NGL Energy Partners LP Announces Fourth Quarter and Full Year Fiscal 2022 Financial Results; Guidance for Fiscal 2023

NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today reported its fourth quarter and full year fiscal 2022 results. The Partnership reported a loss from continuing operations of $29.4 million for the quarter ended March 31, 2022 and $184.1 million for its full fiscal year 2022.

Highlights for the quarter and fiscal year ended March 31, 2022 include:

  • Produced water volumes processed of approximately 1.93 million barrels per day during the quarter ended March 31, 2022, growing 37.7% from the same period in the prior year and 4.7% versus the preceding fiscal quarter
  • Water Solutions Adjusted EBITDA1 of $342 million, an increase of $100.5 million, or 42%, year-over-year
  • Adjusted EBITDA1 from continuing operations for the fourth quarter of Fiscal 2022 of $157.4 million compared to $94.3 million for the fourth quarter of Fiscal 2021
  • Fiscal Year 2022 Adjusted EBITDA1 from continuing operations of $542.5 million compared to $448.3 million in the prior year
  • Announced a new long-term produced water transportation, recycling and disposal agreement with a leading investment grade independent producer. The new dedicated agreement spans an area of over 300,000 acres in New Mexico and Texas, bringing our total dedicated acreage portfolio in the Delaware Basin to over 660,000 acres.

“The Partnership had a strong finish to its Fiscal 2022 and continues to see positive momentum as we move into our 2023 fiscal year. Produced water volumes approximated 2.1 million barrels per day in April, 2.2 million barrels per day in May and are expected to exceed this level for the remainder of Fiscal 2023. We achieved our first $90 million Adjusted EBITDA1 quarter in Water Solutions segment and anticipate Adjusted EBITDA1 for the Water Solutions segment of over $400 million for the upcoming fiscal year, assuming current producer activity levels and commodity prices. This is an increase of $15 million from our previous guidance of $385 million. We have worked incredibly hard over the past few years to build the premier water solutions asset position in the best basin in the country and we are beginning to realize the benefit of those efforts,” stated Mike Krimbill, NGL’s CEO. “The Partnership expects total Adjusted EBITDA1 of at least $600 million and capital expenditures of approximately $100 million for Fiscal 2023. Assuming stable commodity prices, we expect the resulting free cash flow to total approximately $280 million, which we plan to use to repay our Senior Notes due 2023. We will update the market on our progress towards these goals as the year goes on,” Krimbill concluded.

____________________________

1 See the “Non-GAAP Financial Measures” section of this release for the definition of Adjusted EBITDA (as used herein) and a discussion of this non-GAAP financial measure.

Quarterly Results of Operations

The following table summarizes operating income (loss) and Adjusted EBITDA1 from continuing operations by reportable segment for the periods indicated:

 

 

Quarter Ended

 

 

March 31, 2022

 

March 31, 2021

 

 

Operating

Income (Loss)

 

Adjusted

EBITDA1

 

Operating

Income (Loss)

 

Adjusted

EBITDA1

 

 

(in thousands)

Water Solutions

 

$

34,645

 

 

$

90,279

 

 

$

(79,217

)

 

$

57,979

 

Crude Oil Logistics

 

 

7,092

 

 

 

54,459

 

 

 

6,303

 

 

 

22,176

 

Liquids Logistics

 

 

10,349

 

 

 

24,546

 

 

 

19,103

 

 

 

26,467

 

Corporate and Other

 

 

(13,637

)

 

 

(11,870

)

 

 

(16,166

)

 

 

(12,343

)

Total

 

$

38,449

 

 

$

157,414

 

 

$

(69,977

)

 

$

94,279

 

Water Solutions

Operating income for the Water Solutions segment increased $113.9 million for the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021. The Partnership processed approximately 1.93 million barrels of water per day during the quarter ended March 31, 2022, a 37.7% increase when compared to approximately 1.40 million barrels of water per day processed during the quarter ended March 31, 2021. This increase was due to higher production volumes (and associated produced water) primarily in the Delaware Basin driven by the recovery in crude oil prices from the prior year. The Partnership also sold approximately 146,000 barrels per day of produced and recycled water for use in our customers’ completion activities.

Revenues from recovered crude oil, including the impact from realized skim oil hedges, totaled $26.4 million for the quarter ended March 31, 2022, an increase of $14.3 million from the prior year period. This increase was due to increased skim oil barrels sold due to higher produced water volumes processed as well as higher realized crude oil prices received from the sale of skim oil barrels.

Operating expenses in the Water Solutions segment decreased to $0.28 per produced barrel processed compared to $0.29 per barrel in the comparative quarter last year primarily due to continued efforts to manage operating costs per barrel along with higher produced water volumes processed. Two of the Water Solutions segment’s largest variable expenses, utility and royalty expenses, were not (and are not expected to be) impacted by the rise in inflation due to negotiating long-term utility contracts with fixed rates and royalty contracts with no escalation clauses.

