NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the
“Partnership”) today reported its second quarter Fiscal 2023
financial results. Highlights include:
- Net income for the second quarter of Fiscal 2023 of $3.6
million, compared to a net loss of $1.2 million for the second
quarter of Fiscal 2022; Net income for the first six months of
Fiscal 2023 of $26.7 million, compared to a net loss of $135.7
million for the comparable period of Fiscal 2022
- Adjusted EBITDA(1) for the second quarter of Fiscal 2023 of
$142.2 million, compared to $146.3 million for the second quarter
of Fiscal 2022; Adjusted EBITDA for the first six months of Fiscal
2023 of $266.1 million, compared to $237.4 million for the
comparable period of 2022
- Operating income for the Water Solutions segment of $47.1
million for the second quarter of Fiscal 2023, compared to $32.8
million for the second quarter of Fiscal 2022
- Water Solutions’ quarterly Adjusted EBITDA(1) of $104.8 million
for the second quarter of Fiscal 2023, a 19.8% increase compared to
the second quarter of Fiscal 2022
- Record produced water volumes processed of approximately 2.27
million barrels per day during the second quarter of Fiscal 2023,
growing 28.7% from the same period in the prior year and 5.2% over
the immediately preceding fiscal quarter
- Reduced $55.2 million in principal on unsecured notes and
equipment financing note in the quarter
“Our Water Solutions segment continues to see strong disposal
volume growth, achieving record water volumes processed in the
quarter. Our refined products and biodiesel businesses in our
Liquids Logistics segment have outperformed as well, benefiting
from higher margins due to tighter supplies, and our Crude Oil
Logistics segment is reporting strong physical margins, offsetting
headwinds of lower volumes out of the DJ Basin. Our seasonal butane
and propane segments are positioned to benefit from the refinery
blending season and winter weather with both of these businesses
generating the majority of their Adjusted EBITDA(2) and free cash
flow(2) in the second half of the fiscal year. We are reaffirming
guidance for Adjusted EBITDA(2) in excess of $600 million for the
Partnership and over $410 million for our Water Solutions segment
for Fiscal 2023, and are adjusting our capital expenditure guidance
to a range of $105 million - $115 million,” stated Mike Krimbill,
NGL’s CEO. “Our primary focus remains repaying the 2023 unsecured
notes and driving leverage to below 4.75 times,” 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.
(2) Certain of the forward-looking financial measures are
provided on a non-GAAP basis. A reconciliation of forward-looking
financial measures to the most directly comparable financial
measures calculated and presented in accordance with GAAP is
potentially misleading and not practical given the difficulty of
projecting event driven transactional and other non-core operating
items in any future period. The magnitude of these items, however,
may be significant.
Quarterly Results of Operations
The following table summarizes operating income (loss) and
Adjusted EBITDA(1) from continuing operations by reportable segment
for the periods indicated:
Quarter Ended
September 30, 2022
September 30, 2021
Operating Income
(Loss)
Adjusted EBITDA(1)
Operating Income
(Loss)
Adjusted EBITDA(1)
(in thousands)
Water Solutions
$
47,128
$
104,774
$
32,772
$
87,424
Crude Oil Logistics
32,927
32,863
28,231
48,776
Liquids Logistics
1,653
16,513
11,461
18,465
Corporate and Other
(12,938
)
(11,908
)
(7,646
)
(8,404
)
Total
$
68,770
$
142,242
$
64,818
$
146,261
Water Solutions
Operating income for the Water Solutions segment increased $14.4
million for the quarter ended September 30, 2022, compared to the
quarter ended September 30, 2021. The Partnership processed
approximately 2.27 million barrels of produced water per day during
the quarter ended September 30, 2022, a 28.7% increase when
compared to approximately 1.76 million barrels of water per day
processed during the quarter ended September 30, 2021. This
increase was due to higher production volumes (and associated
produced water) primarily in the Delaware Basin driven by higher
crude oil prices and completion activity. Service fees for produced
water processed ($/barrel) benefited from payments made by certain
producers for committed volumes not delivered. The Partnership also
sold approximately 94,000 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 $24.2 million for the quarter
ended September 30, 2022, an increase of $4.9 million from the
prior year period. This increase was due to increased skim oil
barrels sold as a result of higher produced water volumes processed
and higher realized crude oil prices received from the sale of skim
oil barrels. This was offset by lower skim oil volumes per barrel
of produced water processed.
