payable-affiliates 474 7,918
Accrued expenses and other payables 230,752 207,125
Advance payments received from customers 46,850 35,944
Current maturities of long-term debt 3,260 29,590
Liabilities held for sale   16,574      
Total current liabilities 1,164,678 938,598
LONG-TERM DEBT, net of debt issuance costs of $22,883 and $33,458, respectively, and current maturities 2,921,966 2,963,483
OTHER NONCURRENT LIABILITIES 168,281 184,534
 
CLASS A 10.75% CONVERTIBLE PREFERRED UNITS, 19,942,169 and 19,942,169 preferred units issued and outstanding, respectively 76,056 63,890
REDEEMABLE NONCONTROLLING INTEREST 4,011 3,072
 
EQUITY:
General partner, representing a 0.1% interest, 121,205 and 120,300 notional units, respectively (50,869 ) (50,529 )
Limited partners, representing a 99.9% interest, 121,083,664 and 120,179,407 common units issued and outstanding, respectively 1,823,740 2,192,413
Class B preferred limited partners, 8,400,000 and 0 preferred units issued and outstanding, respectively 202,731
Accumulated other comprehensive loss (1,478 ) (1,828 )
Noncontrolling interests   7,270     26,746  
Total equity   1,981,394     2,166,802  
Total liabilities and equity $ 6,316,386   $ 6,320,379  
 
       
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in Thousands, except unit and per unit amounts)
 
Three Months Ended December 31, Nine Months Ended December 31,
2017 2016 2017 2016
REVENUES:
Crude Oil Logistics $ 585,007 $ 385,906 $ 1,526,944 $ 1,161,742
Water Solutions 64,024 40,359 162,023 115,845
Liquids 709,044 470,275 1,379,981 909,584
Retail Propane 160,025 128,654 291,797 240,131
Refined Products and Renewables 2,944,874 2,381,283 8,806,717 6,746,168
Other   289     164     696     679  
Total Revenues 4,463,263 3,406,641 12,168,158 9,174,149
COST OF SALES:
Crude Oil Logistics 552,871 361,839 1,423,511 1,107,587
Water Solutions 10,192 477 13,019 3,871
Liquids 670,701 430,946 1,319,344 831,221
Retail Propane 87,487 60,508 148,443 106,019
Refined Products and Renewables 2,951,440 2,374,175 8,781,009 6,674,194
Other   117     77     311     300  
Total Cost of Sales 4,272,808 3,228,022 11,685,637 8,723,192
OPERATING COSTS AND EXPENSES:
Operating 84,846 76,981 237,285 225,408
General and administrative 29,218 18,280 77,689 88,077
Depreciation and amortization 63,340 60,767 192,427 160,276
(Gain) loss on disposal or impairment of assets, net (111,480 ) 34 (11,242 ) (203,433 )
Revaluation of liabilities           5,600      
Operating Income (Loss) 124,531 22,557 (19,238 ) 180,629
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities 3,426 1,279 7,270 1,726
Revaluation of investments (14,365 )
Interest expense (51,790 ) (41,436 ) (151,249 ) (105,316 )
(Loss) gain on early extinguishment of liabilities, net (21,141 ) (22,479 ) 30,890
Other income, net   2,107     20,007     6,113     25,860  
Income (Loss) Before Income Taxes 57,133 2,407 (179,583 ) 119,424
INCOME TAX EXPENSE   (364 )   (1,114 )   (934 )   (2,036 )
Net Income (Loss) 56,769 1,293 (180,517 ) 117,388
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (89 ) (317 ) (221 ) (6,091 )
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO REDEEMABLE NONCONTROLLING INTERESTS   (424 )       261      
NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP 56,256 976 (180,477 ) 111,297
LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS (16,219 ) (8,906 ) (42,001 ) (20,958 )
LESS: NET (INCOME) LOSS ALLOCATED TO GENERAL PARTNER (73 ) (22 ) 121 (180 )
LESS: REPURCHASE OF WARRANTS           (349 )    
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS $ 39,964   $ (7,952 ) $ (222,706 ) $ 90,159  
BASIC INCOME (LOSS) PER COMMON UNIT $ 0.33   $ (0.07 ) $ (1.84 ) $ 0.85  
DILUTED INCOME (LOSS) PER COMMON UNIT $ 0.32   $ (0.07 ) $ (1.84 ) $ 0.82  
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING   120,844,008     107,966,901     120,899,502     106,114,668  
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING   124,161,966     107,966,901     120,899,502     109,554,928  
 