Crude Oil Logistics

Operating income for the fourth quarter of Fiscal 2022 increased slightly compared to the same quarter in Fiscal 2021. Our margins continued to benefit from high crude oil prices, which increase contracted rates with certain producers, and realized gains on the sale of inventory due to rapidly increasing crude oil prices. This was offset by our losses from derivatives which increased by $33 million for the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021, a portion of which is expected to be realized in Adjusted EBITDA1 during the quarter ending June 30, 2022.

During the three months ended March 31, 2022, physical volumes on the Grand Mesa Pipeline averaged approximately 74,000 barrels per day, compared to approximately 66,000 barrels per day for the three months ended March 31, 2021. This increase was due primarily to the new supply agreement with a term customer, which commenced in March 2021.

As a part of continued efforts to optimize the Partnership’s asset portfolio, we sold certain of our crude trucking assets during the quarter, which generated a $5.5 million gain on the sale of assets.

Liquids Logistics

Operating income for the Liquids Logistics segment decreased $8.8 million for the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021. This decrease is mainly related to lower product margins on propane due to reduced demand, increased competition and lower product allocations from certain suppliers, as well as lower service revenues due to the sale of Sawtooth and less throughput in certain of our terminals. The decrease was offset by higher product margins for butane and refined products as a result of tighter supply markets and volatility caused by the geopolitical unrest.

Propane volumes decreased by 87.8 million gallons, or 18.4%, compared to the quarter ended March 31, 2021, due to the warm winter weather in our core operating areas, increased competition and lower allocations of product from certain suppliers. Butane volumes decreased by 19.2 million gallons, or 10.7%, due to the tight supply market and an increase in demand for exports.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our asset-based revolving credit facility (“ABL Facility”)) was approximately $232.7 million as of March 31, 2022. On March 31, 2022, the Partnership reported $116.0 million in outstanding borrowings on its ABL Facility, compared to $4.0 million in outstanding borrowings at March 31, 2021. This increase was due to higher working capital requirements as a result of increased commodity prices, a portion of which was funded using free cash flow. On April 13, 2022, the ABL Facility was amended to increase, under the accordion feature, the commitments to $600 million with an agreement to lower the commitments back to $500 million on or before March 31, 2023.

As of March 31, 2022, the Partnership is in compliance with all of its debt covenants and has no significant current debt maturities before November 2023. The Partnership expects to generate approximately $280 million of excess cash flow in Fiscal 2023, which it plans to use to repay outstanding indebtedness and improve leverage.

Fourth Quarter Conference Call Information

A conference call to discuss NGL’s results of operations is scheduled for 4:00 pm Central Time on Monday, June 6, 2022. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/45661 or by dialing (888) 506-0062 and providing access code: 956840. An archived audio replay of the call will be available for 14 days, which can be accessed by dialing (877) 481-4010 and providing access code 45661.

NGL filed its Annual Report on Form 10-K for the year ended March 31, 2022 with the Securities and Exchange Commission after market on June 6, 2022. A copy of the Form 10-K can be found on the Partnership’s website at www.nglenergypartners.com. Unitholders may also request, free of charge, a hard copy of our Form 10-K and our complete audited financial statements.

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 net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities, certain legal settlements and other. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to TransMontaigne Product Services, LLC (“TPSL”), our refined products business in the mid-continent region of the United States (“Mid-Con”) and our gas blending business in the southeastern and eastern regions of the United States (“Gas Blending”), which are included in discontinued operations, and certain refined products businesses within NGL’s Liquids Logistics segment, as discussed below. EBITDA and Adjusted EBITDA should not be considered alternatives to net loss, loss from continuing operations 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 the Mid-Con, and Gas Blending businesses, which are included in discontinued operations, and certain businesses within NGL’s Liquids Logistics 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 the Mid-Con, and Gas Blending businesses, which are included in discontinued operations, and certain businesses within NGL’s Liquids Logistics segment. The primary hedging strategy of these businesses 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 cover extended periods of time. The “inventory valuation adjustment” row in the reconciliation table reflects the difference between the market value of the inventory of these businesses at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge. 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. In NGL’s Crude Oil Logistics segment, they purchase certain crude oil barrels using the West Texas Intermediate (“WTI”) calendar month average (“CMA”) price and sell the crude oil barrels using the WTI CMA price plus the Argus CMA Differential Roll Component (“CMA Differential Roll”) per NGL’s contracts. To eliminate the volatility of the CMA Differential Roll, NGL entered into derivative instrument positions in January 2021 to secure a margin of approximately $0.20 per barrel on 1.5 million barrels per month from May 2021 through December 2023. Due to the nature of these positions, the cash flow and earnings recognized on a GAAP basis will differ from period to period depending on the current crude oil price and future estimated crude oil price which are valued utilizing third-party market quoted prices. NGL is recognizing in Adjusted EBITDA the gains and losses from the derivative instrument positions entered into in January 2021 to properly align with the physical margin we are hedging each month through the term of this transaction. This representation aligns with management’s evaluation of the transaction.

Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance capital expenditures, income tax expense, cash interest expense, preferred unit distributions and other. Maintenance capital expenditures represent capital expenditures necessary to maintain the Partnership’s operating capacity. For the CMA Differential Roll transaction, as discussed above, we have included an adjustment to Distributable Cash Flow to reflect, in the period for which they relate, the actual cash flows for the positions that settled that are not being recognized in Adjusted EBITDA. 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 net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition 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, a Delaware limited partnership, is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process.

For further information, visit the Partnership’s website at www.nglenergypartners.com.

 

NGL ENERGY PARTNERS LP AND SUBSIDIARIES

Unaudited Consolidated Balance Sheets

(in Thousands, except unit amounts)

 

 

March 31,

 

2022

 

2021

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

3,822

 

 

$

4,829

 

Accounts receivable-trade, net of allowance for expected credit losses of $2,626 and $2,192, respectively

 

1,123,163

 

 

 

725,943

 

Accounts receivable-affiliates

 

8,591

 

 

 

9,435

 

Inventories

 

251,277

 

 

 

158,467

 

Prepaid expenses and other current assets

 

159,486

 

 

 

109,164

 

Total current assets

 

1,546,339

 

 

 

1,007,838

 

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $887,006 and $776,279, respectively

 

2,462,390

 

 

 

2,706,853

 

GOODWILL

 

744,439

 

 

 

744,439

 

INTANGIBLE ASSETS, net of accumulated amortization of $507,285 and $517,518, respectively

 

1,135,354

 

 

 

1,262,613

 

INVESTMENTS IN UNCONSOLIDATED ENTITIES

 

21,897

 

 

 

22,719

 

OPERATING LEASE RIGHT-OF-USE ASSETS

 

114,124

 

 

 

152,146

 

OTHER NONCURRENT ASSETS

 

45,802

 

 

 

50,733

 

Total assets

$

6,070,345

 

 

$

5,947,341

 

LIABILITIES AND EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable-trade

$

1,084,837

 

 

$

679,868

 

Accounts payable-affiliates

 

73

 

 

 

119

 

Accrued expenses and other payables

 

140,719

 

 

 

170,400

 

Advance payments received from customers

 

7,934

 

 

 

11,163

 

Current maturities of long-term debt

 

2,378

 

 

 

2,183

 

Operating lease obligations

 

41,261

 

 

 

47,070

 

Total current liabilities

 

1,277,202

 

 

 

910,803

 

LONG-TERM DEBT, net of debt issuance costs of $42,988 and $55,555, respectively, and current maturities

 

3,350,463

 

 

 

3,319,030

 

OPERATING LEASE OBLIGATIONS

 

72,784

 

 

 

103,637

 

OTHER NONCURRENT LIABILITIES

 

104,346

 

 

 

114,615

 

 

 

 

 

CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively

 

551,097

 

 

 

551,097

 

 

 

 

 

EQUITY:

 

 

 

General partner, representing a 0.1% interest, 130,827 and 129,724 notional units, respectively

 

(52,478

)

 

 

(52,189

)

Limited partners, representing a 99.9% interest, 130,695,970 and 129,593,939 common units issued and outstanding, respectively

 

401,486

 

 

 

582,784

 

Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively

 

305,468

 

 

 

305,468

 

Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively

 

42,891

 

 

 

42,891

 

Accumulated other comprehensive loss

 

(308

)

 

 

(266

)

Noncontrolling interests

 

17,394

 

 

 

69,471

 

Total equity

 

714,453

 

 

 

948,159

 

Total liabilities and equity

$

6,070,345

 

 

$

5,947,341

 

 

NGL ENERGY PARTNERS LP AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

(in Thousands, except unit and per unit amounts)

 

 

 

Three Months Ended March 31,

 

Year Ended March 31,

 

 

2022

 

2021

 

2022

 

2021

REVENUES:

 

 

 

 

 

 

 

 

Water Solutions

 

$

147,777

 

 

$

95,318

 

 

$

544,866

 

 

$

370,986

 

Crude Oil Logistics

 

 

789,839

 

 

 

493,467

 

 

 

2,505,496

 

 

 

1,721,636

 

Liquids Logistics

 

 

1,595,631

 

 

 

1,163,333

 

 

 

4,897,553

 

 

 

3,133,146

 

Corporate and Other

 

 

 

 

 

313

 

 

 

 

 

 