Operating expenses in the Water Solutions segment increased to
$0.27 per produced barrel processed compared to $0.26 per produced
barrel processed in the comparative quarter last year primarily due
to higher repairs and maintenance expense due to the timing of
repairs and the operation of temporary booster stations. Three of
the Water Solutions segment’s largest variable expenses, utility,
royalty and chemical expenses, were not (and are not expected to
be) impacted by the rise in inflation due to negotiated long-term
utility contracts with fixed rates, royalty contracts with no
escalation clauses and a fixed chemical expense per barrel with our
chemical provider.
Crude Oil Logistics
Operating income for the quarter ended September 30, 2022
increased $4.7 million compared to the quarter ended September 30,
2021, primarily due to higher commodity prices compared to the
prior year and an increase in net derivative gains of $28.9
million, partially offset by higher costs of sales (excluding the
impact of derivatives), which was also due to higher commodity
prices. Product margin decreased primarily due to the sale of
higher priced inventory into a market in which prices are declining
and as crude oil product margin calculations do not include gains
and losses from derivatives that may offset the movement in the
physical margin. This decrease was offset by higher contracted
rates with certain producers as well as increased differentials on
certain other sales contracts. During the three months ended
September 30, 2022, physical volumes on the Grand Mesa Pipeline
averaged approximately 72,000 barrels per day, compared to
approximately 80,000 barrels per day for the three months ended
September 30, 2021. Both contracted and non-contracted volumes
decreased as overall production in the DJ Basin declined in part
due to producer permitting issues.
Liquids Logistics
Operating income for the Liquids Logistics segment decreased
$9.8 million for the quarter ended September 30, 2022, compared to
the quarter ended September 30, 2021. Product margins (excluding
the impact of derivatives) for both propane and butane declined
during the current quarter as a result of decreasing market prices
as the cost of sales applied to lower priced spot volumes sold were
based on inventory purchased in a higher price environment. We
expect margin to increase as we replace our current inventory with
inventory purchased in a lower price environment and realize margin
associated with our forward fixed-priced sales contracts.
Additionally, we recorded net derivative losses of $0.9 million
during the quarter ended September 30, 2022, compared to net
derivative gains of $16.5 million during the quarter ended
September 30, 2021.
These decreases in operating income were offset by increased
margins for refined products, biodiesel and asphalt due to tighter
supply in certain markets.
Corporate and Other
Corporate and Other expenses increased primarily due to
increased incentive compensation payments and the timing of those
payments compared to the prior year as well as increased
equity-based compensation due to a reversal of an incentive
compensation accrual during the three months ended September 30,
2021.
Capitalization and Liquidity
Total liquidity (cash plus available capacity on our asset-based
revolving credit facility (“ABL Facility”)) was approximately
$174.7 million as of September 30, 2022. Borrowings on the
Partnership’s ABL Facility totaled approximately $287.0 million.
The increase from March 31, 2022 was primarily due to increases in
working capital balances driven by increased inventory volumes and
higher net account receivable balances.
The Partnership is in compliance with all of its debt covenants
and has no significant debt maturities before November 2023. The
Partnership expects to be able to pay off our outstanding 2023
Notes prior to their maturity date on November 1, 2023 using free
cash flow(2), and if needed, borrowings under our ABL Facility.
Proceeds generated from other cash flow positive initiatives
currently being pursued may also be used to repay the outstanding
balance of the 2023 Notes prior to their maturity.
Second Quarter Conference Call Information
A conference call to discuss NGL’s results of operations is
scheduled for 4:00 pm Central Time on Wednesday, November 9, 2022.