       

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 December 31, Nine Months Ended December 31,
2017 2016 2017 2016
(in thousands)
Net income (loss) $ 56,769 $ 1,293 $ (180,517 ) $ 117,388
Less: Net income attributable to noncontrolling interests (89 ) (317 ) (221 ) (6,091 )
Less: Net (income) loss attributable to redeemable noncontrolling interests   (424 )       261      
Net income (loss) attributable to NGL Energy Partners LP 56,256 976 (180,477 ) 111,297
Interest expense 51,825 41,486 151,391 105,283
Income tax expense 364 1,114 934 2,036
Depreciation and amortization   67,025     64,644     204,514     171,746  
EBITDA 175,470 108,220 176,362 390,362
Net unrealized losses (gains) on derivatives 775 (3,957 ) 16,851 (737 )
Inventory valuation adjustment (1) 27,786 7,859 6,439 40,552
Lower of cost or market adjustments (3,907 ) 731 5,504 839
(Gain) loss on disposal or impairment of assets, net (111,479 ) 35 (11,241 ) (203,469 )
Loss (gain) on early extinguishment of liabilities, net 21,141 22,479 (30,890 )
Revaluation of investments 14,365
Equity-based compensation expense (2) 12,228 6,865 27,114 39,859
Acquisition expense (3) 186 378 132 1,539
Revaluation of liabilities 5,600
Other (4)   448     617     3,089     7,734  
Adjusted EBITDA 122,648 120,748 252,329 260,154
Less: Cash interest expense (5) 49,043 38,405 142,758 96,796
Less: Income tax expense 364 1,114 934 2,036
Less: Maintenance capital expenditures 12,156 5,205 26,677 17,901
Less: Other (6)   316     19     549     19  
Distributable Cash Flow $ 60,769   $ 76,005   $ 81,411   $ 143,402  
 
(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 unaudited condensed consolidated financial statements included in the Partnership’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2017. 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 unaudited condensed consolidated financial statements only include expenses associated with equity-based awards that have been formally granted.

 
(3) Amounts represent expenses we incurred related to legal and advisory costs associated with acquisitions, partially offset by reimbursement for certain legal costs incurred in prior periods.
 

(4) Amounts for the three months ended December 31, 2017 and 2016, and the nine months ended December 31, 2017, represent non-cash operating expenses related to our Grand Mesa Pipeline and accretion expense for asset retirement obligations. The amount for the nine months ended December 31, 2016, represents non-cash operating expenses related to our Grand Mesa Pipeline, adjustments related to noncontrolling interests and accretion expense for asset retirement obligations.

 
(5) Amount represents interest expense payable in cash for the period presented, excluding changes in the accrued interest balance.
 
(6) Amount represents cash paid to settle asset retirement obligations.
 
             

ADJUSTED EBITDA RECONCILIATION BY SEGMENT

 
Three Months Ended December 31, 2017
Crude Oil
Logistics
Water
Solutions
Liquids Retail
Propane

