NGL Energy Partners LP Announces Seasonal Net Loss And Filing Of Form 10-Q

NGL Energy Partners LP (NYSE:NGL), “NGL Energy,” today reported a seasonal net loss allocable to limited partners for the three month period ended September 30, 2011, of $5.4 million and an Adjusted EBITDA loss of $3.9 million. Net loss per limited partner common and subordinated unit for the period was $(0.36).

For the six month period ended September 30, 2011, NGL Energy reported a seasonal net loss allocable to limited partners of $12.2 million and an Adjusted EBITDA loss of $5.6 million. Net loss per limited partner common and subordinated unit for the period was $(0.88).

Subsequent to September 30, 2011, the Partnership announced the completion of two significant business combinations. In October 2011, the assets of E. Osterman Propane and its affiliates were contributed to NGL Energy, adding 20 service and satellite distributions locations with sales exceeding 40 million gallons of propane annually. The Osterman transaction increased Partnership equity by approximately $84 million and long-term debt by approximately $96 million.

In early November 2011, NGL Energy announced that substantially all of the natural gas liquids assets of SemStream, L.P., “Semstream,” a subsidiary of SemGroup Corporation (NYSE: SEMG), had been contributed to the Partnership. The transaction added 12 natural gas liquids terminals, 12 million gallons of above ground propane storage, 3.7 million barrels of leased underground natural gas liquids storage, a rail fleet of 350 leased and 12 owned cars and approximately $93 million of natural gas liquids inventory to the Partnership’s assets. The SemStream transaction increased Partnership equity by approximately $188 million and seasonal borrowings by approximately $93 million.

“The net loss for the second quarter is consistent with the seasonal nature of our business. However, the loss included approximately $1.2 million of acquisition related costs that could not be capitalized under GAAP,” said Craig S. Jones, the Partnership Chief Financial Officer.

EBITDA and Adjusted EBITDA are non-GAAP financial measures which we believe are used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of the Partnership's fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, or other measures of cash flow. A table reconciling EBITDA and Adjusted EBITDA with appropriate GAAP financial measures is included in the summarized financial information in this release. The Partnership’s Adjusted EBITDA excludes from EBITDA the unrealized gain or loss on commodity derivative contracts and gain or loss on asset sales for the period.

NGL Energy also announced that it has filed its quarterly report on Form 10-Q for its fiscal quarter ended September 30, 2011 with the Securities and Exchange Commission. NGL has posted a copy of the Form 10-Q on its website at www.nglenergypartners.com. Unitholders of NGL will be provided a copy of NGL's Form 10-Q free of charge upon request. Any such request should be made in writing directed to: NGL Energy Partners LP, Investor Relations, 6120 South Yale Avenue, #805, Tulsa, OK 74136.

About NGL Energy Partners: NGL Energy Partners LP owns and operates a vertically integrated energy business with three operating segments: midstream, wholesale supply and marketing, and retail propane. For further information about the Partnership and the financial results disclosed in this press release, see our website at www.nglenergypartners.com.
NGL ENERGY PARTNERS LP
Unaudited Condensed Consolidated Balance Sheets
As of September 30, 2011 and March 31, 2011
(U.S. Dollars in Thousands)
   
September 30, March 31,
2011 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,403 $ 16,337

Accounts receivable - trade, net of allowance for doubtful accounts of $163 and $161, respectively
55,058 44,346
Accounts receivable - affiliates 92 -
Inventories 107,285 12,697
Product exchanges 668 427
Prepaid expenses and other current assets   2,612   3,683
Total current assets 174,118 77,490
 

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $5,347 and $2,871, respectively
66,405 66,020
GOODWILL 9,118 8,568
INTANGIBLE ASSETS, net of accumulated amortization of $3,062 and $1,558, respectively   12,632   11,755
Total assets $ 262,273 $ 163,833
 
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 62,736 $ 37,244
Accrued expenses and other payables 4,712 3,711
Product exchanges 10,142 1,045
Advance payments received from customers 33,131 7,714
Current maturities of long-term debt   40,647   830
Total current liabilities 151,368 50,544
 
LONG-TERM DEBT, net of current maturities 10,090 65,541
OTHER NON-CURRENT LIABILITIES 50 395
 
COMMITMENTS AND CONTINGENCIES
 
PARTNERS' EQUITY:
General Partner — 0.1% interest; 14,799 and 10,945 notional units outstanding, respectively 138 72
Limited Partners — 99.9% interest —
Common units — 8,864,222 and 10,933,568 units outstanding, respectively 81,834 47,225
Subordinated units — 5,919,346 and no units outstanding, respectively 18,793 -
Accumulated other comprehensive income —
Foreign currency translation   -   56
Total partners' equity   100,765   47,353
Total liabilities and partners' equity $ 262,273 $ 163,833
 