Analysts, investors, and other interested parties may join the
webcast via the event link:
https://www.webcaster4.com/Webcast/Page/2808/46952 or by dialing
(877) 545-0523 and providing access code: 866911. An archived audio
replay of the call will be available for 14 days, which can be
accessed by dialing (877) 481-4010 and providing replay passcode
46952.
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 certain refined products businesses within NGL’s Liquids
Logistics segment as discussed below. EBITDA and Adjusted EBITDA
should not be considered as 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 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 records a realized gain or loss. NGL does not draw such a
distinction between realized and unrealized gains and losses on
derivatives of 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. 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 NGL
is 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.
We do not provide a reconciliation for non-GAAP estimates on a
forward-looking basis where we are unable to provide a meaningful
calculation or estimation of reconciling items and the information
is not available without unreasonable effort. This is due to the
inherent difficulty of forecasting the timing or amount of various
items that would impact the most directly comparable
forward-looking U.S. GAAP financial measure that have not yet
occurred, are out of the Partnership’s control and/or cannot be
reasonably predicted. Forward-looking non-GAAP financial measures
provided without the most directly comparable U.S. GAAP financial
measures may vary materially from the corresponding U.S. GAAP
financial measures.
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 Condensed
Consolidated Balance Sheets
(in Thousands, except unit
amounts)
September 30, 2022
March 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
4,540
$
3,822
Accounts receivable-trade, net of
allowance for expected credit losses of $2,823 and $2,626,
respectively
1,130,760
1,123,163
Accounts receivable-affiliates
9,580
8,591
Inventories
344,719
251,277
Prepaid expenses and other current
assets
153,265
159,486
Total current assets
1,642,864
1,546,339
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation of $958,669 and $887,006, respectively
2,446,675
2,462,390
GOODWILL
744,439
744,439
INTANGIBLE ASSETS, net of accumulated
amortization of $548,627 and $507,285, respectively
1,096,144
1,135,354
INVESTMENTS IN UNCONSOLIDATED ENTITIES
21,557
21,897
OPERATING LEASE RIGHT-OF-USE ASSETS
97,685
114,124
OTHER NONCURRENT ASSETS
64,803
45,802
Total assets
$
6,114,167
$
6,070,345
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade
$
993,748
$
1,084,837
Accounts payable-affiliates
70
73
Accrued expenses and other payables
150,529
140,719
Advance payments received from
customers
25,567
7,934
Current maturities of long-term debt
2,482
2,378
Operating lease obligations
35,257
41,261
Total current liabilities
1,207,653
1,277,202
LONG-TERM DEBT, net of debt issuance costs
of $36,783 and $42,988, respectively, and current maturities
3,448,431
3,350,463
OPERATING LEASE OBLIGATIONS
62,092
72,784
OTHER NONCURRENT LIABILITIES
104,133
104,346
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 130,827 notional units, respectively
(52,510
)
(52,478
)
Limited partners, representing a 99.9%
interest, 130,695,970 and 130,695,970 common units issued and
outstanding, respectively
428,865
401,486
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
(440
)
(308
)
Noncontrolling interests
16,487
17,394
Total equity
740,761
714,453
Total liabilities and equity
$
6,114,167
$
6,070,345
NGL ENERGY PARTNERS LP AND
SUBSIDIARIES
