NGL Energy Partners LP (NYSE:NGL) today reported Adjusted EBITDA of $70.4 million for the three months ended September 30, 2014 (exclusive of $3.2 million of advisory and legal costs related to acquisitions and $5.0 million of severance/retention costs related to the Gavilon and TransMontaigne acquisitions), compared to Adjusted EBITDA of $42.1 million during the three months ended September 30, 2013 (exclusive of $0.8 million of costs related to acquisitions). NGL reported a net loss of $15.9 million for the three months ended September 30, 2014, compared to net loss of $0.9 million for the three months ended September 30, 2013. Net loss per limited partner common unit for the three months ended September 30, 2014 was $(0.34), compared to net loss per limited partner common unit of $(0.05) for the three months ended September 30, 2013.
For the six months ended September 30, 2014, Adjusted EBITDA of $113.5 million (exclusive of $4.3 million of advisory and legal costs related to acquisitions and $7.7 million of severance/retention costs related to the Gavilon and TransMontaigne acquisitions), compared to Adjusted EBITDA of $69.5 million during the six months ended September 30, 2013 (exclusive of $1.4 million of costs related to acquisitions). NGL reported a net loss of $55.8 million for the six months ended September 30, 2014, compared to a net loss of $18.4 million for the six months ended September 30, 2013. Net loss per limited partner common unit for the six months ended September 30, 2014 was $(0.93), compared to a net loss per limited partner common unit of $(0.37) for the six months ended September 30, 2013.
NGL’s recent accomplishments include the following:
- Formation of Grand Mesa Pipeline, LLC (“Grand Mesa”), a joint venture for which NGL has a 50% ownership interest. Grand Mesa is building a crude oil pipeline originating in Weld County, Colorado, and terminating at NGL’s crude oil storage terminal in Cushing, Oklahoma. An open season was successfully completed and right-of-way is currently being acquired. NGL expects this project to significantly increase its fee-based cash flows upon completion.
- NGL announced plans to build a crude oil transloading facility, backed by executed producer commitments, capable of handling unit trains west of Albuquerque, New Mexico in the San Juan Basin. The terminal will provide producers with new options for reaching multiple domestic markets via an interconnect with the BNSF Railway Company transcontinental mainline.
- The acquisition of TransMontaigne Inc. in July 2014. As part of the acquisition, NGL acquired line space on Plantation and Colonial Pipelines, refined products purchase and sale contracts, and the general partner interest and a 19.7% limited partner interest in TransMontaigne Partners L.P., a publicly-traded partnership that conducts refined products and crude oil transportation and terminaling operations.
In addition, NGL reaffirms its Adjusted EBITDA guidance of $425 million for fiscal year 2015 and approximately 18% distribution growth for calendar year 2014 with a 10% distribution growth thereafter.
A conference call to discuss NGL's results of operations is scheduled for 3:00pm Eastern Time (2:00pm Central Time) on November 11, 2014. Analysts, investors, and other interested parties may access the conference call by dialing (866) 953-6857 and providing access code 40384476. An archived audio replay of the conference call will be available for 7 days beginning at 7:00pm Eastern Time (6:00pm Central Time) on November 11, 2014 and can be accessed by dialing (888) 286-8010 and providing access code 74723157.
NGL also announced that it has filed its quarterly report on Form 10-Q for its fiscal quarter ended September 30, 2014 with the Securities and Exchange Commission. NGL has posted a copy of the Form 10-Q on its website at www.nglenergypartners.com.
NGL defines EBITDA as net income (loss) attributable to parent equity, plus interest expense, income taxes, and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding the unrealized gain or loss on derivative contracts, the gain or loss on the disposal or impairment of assets, and share-based compensation expense. For purposes of NGL’s Adjusted EBITDA calculation, NGL draws a distinction between unrealized gains and losses on derivatives and realized 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 is settled, NGL reverses the previously-recorded unrealized gain or loss and records a realized gain or loss. The realized gain or loss is equal to the amount received or paid on the contract. NGL acquired Gavilon Energy in December 2013 and TransMontaigne in July 2014. NGL is still in the process of developing procedures to calculate realized and unrealized gains and losses for the Gavilon Energy and TransMontaigne operations in the same way NGL calculates them for its other operations. Accordingly, the net unrealized gains and losses in the Adjusted EBITDA table below exclude any unrealized gains and losses related to Gavilon Energy and TransMontaigne. For the three months and six months ended September 30, 2014, NGL excluded a lower-of-cost-or-market adjustment to crude oil inventory from the calculation of Adjusted EBITDA. A large portion of this adjustment was hedged through financial derivatives, and the related unrealized gain has also been excluded from the calculation of Adjusted EBITDA.
