Seventh paragraph (under Crude Oil Logistics), second sentence should read: During the three months ended March 31, 2021, financial volumes on the Grand Mesa Pipeline averaged approximately 66,000 barrels per day compared to 131,000 barrels per day during the prior year period, a decrease primarily due to the bankruptcy court’s approved rejection of the Extraction transportation agreement. Winter storm Uri in February 2021 reduced not only volumes at the lease in all areas of our operations, including the DJ Basin, but also refinery demand due to outages on the United States Gulf Coast. (instead of During the three months ended March 31, 2021, financial volumes on the Grand Mesa Pipeline averaged approximately 131,000 barrels per day during the prior year period, a decrease primarily due to the bankruptcy court’s approved rejection of the Extraction transportation agreement. Winter storm Uri in February 2021 reduced not only volumes at the lease in all areas of our operations, including the DJ Basin, but also refinery demand due to outages on the United States Gulf Coast.)
The updated release reads:
NGL ENERGY PARTNERS LP ANNOUNCES FOURTH QUARTER AND FULL YEAR FISCAL 2021 FINANCIAL RESULTS
NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today reported its fourth quarter and full year fiscal 2021 results.
Highlights for the quarter and fiscal year ended March 31, 2021 include:
- Loss from continuing operations for the quarter ended March 31, 2021 of $229.2 million, including a loss of $63.1 million related to the early repayment of the Partnership’s term loan facility, a one-time $40.0 million consent payment to the holders of the Partnership’s Class D Preferred Units and a non-cash impairment charge of $84.3 million for certain inactive or underutilized saltwater disposal facilities
- Loss from continuing operations of $637.4 million for Fiscal 2021, which includes the $383.6 million write down of goodwill and certain intangibles related to the impact of the bankruptcy rejection of transportation contracts with Extraction Oil & Gas, Inc. (“Extraction”), certain costs associated with the re-financing of our credit facility and term loan facility and the impairment of certain assets
- Adjusted EBITDA from continuing operations for the fourth quarter of Fiscal 2021 of $94.3 million, compared to $161.8 million for the fourth quarter of Fiscal 2020, driven by lower volumes in each of our operating segments
- Fiscal Year 2021 Adjusted EBITDA from continuing operations of $448.3 million compared to $589.5 million in the prior year
- Completion of a private offering of $2.05 billion of 7.5% senior secured notes due 2026 (“2026 Secured Notes”) and a new $500.0 million asset-based revolving credit facility (“ABL Facility”) on February 4, 2021. These transactions significantly extended debt maturities as proceeds received were used to repay all outstanding amounts under the Partnership’s previous $1.915 billion revolving credit facility due in October 2021 and its $250.0 million term loan facility and terminate those agreements, as well as to pay all fees and expenses associated with the transactions.
- Announced suspension of all common unit and preferred unit distributions until the Board of Directors of our general partner deems it prudent to resume distributions and such distributions are consistent with the terms of the Partnership’s various debt agreements
“The Partnership is well positioned going into its Fiscal 2022, as crude prices, producer volumes and demand for commodities have all increased following a challenging Fiscal 2021. Our Water Solutions segment continues to drive the growth of the Partnership and we look to fully capitalize on our Delaware Basin platform in the coming year. We are excited about rising and stabilizing crude oil prices and the return of production growth in the DJ Basin and expect to see increased producer demand for capacity on our Grand Mesa Pipeline as well,” stated Mike Krimbill, NGL’s CEO. “Fiscal 2021 was significant for the Partnership as we successfully extended our debt maturities and improved liquidity in a difficult banking environment for energy companies and provided a secure platform from which the Partnership can operate going forward. Once again, we are looking forward to seeing increased utilization of our existing asset platform to deliver excess free cash flow for deleveraging and the eventual reinstatement of our distributions,” Krimbill concluded.
Quarterly Results of Operations
The following table summarizes operating income (loss) and Adjusted EBITDA from continuing operations by reportable segment for the periods indicated:
Quarter Ended | ||||||||||||||||
March 31, 2021 | March 31, 2020 | |||||||||||||||
Operating
| Adjusted
| Operating
| Adjusted
| |||||||||||||
(in thousands) | ||||||||||||||||
Water Solutions | $ | (79,217 | ) | $ | 57,979 | $ | (207,444 | ) | $ | 72,140 | ||||||
Crude Oil Logistics | 6,303 | 22,176 | 16,750 | 56,938 | ||||||||||||
Liquids Logistics | 19,103 | 26,467 | 29,204 | 47,424 | ||||||||||||
Corporate and Other | (16,166 | ) | (12,343 | ) | (15,872 | ) | (14,740 | ) | ||||||||
Total | $ | (69,977 | ) | $ | 94,279 | $ | (177,362 | ) | $ | 161,762 | ||||||
Water Solutions
The Partnership processed approximately 1.4 million barrels of water per day during the quarter ended March 31, 2021, a 17.6% decrease when compared to approximately 1.7 million barrels of water per day processed during the quarter ended March 31, 2020. This decrease was primarily due to lower development activity and production volumes through the past year along with the impact from winter storm Uri and the slower recovery of volumes in the Delaware Basin. The decline was partially offset by new produced water volumes received upon the completion and commencement of the Partnership’s Poker Lake pipeline. The pipeline was successfully completed in October 2020 with capacity of over 400,000 barrels per day and connects into the Partnership’s integrated Delaware Basin produced water pipeline infrastructure network.