Unaudited Condensed
Consolidated Statements of Operations
(in Thousands, except unit and
per unit amounts)
Three Months Ended September
30,
Six Months Ended September
30,
2022
2021
2022
2021
REVENUES:
Water Solutions
$
164,910
$
136,210
$
330,989
$
266,436
Crude Oil Logistics
574,783
554,830
1,440,154
1,108,454
Liquids Logistics
1,269,754
1,063,097
2,735,687
1,867,902
Total Revenues
2,009,447
1,754,137
4,506,830
3,242,792
COST OF SALES:
Water Solutions
920
6,423
11,145
16,761
Crude Oil Logistics
514,199
498,089
1,336,569
1,035,346
Liquids Logistics
1,249,001
1,021,081
2,671,417
1,798,279
Total Cost of Sales
1,764,120
1,525,593
4,019,131
2,850,386
OPERATING COSTS AND EXPENSES:
Operating
84,158
69,019
156,018
134,803
General and administrative
16,628
11,450
33,385
27,224
Depreciation and amortization
68,118
69,563
134,778
153,665
Loss on disposal or impairment of assets,
net
7,653
13,694
7,485
81,230
Operating Income (Loss)
68,770
64,818
156,033
(4,516
)
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated
entities
1,207
434
1,881
646
Interest expense
(68,297
)
(68,495
)
(135,608
)
(135,625
)
Gain on early extinguishment of
liabilities, net
2,479
1,071
4,141
1,122
Other (expense) income, net
(15
)
730
631
1,979
Income (Loss) Before Income Taxes
4,144
(1,442
)
27,078
(136,394
)
INCOME TAX (EXPENSE) BENEFIT
(537
)
235
(365
)
685
Net Income (Loss)
3,607
(1,207
)
26,713
(135,709
)
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(97
)
(330
)
(342
)
(768
)
NET INCOME (LOSS) ATTRIBUTABLE TO NGL
ENERGY PARTNERS LP
$
3,510
$
(1,537
)
$
26,371
$
(136,477
)
NET LOSS ALLOCATED TO COMMON
UNITHOLDERS
$
(26,899
)
$
(27,236
)
$
(31,578
)
$
(187,128
)
BASIC LOSS PER COMMON UNIT
$
(0.21
)
$
(0.21
)
$
(0.24
)
$
(1.44
)
DILUTED LOSS PER COMMON UNIT
$
(0.21
)
$
(0.21
)
$
(0.24
)
$
(1.44
)
BASIC WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING
130,695,970
129,593,939
130,695,970
129,593,939
DILUTED WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING
130,695,970
129,593,939
130,695,970
129,593,939
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 September
30,
Six Months Ended September
30,
2022
2021
2022
2021
(in thousands)
Net income (loss)
$
3,607
$
(1,207
)
$
26,713
$
(135,709
)
Less: Net income attributable to
noncontrolling interests
(97
)
(330
)
(342
)
(768
)
Net income (loss) attributable to NGL
Energy Partners LP
3,510
(1,537
)
26,371
(136,477
)
Interest expense
68,313
68,512
135,639
135,642
Income tax expense (benefit)
537
(235
)
365
(685
)
Depreciation and amortization
68,103
69,543
134,717
152,900
EBITDA
140,463
136,283
297,092
151,380
Net unrealized gains on derivatives
(4,828
)
(18,490
)
(61,730
)
(34,754
)
CMA Differential Roll net losses (gains)
(1)
(6,518
)
12,805
28,102
37,115
Inventory valuation adjustment (2)
(3,560
)
(451
)
(4,115
)
767
Lower of cost or net realizable value
adjustments
10,143
3,521
857
(285
)
Loss on disposal or impairment of assets,
net
7,653
13,695
7,485
81,233
Gain on early extinguishment of
liabilities, net
(2,479
)
(1,072
)
(4,141
)
(1,159
)
Equity-based compensation expense
479
(2,753
)
976
(1,793
)
Acquisition expense (3)
—
36
—
103
Other (4)
889
2,687
1,592
4,755
Adjusted EBITDA
$
142,242
$
146,261
$
266,118
$
237,362
Less: Cash interest expense (5)
64,096
63,729
127,221
127,088
Less: Income tax expense (benefit)
537
(235
)
365
(685
)
Less: Maintenance capital expenditures
14,219
16,979
29,586
24,724
Less: CMA Differential Roll (6)
(16,274
)
9,968
1,934
33,900
Less: Other (7)
77
—
170
—
Distributable Cash Flow
$
79,587
$
55,820
$
106,842
$
52,335
__________________________
(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. See “Non-GAAP Financial Measures” section above for a further
discussion.