1,255

 

Total Revenues

 

 

2,533,247

 

 

 

1,752,431

 

 

 

7,947,915

 

 

 

5,227,023

 

COST OF SALES:

 

 

 

 

 

 

 

 

Water Solutions

 

 

12,189

 

 

 

1,063

 

 

 

33,980

 

 

 

9,622

 

Crude Oil Logistics

 

 

761,055

 

 

 

462,732

 

 

 

2,352,932

 

 

 

1,515,993

 

Liquids Logistics

 

 

1,565,361

 

 

 

1,108,758

 

 

 

4,752,400

 

 

 

2,966,391

 

Corporate and Other

 

 

 

 

 

453

 

 

 

 

 

 

1,816

 

Total Cost of Sales

 

 

2,338,605

 

 

 

1,573,006

 

 

 

7,139,312

 

 

 

4,493,822

 

OPERATING COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

Operating

 

 

77,925

 

 

 

72,094

 

 

 

285,535

 

 

 

254,562

 

General and administrative

 

 

17,397

 

 

 

19,791

 

 

 

63,546

 

 

 

70,468

 

Depreciation and amortization

 

 

66,575

 

 

 

67,572

 

 

 

288,720

 

 

 

317,227

 

Loss on disposal or impairment of assets, net

 

 

791

 

 

 

83,684

 

 

 

94,254

 

 

 

475,436

 

Revaluation of liabilities

 

 

(6,495

)

 

 

6,261

 

 

 

(6,495

)

 

 

6,261

 

Operating Income (Loss)

 

 

38,449

 

 

 

(69,977

)

 

 

83,043

 

 

 

(390,753

)

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

Equity in earnings of unconsolidated entities

 

 

635

 

 

 

804

 

 

 

1,400

 

 

 

1,938

 

Interest expense

 

 

(67,636

)

 

 

(60,651

)

 

 

(271,640

)

 

 

(198,799

)

Gain (loss) on early extinguishment of liabilities, net

 

 

682

 

 

 

(60,984

)

 

 

1,813

 

 

 

(16,692

)

Other income (expense), net

 

 

251

 

 

 

(39,563

)

 

 

2,254

 

 

 

(36,503

)

Loss From Continuing Operations Before Income Taxes

 

 

(27,619

)

 

 

(230,371

)

 

 

(183,130

)

 

 

(640,809

)

INCOME TAX (EXPENSE) BENEFIT

 

 

(1,791

)

 

 

1,154

 

 

 

(971

)

 

 

3,391

 

Loss From Continuing Operations

 

 

(29,410

)

 

 

(229,217

)

 

 

(184,101

)

 

 

(637,418

)

Loss From Discontinued Operations, net of Tax

 

 

 

 

 

(23

)

 

 

 

 

 

(1,769

)

Net Loss

 

 

(29,410

)

 

 

(229,240

)

 

 

(184,101

)

 

 

(639,187

)

LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

 

50

 

 

 

(447

)

 

 

(655

)

 

 

(632

)

NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP

 

$

(29,360

)

 

$

(229,687

)

 

$

(184,756

)

 

$

(639,819

)

NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS

 

$

(56,269

)

 

$

(253,180

)

 

$

(288,630

)

 

$

(730,683

)

NET LOSS FROM DISCONTINUED OPERATIONS ALLOCATED TO COMMON UNITHOLDERS

 

$

 

 

$

(23

)

 

$

 

 

$

(1,767

)

NET LOSS ALLOCATED TO COMMON UNITHOLDERS

 

$

(56,269

)

 

$

(253,203

)

 

$

(288,630

)

 

$

(732,450

)

BASIC LOSS PER COMMON UNIT

 

 

 

 

 

 

 

 

Loss From Continuing Operations

 

$

(0.43

)

 

$

(1.96

)

 

$

(2.22

)

 

$

(5.67

)

Loss From Discontinued Operations, net of Tax

 

$

 

 

$

 

 

$

 

 

$

(0.01

)

Net Loss

 

$

(0.43

)

 

$

(1.96

)

 

$

(2.22

)

 

$

(5.68

)

DILUTED LOSS PER COMMON UNIT

 

 

 

 

 

 

 

 

Loss From Continuing Operations

 

$

(0.43

)

 

$

(1.96

)

 

$

(2.22

)

 

$

(5.67

)

Loss From Discontinued Operations, net of Tax

 

$

 

 

$

 

 

$

 

 

$

(0.01

)

Net Loss

 

$

(0.43

)

 

$

(1.96

)

 

$

(2.22

)

 

$

(5.68

)

BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING

 

 

130,371,691

 

 

 

129,395,184

 

 

 

129,840,234

 

 

 

128,980,823

 

DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING

 

 

130,371,691

 

 

 

129,395,184

 

 

 

129,840,234

 