Refined
Products
and
Renewables

Corporate
and
Other

Consolidated
(in thousands)
Operating income (loss) $ 106,279 $ (1,373 ) $ 22,290 $ 23,972 $ (4,791 ) $ (21,846 ) $ 124,531
Depreciation and amortization 20,092 24,586 6,247 11,130 323 962 63,340
Amortization recorded to cost of sales 85 70 1,350 1,505
Net unrealized losses (gains) on derivatives 962 8,504 (8,550 ) (141 ) 775
Inventory valuation adjustment 27,786 27,786
Lower of cost or market adjustments 5,207 (9,114 ) (3,907 )
(Gain) loss on disposal or impairment of assets, net (107,574 ) 2,929 (214 ) 908 (7,529 ) (111,480 )
Equity-based compensation expense 12,228 12,228
Acquisition expense 186 186
Other income, net 5 190 93 29 151 1,639 2,107
Adjusted EBITDA attributable to unconsolidated entities 3,887 144 902 1,018 5,951
Adjusted EBITDA attributable to noncontrolling interest (185 ) (637 ) (822 )
Other   1,377     91     21     (1,041 )           448  
Adjusted EBITDA $ 30,320   $ 34,886   $ 19,957   $ 35,122   $ 9,194   $ (6,831 ) $ 122,648  
 
 
Three Months Ended December 31, 2016
Crude Oil
Logistics
Water
Solutions
Liquids

Retail
Propane

Refined
Products
and
Renewables

Corporate
and
Other

Consolidated
(in thousands)
Operating (loss) income $ (9,163 ) $ (11,898 ) $ 24,765 $ 21,772 $ 8,209 $ (11,128 ) $ 22,557
Depreciation and amortization 16,503 27,150 4,441 11,379 404 890 60,767
Amortization recorded to cost of sales 100 195 1,458 1,753
Net unrealized losses (gains) on derivatives 732 (1,304 ) (3,387 ) 2 (3,957 )
Inventory valuation adjustment 7,859 7,859
Lower of cost or market adjustments 731 731
Loss (gain) on disposal or impairment of assets, net 4,655 2,323 60 (62 ) (6,941 ) (1 ) 34
Equity-based compensation expense 6,865 6,865
Acquisition expense (2 ) 380 378
Other income, net 721 1,214 4 19 16,220 1,829 20,007
Adjusted EBITDA attributable to unconsolidated entities 2,577 54 (111 ) 1,867 4,387
Adjusted EBITDA attributable to noncontrolling interest (667 ) (583 ) (1,250 )
Other   481     116     20                 617  
Adjusted EBITDA $ 16,606   $ 16,988   $ 26,098   $ 32,414   $ 29,807   $ (1,165 ) $ 120,748  
 
             
Nine Months Ended December 31, 2017
Crude Oil
Logistics
Water
Solutions
Liquids Retail
Propane

Refined
Products
and
Renewables

Corporate
and
Other

Consolidated
(in thousands)
Operating income (loss) $ 111,832 $ (10,075 ) $ (104,589 ) $ 8,878 $ 30,747 $ (56,031 ) $ (19,238 )
Depreciation and amortization 61,885 73,847 18,718 34,205 971 2,801 192,427
Amortization recorded to cost of sales 254 211 4,131 4,596
Net unrealized losses on derivatives 2,473 11,526 2,763 89 16,851
Inventory valuation adjustment 6,439 6,439
Lower of cost or market adjustments 5,207 297 5,504
(Gain) loss on disposal or impairment of assets, net (111,290 ) 3,114 117,515 2,004 (22,585 ) (11,242 )
Equity-based compensation expense 27,114 27,114
Acquisition expense 132 132
Other income, net 99 210 100 280 486 4,938 6,113
Adjusted EBITDA attributable to unconsolidated entities 11,507 425 891 3,125 15,948
Adjusted EBITDA attributable to noncontrolling interest (619 ) (385 ) (1,004 )
Revaluation of liabilities 5,600 5,600
Other   3,790     276     64     (1,041 )           3,089  
Adjusted EBITDA $ 85,757   $ 84,304   $ 34,782   $ 44,921   $ 23,611   $ (21,046 ) $ 252,329  
 
 
Nine Months Ended December 31, 2016
Crude Oil
Logistics
Water
Solutions
Liquids Retail
Propane