(3)
Amounts represent expenses we incurred
related to legal and advisory costs associated with
acquisitions.
(4)
Amounts represent non-cash operating
expenses related to our Grand Mesa Pipeline, unrealized
gains/losses on marketable securities and accretion expense for
asset retirement obligations.
(5)
Amounts represent interest expense payable
in cash, excluding changes in the accrued interest balance.
(6)
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.
(7)
Amounts represents cash paid to settle
asset retirement obligations.
ADJUSTED EBITDA RECONCILIATION BY
SEGMENT
Three Months Ended September
30, 2022
Water Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate and
Other
Consolidated
(in thousands)
Operating income (loss)
$
47,128
$
32,927
$
1,653
$
(12,938
)
$
68,770
Depreciation and amortization
51,327
11,775
3,396
1,620
68,118
Amortization recorded to cost of sales
—
—
69
—
69
Net unrealized (gains) losses on
derivatives
(4,340
)
(4,575
)
4,087
—
(4,828
)
CMA Differential Roll net losses
(gains)
—
(6,518
)
—
—
(6,518
)
Inventory valuation adjustment
—
—
(3,560
)
—
(3,560
)
Lower of cost or net realizable value
adjustments
—
(493
)
10,636
—
10,143
Loss (gain) on disposal or impairment of
assets, net
9,035
(296
)
52
(1,138
)
7,653
Equity-based compensation expense
—
—
—
479
479
Other (expense) income, net
(251
)
303
(91
)
24
(15
)
Adjusted EBITDA attributable to
unconsolidated entities
1,387
—
(17
)
45
1,415
Adjusted EBITDA attributable to
noncontrolling interest
(373
)
—
—
—
(373
)
Other
861
(260
)
288
—
889
Adjusted EBITDA
$
104,774
$
32,863
$
16,513
$
(11,908
)
$
142,242
Three Months Ended September
30, 2021
Water Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate and
Other
Consolidated
(in thousands)
Operating income (loss)
$
32,772
$
28,231
$
11,461
$
(7,646
)
$
64,818
Depreciation and amortization
50,670
12,454
4,686
1,753
69,563
Amortization recorded to cost of sales
—
—
71
—
71
Net unrealized losses (gains) on
derivatives
1,521
(7,153
)
(12,858
)
—
(18,490
)
CMA Differential Roll net losses
(gains)
—
12,805
—
—
12,805
Inventory valuation adjustment
—
—
(451
)
—
(451
)
Lower of cost or net realizable value
adjustments
—
—
3,521
—
3,521
Loss (gain) on disposal or impairment of
assets, net
1,962
(14
)
11,746
—
13,694
Equity-based compensation expense
—
—
—
(2,753
)
(2,753
)
Acquisition expense
—
—
—
36
36
Other income, net
10
154
295
271
730
Adjusted EBITDA attributable to
unconsolidated entities
716
—
(9
)
(65
)
642
Adjusted EBITDA attributable to
noncontrolling interest
(614
)
—
3
—
(611
)
Other
387
2,299
—
—
2,686
Adjusted EBITDA
$
87,424
$
48,776
$
18,465
$
(8,404
)
$
146,261
Six Months Ended September 30,
2022
Water Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate and
Other
Consolidated
(in thousands)
Operating income (loss)
$
100,733
$
51,916
$
28,293
$
(24,909
)
$
156,033
Depreciation and amortization
101,175
23,529
6,777
3,297
134,778
Amortization recorded to cost of sales
—
—
137
—
137
Net unrealized gains on derivatives
(4,464
)
(55,580
)
(1,686
)
—
(61,730
)
CMA Differential Roll net losses
(gains)
—
28,102
—
—
28,102
Inventory valuation adjustment
—
—
(4,115
)
—
(4,115
)
Lower of cost or net realizable value
adjustments
—
1,074
(217
)
—
857
Loss (gain) on disposal or impairment of
assets, net
9,976
(1,556
)
52
(987
)
7,485