EBITDA and Adjusted EBITDA should not be considered an alternative 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 for evaluating its ability to make quarterly distributions to its unitholders and is presented solely as a supplemental measure. NGL believes that Adjusted EBITDA provides additional information for evaluating its financial performance without regard to its financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other entities. A reconciliation of Adjusted EBITDA to net income attributable to parent equity is shown below.
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 its expectations as reflected in the forward-looking statements are reasonable, NGL can give no assurance that such expectations 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.
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: water solutions, crude oil logistics, NGL logistics, refined products/renewables and retail propane. For further information visit the Partnership's website at www.nglenergypartners.com.
| NGL ENERGY PARTNERS LP | ||||||||
| Unaudited Condensed Consolidated Balance Sheets | ||||||||
| September 30, 2014 and March 31, 2014 | ||||||||
| (U.S. Dollars in Thousands, except unit amounts) | ||||||||
| September 30, | March 31, | |||||||
| 2014 | 2014 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 11,823 | $ | 10,440 | ||||
Accounts receivable - trade, net of allowance for doubtful accounts of $2,816 and $2,822, respectively | 1,433,117 | 900,904 | ||||||
| Accounts receivable - affiliates | 41,706 | 7,445 | ||||||
| Inventories | 941,589 | 310,160 | ||||||
| Prepaid expenses and other current assets | 156,818 | 80,350 | ||||||
| Total current assets | 2,585,053 | 1,309,299 | ||||||
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $153,057 and $109,564, respectively | 1,433,313 | 829,346 | ||||||
| GOODWILL | 1,170,490 | 1,107,006 | ||||||
INTANGIBLE ASSETS, net of accumulated amortization of $166,484 and $116,728, respectively | 838,088 | 714,956 | ||||||
| INVESTMENTS IN UNCONSOLIDATED ENTITIES | 482,644 | 189,821 | ||||||
| OTHER NONCURRENT ASSETS | 42,091 | 16,795 | ||||||
| Total assets | $ | 6,551,679 | $ | 4,167,223 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable - trade | $ | 1,345,024 | $ | 740,211 | ||||
| Accounts payable - affiliates | 85,307 | 76,846 | ||||||
| Accrued expenses and other payables | 218,482 | 141,690 | ||||||
| Advance payments received from customers | 106,105 | 29,965 | ||||||
| Current maturities of long-term debt | 5,062 | 7,080 | ||||||
| Total current liabilities | 1,759,980 | 995,792 | ||||||
| LONG-TERM DEBT, net of current maturities | 2,437,351 | 1,629,834 | ||||||
| OTHER NONCURRENT LIABILITIES | 39,518 | 9,744 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| EQUITY: | ||||||||
General partner, representing a 0.1% interest, 88,634 and 79,420 notional units at September 30, 2014 and March 31, 2014, respectively | (39,690 | ) | (45,287 | ) | ||||
| Limited partners, representing a 99.9% interest - | ||||||||
Common units, 88,545,764 and 73,421,309 units issued and outstanding at September 30, 2014 and March 31, 2014, respectively | 1,785,823 | 1,570,074 | ||||||
| Subordinated units, 5,919,346 units issued and outstanding at March 31, 2014 | - | 2,028 | ||||||
| Accumulated other comprehensive loss | (73 | ) | (236 | ) | ||||
| Noncontrolling interests | 568,770 | 5,274 | ||||||
| Total equity | 2,314,830 | 1,531,853 | ||||||
| Total liabilities and equity | $ | 6,551,679 | $ | 4,167,223 | ||||
| NGL ENERGY PARTNERS LP | ||||||||||||||||
| Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
| For the Three Months and Six Months Ended September 30, 2014 and 2013 | ||||||||||||||||
| (U.S. Dollars in Thousands, except unit and per unit amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| REVENUES: | ||||||||||||||||