 

 

128,980,823

 

 

EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION

(Unaudited)

 

The following table reconciles NGL’s net loss to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow for the periods indicated:

 

 

 

Three Months Ended March 31,

 

Year Ended March 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

(in thousands)

Net loss

 

$

(29,410

)

 

$

(229,240

)

 

$

(184,101

)

 

$

(639,187

)

Less: Net loss (income) attributable to noncontrolling interests

 

 

50

 

 

 

(447

)

 

 

(655

)

 

 

(632

)

Net loss attributable to NGL Energy Partners LP

 

 

(29,360

)

 

 

(229,687

)

 

 

(184,756

)

 

 

(639,819

)

Interest expense

 

 

67,652

 

 

 

60,664

 

 

 

271,689

 

 

 

198,823

 

Income tax expense (benefit)

 

 

1,791

 

 

 

(1,153

)

 

 

971

 

 

 

(3,444

)

Depreciation and amortization

 

 

66,591

 

 

 

66,921

 

 

 

287,943

 

 

 

314,476

 

EBITDA

 

 

106,674

 

 

 

(103,255

)

 

 

375,847

 

 

 

(129,964

)

Net unrealized losses (gains) on derivatives

 

 

33,277

 

 

 

(291

)

 

 

(14,977

)

 

 

47,366

 

CMA Differential Roll net losses (gains) (1)

 

 

6,751

 

 

 

 

 

 

67,738

 

 

 

 

Inventory valuation adjustment (2)

 

 

6,497

 

 

 

(169

)

 

 

8,409

 

 

 

1,224

 

Lower of cost or net realizable value adjustments

 

 

8,226

 

 

 

3,111

 

 

 

10,862

 

 

 

(30,102

)

Loss on disposal or impairment of assets, net

 

 

791

 

 

 

83,677

 

 

 

94,059

 

 

 

476,601

 

(Gain) loss on early extinguishment of liabilities, net

 

 

(683

)

 

 

60,984

 

 

 

(1,851

)

 

 

16,692

 

Equity-based compensation expense (3)

 

 

(8

)

 

 

1,049

 

 

 

(1,052

)

 

 

6,727

 

Acquisition expense (4)

 

 

 

 

 

796

 

 

 

67

 

 

 

1,711

 

Revaluation of liabilities (5)

 

 

(6,495

)

 

 

6,261

 

 

 

(6,495

)

 

 

6,261

 

Class D Preferred Unitholder consent fee (6)

 

 

 

 

 

40,000

 

 

 

 

 

 

40,000

 

Other (7)

 

 

2,384

 

 

 

2,086

 

 

 

9,909

 

 

 

11,135

 

Adjusted EBITDA

 

$

157,414

 

 

$

94,249

 

 

$

542,516

 

 

$

447,651

 

Adjusted EBITDA - Discontinued Operations (8)

 

$

 

 

$

(30

)

 

$

 

 

$

(621

)

Adjusted EBITDA - Continuing Operations

 

$

157,414

 

 

$

94,279

 

 

$

542,516

 

 

$

448,272

 

Less: Cash interest expense (9)

 

 

63,482

 

 

 

57,178

 

 

 

254,619

 

 

 

185,138

 

Less: Income tax expense (benefit)

 

 

1,791

 

 

 

(1,154

)

 

 

971

 

 

 

(3,391

)

Less: Maintenance capital expenditures

 

 

21,414

 

 

 

6,520

 

 

 

59,468

 

 

 

28,787

 

Less: CMA Differential Roll (10)

 

 

5,563

 

 

 

 

 

 

54,817

 

 

 

 

Less: Preferred unit distributions paid

 

 

 

 

 

23,770

 

 

 

 

 

 

77,678

 

Less: Other (11)

 

 

 

 

 

(9

)

 

 

 

 

 

 

Distributable Cash Flow - Continuing Operations

 

$

65,164

 

 

$

7,974

 

 

$

172,641

 

 

$

160,060

 

(1)

Adjustment to align, within Adjusted EBITDA, the net gains and losses of the Partnership’s CMA Differential Roll derivative instruments positions with the physical margin being hedged. See “Non-GAAP Financial Measures” section above for a further discussion.

(2)

Amount reflects the difference between the market value of the inventory at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge. See “Non-GAAP Financial Measures” section above for a further discussion.

(3)

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 the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2022. 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.

(4)

Amounts represent expenses we incurred related to legal and advisory costs associated with acquisitions.

(5)

Amounts for the three months ended March 31, 2022 and 2021 and years ended March 31, 2022 and 2021 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.

(6)

Represents the fee paid to the holders of the Class D Preferred Units to obtain their consent in order to complete the issuance of the 2026 Senior Secured Notes and the ABL Facility (as discussed in the footnotes to our consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2022).

