NGL Energy Partners LP Announces Second Quarter Results and Filing of Form 10-Q

NGL Energy Partners LP Announces Second Quarter Results and Filing of Form 10-Q

TULSA, Okla.--(BUSINESS WIRE)-- NGL Energy Partners LP (NYS: NGL) , "NGL Energy," today reported net income of $10.1 million and Adjusted EBITDA of $26.3 million for the three months ended September 30, 2012. Net income per limited partner common unit for the quarter was $0.18. General and administrative expenses during the quarter ended September 30, 2012 included $0.6 million of costs related to acquisitions.

NGL Energy's results of operations for the three months ended September 30, 2012 include the operations acquired in a June 2012 merger with High Sierra Energy, LP ("High Sierra"), which contributed significantly to NGL Energy's net income. High Sierra's businesses include crude oil gathering, transportation and marketing; water treatment, disposal, and transportation; and natural gas liquids transportation and marketing.


For the six month period ended September 30, 2012, NGL Energy reported a net loss of $14.6 million and Adjusted EBITDA of $19.9 million. Net loss per limited partner common unit for the six months ended September 30, 2012 was $(0.37). The net loss was impacted by the following items:

  • General and administrative expenses during the quarter ended June 30, 2012 included $3.5 million of costs related to the merger with High Sierra.
  • NGL recorded a loss of $5.8 million resulting from the accelerated amortization of previously capitalized debt issuance costs upon closing of its new revolving credit facility.
  • Declining propane prices during April and May 2012 had an adverse impact on margins of NGL's wholesale marketing and supply segment, which NGL expects to recover when delivering future volumes. NGL has contracts whereby it has committed to purchase ratable volumes of propane at index prices. NGL seeks to manage the price risk associated with these contracts primarily by selling the inventory not stored immediately after it is received. When NGL sells product, it records the cost of sale at the average cost of all inventory at that location, which may include inventory purchased earlier at higher prices and stored for sale in the future. During periods of falling prices, this results in negative margins on these sales.

During October 2012, NGL Energy completed a business combination whereby it acquired certain entities that operate salt water disposal wells and related assets. During October and November 2012, NGL Energy acquired two retail propane businesses. On November 1, 2012, NGL Energy completed a business combination whereby it acquired certain entities that conduct crude oil purchasing and logistics operations in Texas and New Mexico.

A conference call to discuss NGL Energy's results of operations is scheduled for 3:00 p.m. Central Time on November 19, 2012. Analysts, investors, and other interested parties may access the conference call by dialing (800) 510-9661 and providing access code 81546845. An audio replay of the conference call will be available for 7 days beginning at 4:00 p.m. Central Time on November 19, 2012 and can be accessed by dialing (888) 286-8010 and providing access code 85915820.

NGL Energy also announced that it has filed its quarterly report on Form 10-Q for its fiscal quarter ended September 30, 2012 with the Securities and Exchange Commission. NGL Energy has posted a copy of the Form 10-Q on its website at www.nglenergypartners.com.

NGL Energy defines EBITDA as net income (loss) attributable to parent equity, plus income taxes, interest expense and depreciation and amortization expense. NGL Energy 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 Energy 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 Energy 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 Energy 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.

About NGL Energy Partners: NGL Energy Partners LP owns and operates a vertically integrated energy business. For further information about NGL Energy and the financial results disclosed in this press release, see NGL Energy's website at www.nglenergypartners.com.

     
 
NGL ENERGY PARTNERS LP
Unaudited Condensed Consolidated Balance Sheets
As of September 30, 2012 and March 31, 2012
(U.S. Dollars in Thousands, except unit amounts)
 
September 30, March 31,
2012 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 26,009 $ 7,832

Accounts receivable - trade, net of allowance for doubtful accounts of $1,356 and $818, respectively

385,494 84,004
Receivables from affiliates 3,238 2,282
Inventories 264,556 94,504
Prepaid expenses and other current assets   57,000     10,002
Total current assets 736,297 198,624
 

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $25,326 and $12,843, respectively

425,641 237,652
GOODWILL 515,881 170,647
INTANGIBLE ASSETS, net of accumulated amortization of $17,646 and $8,174, respectively 345,942 139,780
OTHER NONCURRENT ASSETS   5,658     2,766
Total assets $ 2,029,419   $ 749,469
 
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 419,750 $ 81,369
Accrued expenses and other payables 68,724 14,143
Advance payments received from customers 74,814 20,293
Payables to affiliates 11,780 9,462
Current maturities of long-term debt   78,033     19,484
Total current liabilities 653,101 144,751
 