| Crude oil logistics | $ | 2,111,143 | $ | 1,014,008 | $ | 4,040,426 | $ | 1,944,802 | ||||||||
| Water solutions | 52,719 | 34,190 | 100,033 | 54,703 | ||||||||||||
| Liquids | 539,753 | 484,874 | 1,014,910 | 845,833 | ||||||||||||
| Retail propane | 68,358 | 59,380 | 146,260 | 131,597 | ||||||||||||
| Refined products and renewables | 2,607,220 | - | 3,724,717 | - | ||||||||||||
| Other | 1,333 | 1,485 | 2,794 | 2,959 | ||||||||||||
| Total Revenues | 5,380,526 | 1,593,937 | 9,029,140 | 2,979,894 | ||||||||||||
| COST OF SALES: | ||||||||||||||||
| Crude oil logistics | 2,083,712 | 992,135 | 3,981,351 | 1,901,354 | ||||||||||||
| Water solutions | (9,439 | ) | 3,782 | 1,134 | 4,365 | |||||||||||
| Liquids | 514,064 | 459,394 | 976,080 | 809,645 | ||||||||||||
| Retail propane | 39,894 | 33,539 | 87,418 | 76,562 | ||||||||||||
| Refined products and renewables | 2,550,851 | - | 3,665,164 | - | ||||||||||||
| Other | 383 | - | 2,371 | - | ||||||||||||
| Total Cost of Sales | 5,179,465 | 1,488,850 | 8,713,518 | 2,791,926 | ||||||||||||
| OPERATING COSTS AND EXPENSES: | ||||||||||||||||
| Operating | 101,553 | 55,769 | 169,421 | 104,814 | ||||||||||||
| General and administrative | 41,639 | 14,312 | 69,512 | 32,766 | ||||||||||||
| Depreciation and amortization | 50,099 | 25,061 | 89,474 | 47,785 | ||||||||||||
| Operating Income (Loss) | 7,770 | 9,945 | (12,785 | ) | 2,603 | |||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Earnings of unconsolidated entities | 3,697 | - | 6,262 | - | ||||||||||||
| Interest expense | (28,651 | ) | (11,060 | ) | (49,145 | ) | (21,682 | ) | ||||||||
| Other, net | (617 | ) | 419 | (1,008 | ) | 469 | ||||||||||
| Loss Before Income Taxes | (17,801 | ) | (696 | ) | (56,676 | ) | (18,610 | ) | ||||||||
| INCOME TAX (PROVISION) BENEFIT | 1,922 | (236 | ) | 887 | 170 | |||||||||||
| Net Loss | (15,879 | ) | (932 | ) | (55,789 | ) | (18,440 | ) | ||||||||
| LESS: NET INCOME ALLOCATED TO GENERAL PARTNER | (11,056 | ) | (2,451 | ) | (20,437 | ) | (4,139 | ) | ||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (3,345 | ) | (9 | ) | (3,410 | ) | (134 | ) | ||||||||
| NET LOSS ALLOCATED TO LIMITED PARTNERS | $ | (30,280 | ) | $ | (3,392 | ) | $ | (79,636 | ) | $ | (22,713 | ) | ||||
| BASIC AND DILUTED LOSS PER COMMON UNIT | $ | (0.34 | ) | $ | (0.05 | ) | $ | (0.93 | ) | $ | (0.37 | ) | ||||
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING | 88,331,653 | 58,909,389 | 81,267,742 | 53,336,969 | ||||||||||||
ADJUSTED EBITDA RECONCILIATION
The following table reconciles net loss attributable to parent equity to EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures, for the periods indicated:
| Three Months Ended | Six Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net loss attributable to parent equity | $ | (19,224 | ) | $ | (941 | ) | $ | (59,199 | ) | $ | (18,574 | ) | ||||
| Income tax provision (benefit) | (1,933 | ) | 236 | (898 | ) | (170 | ) | |||||||||
| Interest expense | 27,929 | 11,060 | 48,446 | 21,682 | ||||||||||||
| Depreciation and amortization | 48,366 | 25,753 | 92,716 | 48,948 | ||||||||||||
| EBITDA | 55,138 | 36,108 | 81,065 | 51,886 | ||||||||||||
| Net unrealized (gains) losses on derivative contracts | (13,700 | ) | 167 | (8,690 | ) | 3,745 | ||||||||||
| Lower of cost or market adjustment | 2,837 | - | 2,837 | - | ||||||||||||
| Loss on disposal or impairment of assets | 4,150 | 1,790 | 4,608 | 2,163 | ||||||||||||
| Equity-based compensation expense | 13,745 | 3,217 | 21,659 | 10,292 | ||||||||||||
| Adjusted EBITDA | $ | 62,170 | $ | 41,282 | $ | 101,479 | $ | 68,086 | ||||||||
Contacts:
Atanas H. Atanasov, 918-481-1119
Executive
Vice President, Chief Financial Officer and Treasurer
atanas.atanasov@nglep.com