(7)

Amounts for the three months and years ended March 31, 2022 and 2021 represent non-cash operating expenses related to our Grand Mesa Pipeline, unrealized losses on marketable securities and accretion expense for asset retirement obligations.

(8)

Amounts include the operations of TPSL, Gas Blending and Mid-Con.

(9)

Amounts represent interest expense payable in cash for the period presented, excluding changes in the accrued interest balance.

(10)

Amount represents the cash portion of the adjustments of the Partnership’s CMA Differential Roll derivative instrument positions, as discussed above, that settled during the period.

(11)

Amounts represent cash paid to settle asset retirement obligations.

 

ADJUSTED EBITDA RECONCILIATION BY SEGMENT

(Unaudited)

 

 

Three Months Ended March 31, 2022

 

Water

Solutions

 

Crude Oil

Logistics

 

Liquids

Logistics

 

Corporate

and

Other

 

Consolidated

 

(in thousands)

Operating income (loss)

$

34,645

 

 

$

7,092

 

 

$

10,349

 

 

$

(13,637

)

 

$

38,449

 

Depreciation and amortization

 

50,092

 

 

 

11,460

 

 

 

3,305

 

 

 

1,718

 

 

 

66,575

 

Amortization recorded to cost of sales

 

 

 

 

 

 

 

68

 

 

 

 

 

 

68

 

Net unrealized losses (gains) on derivatives

 

4,807

 

 

 

30,144

 

 

 

(1,674

)

 

 

 

 

 

33,277

 

CMA Differential Roll net losses (gains)

 

 

 

 

6,751

 

 

 

 

 

 

 

 

 

6,751

 

Inventory valuation adjustment

 

 

 

 

 

 

 

6,497

 

 

 

 

 

 

6,497

 

Lower of cost or net realizable value adjustments

 

 

 

 

2,246

 

 

 

5,980

 

 

 

 

 

 

8,226

 

Loss (gain) on disposal or impairment of assets, net

 

6,148

 

 

 

(5,307

)

 

 

 

 

 

(50

)

 

 

791

 

Equity-based compensation expense

 

 

 

 

 

 

 

 

 

 

(8

)

 

 

(8

)

Other income, net

 

102

 

 

 

3

 

 

 

84

 

 

 

62

 

 

 

251

 

Adjusted EBITDA attributable to unconsolidated entities

 

804

 

 

 

 

 

 

23

 

 

 

45

 

 

 

872

 

Adjusted EBITDA attributable to noncontrolling interest

 

(225

)

 

 

 

 

 

1

 

 

 

 

 

 

(224

)

Revaluation of liabilities

 

(6,495

)

 

 

 

 

 

 

 

 

 

 

 

(6,495

)

Other

 

401

 

 

 

2,070

 

 

 

(87

)

 

 

 

 

 

2,384

 

Adjusted EBITDA

$

90,279

 

 

$

54,459

 

 

$

24,546

 

 

$

(11,870

)

 

$

157,414

 

 

Three Months Ended March 31, 2021

 

Water

Solutions

 

Crude Oil

Logistics

 

Liquids

Logistics

 

Corporate

and

Other

 

Continuing

Operations

 

Discontinued

Operations

(TPSL, Mid-Con,

Gas Blending)

 

Consolidated

 

(in thousands)

Operating (loss) income

$

(79,217

)

 

$

6,303

 

 

$

19,103

 

 

$

(16,166

)

 

$

(69,977

)

 

$

 

 

$

(69,977

)

Depreciation and amortization

 

48,427

 

 

 

10,334

 

 

 

7,026

 

 

 

1,785

 

 

 

67,572

 

 

 

 

 

 

67,572

 

Amortization recorded to cost of sales

 

 

 

 

 

 

 

77

 

 

 

 

 

 

77

 

 

 

 

 

 

77

 

Net unrealized losses (gains) on derivatives

 

975

 

 

 

4,233

 

 

 

(5,499

)

 

 

 

 

 

(291

)

 

 

 

 

 

(291

)

Inventory valuation adjustment

 

 

 

 

 

 

 

(202

)

 

 

 

 

 

(202

)

 

 

 

 

 

(202

)

Lower of cost or net realizable value adjustments

 

 

 

 

(213

)

 

 

3,357

 

 

 

 

 

 

3,144

 

 

 

 

 

 

3,144

 

Loss (gain) on disposal or impairment of assets, net

 

80,357

 

 

 

(248

)

 

 

3,346

 

 

 

229

 

 

 

83,684

 

 

 

 

 

 

83,684

 

Equity-based compensation expense

 

 

 

 

 

 

 

 

 

 

1,049

 

 

 

1,049

 

 

 

 

 

 

1,049

 

Acquisition expense

 

10

 

 

 

 

 

 

 

 

 

786

 

 

 