Equity-based compensation expense
—
—
—
976
976
Other income (expense), net
8
331
(184
)
476
631
Adjusted EBITDA attributable to
unconsolidated entities
2,212
—
(24
)
89
2,277
Adjusted EBITDA attributable to
noncontrolling interest
(905
)
—
—
—
(905
)
Other
1,086
125
381
—
1,592
Adjusted EBITDA
$
209,821
$
47,941
$
29,414
$
(21,058
)
$
266,118
Six Months Ended September 30,
2021
Water Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate and
Other
Consolidated
(in thousands)
Operating income (loss)
$
40,355
$
16,650
$
(41,948
)
$
(19,573
)
$
(4,516
)
Depreciation and amortization
113,651
24,863
11,653
3,498
153,665
Amortization recorded to cost of sales
—
—
144
—
144
Net unrealized losses (gains) on
derivatives
5,087
(21,607
)
(18,234
)
—
(34,754
)
CMA Differential Roll net losses
(gains)
—
37,115
—
—
37,115
Inventory valuation adjustment
—
—
767
—
767
Lower of cost or net realizable value
adjustments
—
(11
)
(274
)
—
(285
)
Loss (gain) on disposal or impairment of
assets, net
9,453
(56
)
71,833
—
81,230
Equity-based compensation expense
—
—
—
(1,793
)
(1,793
)
Acquisition expense
—
—
—
103
103
Other income, net
622
350
658
349
1,979
Adjusted EBITDA attributable to
unconsolidated entities
1,175
—
(19
)
(120
)
1,036
Adjusted EBITDA attributable to
noncontrolling interest
(1,568
)
—
(526
)
—
(2,094
)
Other
160
4,620
(15
)
—
4,765
Adjusted EBITDA
$
168,935
$
61,924
$
24,039
$
(17,536
)
$
237,362
OPERATIONAL DATA
(Unaudited)
Three Months Ended
Six Months Ended
September 30,
September 30,
2022
2021
2022
2021
(in thousands, except per day
amounts)
Water Solutions:
Produced water processed (barrels per
day)
Delaware Basin
1,986,585
1,485,087
1,937,179
1,456,810
Eagle Ford Basin
112,337
95,728
105,463
93,796
DJ Basin
153,766
149,426
152,057
134,197
Other Basins
13,150
30,142
15,505
29,118
Total
2,265,838
1,760,383
2,210,204
1,713,921
Recycled water (barrels per day)
93,898
67,027
115,294
88,116
Total (barrels per day)
2,359,736
1,827,410
2,325,498
1,802,037
Skim oil sold (barrels per day)
3,216
2,821
3,584
2,662
Crude Oil Logistics:
Crude oil sold (barrels)
5,839
7,518
13,473
15,512
Crude oil transported on owned pipelines
(barrels)
6,600
7,337
13,770
14,371
Crude oil storage capacity - owned and
leased (barrels) (1)
5,232
5,232
Crude oil inventory (barrels) (1)
660
1,249
Liquids Logistics:
Refined products sold (gallons)
186,031
196,932
374,657
382,238
Propane sold (gallons)
169,775
180,322
334,619
350,601
Butane sold (gallons)
111,551
124,881
232,076
247,455
Other products sold (gallons)
104,979
97,310
198,616
190,163
Natural gas liquids and refined products
storage capacity - owned and leased (gallons) (1)
167,559
169,087
Refined products inventory (gallons)
(1)
1,990
2,576
Propane inventory (gallons) (1)
101,880
98,429
Butane inventory (gallons) (1)
84,928
75,500
Other products inventory (gallons) (1)
33,653
17,465
__________________________
(1)
Information is presented as of September
30, 2022 and September 30, 2021, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221109005898/en/
NGL Energy Partners LP Linda J. Bridges, 918-481-1119 Executive
Vice President, Chief Financial Officer and Treasurer
Linda.Bridges@nglep.com or David Sullivan, 918-481-1119 Vice
President - Finance David.Sullivan@nglep.com
NGL Energy Partners (NYSE:NGL)
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