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

NGL Energy Partners LP (NYSE:NGL) today reported increased Adjusted EBITDA of $42.1 million for the three months ended September 30, 2013 (exclusive of $0.8 million of costs related to acquisitions), compared to Adjusted EBITDA of $26.9 million during the three months ended September 30, 2012 (exclusive of $0.6 million of costs related to acquisitions). NGL reported a net loss of $0.9 million for the three months ended September 30, 2013, compared to net income of $10.1 million for the three months ended September 30, 2012. Net loss per limited partner common unit for the three months ended September 30, 2013 was $(0.05), compared to net income per limited partner common unit of $0.18 for the three months ended September 30, 2012.

For the six months ended September 30, 2013, NGL reported increased Adjusted EBITDA of $69.5 million (exclusive of $1.4 million of costs related to acquisitions), compared to an Adjusted EBITDA of $24.3 million during the six months ended September 30, 2012 (exclusive of $4.4 million of costs related to acquisitions). NGL reported a net loss of $18.4 million for the six months ended September 30, 2013, compared to a net loss of $14.6 million for the six months ended September 30, 2012. Net loss per limited partner common unit was $(0.37) for the six months ended September 30, 2013 and for the six months ended September 30, 2012.

NGL’s Chief Executive Officer, H. Michael Krimbill, said, “NGL delivered solid second quarter results in line with our guidance. We continue to make progress toward our goals for fiscal 2014. Highlights include:
  • We reached an agreement to acquire the diversified midstream energy business of Gavilon. We expect this acquisition to close during December 2013.
  • We amended our revolving credit facility in November 2013. This amendment expands the capacity to $1.671 billion, extends the maturity date to late 2018, and reduces the interest rate on our revolving credit facility.
  • We reached an agreement to sell $240 million of common units in a private placement. We expect this sale to close concurrent with the closing of the Gavilon acquisition.
  • We sold $450 million of senior unsecured notes in a private placement during October 2013.
  • We completed eight acquisitions during the quarter ended September 30, 2013, primarily to expand our water services and crude oil logistics businesses. Capital expenditures for these assets approximated $473.6 million, of which $80.6 million represented equity issued to sellers of the acquired businesses.
  • We continued our internal growth initiatives, spending approximately $52.4 million of organic growth capital during the six months ended September 30, 2013, primarily to expand our water services and natural gas liquids terminal capabilities.
  • We completed public offerings of common units in July 2013 and September 2013, selling 14,450,000 common units for net proceeds of approximately $415.1 million.
  • At September 30, 2013, our leverage ratio approximated 2.25x, providing a strong balance sheet, which enables us to respond quickly to opportunities.
  • We increased our distribution per limited partner unit to $0.51125 per unit ($2.045 on an annualized basis), which represents a 3.5% increase over the previous quarter and a 13.6% increase over the same quarter of the prior fiscal year.”

NGL also announced that it has filed its quarterly report on Form 10-Q for its fiscal quarter ended September 30, 2013 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 3:00pm Eastern Time (2:00pm Central Time) on November 13, 2013. Analysts, investors, and other interested parties may access the conference call by dialing (866) 318-8615 and providing access code 93946282. An audio replay of the conference call will be available for 7 days beginning at 7:00pm Eastern Time (6:00pm Central Time) on November 13, 2013 and can be accessed by dialing (888) 286-8010 and providing access code 54078289.

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, 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 propane. 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 September 30, 2013 and March 31, 2013
(U.S. Dollars in Thousands, except unit amounts)
 
September 30, March 31,
2013 2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,528 $ 11,561

Accounts receivable - trade, net of allowance for doubtful accounts of $1,893 and $1,760, respectively
602,033 562,889
Accounts receivable - affiliates 3,071 22,883
Inventories 355,300 126,895
Prepaid expenses and other current assets   47,927     37,891  
Total current assets 1,013,859 762,119
 

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $76,390 and $50,127, respectively
631,663 516,937
GOODWILL 840,287 563,146

INTANGIBLE ASSETS, net of accumulated amortization of $68,790 and $44,155, respectively
534,746 442,603
OTHER NONCURRENT ASSETS   5,938     6,542  
Total assets $ 3,026,493   $ 2,291,347  
 
LIABILITIES AND PARTNERS’ EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 604,018 $ 535,687
Accrued expenses and other payables 101,988 85,703
Advance payments received from customers 67,994 22,372
Accounts payable - affiliates 18,429 6,900
Current maturities of long-term debt   8,229     8,626  
Total current liabilities 800,658 659,288
 
LONG-TERM DEBT, net of current maturities 906,066 740,436
OTHER NONCURRENT LIABILITIES 2,673 2,205
 
COMMITMENTS AND CONTINGENCIES
 
PARTNERS’ EQUITY:

General Partner — 0.1% interest; 71,288 and 53,676 notional units outstanding at September 30, 2013 and March 31, 2013, respectively
(48,782 ) (50,497 )
Limited Partners — 99.9% interest —

Common units — 65,296,884 and 47,703,313 units outstanding at September 30, 2013 and March 31, 2013, respectively
1,354,305 920,998