LONG-TERM DEBT, net of current maturities 569,903 199,177
OTHER NONCURRENT LIABILITIES 2,599 212
 
COMMITMENTS AND CONTINGENCIES
 
PARTNERS' EQUITY:
General Partner — 0.1% interest; 50,821 and 29,245 notional units outstanding, respectively (51,052 ) 442
Limited Partners — 99.9% interest —
Common units — 44,850,439 and 23,296,253 units outstanding, respectively 839,977 384,604
Subordinated units — 5,919,346 units outstanding at September 30, 2012 and March 31, 2012 11,784 19,824
Accumulated other comprehensive income —
Foreign currency translation 28 31
Noncontrolling interests   3,079     428
Total partners' equity   803,816     405,329
Total liabilities and partners' equity $ 2,029,419   $ 749,469
     
 
NGL ENERGY PARTNERS LP
Unaudited Condensed Consolidated Statements of Operations
Three Months and Six Months Ended September 30, 2012 and 2011
(U.S. Dollars in Thousands, except unit and per unit amounts)
 
Three Months Ended Six Months Ended
September 30, September 30,
2012   2011 2012   2011
REVENUES:
Retail propane $ 57,003 $ 19,225 $ 116,211 $ 32,077
Natural gas liquids logistics 350,368 190,816 541,985 368,809
Crude oil logistics 711,021 - 784,538 -
Water services 15,810 - 17,751 -
Other   1,308     -     1,461     -  

Total Revenues

  1,135,510     210,041     1,461,946     400,886  
 
COST OF SALES:
Retail propane 29,666 13,208 67,107 21,314
Natural gas liquids logistics 328,283 188,246 512,328 366,113
Crude oil logistics 693,687 - 770,570 -
Water services   2,054     -     2,670     -  
Total Cost of Sales   1,053,690     201,454     1,352,675     387,427  
 
OPERATING COSTS AND EXPENSES:
Operating 39,431 7,250 62,769 14,392
General and administrative 10,443 4,164 20,403 6,200
Depreciation and amortization   13,361     1,701     22,588     3,078  
Operating Income (Loss) 18,585 (4,528 ) 3,511 (10,211 )
 
OTHER INCOME (EXPENSE):
Interest income 263 99 629 225
Interest expense (8,692 ) (1,012 ) (12,492 ) (2,313 )
Loss on early extinguishment of debt - - (5,769 ) -
Other, net   3     46     29     131  
Income (Loss) Before Income Taxes 10,159 (5,395 ) (14,092 ) (12,168 )
 
INCOME TAX PROVISION   (77 )   -     (536 )   -  
 
Net Income (Loss) 10,082 (5,395 ) (14,628 ) (12,168 )
 
Net (Income) Loss Allocated to General Partner (694 ) 5 (789 ) 12
 
Net (Income) Loss Attributable to Noncontrolling Interests (9 ) - 51 -
 
Net Income (Loss) Attributable to Parent Equity        
Allocated to Limited Partners $ 9,379   $ (5,390 ) $ (15,366 ) $ (12,156 )
 
Basic and Diluted Earnings (Loss) per Common Unit $ 0.18   $ (0.36 ) $ (0.37 ) $ (0.88 )
 
Basic and Diluted Earnings (Loss) per Subordinated Unit $ 0.18   $ (0.36 ) $ (0.38 ) $ (0.88 )
 
Basic and Diluted Weighted average units outstanding:
Common   44,831,836     8,864,222     35,730,492     9,370,997  
Subordinated   5,919,346     5,919,346     5,919,346     4,431,423  
 
 

OPERATIONAL DATA

The following table summarizes the volume of product sold and wastewater processed for the three months and six months ended September 30, 2012 and 2011. Gallons sold by our natural gas liquids logistics segment shown in the table below include sales to our retail segment.


Increase your money and finance knowledge from home

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Add a Comment

*0 / 3000 Character Maximum
         
Three Months Ended Six Months Ended
September 30, September 30,

Segment

2012   2011 2012 2011
(in thousands)
Retail propane
Propane gallons sold 20,057 7,961 39,327 12,964
Distillate gallons sold 3,024 - 6,273 -
 
Natural gas liquids logistics
Propane gallons sold 137,840 109,468 256,755 212,166
Other natural gas liquids gallons sold 186,795 19,654 251,750 38,100
 
Crude oil logistics
Crude oil barrels sold 7,479 - 8,461 -
 
TWX +0.42 77.80

Related Tweets

More Tweets

Investing Calculators

Set investment goals