NGL Energy Partners LP (NYSE:NGL) today reported Adjusted EBITDA
of $113.5 million for the three months ended December 31, 2015
(exclusive of $0.2 million of advisory and legal costs related to
acquisitions) compared to Adjusted EBITDA of $144.8 million for the
three months ended December 31, 2014 (exclusive of $0.7 million of
advisory and legal costs related to acquisitions and $7.6 million
of compensation costs related to the Gavilon and TransMontaigne
acquisitions). NGL reported net income of $29.6 million for the
three months ended December 31, 2015, compared to a net loss of
$5.3 million for the three months ended December 31, 2014.
For the nine months ended December 31, 2015, NGL reported
Adjusted EBITDA of $270.1 million (exclusive of $0.9 million of
advisory and legal costs related to acquisitions), compared to
Adjusted EBITDA of $258.3 million during the nine months ended
December 31, 2014 (exclusive of $5.0 million of advisory and legal
costs related to acquisitions and $15.3 million of compensation
costs related to the Gavilon and TransMontaigne acquisitions). NGL
reported a net loss of $33.1 million for the nine months ended
December 31, 2015, compared to a net loss of $61.1 million for the
nine months ended December 31, 2014.
Since December 1, 2015 NGL has achieved two major
initiatives:
- Reached an agreement with Saddlehorn
Pipeline Company, LLC to combine NGL’s Grand Mesa project with the
Saddlehorn Pipeline project. This reduced our capital expenditure
requirements by approximately $200 million.
- Sold TransMontaigne GP LLC on February
1, 2016 and reduced indebtedness by approximately $350 million with
the cash proceeds. As a result, NGL will deconsolidate the
TransMontaigne Partners LP (“TLP”) financials from the NGL
financials going forward and indebtedness will decrease by an
additional $248 million (TLP Revolving Credit Facility) in future
SEC filings.
With respect to capital expenditures anticipated for the next 18
months, we reiterate our guidance of $350 million of which only
$250 million is currently committed.
NGL is adjusting the EBITDA guidance for Fiscal Year 2016 to
$450 million from our previous guidance of $500 million. This is
driven by the continued decline of the price of crude oil, which
has impacted the value of the recovered hydrocarbon revenue in our
water solutions business.
Comparing Fiscal 2016 third quarter to the same quarter a year
ago:
- Water Solutions increased volumes
nearly 20% while disposal fees per barrel declined about 5%.
- Liquids volumes declined 6% due to warm
weather while margins doubled.
- Retail Propane margins increased 4.5%
while volumes declined 12% as a result of warm weather.
- Refined Products volumes are up 31%
while margins declined about 2 cents per gallon.
- Crude Oil Logistics results were
comparable to the prior year. The decline in marketing volumes was
offset by increased utilization of Cushing storage.
NGL defines EBITDA as net income (loss) attributable to parent
equity, plus interest expense, income tax provision (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, and equity-based compensation expense. NGL
also includes in Adjusted EBITDA certain inventory valuation
adjustments related to its refined products and renewables segment,
as described below. EBITDA and Adjusted EBITDA should not be
considered alternatives to net income, income before income taxes,
cash flows from operating activities, or any other measure of
financial performance calculated in accordance with accounting
principles generally accepted in the United States (“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 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 to investors for
evaluating NGL’s financial performance without regard to 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.
Other than for its refined products and renewables segment, for
purposes of its 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 its 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 table below reflects
the excess of the market value of the inventory of the refined
products and renewables segment at the balance sheet date over its
cost. NGL adds this to Adjusted EBITDA because the gains and losses
associated with derivative contracts of this segment, which are
intended primarily to hedge inventory holding risk, also impact
Adjusted EBITDA.
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: crude oil logistics, water solutions, liquids,
retail propane, and refined products and renewables. For further
information, visit the Partnership's website at
www.nglenergypartners.com.