Refined
Products
and
Renewables

Corporate
and
Other

Consolidated
(in thousands)
Operating (loss) income $ (28,827 ) $ 63,136 $ 33,092 $ 10,553 $ 169,365 $ (66,690 ) $ 180,629
Depreciation and amortization 34,496 76,713 13,315 31,771 1,237 2,744 160,276
Amortization recorded to cost of sales 284 585 4,229 5,098
Net unrealized losses (gains) on derivatives 951 (2,138 ) 239 211 (737 )
Inventory valuation adjustment 40,552 40,552
Lower of cost or market adjustments 839 839
Loss (gain) on disposal or impairment of assets, net 14,617 (91,958 ) 109 (96 ) (126,101 ) (4 ) (203,433 )
Equity-based compensation expense 39,859 39,859
Acquisition expense 1,539 1,539
Other (expense) income, net (589 ) 1,524 67 339 19,099 5,420 25,860
Adjusted EBITDA attributable to unconsolidated entities 7,651 (9 ) (388 ) 3,543 10,797
Adjusted EBITDA attributable to noncontrolling interest (2,298 ) (442 ) (2,740 )
Other   1,276     279     60                 1,615  
Adjusted EBITDA $ 29,859   $ 45,249   $ 47,467   $ 41,948   $ 112,763   $ (17,132 ) $ 260,154  
 
       
OPERATIONAL DATA
(Unaudited)
 
Three Months Ended Nine Months Ended
December 31, December 31,
2017 2016 2017 2016
(in thousands, except per day amounts)
Crude Oil Logistics:
Crude oil sold (barrels) 10,006 7,527 28,588 24,838
Crude oil transported on owned pipelines (barrels) 9,228 1,610 24,176 1,610
Crude oil storage capacity - owned and leased (barrels) (1) 6,362 6,765
Crude oil inventory (barrels) (1) 1,356 2,037
 
Water Solutions:
Wastewater processed (barrels per day)
Eagle Ford Basin 255,634 203,349 228,698 207,732
Permian Basin 334,556 208,495 280,158 182,165
DJ Basin 121,061 67,560 114,156 62,495
Other Basins 78,144 36,778 66,884 38,199
Total 789,395 516,182 689,896 490,591
Solids processed (barrels per day) 6,095 2,624 5,357 2,643
Skim oil sold (barrels per day) 3,623 1,597 2,923 1,714
 
Liquids:
Propane sold (gallons) 399,211 386,854 881,719 813,490
Butane sold (gallons) 191,504 149,403 408,440 347,858
Other products sold (gallons) 104,136 89,974 296,756 256,451
Liquids storage capacity - owned and leased (gallons) (1) 453,971 358,537
Propane inventory (gallons) (1) 130,940 135,582
Butane inventory (gallons) (1) 41,941 22,261
Other products inventory (gallons) (1) 9,616 6,887
 
Retail Propane:
Propane sold (gallons) 62,058 56,572 117,488 105,933
Distillates sold (gallons) 9,381 9,139 17,088 17,505
Propane inventory (gallons) (1) 6,760 10,708
Distillates inventory (gallons) (1) 2,618 2,457
 
Refined Products and Renewables:
Gasoline sold (barrels) 22,902 22,227 77,877 65,278
Diesel sold (barrels) 15,004 13,215 43,792 38,415
Ethanol sold (barrels) 900 1,125 2,892 3,190
Biodiesel sold (barrels) 477 733 1,672 1,948
Refined Products and Renewables storage capacity - leased (barrels) (1) 9,046 7,794
Gasoline inventory (barrels) (1) 3,007 2,627
Diesel inventory (barrels) (1) 1,605 2,738
Ethanol inventory (barrels) (1) 684 502
Biodiesel inventory (barrels) (1) 153 501
 

(1) Information is presented as of December 31, 2017, and December 31, 2016, respectively, and does not include the inventory for the portion of the Retail Propane segment that has been classified as held for sale as of December 31, 2017.

NGL Energy Partners LP
Trey Karlovich, 918-481-1119
Chief Financial Officer and Executive Vice President
[email protected]
or
Linda Bridges, 918-481-1119
Vice President - Finance and Treasurer
[email protected]


Source: Business Wire (February 9, 2018 - 8:53 AM EST)

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