796

 

 

 

 

 

 

796

 

Other income (expense), net

 

7

 

 

 

50

 

 

 

297

 

 

 

(39,917

)

 

 

(39,563

)

 

 

 

 

 

(39,563

)

Adjusted EBITDA attributable to unconsolidated entities

 

1,136

 

 

 

 

 

 

8

 

 

 

(109

)

 

 

1,035

 

 

 

 

 

 

1,035

 

Adjusted EBITDA attributable to noncontrolling interest

 

(330

)

 

 

 

 

 

(1,071

)

 

 

 

 

 

(1,401

)

 

 

 

 

 

(1,401

)

Revaluation of liabilities

 

6,261

 

 

 

 

 

 

 

 

 

 

 

 

6,261

 

 

 

 

 

 

6,261

 

Class D Preferred Unitholder consent fee

 

 

 

 

 

 

 

 

 

 

40,000

 

 

 

40,000

 

 

 

 

 

 

40,000

 

Other

 

353

 

 

 

1,717

 

 

 

25

 

 

 

 

 

 

2,095

 

 

 

 

 

 

2,095

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30

)

 

 

(30

)

Adjusted EBITDA

$

57,979

 

 

$

22,176

 

 

$

26,467

 

 

$

(12,343

)

 

$

94,279

 

 

$

(30

)

 

$

94,249

 

 

Year Ended March 31, 2022

 

Water

Solutions

 

Crude Oil

Logistics

 

Liquids

Logistics

 

Corporate

and

Other

 

Consolidated

 

(in thousands)

Operating income (loss)

$

94,851

 

 

$

45,033

 

 

$

(8,441

)

 

$

(48,400

)

 

$

83,043

 

Depreciation and amortization

 

214,558

 

 

 

48,489

 

 

 

18,714

 

 

 

6,959

 

 

 

288,720

 

Amortization recorded to cost of sales

 

 

 

 

 

 

 

281

 

 

 

 

 

 

281

 

Net unrealized losses (gains) on derivatives

 

11,652

 

 

 

(23,664

)

 

 

(2,965

)

 

 

 

 

 

(14,977

)

CMA Differential Roll net losses (gains)

 

 

 

 

67,738

 

 

 

 

 

 

 

 

 

67,738

 

Inventory valuation adjustment

 

 

 

 

 

 

 

8,409

 

 

 

 

 

 

8,409

 

Lower of cost or net realizable value adjustments

 

 

 

 

2,235

 

 

 

8,627

 

 

 

 

 

 

10,862

 

Loss (gain) on disposal or impairment of assets, net

 

25,598

 

 

 

(3,101

)

 

 

71,807

 

 

 

(50

)

 

 

94,254

 

Equity-based compensation expense

 

 

 

 

 

 

 

 

 

 

(1,052

)

 

 

(1,052

)

Acquisition expense

 

4

 

 

 

 

 

 

 

 

 

63

 

 

 

67

 

Other income, net

 

718

 

 

 

353

 

 

 

711

 

 

 

472

 

 

 

2,254

 

Adjusted EBITDA attributable to unconsolidated entities

 

2,363

 

 

 

 

 

 

14

 

 

 

(145

)

 

 

2,232

 

Adjusted EBITDA attributable to noncontrolling interest

 

(2,212

)

 

 

 

 

 

(528

)

 

 

 

 

 

(2,740

)

Revaluation of liabilities

 

(6,495

)

 

 

 

 

 

 

 

 

 

 

 

(6,495

)

Other

 

921

 

 

 

9,064

 

 

 

(65

)

 

 

 

 

 

9,920

 

Adjusted EBITDA

$

341,958

 

 

$

146,147

 

 

$

96,564

 

 

$

(42,153

)

 

$

542,516

 

 

Year Ended March 31, 2021

 

Water

Solutions

 

Crude Oil

Logistics

 

Liquids

Logistics

 

Corporate

and

Other

 

Continuing

Operations

 

Discontinued

Operations

(TPSL, Mid-Con,

Gas Blending)

 

Consolidated

 

(in thousands)

Operating (loss) income

$

(92,720

)

 

$

(304,330

)

 

$

70,441

 

 

$

(64,144

)

 

$

(390,753

)

 

$

 

 

$

(390,753

)

Depreciation and amortization

 

222,107

 

 

 

60,874

 

 

 

29,184

 

 

 

5,062

 

 

 

317,227

 

 

 

 

 

 

317,227

 

Amortization recorded to cost of sales

 

 

 

 

 

 

 

307

 

 

 

 

 

 

307

 

 

 

 

 

 

307

 

Net unrealized losses (gains) on derivatives

 

24,500

 

 

 

23,432

 

 

 

(566

)

 

 

 

 

 

47,366

 

 

 

 

 

 

47,366

 

