NGL Energy Partners LP Announces Third Quarter Results And Filing Of Form 10-Q

NGL Energy Partners LP (NYSE:NGL) today reported net income of $40.5 million and Adjusted EBITDA of $73.2 million for the three months ended December 31, 2012. Net income per limited partner common unit for the quarter was $0.75. General and administrative expenses during the quarter ended December 31, 2012 included $0.8 million of costs related to acquisitions.

NGL’s Chief Executive Officer, H. Michael Krimbill, said, “We are pleased to announce Adjusted EBITDA results exceeding prior guidance for the quarter. We completed a number of acquisitions during the quarter that further enhanced our ability to provide customers with a full range of services from wellhead to the end market. Going forward our focus will also include internal growth projects, many of which have been initiated in fiscal 2013 and will contribute to results in fiscal 2014.”

During the three months ended December 31, 2012, NGL completed several acquisitions, including:
  • The November 2012 acquisition of certain entities that conduct crude oil purchasing and logistics operations in Texas and New Mexico;
  • The December 2012 acquisition of a barge transportation business;
  • The acquisition of two retail propane businesses; and
  • The acquisition of three water services and crude oil logistics businesses.

For the nine months ended December 31, 2012, NGL reported net income of $25.8 million and Adjusted EBITDA of $93.1 million. Net income per limited partner common unit for the nine months ended December 31, 2012 was $0.53. General and administrative expenses during the nine months ended December 31, 2012 included $5.2 million of costs related to acquisitions.

On January 24, 2013, NGL announced that the Board of Directors of its general partner increased the quarterly cash distribution for the third fiscal quarter ended December 31, 2012, by $.0125 to $0.4625 per outstanding limited partner unit from $0.45 per unit, resulting in an annualized cash distribution of $1.85 per unit. This distribution was paid on February 14, 2013, to unitholders of record entitled to receive the distribution at the close of business on February 4, 2013. This is the fifth consecutive quarter NGL has increased its cash distribution since its initial public offering in May 2011.

NGL also announced that it has filed its quarterly report on Form 10-Q for its fiscal quarter ended December 31, 2012 with the Securities and Exchange Commission. NGL has posted a copy of the Form 10-Q on its website at www.nglenergypartners.com.

A conference call to discuss NGL's results of operations is scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 15, 2013. Analysts, investors, and other interested parties may access the conference call by dialing (866) 788-0545 and providing access code 55364675. An audio replay of the conference call will be available for 7 days beginning at 12:00 p.m. Eastern Time on February 15, 2013 and can be accessed by dialing (888) 286-8010 and providing access code 86475629.

NGL defines EBITDA as net income (loss) attributable to parent equity, plus income taxes, interest expense and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding the unrealized gain or loss on derivative contracts and the gain or loss on the disposal of assets and share-based compensation expenses. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, income before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP as those items are used to measure operating performance, liquidity or the ability to service debt obligations. NGL believes that EBITDA provides additional information for evaluating its ability to make quarterly distributions to its unitholders and is presented solely as a supplemental measure. NGL believes that Adjusted EBITDA provides additional information for evaluating its financial performance without regard to its financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other entities. A reconciliation of Adjusted EBITDA to net income (loss) attributable to parent equity is shown below.

This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes its expectations as reflected in the forward-looking statements are reasonable, NGL can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in NGL’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors”. NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

About NGL Energy Partners LP

NGL Energy Partners LP is a Delaware limited partnership. NGL owns and operates a vertically integrated energy business with four primary businesses: water services, crude oil logistics, NGL logistics and retail. NGL completed its initial public offering in May 2011. For further information visit the Partnership's website at www.nglenergypartners.com.
 
NGL ENERGY PARTNERS LP
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2012 and March 31, 2012
(U.S. Dollars in Thousands, except unit amounts)
 
   

December 31,2012
   

March 31,2012

ASSETS
CURRENT ASSETS:

Cash and cash equivalents
$ 23,903 $ 7,832

Accounts receivable - trade, net of allowance for doubtful accounts of $1,962 and $818, respectively
595,274 84,004
Receivables from affiliates 1,334 2,282
Inventories 234,025 94,504
Prepaid expenses and other current assets   58,004     10,002
Total current assets 912,540 198,624
 

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $34,072 and $12,843, respectively
520,084 231,394
GOODWILL 510,072 167,245

INTANGIBLE ASSETS, net of accumulated amortization of $29,807 and $8,174, respectively
487,206 149,490
OTHER NONCURRENT ASSETS   7,567     2,766
Total assets $ 2,437,469   $ 749,519
 

LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 579,371 $ 81,369
Accrued expenses and other payables 74,064 14,143
Advance payments received from customers 59,237 20,293
Payables to affiliates 6,527 9,462
Current maturities of long-term debt   8,635     19,534
Total current liabilities 727,834 144,801
 
LONG-TERM DEBT, net of current maturities 827,570 199,177
OTHER NONCURRENT LIABILITIES 1,428 212
 