Operating expenses in the Water Solutions segment decreased to $0.29 per barrel compared to $0.38 per barrel in the comparative quarter last year. This includes certain costs incurred in February 2021 related to winter storm Uri, combined with lower volumes. The Partnership has taken significant steps to reduce operating costs and continues to evaluate cost saving initiatives.
Crude Oil Logistics
Operating income for the fourth quarter of Fiscal 2021 decreased compared to the same quarter in Fiscal 2020 due to lower activity on our Grand Mesa Pipeline, revenues from which decreased by $19.1 million during the quarter ended March 31, 2021, compared to the quarter ended March 31, 2020. During the three months ended March 31, 2021, financial volumes on the Grand Mesa Pipeline averaged approximately 66,000 barrels per day compared to 131,000 barrels per day during the prior year period, a decrease primarily due to the bankruptcy court’s approved rejection of the Extraction transportation agreement. Winter storm Uri in February 2021 reduced not only volumes at the lease in all areas of our operations, including the DJ Basin, but also refinery demand due to outages on the United States Gulf Coast. This was partially offset by an increase in prices during the fourth quarter of Fiscal 2021.
Liquids Logistics
Total product margin per gallon, excluding the impact of derivatives, was $0.060 for the quarter ended March 31, 2021 compared to $0.044 in the same quarter of the prior year. Liquids revenues increased due to increased commodity prices in the quarter ended March 31, 2021 as a result of winter storm Uri in February, which impacted the supply of natural gas liquids and refined products. Refined products volume sold decreased during the quarter ended March 31, 2021 and totaled approximately 188.4 million gallons, compared to 292.1 million gallons in the same period in the prior year, as demand for refined products has not fully rebounded from the pandemic. Butane volumes also continued to be impacted by a lack in demand. Propane volumes for the quarter ended March 31, 2021 were down approximately 5.0% from the same period last year due to less demand throughout the heating season in our core operating areas.
Capitalization and Liquidity
Total liquidity (cash plus available capacity on our revolving credit facility) was approximately $344.9 million as of March 31, 2021. The Partnership is in compliance with all of its debt covenants and has no significant current debt maturities before November 2023. The Partnership expects to generate excess cash flow in Fiscal 2022, which will be utilized to repay outstanding indebtedness and improve leverage.
Fourth Quarter Conference Call Information
A conference call to discuss NGL’s results of operations is scheduled for 4:00 pm Central Time on Thursday, June 3, 2021. Analysts, investors, and other interested parties may access the conference call by dialing (800) 291-4083 and providing access code 7299585. An archived audio replay of the conference call will be available for 7 days beginning at 1:00 pm Central Time on June 4, 2021, which can be accessed by dialing (855) 859-2056 and providing access code 7299585.
NGL filed its Annual Report on Form 10-K for the year ended March 31, 2021 with the Securities and Exchange Commission after market on June 3, 2021. A copy of the Form 10-K can be found on the Partnership’s website at www.nglenergypartners.com. Unitholders may also request, free of charge, a hard copy of our Form 10-K and our complete audited financial statements.
Non-GAAP Financial Measures
NGL defines EBITDA as net income (loss) attributable to NGL Energy Partners LP, plus interest expense, income tax expense (benefit), and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities, certain legal settlements and other. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to TransMontaigne Product Services, LLC (“TPSL”), our refined products business in the mid-continent region of the United States (“Mid-Con”) and our gas blending business in the southeastern and eastern regions of the United States (“Gas Blending”), which are included in discontinued operations, and certain refined products businesses within NGL’s Liquids Logistics segment, as discussed below. EBITDA and Adjusted EBITDA should not be considered alternatives to net loss, loss from continuing operations 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 to investors for evaluating NGL’s ability to make quarterly distributions to NGL’s 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 NGL’s financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA, Adjusted EBITDA, or similarly titled measures used by other entities.
Other than for the TPSL, Mid-Con, and Gas Blending businesses, which are included in discontinued operations, and certain businesses within NGL’s Liquids Logistics segment, for purposes of the 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 record a realized gain or loss. NGL does not draw such a distinction between realized and unrealized gains and losses on derivatives of the TPSL, Mid-Con, and Gas Blending businesses, which are included in discontinued operations, and certain businesses within NGL’s Liquids Logistics segment. The primary hedging strategy of these businesses 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 cover extended periods of time. The “inventory valuation adjustment” row in the reconciliation table reflects the difference between the market value of the inventory of these businesses at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge. NGL includes this in Adjusted EBITDA because the unrealized gains and losses associated with derivative contracts associated with the inventory of this segment, which are intended primarily to hedge inventory holding risk and are included in net income, also affect Adjusted EBITDA.
Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance capital expenditures, income tax expense, cash interest expense, preferred unit distributions and other. Maintenance capital expenditures represent capital expenditures necessary to maintain the Partnership’s operating capacity. Distributable Cash Flow is a performance metric used by senior management to compare cash flows generated by the Partnership (excluding growth capital expenditures and prior to the establishment of any retained cash reserves by the Board of Directors) to the cash distributions expected to be paid to unitholders. Using this metric, management can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. This financial measure also is important to investors as an indicator of whether the Partnership is generating cash flow at a level that can sustain, or support an increase in, quarterly distribution rates. Actual distribution amounts are set by the Board of Directors.
Forward-Looking Statements
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 such forward-looking statements are reasonable, NGL cannot assure they 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.
NGL provides Adjusted EBITDA guidance that does not include certain charges and costs, which in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior periods, such as income taxes, interest and other non-operating items, depreciation and amortization, net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities and items that are unusual in nature or infrequently occurring. The exclusion of these charges and costs in future periods will have a significant impact on the Partnership’s Adjusted EBITDA, and the Partnership is not able to provide a reconciliation of its Adjusted EBITDA guidance to net income (loss) without unreasonable efforts due to the uncertainty and variability of the nature and amount of these future charges and costs and the Partnership believes that such reconciliation, if possible, would imply a degree of precision that would be potentially confusing or misleading to investors.
About NGL Energy Partners LP
NGL Energy Partners LP, a Delaware limited partnership, is a diversified midstream energy company that transports, treats, recycles and disposes of produced water generated as part of the energy production process as well as transports, stores, markets and provides other logistics services for crude oil and liquid hydrocarbons.
For further information, visit the Partnership’s website at www.nglenergypartners.com.
NGL ENERGY PARTNERS LP AND SUBSIDIARIES | |||||||
Unaudited Consolidated Balance Sheets | |||||||
(in Thousands, except unit amounts) | |||||||
March 31, | |||||||
2021 | 2020 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 4,829 | $ | 22,704 | |||
Accounts receivable-trade, net of allowance for expected credit losses of $2,192 and $4,540, respectively | 725,943 | 566,834 | |||||
Accounts receivable-affiliates | 9,435 | 12,934 | |||||
Inventories | 158,467 | 69,634 | |||||
Prepaid expenses and other current assets | 109,164 | 101,981 | |||||
Total current assets | 1,007,838 | 774,087 | |||||
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $776,279 and $529,068, respectively | 2,706,853 | 2,851,555 | |||||
GOODWILL | 744,439 | 993,587 | |||||
INTANGIBLE ASSETS, net of accumulated amortization of $517,518 and $631,449, respectively | 1,262,613 | 1,612,480 | |||||
INVESTMENTS IN UNCONSOLIDATED ENTITIES | 22,719 | 23,182 | |||||
OPERATING LEASE RIGHT-OF-USE ASSETS | 152,146 | 180,708 | |||||
OTHER NONCURRENT ASSETS | 50,733 | 63,137 | |||||
Total assets | $ | 5,947,341 | $ | 6,498,736 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable-trade | $ | 679,868 | $ | 515,049 | |||
Accounts payable-affiliates | 119 | 17,717 | |||||
Accrued expenses and other payables | 170,400 | 232,062 | |||||
Advance payments received from customers | 11,163 | 19,536 | |||||
Current maturities of long-term debt | 2,183 | 4,683 | |||||
Operating lease obligations | 47,070 | 56,776 | |||||
Total current liabilities | 910,803 | 845,823 | |||||
LONG-TERM DEBT, net of debt issuance costs of $55,555 and $19,795, respectively, and current maturities | 3,319,030 | 3,144,848 | |||||
OPERATING LEASE OBLIGATIONS | 103,637 | 121,013 | |||||