Inventory valuation adjustment

 

 

 

 

 

 

 

1,197

 

 

 

 

 

 

1,197

 

 

 

 

 

 

1,197

 

Lower of cost or net realizable value adjustments

 

 

 

 

(29,458

)

 

 

(617

)

 

 

 

 

 

(30,075

)

 

 

 

 

 

(30,075

)

Loss on disposal or impairment of assets, net

 

76,942

 

 

 

384,143

 

 

 

3,350

 

 

 

11,001

 

 

 

475,436

 

 

 

 

 

 

475,436

 

Equity-based compensation expense

 

 

 

 

 

 

 

 

 

 

6,727

 

 

 

6,727

 

 

 

 

 

 

6,727

 

Acquisition expense

 

27

 

 

 

 

 

 

 

 

 

1,684

 

 

 

1,711

 

 

 

 

 

 

1,711

 

Other income (expense), net

 

266

 

 

 

1,565

 

 

 

1,301

 

 

 

(39,635

)

 

 

(36,503

)

 

 

 

 

 

(36,503

)

Adjusted EBITDA attributable to unconsolidated entities

 

3,019

 

 

 

 

 

 

(3

)

 

 

(252

)

 

 

2,764

 

 

 

 

 

 

2,764

 

Adjusted EBITDA attributable to noncontrolling interest

 

(1,647

)

 

 

 

 

 

(2,887

)

 

 

 

 

 

(4,534

)

 

 

 

 

 

(4,534

)

Revaluation of liabilities

 

6,261

 

 

 

 

 

 

 

 

 

 

 

 

6,261

 

 

 

 

 

 

6,261

 

Class D Preferred Unitholder consent fee

 

 

 

 

 

 

 

 

 

 

40,000

 

 

 

40,000

 

 

 

 

 

 

40,000

 

Intersegment transactions (1)

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

Other

 

2,751

 

 

 

8,317

 

 

 

100

 

 

 

 

 

 

11,168

 

 

 

 

 

 

11,168

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(621

)

 

 

(621

)

Adjusted EBITDA

$

241,506

 

 

$

144,543

 

 

$

101,780

 

 

$

(39,557

)

 

$

448,272

 

 

$

(621

)

 

$

447,651

 

(1)

Amount reflects the transactions with TPSL, Mid-Con and Gas Blending that are eliminated in consolidation.

 

OPERATIONAL DATA

(Unaudited)

 

 

Three Months Ended

 

Year Ended

 

March 31,

 

March 31,

 

2022

 

2021

 

2022

 

2021

 

(in thousands, except per day amounts)

Water Solutions:

 

 

 

 

 

 

 

Produced water processed (barrels per day)

 

 

 

 

 

 

 

Delaware Basin

1,664,140

 

1,212,453

 

1,531,830

 

1,148,582

Eagle Ford Basin

99,299

 

63,871

 

99,298

 

78,397

DJ Basin

142,628

 

101,116

 

142,611

 

111,016

Other Basins

20,091

 

21,210

 

24,179

 

26,596

Total

1,926,158

 

1,398,650

 

1,797,918

 

1,364,591

Recycled water (barrels per day)

145,944

 

45,017

 

93,487

 

43,503

Total (barrels per day)

2,072,102

 

1,443,667

 

1,891,405

 

1,408,094

Skim oil sold (barrels per day)

3,468

 

2,525

 

2,864

 

1,957

 

 

 

 

 

 

 

 

Crude Oil Logistics:

 

 

 

 

 

 

 

Crude oil sold (barrels)

8,064

 

8,146

 

31,091

 

38,349

Crude oil transported on owned pipelines (barrels)

6,653

 

5,961

 

28,410

 

32,797

Crude oil storage capacity - owned and leased (barrels) (1)

 

 

 

 

5,232

 

5,239

Crude oil inventory (barrels) (1)

 

 

 

 

1,339

 

1,201

 

 

 

 

 

 

 

 

Liquids Logistics:

 

 

 

 

 

 

 

Refined products sold (gallons)

190,661

 

188,368

 

776,797

 

834,717

Propane sold (gallons)

389,823

 

477,652

 

1,034,706

 

1,364,224

Butane sold (gallons)

160,386

 

179,601

 

588,032

 

655,256

Other products sold (gallons)

86,828

 

119,654

 

376,906

 

471,245

Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1)

 

 

 

 

156,219

 

427,975

Refined products inventory (gallons) (1)

 

 

 

 

1,090

 

1,223

Propane inventory (gallons) (1)

 

 

 

 

37,719

 

51,026

Butane inventory (gallons) (1)

 

 

 

 

19,825

 

20,066

Other products inventory (gallons) (1)

 

 

 

 

18,614

 

19,195

(1)

Information is presented as of March 31, 2022 and March 31, 2021, respectively.

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.