Subordinated units — 5,919,346 units outstanding at September 30, 2013 and March 31, 2013
4,130 13,153
Accumulated other comprehensive income (loss) —
Foreign currency translation (6 ) 24
Noncontrolling interests   7,449     5,740  
Total partners’ equity   1,317,096     889,418  
Total liabilities and partners’ equity $ 3,026,493   $ 2,291,347  
         
 
NGL ENERGY PARTNERS LP
Unaudited Condensed Consolidated Statements of Operations
For the Three Months and Six Months Ended September 30, 2013 and 2012
(U.S. Dollars in Thousands, except unit and per unit amounts)
 
Three Months Ended Six Months Ended
September 30, September 30,
2013 2012 2013 2012
REVENUES:
Crude oil logistics $ 1,014,008 $ 711,021 $ 1,944,802 $ 784,538
Water services 34,190 15,810 54,703 17,751
Natural gas liquids logistics 484,874 350,368 845,833 541,985
Retail propane 59,380 57,003 131,597 116,211
Other   1,485     1,308     2,959     1,461  
Total Revenues   1,593,937     1,135,510     2,979,894     1,461,946  
 
COST OF SALES:
Crude oil logistics 992,135 693,687 1,901,354 770,570
Water services 3,782 2,054 4,365 2,670
Natural gas liquids logistics 459,394 328,283 809,645 512,328
Retail propane   33,539     29,666     76,562     67,107  
Total Cost of Sales   1,488,850     1,053,690     2,791,926     1,352,675  
 
OPERATING COSTS AND EXPENSES:
Operating 55,769 39,431 104,814 62,769
General and administrative 14,312 10,443 32,766 20,403
Depreciation and amortization   25,061     13,361     47,785     22,588  
Operating Income 9,945 18,585 2,603 3,511
 
OTHER INCOME (EXPENSE):
Interest expense (11,060 ) (8,692 ) (21,682 ) (12,492 )
Loss on early extinguishment of debt - - - (5,769 )
Interest income 266 263 664 629
Other, net   153     3     (195 )   29  
Income (Loss) Before Income Taxes (696 ) 10,159 (18,610 ) (14,092 )
 
INCOME TAX (PROVISION) BENEFIT   (236 )   (77 )   170     (536 )
 
Net Income (Loss) (932 ) 10,082 (18,440 ) (14,628 )
 
Net Income Allocated to General Partner (2,451 ) (694 ) (4,139 ) (789 )
 
Net (Income) Loss Attributable to Noncontrolling Interests (9 ) (9 ) (134 ) 51
 
Net Income (Loss) Attributable to Parent Equity        
Allocated to Limited Partners $ (3,392 ) $ 9,379   $ (22,713 ) $ (15,366 )
 
Basic and Diluted Income (Loss) per Common Unit $ (0.05 ) $ 0.18   $ (0.37 ) $ (0.37 )
 
Basic and Diluted Income (Loss) per Subordinated Unit $ (0.09 ) $ 0.18   $ (0.52 ) $ (0.38 )
 
Basic and Diluted Weighted Average Units Outstanding:
Common   58,909,389     44,831,836     53,336,969     35,730,492  
Subordinated   5,919,346     5,919,346     5,919,346     5,919,346  
 
 

OPERATIONAL DATA

The following table summarizes the volume of product sold and wastewater delivered for the three months ended September 30, 2013 and 2012. Gallons sold by our natural gas liquids logistics segment shown in the table below include sales to our retail segment.

       
Three Months Ended Six Months Ended
September 30, September 30,
Segment 2013     2012 2013     2012
(in thousands)
Crude oil logistics
Crude oil sold (barrels) 9,280 7,479 18,535 8,461
 
Water services
Water delivered (barrels) 16,459 6,036 26,498 6,775
 
Natural gas liquids logistics
Propane sold (gallons) 183,415 137,840 310,834 256,755
Other natural gas liquids sold (gallons) 294,809 186,795 544,061 251,750
 
Retail propane
Propane sold (gallons) 20,599 20,057 43,992 39,327
Distillates sold (gallons) 3,072 3,024 8,176 6,273
 
 

ADJUSTED EBITDA RECONCILIATION

The following table reconciles 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 Ended Six Months Ended
September 30, September 30,
2013     2012 2013     2012
(in thousands)
EBITDA:
Net income (loss) attributable to parent equity $ (941 ) $ 10,073 $ (18,574 ) $ (14,577 )
Provision (benefit) for income taxes 236 77 (170 ) 536
Interest expense 11,060 8,692 21,682 12,492
Loss on early extinguishment of debt - - - 5,769
Depreciation and amortization expense   25,753     14,699     48,948     24,113  
EBITDA $ 36,108 $ 33,541 $ 51,886 $ 28,333
Unrealized (gain) loss on derivative contracts 167 (9,476 ) 3,745 (11,405 )
Loss (gain) on disposal of assets 1,790 (30 ) 2,163 (23 )
Share-based compensation expense   3,217     2,302     10,292     2,957  
Adjusted EBITDA $ 41,282   $ 26,337   $ 68,086   $ 19,862  

Copyright Business Wire 2010

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