OTHER NONCURRENT LIABILITIES | 114,615 | 114,079 | |||||
CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively | 551,097 | 537,283 | |||||
EQUITY: | |||||||
General partner, representing a 0.1% interest, 129,724 and 128,901 notional units, respectively | (52,189 | ) | (51,390 | ) | |||
Limited partners, representing a 99.9% interest, 129,593,939 and 128,771,715 common units issued and outstanding, respectively | 582,784 | 1,366,152 | |||||
Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively | 305,468 | 305,468 | |||||
Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively | 42,891 | 42,891 | |||||
Accumulated other comprehensive loss | (266 | ) | (385 | ) | |||
Noncontrolling interests | 69,471 | 72,954 | |||||
Total equity | 948,159 | 1,735,690 | |||||
Total liabilities and equity | $ | 5,947,341 | $ | 6,498,736 | |||
NGL ENERGY PARTNERS LP AND SUBSIDIARIES | ||||||||||||||||
Unaudited Consolidated Statements of Operations | ||||||||||||||||
(in Thousands, except unit and per unit amounts) | ||||||||||||||||
Three Months Ended March 31, | Year Ended March 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
REVENUES: | ||||||||||||||||
Water Solutions | $ | 95,318 | $ | 127,420 | $ | 370,986 | $ | 422,059 | ||||||||
Crude Oil Logistics | 493,467 | 501,466 | 1,721,636 | 2,549,767 | ||||||||||||
Liquids Logistics | 1,163,333 | 1,052,119 | 3,133,146 | 4,611,136 | ||||||||||||
Other | 313 | 239 | 1,255 | 1,038 | ||||||||||||
Total Revenues | 1,752,431 | 1,681,244 | 5,227,023 | 7,584,000 | ||||||||||||
COST OF SALES: | ||||||||||||||||
Water Solutions | 1,063 | (38,571 | ) | 9,622 | (33,870 | ) | ||||||||||
Crude Oil Logistics | 462,732 | 446,571 | 1,515,993 | 2,293,953 | ||||||||||||
Liquids Logistics | 1,108,758 | 981,341 | 2,966,391 | 4,342,526 | ||||||||||||
Other | 453 | 437 | 1,816 | 1,774 | ||||||||||||
Total Cost of Sales | 1,573,006 | 1,389,778 | 4,493,822 | 6,604,383 | ||||||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||||||
Operating | 72,094 | 102,383 | 254,562 | 332,993 | ||||||||||||
General and administrative | 19,791 | 20,264 | 70,468 | 113,664 | ||||||||||||
Depreciation and amortization | 67,572 | 74,719 | 317,227 | 265,312 | ||||||||||||
Loss on disposal or impairment of assets, net | 83,684 | 272,268 | 475,436 | 261,786 | ||||||||||||
Revaluation of liabilities | 6,261 | (806 | ) | 6,261 | 9,194 | |||||||||||
Operating Loss | (69,977 | ) | (177,362 | ) | (390,753 | ) | (3,332 | ) | ||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Equity in earnings of unconsolidated entities | 804 | 1,014 | 1,938 | 1,291 | ||||||||||||
Interest expense | (60,651 | ) | (49,370 | ) | (198,799 | ) | (181,184 | ) | ||||||||
(Loss) gain on early extinguishment of liabilities, net | (60,984 | ) | 1,341 | (16,692 | ) | 1,341 | ||||||||||
Other (expense) income, net | (39,563 | ) | 717 | (36,503 | ) | 1,684 | ||||||||||
Loss From Continuing Operations Before Income Taxes | (230,371 | ) | (223,660 | ) | (640,809 | ) | (180,200 | ) | ||||||||
INCOME TAX BENEFIT (EXPENSE) | 1,154 | 651 | 3,391 | (345 | ) | |||||||||||
Loss From Continuing Operations | (229,217 | ) | (223,009 | ) | (637,418 | ) | (180,545 | ) | ||||||||
Loss From Discontinued Operations, net of Tax | (23 | ) | (25,435 | ) | (1,769 | ) | (218,235 | ) | ||||||||
Net Loss | (229,240 | ) | (248,444 | ) | (639,187 | ) | (398,780 | ) | ||||||||
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (447 | ) | 1,210 | (632 | ) | 1,773 | ||||||||||
NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP | $ | (229,687 | ) | $ | (247,234 | ) | $ | (639,819 | ) | $ | (397,007 | ) | ||||
NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS | $ | (253,180 | ) | $ | (243,454 | ) | $ | (730,683 | ) | $ | (367,246 | ) | ||||
NET LOSS FROM DISCONTINUED OPERATIONS ALLOCATED TO COMMON UNITHOLDERS | $ | (23 | ) | $ | (25,410 | ) | $ | (1,767 | ) | $ | (218,017 | ) | ||||
NET LOSS ALLOCATED TO COMMON UNITHOLDERS | $ | (253,203 | ) | $ | (268,864 | ) | $ | (732,450 | ) | $ | (585,263 | ) | ||||
BASIC (LOSS) INCOME PER COMMON UNIT | ||||||||||||||||
Loss From Continuing Operations | $ | (1.96 | ) | $ | (1.89 | ) | $ | (5.67 | ) | $ | (2.88 | ) | ||||