 
NGL ENERGY PARTNERS LP
AND NGL SUPPLY, INC.
Unaudited Condensed Consolidated Statements of Operations
Three Months and Six Months Ended September 30, 2011 and 2010
(U.S. Dollars in Thousands, except per unit and per share amounts)
       
 
NGL Energy Partners LP NGL Supply, Inc. NGL Energy Partners LP NGL Supply, Inc.
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2011 2010 2011 2010
REVENUES:
Retail propane $ 19,225 $ 4,727 $ 32,077 $ 6,868
Wholesale supply and marketing 190,130 151,295 367,627 309,029
Midstream   686     629     1,182     1,046  
Total Revenues   210,041     156,651     400,886     316,943  
 
COST OF SALES:
Retail propane 13,208 3,393 21,314 4,749
Wholesale supply and marketing 188,144 149,199 365,913 305,965
Midstream   102     101     200     194  
Total Cost of Sales   201,454     152,693     387,427     310,908  
 
Gross Margin 8,587 3,958 13,459 6,035
 
OPERATING COSTS AND EXPENSES:
Operating 7,250 2,667 14,392 5,231
General and administrative 4,164 2,105 6,200 3,210
Depreciation and amortization   1,701     674     3,078     1,389  
Operating Loss (4,528 ) (1,488 ) (10,211 ) (3,795 )
 
OTHER INCOME (EXPENSE):
Interest income 99 25 225 66
Interest expense (1,012 ) (300 ) (2,313 ) (372 )
Other, net   46     19     131     124  
Loss Before Income Taxes (5,395 ) (1,744 ) (12,168 ) (3,977 )
 
INCOME TAX BENEFIT   -     627     -     1,417  
 
Net Loss (5,395 ) (1,117 ) (12,168 ) (2,560 )
 
Net Loss Allocated to General Partner 5 12
 
Net Loss Attributable to Noncontrolling Interest 16 45

 
       

Net Loss Allocable to Limited Partners or Attributable to Parent Equity
$ (5,390 ) $ (1,101 ) $ (12,156 ) $ (2,515 )
 
Basic and Diluted Earnings Per Common Unit or Share $ (0.36 ) $ (55.86 ) $ (0.88 ) $ (128.46 )
 
Basic and Diluted Earnings per Subordinated Unit $ (0.36 ) $ (0.88 )
 
Basic and Diluted Weighted average units outstanding:
Common   8,864,222     9,370,997  
Subordinated   5,919,346     4,431,423  
 

Basic and Diluted Weighted average common shares outstanding:
  19,711     19,711  
 
 
NGL ENERGY PARTNERS LP
AND NGL SUPPLY, INC.
Summarized Operating Information
 
 
VOLUME INFORMATION
       
 
Three Months Ended September 30, Six Months Ended September 30,

Segment
2011 2010 2011 2010
(gallons in thousands)
Retail propane sales 7,961 2,753 12,964 3,747
Wholesale supply and marketing 129,121 137,186 250,265 272,422
Midstream 28,256 26,119 49,259 43,704
Total 165,338 166,058 312,488 319,873
 

ADJUSTED EBITDA RECONCILIATION

The following tables reconcile net loss or net loss to parent equity to our EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures, for the periods indicated:
  Three Months Ended September 30,   Six Months Ended September 30,
2011   2010 2011   2010
(in thousands)
EBITDA:
Net loss or net loss to parent equity $ (5,395 ) $ (1,101 ) $ (12,168 ) $ (2,515 )
Benefit for income taxes - (627 ) - (1,417 )
Interest expense 1,012 300 2,313 372
Depreciation and amortization   1,901     874     3,478     1,789  
EBITDA $ (2,482 ) $ (554 ) $ (6,377 ) $ (1,771 )
Unrealized (gain) loss on derivative contracts (1,384 ) (317 ) 862 200
Gain on sale of assets   (46 )   (19 )   (46 )   (124 )
Adjusted EBITDA $ (3,912 ) $ (890 ) $ (5,561 ) $ (1,695 )
 

We define EBITDA as net income (loss) or net income (loss) attributable to parent equity, plus income taxes, interest expense and depreciation and amortization expense. We define Adjusted EBITDA as EBITDA excluding the unrealized gain or loss on derivative contracts and the gain or loss on the disposal of assets. 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. We believe that EBITDA provides additional information for evaluating our ability to make quarterly distributions to our unitholders and is presented solely as a supplemental measure. We believe that Adjusted EBITDA provides additional information for evaluating our financial performance without regard to our financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as we define them, may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other entities.

Copyright Business Wire 2010

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