COMMITMENTS AND CONTINGENCIES
 
PARTNERS' EQUITY:
General Partner — 0.1% interest; 53,174 and 29,245 notional units outstanding, respectively (50,752 ) 442
Limited Partners — 99.9% interest —
Common units — 47,201,831 and 23,296,253 units outstanding, respectively 912,028 384,604

Subordinated units — 5,919,346 units outstanding at December 31, 2012 and March 31, 2012
13,556 19,824
Accumulated other comprehensive income —
Foreign currency translation 32 31
Noncontrolling interests   5,773     428
Total partners' equity   880,637     405,329
Total liabilities and partners' equity $ 2,437,469   $ 749,519
 
 
NGL ENERGY PARTNERS LP
Unaudited Condensed Consolidated Statements of Operations
Three Months and Nine Months Ended December 31, 2012 and 2011
(U.S. Dollars in Thousands, except unit and per unit amounts)
 
   

Three Months EndedDecember 31,
   

Nine Months EndedDecember 31,
  2012         2011     2012         2011  
REVENUES:
Retail propane $ 127,905 $ 62,701 $ 244,116 $ 94,787
Natural gas liquids logistics 508,131 407,948 1,050,116 776,757
Crude oil logistics 677,985 1,462,523
Water services 22,806 40,557
Other   1,381         2,842      
Total Revenues   1,338,208     470,649     2,800,154     871,544  
 
COST OF SALES:
Retail propane 77,449 40,502 144,556 61,825
Natural gas liquids logistics 470,621 399,288 982,949 765,400
Crude oil logistics 654,976 1,425,546
Water services   1,499         4,169      
Total Cost of Sales   1,204,545     439,790     2,557,220     827,225  
 
OPERATING COSTS AND EXPENSES:
Operating 50,518 12,653 113,287 27,045
General and administrative 14,175 4,163 34,578 10,363
Depreciation and amortization   18,747     5,402     41,335     8,480  
Operating Income (Loss) 50,223 8,641 53,734 (1,569 )
 
OTHER INCOME (EXPENSE):
Interest income 241 197 870 422
Interest expense (9,762 ) (2,676 ) (22,254 ) (4,989 )
Loss on early extinguishment of debt (5,769 )
Other, net   20     86     49     215  
Income (Loss) Before Income Taxes 40,722 6,248 26,630 (5,921 )
 
INCOME TAX PROVISION   (245 )   (158 )   (781 )   (158 )
 
Net Income (Loss) 40,477 6,090 25,849 (6,079 )
 
Net (Income) Loss Allocated to General Partner (942 ) (6 ) (1,731 ) 6
 
Net (Income) Loss Attributable to Noncontrolling Interests   (301 )       (250 )    
 

Net Income (Loss) Attributable to Parent Equity Allocated to Limited Partners
$ 39,234   $ 6,084   $ 23,868   $ (6,073 )
 
Basic and Diluted Earnings (Loss) per Common Unit $ 0.75   $ 0.24   $ 0.53   $ (0.41 )
 
Basic and Diluted Earnings (Loss) per Subordinated Unit $ 0.75   $ 0.28   $ 0.51   $ (0.20 )
 
Basic and Diluted Weighted average units outstanding:
Common   46,364,381     18,699,590     39,288,012     12,491,836  
Subordinated   5,919,346     5,919,346     5,919,346     4,929,201  
 

OPERATIONAL DATA

The following table summarizes the volume of product sold and wastewater processed for the three months and nine months ended December 31, 2012 and 2011. Gallons sold by our natural gas liquids logistics segment shown in the table below include sales to our retail segment.

 
   

Three Months EndedDecember 31,
   

Nine Months EndedDecember 31,

Segment
2012     2011 2012     2011

(in thousands)
Retail propane
Propane gallons sold 42,122 24,694 81,449 37,658
Distillate gallons sold 8,818 15,091
 
Natural gas liquids logistics
Propane gallons sold 275,598 237,490 532,353 449,656
Other natural gas liquids gallons sold 205,498 50,456 457,248 88,556
 
Crude oil logistics
Crude oil barrels sold 7,461 15,922
 
Water services
Barrels of water processed 9,818 16,593
 

ADJUSTED EBITDA RECONCILIATION

The following tables reconcile net income (loss) attributable to parent equity to our EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures, for the periods indicated:

 
 

Three Months EndedDecember 31,
 

Nine Months EndedDecember 31,
  2012       2011     2012       2011  
(in thousands)
EBITDA:
Net income (loss) attributable to parent equity $ 40,176 $ 6,090 $ 25,599 $ (6,079 )
Provision for income taxes 245 158 781 158
Interest expense 9,762 2,676 22,254 4,989
Loss on early extinguishment of debt 5,769
Depreciation and amortization   20,494     5,602     44,607     9,080  
EBITDA $ 70,677 $ 14,526 $ 99,010 $ 8,148
Unrealized (gain) loss on derivative contracts 159 (938 ) (11,246 ) (76 )
Loss (gain) on sale of assets (11 ) (38 ) (34 ) (84 )
Share-based compensation expense   2,365         5,322      
Adjusted EBITDA $ 73,190   $ 13,550   $ 93,052   $ 7,988  
 

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