Loss From Discontinued Operations, net of Tax | $ | — | $ | (0.20 | ) | $ | (0.01 | ) | $ | (1.71 | ) | |||||
Net Loss | $ | (1.96 | ) | $ | (2.09 | ) | $ | (5.68 | ) | $ | (4.59 | ) | ||||
DILUTED (LOSS) INCOME PER COMMON UNIT | ||||||||||||||||
Loss From Continuing Operations | $ | (1.96 | ) | $ | (1.89 | ) | $ | (5.67 | ) | $ | (2.88 | ) | ||||
Loss From Discontinued Operations, net of Tax | $ | — | $ | (0.20 | ) | $ | (0.01 | ) | $ | (1.71 | ) | |||||
Net Loss | $ | (1.96 | ) | $ | (2.09 | ) | $ | (5.68 | ) | $ | (4.59 | ) | ||||
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING | 129,395,184 | 128,576,572 | 128,980,823 | 127,411,908 | ||||||||||||
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING | 129,395,184 | 128,576,572 | 128,980,823 | 127,411,908 | ||||||||||||
EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION | ||||||||||||||||
(Unaudited) | ||||||||||||||||
The following table reconciles NGL’s net loss to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow for the periods indicated: | ||||||||||||||||
Three Months Ended March 31, | Year Ended March 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(in thousands) | ||||||||||||||||
Net loss | $ | (229,240 | ) | $ | (248,444 | ) | $ | (639,187 | ) | $ | (398,780 | ) | ||||
Less: Net (income) loss attributable to noncontrolling interests | (447 | ) | 1,210 | (632 | ) | 1,773 | ||||||||||
Net loss attributable to NGL Energy Partners LP | (229,687 | ) | (247,234 | ) | (639,819 | ) | (397,007 | ) | ||||||||
Interest expense | 60,664 | 49,388 | 198,823 | 181,357 | ||||||||||||
Income tax (benefit) expense | (1,153 | ) | (650 | ) | (3,444 | ) | 365 | |||||||||
Depreciation and amortization | 66,921 | 74,098 | 314,476 | 265,147 | ||||||||||||
EBITDA | (103,255 | ) | (124,398 | ) | (129,964 | ) | 49,862 | |||||||||
Net unrealized (gains) losses on derivatives | (291 | ) | (46,408 | ) | 47,366 | (38,557 | ) | |||||||||
Inventory valuation adjustment (1) | (169 | ) | (4,121 | ) | 1,224 | (29,676 | ) | |||||||||
Lower of cost or net realizable value adjustments | 3,111 | 33,667 | (30,102 | ) | 31,202 | |||||||||||
Loss on disposal or impairment of assets, net | 83,677 | 292,726 | 476,601 | 464,483 | ||||||||||||
Loss (gain) on early extinguishment of liabilities, net | 60,984 | (1,341 | ) | 16,692 | (1,341 | ) | ||||||||||
Equity-based compensation expense (2) | 1,049 | (699 | ) | 6,727 | 26,510 | |||||||||||
Acquisition expense (3) | 796 | 1,127 | 1,711 | 19,722 | ||||||||||||
Revaluation of liabilities (4) | 6,261 | (806 | ) | 6,261 | 9,194 | |||||||||||
Class D Preferred Unitholder consent fee (5) | 40,000 | — | 40,000 | — | ||||||||||||
Other (6) | 2,086 | 5,107 | 11,135 | 15,788 | ||||||||||||
Adjusted EBITDA | $ | 94,249 | $ | 154,854 | $ | 447,651 | $ | 547,187 | ||||||||
Adjusted EBITDA - Discontinued Operations (7) | $ | (30 | ) | $ | (6,908 | ) | $ | (621 | ) | $ | (42,270 | ) | ||||
Adjusted EBITDA - Continuing Operations | $ | 94,279 | $ | 161,762 | $ | 448,272 | $ | 589,457 | ||||||||
Less: Cash interest expense (8) | 57,178 | 45,848 | 185,138 | 170,254 | ||||||||||||
Less: Income tax (benefit) expense | (1,154 | ) | (650 | ) | (3,391 | ) | 345 | |||||||||
Less: Maintenance capital expenditures | 6,520 | 10,999 | 28,787 | 61,353 | ||||||||||||
Less: Preferred unit distributions paid | 23,770 | 14,237 | 77,678 | 45,721 | ||||||||||||
Less: Other (9) | (9 | ) | 16 | — | 658 | |||||||||||
Distributable Cash Flow - Continuing Operations | $ | 7,974 | $ | 91,312 | $ | 160,060 | $ | 311,126 | ||||||||
(1) | Amount reflects the difference between the market value of the inventory at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge. See “Non-GAAP Financial Measures” section above for a further discussion. | |
(2) | Equity-based compensation expense in the table above may differ from equity-based compensation expense reported in the footnotes to our consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2021. Amounts reported in the table above include expense accruals for bonuses expected to be paid in common units, whereas the amounts reported in the footnotes to our consolidated financial statements only include expenses associated with equity-based awards that have been formally granted. | |