NGL ENERGY PARTNERS LP AND
SUBSIDIARIES Unaudited Condensed Consolidated Balance
Sheets (U.S. Dollars in Thousands, except unit amounts)
December 31, March 31, 2015 2015
ASSETS CURRENT ASSETS: Cash and cash equivalents $ 25,179 $
41,303
Accounts receivable–trade, net of
allowance for doubtful accounts of $6,270 and $4,367,
respectively
581,621 1,024,226 Accounts receivable–affiliates 3,812 17,198
Inventories 414,088 441,762 Prepaid expenses and other current
assets 117,476 120,855 Assets held for sale 87,383
- Total current assets 1,229,559 1,645,344
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation of $305,233 and $202,959, respectively
1,972,925 1,617,389 GOODWILL 1,522,644 1,402,761
INTANGIBLE ASSETS, net of accumulated
amortization of $305,891 and $220,517, respectively
1,242,440 1,288,343 INVESTMENTS IN UNCONSOLIDATED ENTITIES 467,559
472,673 LOAN RECEIVABLE–AFFILIATE 23,258 8,154 OTHER NONCURRENT
ASSETS 106,086 112,837 Total assets $
6,564,471 $ 6,547,501
LIABILITIES AND
EQUITY CURRENT LIABILITIES: Accounts payable–trade $ 511,309 $
833,380 Accounts payable–affiliates 11,042 25,794 Accrued expenses
and other payables 193,295 195,116 Advance payments received from
customers 73,662 54,234 Current maturities of long-term debt
7,600 4,472 Total current liabilities 796,908
1,112,996 LONG-TERM DEBT, net of current maturities
3,323,492 2,745,299 OTHER NONCURRENT LIABILITIES 13,232 16,086
COMMITMENTS AND CONTINGENCIES (NOTE 11) EQUITY:
General partner, representing a 0.1% interest, 105,489 and 103,899
notional units, respectively (34,431 ) (37,021 )
Limited partners, representing a 99.9%
interest, 105,383,639 and 103,794,870 common units issued and
outstanding, respectively
1,920,528 2,162,924 Accumulated other comprehensive loss (148 )
(109 ) Noncontrolling interests 544,890
547,326 Total equity 2,430,839
2,673,120 Total liabilities and equity $ 6,564,471 $
6,547,501
NGL ENERGY
PARTNERS LP AND SUBSIDIARIES Unaudited Condensed
Consolidated Statements of Operations (U.S. Dollars in
Thousands, except unit and per unit amounts) Three
Months Ended December 31, Nine Months Ended December 31,
2015 2014 2015 2014 REVENUES:
Crude oil logistics $ 519,425 $ 1,694,881 $ 2,854,787 $ 5,735,307
Water solutions 45,438 50,241 147,225 150,274 Liquids 353,527
685,096 861,504 1,700,006 Retail propane 100,145 139,765 217,798
286,025 Refined products and renewables 1,666,471 1,983,444
5,335,356 5,708,161 Other - (1,281 ) -
1,513 Total Revenues 2,685,006
4,552,146 9,416,670 13,581,286
COST OF SALES: Crude oil logistics 495,529 1,697,374
2,770,240 5,678,725 Water solutions (3,128 ) (29,085 ) (8,088 )
(27,951 ) Liquids 300,766 657,010 754,157 1,633,090 Retail propane
45,974 81,172 96,417 168,590 Refined products and renewables
1,594,359 1,905,021 5,149,151 5,570,185 Other -
176 - 2,547 Total Cost of
Sales 2,433,500 4,311,668
8,761,877 13,025,186 OPERATING COSTS
AND EXPENSES: Operating 106,783 97,761 314,470 262,616 General and
administrative 23,035 44,230 114,814 113,742 Depreciation and
amortization 59,180 50,335 175,772 139,809
Loss on disposal or impairment of assets,
net
1,328 30,073 3,040
34,639 Operating Income 61,180 18,079 46,697 5,294
OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated
entities 2,858 1,242 14,008 7,504 Interest expense (36,176 )
(30,051 ) (98,549 ) (79,196 ) Other income, net 2,161
3,371 2,941 2,363 Income
(Loss) Before Income Taxes 30,023 (7,359 ) (34,903 ) (64,035 )
INCOME TAX (EXPENSE) BENEFIT (402 ) 2,090
1,846 2,977 Net Income
(Loss) 29,621 (5,269 ) (33,057 ) (61,058 )
LESS: NET INCOME ALLOCATED TO GENERAL
PARTNER
(16,217 ) (11,783 ) (47,742 ) (32,220 ) LESS: NET INCOME
ATTRIBUTABLE TO NONCONTROLLING INTERESTS (6,140 )
(5,649 ) (12,906 ) (9,059 )
NET LOSS ALLOCATED TO LIMITED PARTNERS
$ 7,264 $ (22,701 ) $ (93,705 ) $ (102,337 )
BASIC INCOME (LOSS) PER COMMON UNIT
$ 0.07 $ (0.26 ) $ (0.89 ) $ (1.17 )
DILUTED INCOME (LOSS) PER COMMON UNIT
$ 0.03 $ (0.26 ) $ (0.89 ) $ (1.17 )
BASIC WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING
105,338,200 88,545,764
104,808,649 83,702,571
DILUTED WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING
106,194,547 88,545,764
104,808,649 83,702,571
ADJUSTED EBITDA RECONCILIATION
The following table reconciles net loss attributable to parent
equity to our EBITDA and Adjusted EBITDA, each of which are
non-GAAP financial measures:
Three Months Ended December 31,
Nine Months Ended December 31,
2015 2014 2015 2014 (in
thousands) Net income (loss) $ 29,621 $ (5,269 ) $ (33,057 ) $
(61,058 ) Less Net income attributable to noncontrolling interests
(6,140 ) (5,649 ) (12,906 ) (9,059 )
Net income (loss) attributable to parent equity 23,481 (10,918 )
(45,963 ) (70,117 ) Interest expense 34,740 28,892 92,908 77,338
Income tax expense (benefit) 384 (2,099 ) (1,900 ) (2,997 )
Depreciation and amortization 55,261 51,065
162,728 143,781 EBITDA 113,866
66,940 207,773 148,005 Net unrealized gains on derivatives (1,748 )
(4,724 ) (4,494 ) (13,414 ) Inventory valuation adjustment (16,524
) - 2,831 - Lower of cost or market adjustments 13,251 29,399 7,325
32,236 Loss on disposal or impairment of assets, net 1,343 30,072
3,056 34,680 Equity-based compensation expense 3,032
14,870 52,712 36,529
Adjusted EBITDA $ 113,220 $ 136,557 $ 269,203
$ 238,036
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version on businesswire.com: http://www.businesswire.com/news/home/20160209006883/en/
NGL Energy Partners LPMichael Krimbill, 918-481-1119Chief
Executive Officer
NGL Energy Partners (NYSE:NGL)
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