(3) | Amounts represent expenses we incurred related to legal and advisory costs associated with acquisitions, including Mesquite and Hillstone, along with amounts accrued related to the LCT Capital, LLC legal matter (as discussed in the footnotes to our consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2021). | |
(4) | Amounts for the three months ended March 31, 2021 and 2020 and year ended March 31, 2021 represent the non-cash valuation adjustment of contingent consideration liabilities, offset by the cash payments, related to royalty agreements acquired as part of acquisitions in our Water Solutions segment. Amount for the year ended March 31, 2020 represents the non-cash valuation adjustment of our contingent consideration liability issued by us as part of our acquisition of Mesquite (as discussed in the footnotes to our consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2021), partially offset by the non-cash valuation adjustment of contingent consideration liabilities, offset by the cash payments, related to royalty agreements acquired as part of acquisitions in our Water Solutions segment. | |
(5) | Represents the fee paid to the holders of the Class D Preferred Units to obtain their consent in order to complete the issuance of the 2026 Senior Secured Notes and the ABL Facility (as discussed in the footnotes to our consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2021). | |
(6) | Amounts for the three months and years ended March 31, 2021 and 2020 represent non-cash operating expenses related to our Grand Mesa Pipeline, unrealized losses on marketable securities and accretion expense for asset retirement obligations. | |
(7) | Amounts include the operations of TPSL, Gas Blending and Mid-Con. | |
(8) | Amounts represent interest expense payable in cash for the period presented, excluding changes in the accrued interest balance. | |
(9) | Amounts represent cash paid to settle asset retirement obligations. |
ADJUSTED EBITDA RECONCILIATION BY SEGMENT | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||
Water
| Crude Oil
| Liquids
| Corporate
| Continuing
| Discontinued
| Consolidated | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Operating (loss) income | $ | (79,217 | ) | $ | 6,303 | $ | 19,103 | $ | (16,166 | ) | $ | (69,977 | ) | $ | — | $ | (69,977 | ) | |||||||||
Depreciation and amortization | 48,427 | 10,334 | 7,026 | 1,785 | 67,572 | — | 67,572 | ||||||||||||||||||||
Amortization recorded to cost of sales | — | — | 77 | — | 77 | — | 77 | ||||||||||||||||||||
Net unrealized losses (gains) on derivatives | 975 | 4,233 | (5,499 | ) | — | (291 | ) | — | (291 | ) | |||||||||||||||||
Inventory valuation adjustment | — | — | (202 | ) | — | (202 | ) | — | (202 | ) | |||||||||||||||||
Lower of cost or net realizable value adjustments | — | (213 | ) | 3,357 | — | 3,144 | — | 3,144 | |||||||||||||||||||
Loss (gain) on disposal or impairment of assets, net | 80,357 | (248 | ) | 3,346 | 229 | 83,684 | — | 83,684 | |||||||||||||||||||
Equity-based compensation expense | — | — | — | 1,049 | 1,049 | — | 1,049 | ||||||||||||||||||||
Acquisition expense | 10 | — | — | 786 | 796 | — | 796 | ||||||||||||||||||||
Other income (expense), net | 7 | 50 | 297 | (39,917 | ) | (39,563 | ) | — | (39,563 | ) | |||||||||||||||||
Adjusted EBITDA attributable to unconsolidated entities | 1,136 | — | 8 | (109 | ) | 1,035 | — | 1,035 | |||||||||||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (330 | ) | — | (1,071 | ) | — | (1,401 | ) | — | (1,401 | ) | ||||||||||||||||
Revaluation of liabilities | 6,261 | — | — | — | 6,261 | — | 6,261 | ||||||||||||||||||||
Class D Preferred Unitholder consent fee | — | — | — | 40,000 | 40,000 | — | 40,000 | ||||||||||||||||||||
Other | 353 | 1,717 | 25 | — | 2,095 | — | 2,095 | ||||||||||||||||||||
Discontinued operations | — | — | — | — | — | (30 | ) | (30 | ) | ||||||||||||||||||
Adjusted EBITDA | $ | 57,979 | $ | 22,176 | $ | 26,467 | $ | (12,343 | ) | $ | 94,279 | $ | (30 | ) | $ | 94,249 | |||||||||||
Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||
Water
| Crude Oil
| Liquids
| Corporate
| Continuing
| Discontinued
| Consolidated | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Operating (loss) income | $ | (207,444 | ) | $ | 16,750 | $ | 29,204 | $ | (15,872 | ) | $ | (177,362 | ) | $ | — | $ | (177,362 | ) | |||||||||
Depreciation and amortization | 49,522 | 17,531 | 6,896 | 770 | 74,719 | — | 74,719 | ||||||||||||||||||||
Amortization recorded to cost of sales | — | — | 87 | — | 87 | — | 87 | ||||||||||||||||||||
Net unrealized (gains) losses on derivatives | (35,748 | ) | (11,391 | ) | 731 | — | (46,408 | ) | — | (46,408 | ) | ||||||||||||||||
Inventory valuation adjustment | — | — | (1,886 | ) | — | (1,886 | ) | — | (1,886 | ) | |||||||||||||||||
Lower of cost or net realizable value adjustments | — | 29,469 | 4,213 | — | 33,682 | — | 33,682 | ||||||||||||||||||||
Loss on disposal or impairment of assets, net | 264,306 | 284 | 7,678 | — | 272,268 | — | 272,268 | ||||||||||||||||||||
Equity-based compensation expense | — | — | — | (699 | ) | (699 | ) | — | (699 | ) | |||||||||||||||||
Acquisition expense | 92 | — | — | 1,035 | 1,127 | — | 1,127 | ||||||||||||||||||||
Other income (expense), net | 4 | 614 | (20 | ) | 119 | 717 | — | 717 | |||||||||||||||||||
Adjusted EBITDA attributable to unconsolidated entities | 1,467 | — | 29 | (93 | ) | 1,403 | — | 1,403 | |||||||||||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (613 | ) | — | (546 | ) | — | (1,159 | ) | — | (1,159 | ) | ||||||||||||||||
Revaluation of liabilities | (806 | ) | — | — | — | (806 | ) | — | (806 | ) | |||||||||||||||||
Intersegment transactions (1) | — | — | 974 | — | 974 | — | 974 | ||||||||||||||||||||
Other | 1,360 | 3,681 | 64 | — | 5,105 | — | 5,105 | ||||||||||||||||||||
Discontinued operations | — | — | — | — | — | (6,908 | ) | (6,908 | ) | ||||||||||||||||||
Adjusted EBITDA | $ | 72,140 | $ | 56,938 | $ | 47,424 | $ | (14,740 | ) | $ | 161,762 | $ | (6,908 | ) | $ | 154,854 | |||||||||||
Year Ended March 31, 2021 | |||||||||||||||||||||||||||
Water
| Crude Oil
| Liquids
| Corporate
| Continuing
| Discontinued
| Consolidated | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Operating (loss) income | $ | (92,720 | ) | $ | (304,330 | ) | $ | 70,441 | $ | (64,144 | ) | $ | (390,753 | ) | $ | — | $ | (390,753 | ) | ||||||||
Depreciation and amortization | 222,107 | 60,874 | 29,184 | 5,062 | 317,227 | — | 317,227 | ||||||||||||||||||||
Amortization recorded to cost of sales | — | — | 307 | — | 307 | — | 307 | ||||||||||||||||||||
Net unrealized losses (gains) on derivatives | 24,500 | 23,432 | (566 | ) | — | 47,366 | — | 47,366 | |||||||||||||||||||
Inventory valuation adjustment | — | — | 1,197 | — | 1,197 | — | 1,197 | ||||||||||||||||||||
Lower of cost or net realizable value adjustments | — | (29,458 | ) | (617 | ) | — | (30,075 | ) | — | (30,075 | ) | ||||||||||||||||
Loss on disposal or impairment of assets, net | 76,942 | 384,143 | 3,350 | 11,001 | 475,436 | — | 475,436 | ||||||||||||||||||||
Equity-based compensation expense | — | — | — | 6,727 | 6,727 | — | 6,727 | ||||||||||||||||||||
Acquisition expense | 27 | — | — | 1,684 | 1,711 | — | 1,711 | ||||||||||||||||||||
Other income (expense), net | 266 | 1,565 | 1,301 | (39,635 | ) | (36,503 | ) | — | (36,503 | ) | |||||||||||||||||
Adjusted EBITDA attributable to unconsolidated entities | 3,019 | — | (3 | ) | (252 | ) | 2,764 | — | 2,764 | ||||||||||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (1,647 | ) | — | (2,887 | ) | — | (4,534 | ) | — | (4,534 | ) | ||||||||||||||||
Revaluation of liabilities | 6,261 | — | — | — | 6,261 | — | 6,261 | ||||||||||||||||||||
Class D Preferred Unitholder consent fee | — | — | — | 40,000 | 40,000 | — | 40,000 | ||||||||||||||||||||
Intersegment transactions (1) | — | — | (27 | ) | — | (27 | ) | — | (27 | ) | |||||||||||||||||
Other | 2,751 | 8,317 | 100 | — | 11,168 | — | 11,168 | ||||||||||||||||||||
Discontinued operations | — | — | — | — | — | (621 | ) | (621 | ) | ||||||||||||||||||
Adjusted EBITDA | $ | 241,506 | $ | 144,543 | $ | 101,780 | $ | (39,557 | ) | $ | 448,272 | $ | (621 | ) | $ | 447,651 | |||||||||||
Year Ended March 31, 2020 | |||||||||||||||||||||||||||
Water
| Crude Oil
| Liquids
| Corporate
| Continuing
| Discontinued
| Consolidated | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Operating (loss) income | $ | (173,064 | ) | $ | 117,768 | $ | 142,411 | $ | (90,447 | ) | $ | (3,332 | ) | $ | — | $ | (3,332 | ) | |||||||||
Depreciation and amortization | 163,588 | 70,759 | 27,930 | 3,035 | 265,312 | — | 265,312 | ||||||||||||||||||||
Amortization recorded to cost of sales | — | — | 349 | — | 349 | — | 349 | ||||||||||||||||||||
Net unrealized (gains) losses on derivatives | (29,861 | ) | (11,315 | ) | 2,619 | — | (38,557 | ) | — | (38,557 | ) | ||||||||||||||||
Inventory valuation adjustment | — | — | (2,150 | ) | — | (2,150 | ) | — | (2,150 | ) | |||||||||||||||||
Lower of cost or net realizable value adjustments | — | 29,469 | 2,724 | — | 32,193 | — | 32,193 | ||||||||||||||||||||
Loss (gain) on disposal or impairment of assets, net | 255,285 | (1,144 | ) | 7,645 | — | 261,786 | — | 261,786 | |||||||||||||||||||
Equity-based compensation expense | — | — | — | 26,510 | 26,510 | — | 26,510 | ||||||||||||||||||||
Acquisition expense | 4,079 | — | — | 15,643 | 19,722 | — | 19,722 | ||||||||||||||||||||
Other (expense) income, net | (448 | ) | 717 | 21 | 1,394 | 1,684 | — | 1,684 | |||||||||||||||||||
Adjusted EBITDA attributable to unconsolidated entities | 2,152 | — | 24 | (263 | ) | 1,913 | — | 1,913 | |||||||||||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (1,210 | ) | — | (1,842 | ) | — | (3,052 | ) | — | (3,052 | ) | ||||||||||||||||
Revaluation of liabilities | 9,194 | — | — | — | 9,194 | — | 9,194 | ||||||||||||||||||||
Intersegment transactions (1) | — | — | 2,099 | — | 2,099 | — | 2,099 | ||||||||||||||||||||
Other | 2,607 | 12,965 | 214 | — | 15,786 | — | 15,786 | ||||||||||||||||||||
Discontinued operations | — | — | — | — | — | (42,270 | ) | (42,270 | ) | ||||||||||||||||||
Adjusted EBITDA | $ | 232,322 | $ | 219,219 | $ | 182,044 | $ | (44,128 | ) | $ | 589,457 | $ | (42,270 | ) | $ | 547,187 | |||||||||||
(1) | Amount reflects the transactions with TPSL, Mid-Con and Gas Blending that are eliminated in consolidation. |
OPERATIONAL DATA | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | Year Ended | ||||||||||
March 31, | March 31, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
(in thousands, except per day amounts) | |||||||||||
Water Solutions: | |||||||||||
Produced water processed (barrels per day) | |||||||||||
Delaware Basin (1) | 1,212,453 | 1,294,750 | 1,148,582 | 1,170,158 | |||||||
Eagle Ford Basin | 63,871 | 197,587 | 78,397 | 246,784 | |||||||
DJ Basin | 101,116 | 158,159 | 111,016 | 164,936 | |||||||
Other Basins | 21,210 | 47,594 | 26,596 | 61,091 | |||||||
Total | 1,398,650 | 1,698,090 | 1,364,591 | 1,642,969 | |||||||
Solids processed (barrels per day) | 1,104 | 5,449 | 1,324 | 5,697 | |||||||
Skim oil sold (barrels per day) | 2,525 | 3,539 | 1,957 | 3,397 | |||||||
Crude Oil Logistics: | |||||||||||
Crude oil sold (barrels) | 8,146 | 9,870 | 38,349 | 42,799 | |||||||
Crude oil transported on owned pipelines (barrels) | 5,961 | 10,971 | 32,797 | 45,884 | |||||||
Crude oil storage capacity - owned and leased (barrels) (2) | 5,239 | 5,362 | |||||||||
Crude oil inventory (barrels) (2) | 1,201 | 1,111 | |||||||||
Liquids Logistics: | |||||||||||
Refined products sold (gallons) | 188,368 | 292,140 | 834,717 | 1,272,546 | |||||||
Propane sold (gallons) | 477,652 | 502,977 | 1,364,224 | 1,478,759 | |||||||
Butane sold (gallons) | 179,601 | 225,834 | 655,256 | 814,528 | |||||||
Other products sold (gallons) | 119,654 | 127,286 | 471,245 | 602,872 | |||||||
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (2) | 427,975 | 400,301 | |||||||||
Refined products inventory (gallons) (2) | 1,223 | 2,391 | |||||||||
Propane inventory (gallons) (2) | 51,026 | 57,221 | |||||||||
Butane inventory (gallons) (2) | 20,066 | 24,808 | |||||||||
Other products inventory (gallons) (2) | 19,195 | 26,126 | |||||||||
(1) | During the year ended March 31, 2020, barrels per day of produced water processed by the assets acquired in the Mesquite (acquired July 2, 2019) and Hillstone (acquired October 31, 2019) transactions are calculated by the number of days in which we owned the assets. | |
(2) | Information is presented as of March 31, 2021 and March 31, 2020, respectively. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210603006036/en/
Contacts:
Trey Karlovich, 918-481-1119
Chief Financial Officer and Executive Vice President
Trey.Karlovich@nglep.com
